SHRI SUMIT CHANDOK, Bhopal V. THE ACIT, 2(1), Bhopal

ITA 601/IND/2013

• Counselvise Citation: [2015] 121 COUNSELVISE.COM (IT) 0381 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 9 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-07-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2007-2008
• Appeal Filed On: 07-10-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R A VERMA
• Assessee Lawyers: N D PATWA
• Keywords: Opportunity of being heard; Competent authority

Judgement Text

SUMIT CHANDOK ITA NOS. 601/IND/2013, 527/IND/2014 AND 495/IND/201 3 1 IN THE INCOME TAX APPELLATE TRIBUNA L INDORE BENCH, INDORE BEFORE SHRI D.T. GARASIA, HONBLE JUDICIAL MEMBER AND SHRI B.C. MEENA, HONBLE ACCOUNTANT MEMBER ITA NOS. 601/IND/2013 & 527/IND/2014 A.YS.2007-08 & 2010-11 SUMIT CHANDOK BHOPAL PAN AGMPC 6881B ::: APPELLANT VS ASSTT.COMMR. OF INCOME TAX 2(1) BHOPAL ::: RESPONDENT ITA NO. 495/IND/2013 A.Y. 2009-10 INCOME TAX OFFICER 1(1) BHOPAL ::: APPELLANT VS SUMIT CHANDOK BHOPAL ::: RESPONDENT SUMIT CHANDOK ITA NOS. 601/IND/2013, 527/IND/2014 AND 495/IND/201 3 2 ASSESSEE BY SHRI ASHISH GOYAL & SHRI N.D. PATWA RESPONDENT BY SHRI R.A. VERMA DATE OF HEARING 16.7.2015 DATE OF PRONOUNCEMENT 3 0 .7.2015 O R D E R PER SHRI BENCH ITA NO. 601/IND/2013 EMANATES FROM THE ORDER DATED 14.8.2013 OF THE LEARNED CIT(A)- BILASPUR, CAMP AT BHOPAL AND ITA NO. 527/IND/2014 EMANATES FROM THE ORDER OF THE LEARNED CIT(A)-I, BHOPAL, DATED 5.5.2014 . 2. IN BOTH THESE APPEALS, THE ISSUES RAISED BY THE ASSESSEE ARE THE SAME EXCEPT DIFFERENCE IN THE AMOUNT O F CLAIM OF 80IB(10) OF THE ACT. A.O.S ORDER FOR NOT AL LOWING DEDUCTION U/S 80IB(10) HAD BEEN CONFIRMED BY LEARNED CIT(A) ONLY FOR THE REASON THAT ASSESSEE FAILED TO OBTAI N COMPLETION CERTIFICATE FROM MUNICIPAL CORPORATION, BH OPAL. THE GROUNDS OF APPEAL TAKEN BY THE ASSESSEE IN ITA NO. 601/IND/2013 READ AS UNDER :- SUMIT CHANDOK ITA NOS. 601/IND/2013, 527/IND/2014 AND 495/IND/201 3 3 ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE, THE LD. CIT(APPEALS), BILASPUR ERRED AND WAS NOT JUSTIFIED IN 1. DISMISSING THE APPEAL AND SUSTAINING THE ASSESSMENT ORDER OF THE LD. A.O. UNDER THIS APPEAL WHICH IS CONTRARY TO THE MATERIAL ON RECORDS AND PROVISIONS OF THE ACT, UNJUST, BAD IN LAW AND WITHO UT JURISDICTION. 2. SUSTAINING THE ADDITION OF RS.18,45,279/- MADE BY THE LD. A.O. ON ACCOUNT OF DENIAL OF THE CLAIM OF T HE APPELLANT U/S 80IB(10) OF THE INCOME TAX ACT, 1961 DISREGARDING THE FACTS OF THE CASE AND EXPLANATION SUBMITTED BY THE APPELLANT. 