M/s Penta Homes Private Limited, Patiala V. ACIT, Patiala

ITA 635/CHANDI/2017

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 0537 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 7 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-11-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2009-2010
• Appeal Filed On: 10-04-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: JAGMOHAN KUMAR GARG
• Keywords: Competent authority; Ignorance of law
• Section: 263; 11; 143(3); 80IB; 37(1)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH B,CHANDIGARH !, ' # $ . .. . & , '( # BEFORE: SMT. DIVA SINGH, JM & DR. B.R.R.KUMAR, AM ./ ITA NOS. 635 & 637/CHD/2017 / A.Y : 2009-10 & 2012-13 M/S PENTA HOMES PVT. LTD., 1275/2, JAND GALI, PATIALA. VS THE ACIT, CIRCLE, PATIALA. ./ PAN NO: AACCP9184D / APPELLANT / RESPONDENT ! ' / ASSESSEE BY : SHRI T.N.SINGLA # ! ' / REVENUE BY : SHRI JAGMOHAN KUMAR GARG, CIT-DR $ % ! &/ DATE OF HEARING : 29.10.2018 '()* ! &/ D ATE OF PRONOUNCEMENT : 30.11.2018 ')/ ORDER PER BENCH THESE TWO APPEALS FILED BY THE ASSESSEE PERTAIN TO 2009 -10 AND 2012- 13 ASSESSMENT YEARS WHICH ARE PART OF THE CONSOLIDATED ORDER DATED 22.02.2017 OF CIT(A), PATIALA PERTAINING TO 2009-10, 1010-11 A ND 2012-13 ASSESSMENT YEARS. 2. BOTH THESE APPEALS ARE BEING DECIDED BY A COMMON OR DER AS THE STAND OF THE PARTIES WAS THAT THE ISSUES RAISED IN GROUND NO. 2 IN BOTH THE APPEALS ARE IDENTICAL AND THE ARGUMENTS ADVANCED THEREIN ACCORD INGLY WOULD REMAIN THE SAME. APART FROM THE COMMON ISSUE, THERE IS AN INDEP ENDENT GROUND NO. 3 IN ITA 637/CHD/2017 WHEREIN SEPARATE ARGUMENTS WOUL D BE ADVANCED. ACCORDINGLY, FOR READY REFERENCE, WE REPRODUCE THE GROUN DS FROM ITA 635/CHD/2017 WHICH READ AS UNDER : 1. THAT THE ORDER OF LEARNED COMMISSIONER OF INCOME TA X (A) IS BAD, AGAINST THE FACTS & LAW 2. THAT THE LEARNED COMMISSIONER OF INCOME TAX (A) HAS WRONGLY UPHELD THE DISALLOWANCE OF DEDUCTION U/S 80IB(10) AMOUNTING TO RSL,51,10,390 /-. 3. CONSIDERING THE FACT THAT THERE WAS A COMMON ORDER FOR THREE YEARS AND ONLY THE APPEALS OF TWO YEARS HAD BEEN ARGUED SINCE TH E APPEAL FOR 2010-11 ASSESSMENT YEAR WHICH WAS PART OF THE CONSOLIDATED ORD ER WAS STILL PENDING ITA 635&637CHD/2017 A.Y.2009-10 & 2012-13 PAGE 2 OF 13 BEFORE THE ITAT. THE CASE WAS RE-FIXED REQUIRING THE P ARTIES TO ADDRESS THE ISSUE. THE LD. AR IN RESPONSE TO THE CLARIFICATION POINTED O UT THAT SINCE THERE WERE OTHER ISSUES IN THE APPEAL ON WHICH SOME CLARITY WAS SOUGHT FROM THE ASSESSEE, THESE HAD NOT BEEN ARGUED. HOWEVER, IN THE M EANTIME, BEFORE THE APPEAL COULD COME UP FOR RE-HEARING, ON CLARIFICATION, IT WAS SUBMITTED THAT THE CO-ORDINATE BENCH HAD CONCLUDED THE HEARING ON 27.0 8.2018 IN 2010-11 ASSESSMENT YEAR IN ITA 636/CHD/2017. IN THE SAID BACK GROUND, THE LD. AR