3. THE ASSESSEE IS THE PROPRIETOR OF M/S SHIVA CONSTRUCTIONS, BHOPAL, ENGAGED IN THE BUSINESS OF BUI LDER, CONTRACTORS AND REAL ESTATE DEALER. ASSESSEE CLAIMED DEDUCTION U/S 80IB(10) OF THE ACT OF RS. 18,47,279/ - FOR ASSESSMENT YEAR 2007-08 AND RS. 1,22,90,563/- FOR SUMIT CHANDOK ITA NOS. 601/IND/2013, 527/IND/2014 AND 495/IND/201 3 4 ASSESSMENT YEAR 2010-11. THE ASSESSING OFFICER DENIED THE DEDUCTION U/S 80IB(10) OF THE ACT FOR WANT OF COMPLETION CERTIFICATE FROM MUNICIPAL CORPORATION, BH OPAL. IN THIS CASE THE HOUSING PROJECT WAS SANCTIONED ON 20.11.2006 UNDER THE AMENDED PROVISIONS OF SECTION 80IB(10) OF THE ACT. THE PROJECT WAS TO BE COMPLETED ON OR BEFORE 31.3.2012. AS PER THE ASSESSEE, THE PROJECT W AS COMPLETED ON 30.6.2010. THE ASSESSEE APPLIED WITH MUNICIPAL CORPORATION, BHOPAL, FOR ISSUING THE COMPLET ION CERTIFICATE ON 14.7.2010, 17.8.2011, 17.11.2014 AND 26.3.2012. ON THE DIRECTION OF BHOPAL MUNICIPAL CORPORATION THE APPROVED ARCHITECT OF THE ASSESSEE, SH RI VIKRAM MOHOLE OF M/S INTERARCH, BHOPAL, SUBMITTED A DETAILED TECHNICAL REPORT TO THE BHOPAL MUNICIPAL CORPORATION REGARDING COMPLETION OF THE HOUSING PROJE CT. THE HOUSING PROJECT WAS DULY COMPLETED WHICH IS EVID ENT BY THE POSSESSION LETTER DULY SIGNED BY THE BUYERS. THESE SUMIT CHANDOK ITA NOS. 601/IND/2013, 527/IND/2014 AND 495/IND/201 3 5 BUYERS HAVE ALSO PAID MUNICIPAL TAXES AND GOT REGULAR ELECTRICITY CONNECTION. 4. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT AS PER THE M.P. MUNICIPAL CORPORATION ACT, 1956 SECTION 301 PROVIDES THAT IF THE COMMISSIONER FAILS TO ISSUE COMP LETION CERTIFICATE OR REFUSE THE SAME WITHIN A PRESCRIBED PER IOD OF 15 DAYS FROM THE DELIVERY OF NOTICE IN WRITING WITH REGARD TO COMPLETION OF A PROJECT THEN THE COMPLETION CERTI FICATE SHALL BE DEEMED TO HAVE BEEN ISSUED. 5. AFTER HEARING BOTH THE SIDES, WE ARE OF THE VIEW THAT HON'BLE DELHI HIGH COURT IN THE CASE OF CHD DEVELOPE RS LTD. VS. ACIT, CIRCLE 3(1), NEW DELHI, HAS HELD AS UN DER :- THE ASSESSEE IS EXPECTED TO COMPLETE THE PROJECT AS PER THE APPROVED PLAN AT A PARTICULAR POINT OF TIME AND THE ASSESSEE IS NOT EXPECTED TO DO OR TO FULFIL L THE CONDITIONS WHICH ARE NOT IN EXISTENCE AT THE RELEVA NT POINT OF TIME OR MADE COMPULSORY AFTER MAKING SOME SUMIT CHANDOK ITA NOS. 601/IND/2013, 527/IND/2014 AND 495/IND/201 3 6 AMENDMENT IN THE ACT FROM THE FUTURE DATE. SINCE TH E ASSESSEE WAS TO COMPLETE THE PROJECT ON OR BEFORE AND 31.03.2009 AND REQUEST WAS DULY MADE WITH THE COMPETENT AUTHORITY ON 05.11.2009 MENTIONING THAT THE PROJECT HAS BEEN COMPLETED AND COMPLETION CERTIFICATE MAY BE ISSUED AND IF THE SAME IS NOT ISSUED BY THE COMPETENT AUTHORITY THE ASSESSEE SHOULD NOT BE PENALIZED FOR THE SAME UNLESS AND UNT IL SOME CONTRARY FACTS ARE BROUGHT ON RECORD EVIDENCIN G THAT THE ASSESSEE