RELIED UPON THE ARGUMENTS ADVANCED BEFORE THE AO AND T HE CIT(A) AND THE ARGUMENTS ADVANCED BEFORE THE ITAT THAT EVEN IF THE FIRS T APPROVAL DATE IS CONSIDERED AS 14.10.2015, EVEN THEN ON THE BASIS OF THIRD PARTY EVIDENCES, THE STATUTORY REQUIREMENTS STOOD FULFILLED. THE LD. CIT-DR RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW. 4. THE SHORT ISSUE WHICH ARISES FOR CONSIDERATION IN THE P RESENT APPEAL QUA GROUND NO. 2 IS IN THE BACKGROUND WHERE THE ASSES SEE IS A COMPANY DERIVING INCOME FROM THE BUSINESS OF DEVELOPMENT AND BUILDIN G, HOUSING PROJECTS. A PERUSAL OF THE RECORD SHOWS THAT THE ASSES SMENT ORDER DATED 13.12.2011 PASSED U/S 143(3) WAS SET ASIDE BY CIT, PATIALA U/S 263 ON 20.03.2014. PURSUANT TO THE SAID ORDER, THE ASSESSMENT ORDER DATED 19.03.2015 WAS PASSED BY THE AO DENYING THE DEDUCTION CLAIMED U/S 80IB OF THE ACT. THE AO CONSIDERING THE RECORD NOTED THAT T HE FIRST APPROVAL FROM THE COMPETENT AUTHORITY AVAILABLE ON RECORD WAS DATED 1 4.10.2005 AND IN TERMS OF THE PROVISIONS OF SECTION 80IB, IT WAS NOTED THAT THE COMPLETION CERTIFICATE SHOULD HAVE BEEN OBTAINED ON OR BEFORE 31.03.20 11. THE ASSESSEE, IT IS SEEN MADE VARIOUS ARGUMENTS BEFORE THE A O JUSTIFYING THE ENTITLEMENT OF DEDUCTION U/S 80IB @ 100% IN TERMS OF THE FIRST APPROVAL. THE ARGUMENTS WERE ALSO ADVANCED CONTESTING THAT THE APPROVAL GRANTED BY PUDA ON 14.10.2005 WAS NOT AN APPROVAL GRANTED BY A CO MPETENT AUTHORITY AS IT WAS NOT A LOCAL AUTHORITY AS REQUIRED BY THE IN COME TAX ACT AND THUS, THOUGH THE MATERIAL WAS PROCURED AND CONSTRUCTION ACT IVITY STARTED, IT WAS ULTIMATELY THE SECOND APPROVAL BY ZIRAKPUR MUNICIPALITY WHIC H WAS RELEVANT. THUS, THE COMPLETION LETTER DATED 09.03.2009 ON THE BASIS OF WHICH COMPLETION CERTIFICATE DATED 01.06.2012 AND 17.10.2012 WAS G IVEN, WAS RELIED UPON. IT WAS CANVASSED THAT APPROVAL BY THE MUNIC IPAL COUNCIL, ZIRAKPUR WHICH WAS THE LOCAL AUTHORITY, GRANTED ON 24.10.2 007 ON THE BASIS OF WHICH THE COMPLETION CERTIFICATE COULD HAVE BEEN OBTAINE D ON OR BEFORE 31.03.2013, THE CERTIFICATE GRANTED IN JUNE,2012 AND OCTOBE R,2012 WERE STATED TO BE VERY MUCH WITHIN TIME. IT IS SEEN THA T ITA 635&637CHD/2017 A.Y.2009-10 & 2012-13 PAGE 3 OF 13 THE TAX AUTHORITIES DISCARDED THE SECOND APPROVAL DATED 24.10.2007. THE RELIANCE PLACED BY THE ASSESSEE ON INTER DEPARTMENT ME ETING HELD BY THE DEPARTMENT OF LOCAL GOVERNMENT, GOVERNMENT OF PUNJAB ON 23.02.2006 WAS NOT ACCEPTED. IT WAS ALSO NOTED THAT THE SECOND APPR OVAL DATED 24.10.2007 INFACT RELIES UPON THE FIRST APPROVAL DATED 14.10.2005 AND IT WAS NOTICE D THAT THE ASSESSEE AFTER THE FIRST APPROVAL, PAID EXTERNAL DEP ARTMENTAL CHARGES TO PUDA AND EVEN AFTER THE SECOND APPROVAL, CONTINUED TO P AY THE BALANCE EXTERNAL DEPARTMENTAL CHARGES TO PUDA THEREBY INDICATING THAT THE FIRST APPROVAL WAS VERY MUCH OPERATIVE. THE ARGUMENTS OF THE ASSESSEE THAT THE ASSESSEE WAS IGNORANT ABOUT WHICH AUTHORITY WAS TO BE APPROACHED FOR GRANT OF APPROVAL, WAS DISCARDED ON THE REASONING THAT AN ASS ESSEE WHO EMBARKS ON A MULTI-CRORE PROJECT IS SUPPOSED TO BE WELL VERSE D AND WELL ADVISED ON LAW AND FACTS. UNLIKE POOR AND IGNORANT ORDINARY LITIGAN TS, IT CANNOT TAKE SHELTER OF THE EXCUSE OF IGNORANCE OF LAW . THE DISALLOWANCE OF DEDUCTION U/S 80IB(10) MADE BY THE AO WAS AFFIRMED IN APPEAL BY THE CIT(A). 5. IN 2012-13 I.E. IN ITA 637/CHD/2017, THE REASONING ADOPTED IN DISMISSING THE APPEAL IN 2009-10 WAS FOLLOWED BY THE CIT(A). 6. THE LD. AR THOUGH REITERATING THE FACTS AND POSITION OF LAW HAS CANVASSED BEFORE THE AO AND THE CIT(A) REFERRING TO FACTS AVAILABLE ON RECORD SUBMITTED THAT EVEN IF ON THE INSISTENCE OF THE DEPARTMEN T, THE APPROVAL DATED 14.10.2005 IS ADHERED TO, EVEN THEN THE ASSESSEE ON THE BASIS OF THE MATERIAL AVAILABLE ON RECORD IS ENTITLED TO CLAIM 100% DEDUCT ION OF ELIGIBLE PROFITS U/S 80-IB(10) ON THE BASIS OF THE FOLLOWING FACTS AND EVIDENCES WHICH ARE NOT IN DISPUTE AND INFACT SOME OF WHICH CONSTITUTES TH IRD PARTY EVIDENCES. THE FOLLOWING FACTS WERE REFERRED TO : 1. POSSESSION CERTIFICATES GIVEN TO MORE THAN 600 ALLO TTEES OUT OF THE TOTAL NUMBER OF FLATS CONSTRUCTED OF 782, BY 31.3.2011. 2. CERTIFICATE OF ELECTRICITY CONNECTION RELEASED T O 602 FLATS OWNERS OUT OF THE TOTAL NUMBER OF FLATS CONSTRUCTED OF 782, BY 31.3.2011. 3. FIRE SAFETY CERTIFICATE ISSUED, DATED 27.1.2009, BY THE OFFICE OF FIRE STATION AFTER CHECKING THE FIRE SAFETY ARRANGEMENT INSIDE THE IMP UGNED PROJECT AND FINDING THEM SATISFACTORY. 4. CERTIFICATE OF AIR POLLUTION CONTROL DATED 11.6. 2009 ISSUED TO THE IMPUGNED PROJECT BY PUNJAB POLLUTION CONTROL BOARD. 5. CERTIFICATE OF REGISTRATION OF THE RESIDENTS WEL FARE SOCIETY OF THE IMPUGNED HOUSING PROJECT DATED 23.9.2010. 6. APPLICATION SUBMITTED FOR ISSUANCE OF COMPLETION CERTIFICATE FOR THE IMPUGNED PROJECT DATED 9.3.2009. 7) APPLICATION FOR PERMISSION TO OCCUPY BUILDING, U NDER BUILDING BYE-LAWS, FOR THE IMPUGNED PROJECT DATED 20.01.2009 AND FORMING PART OF THE APPLICATION SUBMITTED FOR ISSUANCE OF COMPLETION CERTIFICATE, SUBMITTING THER EIN THAT THE BUILDING HAD BEEN ITA 635&637CHD/2017 A.Y.2009-10 & 2012-13 PAGE 4 OF 13 COMPLETED IN ALL RESPECTS ACCORDING TO THE SANCTION ED PLAN AND WAS FIT FOR USE FOR WHICH IT HAD BEEN ERECTED. 8) FORM-E, BEING A CERTIFICATE REQUIRED UNDER THE B UILDING BYELAWS NO.3.12(III), ISSUED BY A REGISTERED ARCHITECT CERTIFYING THAT THE IMPUGNED PROJECT HAD BEEN COMPLETED ON 15.9.2008 IN ACCORDANCE WITH SANCTIONED PLAN AND SU BMITTED ALONGWITH APPLICATION FOR ISSUANCE OF COMPLETION CERTIFICATE. 