CONTRAVENED THE CONDITIONS CONTAINED IN THE APPROVAL GRANTED BY SUCH COMPETENT AUTHORITY. AS PER SUB-SECTION (10) OF SECTION 80IB( 10), THE BENEFIT WILL BE HUNDRED PERCENT SUBJECT TO FULFILLMENT OF CERTAIN CONDITIONS. HOWEVER, THIS CONDITION WAS SUBSTITUTED BY THE FINANCE (NO. 2) AC T OF 2009 WITH EFFECT FROM 01.04.2009 WHICH HAS BEEN FURTHER EXPLAINED BY SUB-CLAUSE (II) TO THE EXPLANA TION SUMIT CHANDOK ITA NOS. 601/IND/2013, 527/IND/2014 AND 495/IND/201 3 7 REGARDING COMPLETION CERTIFICATE. HOWEVER, SINCE TH E APPROVAL WAS GRANTED TO THE ASSESSEE ON 01.04.2005, THEREFORE, THE ASSESSEE IS NOT EXPECTED TO FULFILL THE CONDITIONS WHICH WERE NOT ON THE STATUTE WHEN SUCH APPROVAL WAS GRANTED TO THE ASSESSEE. THEREFORE, TH E APPEAL OF THE ASSESSEE DESERVES TO BE ALLOWED. HON'BLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. TARN ETAR CORPORATION (2012) 26 TAXMAN.COM 180(GUJ) HAS HELD AS UNDER :- IN THE PRESENT CASE, THEREFORE, THE FACT THAT THE APPELLANT HAD COMPLETED THE CONSTRUCTION WELL BEFOR E 31 ST MARCH, 2008 IS NOT IN DOUBT. IT IS, OF COURSE, TRU E THAT FORMALLY BU PERMISSION WAS NOT GRANTED BY THE MUNICIPAL AUTHORITY BY SUCH DATE. IT IS EQUALLY TRU E THAT EXPLANATION TO CLAUSE (A) TO SECTION 88IB(10) LINKS THE COMPLETION OF THE CONSTRUCTION TO THE BU PERMISSION BEING GRANTED BY THE LOCAL AUTHORITY. SUMIT CHANDOK ITA NOS. 601/IND/2013, 527/IND/2014 AND 495/IND/201 3 8 HOWEVER, NOT EVERY CONDITION OF THE STATUTE CAN BE SEEN AS MANDATORY. IF SUBSTANTIAL COMPLETION THEREO F IS ESTABLISHED ON RECORD, IN A GIVEN CASE, THE COUR T MAY TAKE A VIEW THAT MINOR DEVIATION THEREOF WOULD NOT VITIATE THE VERY PURPOSE FOR WHICH THE DEDUCTIO N WAS BEING MADE AVAILABLE. IN THE PRESENT CASE, THE FACTS ARE PECULIAR. THE ASSESSEE HAS NOT ONLY COMPLETED THE CONSTRUCTION TW O YEARS BEFORE THE FINAL DATE AND APPLIED FOR BU PERMISSION. SUCH BU PERMISSION WAS NOT REJECTED ON THE GROUND THAT CONSTRUCTION WAS NOT COMPLETED, BUT ON SOME OTHER TECHNICAL GROUND. IN THAT VIEW OF MATTER, GRANTING RELIEF OF DEDUCTION CANNOT BE HELD TO BE ILLEGAL. HON'BLE ITAT, DELHI BENCH C' IN THE CASE OF ACIT VS . CIRCLE 27(1), NEW DELHI VS. SURENDRA DEVELOPERS IN ITA NOS. 2743TO 2745/DEL/2010 HAS HELD AS UNDER :- SUMIT CHANDOK ITA NOS. 601/IND/2013, 527/IND/2014 AND 495/IND/201 3 9 THE LD. CIT(A), IT IS SEEN, HAS GRANTED RELIEF TO THE APPELLANT ON THE BASIS OF THE FACT THAT THOUGH THE APPELLANT HAD APPLIED FOR COMPLETION CERTIFICATE BEFORE THE LOCAL AUTHORITY6 IN TIME, THE SAID CERTI FICATE WAS NOT ISSUED IN TIME BY THE LOCAL AUTHORITY. SUCH ISSUANCE OF COMPLETION CERTIFICATE HAS BEEN HELD AN D IN OUR OPINION, CORRECTLY SO, TO BE BEYOND THE CONT ROL OF THE ASSESSEE. HON'BLE ITAT, DELHI BCNCH C' IN THE CASE OF ACIT C IRCLE 27(1), NEW DELHI VS. M/S GIRIJA COLONISERS IN ITAT N OS. 2417 TO 2422/DEL/2011 HAS HELD AS UNDER :- IN THE LIGHT OF THE FACTS NARRATED IN A.O.S REMAND REPORT AND FACTS AVAILABLE ON RECORD, THE LD. CIT(A ) HAS TAKEN A VIEW THAT THE APPELLANT HAS COMPLETED THE CONSTRUCTION MUCH PRIOR TO 31.03.2008 AND HAD FULFILLED ALL REQUIREMENTS/FORMALITIES OF THE COMPLETION CERTIFICATE AS NOTIFIED BY THE CORPORATI ON SUMIT CHANDOK ITA NOS. 601/IND/2013, 527/IND/2014 AND 495/IND/201 3 10 AT THE TIME OF FILING APPLICATION FOR ISSUANCE OF COMPLETION CERTIFICATE ON 26.11.2007. THE LD. CIT(A ) HAS ALSO RECORDED A FINDING THAT SALES OF ALL RESIDENTIAL UNITS IN RESPECT OF THREE PROJECTS WERE MATERIALIZED ON OR BEFORE 31.03.2008. THE MUNICIPAL AUTHORITY HAS NOT POINTED OUT ANY DEFECT AND IRREGULARITY IN THE APPELLANTS APPLICATION DATED 26.11.2007 SUBMITTED FOR ISSUANCE OF COMPLETION CERTIFICATE OF ALL THE SAID PROJECTS. THEREFORE, IN THE LIGHT OF FACTS FOUND BY THE LD. CIT(A) AND REASONS GIVEN BY HIM AND RESPECTFULLY FOLLOWING THE AFORESAID DECISION OF ITAT, PUNE BENCH B IN THE CASE HINDUSTAN SAMUHA AWAS LIMITED (SUPRA), WE DO NOT FIND ANY REASON TO TAKE A VIEW OTHER THAN TH E VIEW TAKEN BY THE LD. CIT(A) IN THE PRESENT CASE. W E, THEREFORE, UPHOLD THE ORDER OF LD. CIT(A) AND DISMI SS ALL THESE APPEALS FILED BY THE REVENUE. SUMIT CHANDOK ITA NOS. 601/IND/2013, 527/IND/2014 AND 495/IND/201 3 11 HON'BLE ITAT, PUNE BENCH B IN THE CASE OF HINDUSTAN SAMUDHA AWAS LTD. VS. ITO IN ITA NOS. 945 TO 950/PNP 2010 HELD AS UNDER :- FROM THE ABOVE, ONE THING IS CLEAR THAT THE DATE TH AT APPEAR ON THE ARCHITECTS COMPLETION CERTIFICATE FI LED BEFORE THE LOCAL AUTHORITY IS A RELEVANT ONE. IN TH E INSTANT CASE, THE SAID DATE IS 25.03.2008 AND THE APPELLANT FILED REQUISITE FORM BEFORE THE LOCAL AUTHORITY INTIMATING THE COMPLETION OF THE PROJECT. THE SAID CERTIFICATE/INTIMATION WAS ACCEPTED BY THE LOC AL AUTHORITY WITHOUT ANY AMENDMENTS OR OBJECTS. LOCAL AUTHORITY HAS NOT RAISED ANY QUERIES ON THE QUALITY CONSTRUCTION OF THE BUILDING OR THE COMPLETION OF T HE SAME AS PER THE PLANS APPROVED BY SUCH AUTHORITY. IN SUCH CIRCUMSTANCES, IN OUR OPINION, THE DELAY IN OBTAINING THE COMPLETION CERTIFICATE ON 10.10.2008 IS SUMIT CHANDOK ITA NOS. 601/IND/2013, 527/IND/2014 AND 495/IND/201 3 12 CERTAINLY NOT ATTRIBUTABLE TO THE APPELLANT AND OBTAINING THE SAID CERTIFICATE BEFORE 31.03.2008 IS BEYOND THE CONTROL OF THE APPELLANT. THE APPELLANT S JOB INCLUDES THE COMPLETION OF THE BUILDING IN ACCORDANCE WITH THE APPROVAL PLANS AND INTIMATION O F THE SAME TO THE LOCAL AUTHORITY BY WAY OF FILING TH E REQUISITE FORMS TOGETHER WITH THE COMPLETION CERTIFICATE GIVEN BY THE ARCHITECT, THE SPECIALIST IN THE MATTER AND THE APPELLANT HAS DONE HIS JOB SCRUPULOUSLY IN THIS CASE. HOWEVER, THE LOCAL AUTHORITY HAS NEITHER OBJECTED TO THE SAID APPLICAT ION OF THE APPELLANT AND THE ARCHITECT BY RAISING ANY OBJECTION NOR ACCEPTED BY ISSUE OF SAID COMPLETION CERTIFICATE TILL 10.10.2008. THEREFORE, THE DELAY I N GRANT OF THE SAID CERTIFICATE IS CERTAINLY NOT SUMIT CHANDOK ITA NOS. 601/IND/2013, 527/IND/2014 AND 495/IND/201 3 13 ATTRIBUTABLE TO THE APPELLANT. THEREFORE, IN OUR OPINION, THE APPELLANT IS NOT DEFAULTER ON THIS ACC OUNT AND THUS THE A.O. HAS ERRED IN DENYING THE DEDUCTIO N U/S 80IB(10) OF THE ACT. ACCORDINGLY, THE ORDER OF THE CIT(A) HAS TO BE REVERSED. THUS, THE GROUNDS RAISED IN THE APPEAL ARE ALLOWED. 6. CONSIDERING THE FACTS OF THE CASE AS WELL AS THE CASE LAWS DECIDED BY VARIOUS COURTS AND ITAT, WE ARE OF THE VIEW THAT THE REVENUE IS NOT JUSTIFIED IN DENYING THE DED UCTION UNDER SECTION 88IB(10) OF THE ACT. 7. IN THE RESULT, THE APPEALS ARE ALLOWED. 8. IN ITA NO. 495/IND/2013 THE ONLY ISSUE IS REGARDING DELETION OF ADDITION OFRS.24,78,155/- MADE BY THE ASSESSING OFFICER FOR NOT ALLOWING DEDUCTION U/S 80I B(10) OF THE ACT. LD. DR PLEADED THAT THERE WAS VIOLATION OF RU LE 46A OF THE IT RULES. THE ASSESSING OFFICER WAS NOT PROVIDED SUMIT CHANDOK ITA NOS. 601/IND/2013, 527/IND/2014 AND 495/IND/201 3 14 ADEQUATE OPPORTUNITY OF BEING HEARD AS PER THE PROVISION S OF SECTION 250(II) OF THE ACT. THE LEARNED CIT(A) GR ANTED RELIEF ON THE BASIS OF FACTS NOT PRESENTED BEFORE THE ASSESSING OFFICER. 9. WE HAVE HEARD BOTH THE SIDES. THE ISSUE OF DEDUCTION U/S 80IB(10) HAS BEEN CONSIDERED BY US IN THE ASSESSM ENT YEAR 2007-08 AND 2010-11 IN EARLIER PART OF THIS ORDE R. THE CLAIM IS WITH RESPECT TO THE SAME PROJECT SHIVA ROYAL COURT LOCATED AT VILLAGE BAWADIA KALAN, BHOPAL. THE FACTS AND CIRCUMSTANCES REGARDING THE HOUSING PROJECT REMAIN THE SAME. WE HAVE ALREADY DECIDED THE ISSUE OF CLAIM U/S 80IB(10) OF THE ACT IN FAVOUR OF THE ASSESSEE IN ITA NOS. 601/IND/2013 FOR ASSESSMENT YEAR 2007-08 AND 527/IND/2014 (SUPRA) FOR THE ASSESSMENT YEAR 2010-11 (SUPRA). THIS IS ASSESSMENT YEAR 2009-10 FOR THE SAME SUMIT CHANDOK ITA NOS. 601/IND/2013, 527/IND/2014 AND 495/IND/201 3 15 PROJECT. IN VIEW OF THIS FACTUAL MATRIX, WE FIND NO ME RIT IN THE REVENUES APPEAL AND DISMISS THE SAME. 10. IN THE RESULT, THE ASSESSEES APPEALS ARE ALLOWED WHEREAS THE REVENUES APPEAL IS DISMISSED. PRONOUNCED IN OPEN COURT ON 30 TH JULY, 2015 SD SD (D.T. GARASIA) (B.C. MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER 30 TH JULY, 2015 DN/-