9) COMPLETION CERTIFICATE BY A REGISTERED ARCHITECT OR ENGINEER IN FORM-C CERTIFYING THAT THE PROJECT WAS SUPERVISED AND COMPLETED BY IT ON 15-09-08 IN ACCORDANCE WITH PUNJAB REGIONAL AND TOWN PLANNING AND DEVELOPMENT A CT,1995. 10) LETTER WRITTEN BY THE ASSESSEE TO THE ADDITIONA L CHIEF ADMINISTRATOR, GMADA DATED 18.5.2009 REQUESTING TO COMPLETE THE EXTERNAL DEVE LOPMENT WORK RELATING TO THE IMPUGNED PROJECT AND THEREAFTER TO ISSUE COMPLETI ON CERTIFICATE AT THE EARLIEST SO AS TO AVOID ANY LITIGATION AGAINST THE ASSESSEE BY THE AL LOTTEES OF THE PROJECT WHO WERE DEMANDING COMPLETION OF EXTERNAL DEVELOPMENT WORK A ND THE ISSUANCE OF COMPLETION CERTIFICATE. 11) A LETTER ISSUED BY GMADA IN RESPONSE TO INFORMATIO N DEMANDED BY SHRI YOGESHWAR VASHISHT UNDER RTI ACT, 2005 STATING THAT THE LICENCE FOR THE IMPUGNED PROJECT WAS GIVEN ON 14.10.2005 AND THE CO MPLETION CERTIFICATE HAD BEEN APPLIED FOR ON 9.3.2009. (EMPHASIS SUPPLIED) 7. THE COPIES OF THESE DOCUMENTS, IT WAS SUBMITTED, WERE AV AILABLE ON THE PAPER BOOK. IT WAS SUBMITTED THAT IT IS NOT IN THE HAND S OF THE ASSESSEE TO HAVE A COMPLETION CERTIFICATE SIGNED AND DELIVERED ON A SPE CIFIC DATE THE APPLICATION HAVING BEEN MADE WELL WITHIN TIME ALONGWITH THE FAC TS ON RECORD DEMONSTRATE THAT THE ASSESSEE HAD SUBSTANTIALLY COMPLE TED THE CONSTRUCTION. THUS, THE COMPLETION CERTIFICATES MADE AVAILABLE DATED 01.06 .2012 AND 17.10.2012 WERE IN THE BACKGROUND WHERE THE CONSTRUCTIO N STOOD COMPLETED AND INFACT EVEN THE POSSESSION STOOD HANDED OVER TO TH E OWNERS WELL WITHIN TIME. IT WAS HIS SUBMISSION THAT OUT OF THE 782 FLATS CONSTRUCTED, POSS ESSION OF 624 FLATS STOOD GIVEN BY 31.03.2011 AND IN 602 FLATS, ELECTRICITY CONNEC TION HAD ALSO BEEN GIVEN. IT WAS SUBMITTED THAT THESE ARE THIRD PARTY EVIDENCES. SIMILARLY, FIRE FIGHTING SYSTEM STOOD INSTALLED ON 12.12.2008 AND COPY OF THE LETTER ISSUED ON 27.01.2009 BY THE CONCERNED FIRE STATION , DERA BASSI CERTIFIED THE FACT THAT ADMITTEDLY PERSONNEL OF THE FIRE D EPARTMENT HAD VISITED AND CHECKED THE FIRE SAFETY ARRANGEMENTS AND ONL Y AFTER CARRYING OUT INSPECTION ETC. HAD ISSUED THE CERTIFICATE. THE POLLUTION CO NTROL AUTHORITY ALSO HAS CERTIFIED AS PER CERTIFICATE DATED 11.06.2009, WHICH IS ALSO A THIRD PARTY EVIDENCE. THUS, THE APPLICATION OF THE ASSESSEE DAT ED 18.05.2009FOR ISSUANCE OF COMPLETION CERTIFICATE BEFORE GAMADA WHICH IS THE CONCERNED LOCAL AUTHORITY FOR ISSUANCE OF COMPLETION CERTIFICATE EVIDENT LY DEMONSTRATES THAT THE PROJECT STOOD COMPLETED BEFORE THE STIPULATED DATE OF FIVE YEARS. MERE ISSUANCE OF CERTIFICATE ON SUBSEQUENT DA TE, IT WAS SUBMITTED, CANNOT BE THE BASIS FOR DENYING THE LEGITIMATE C LAIM. RELIANCE WAS PLACED UPON THE DECISION OF THE JURISDICTIONAL HIGH COUR T IN THE CASE OF ITA 635&637CHD/2017 A.Y.2009-10 & 2012-13 PAGE 5 OF 13 PR. CIT VS AMBEY DEVELOPERS PVT. LTD. IN ITA 263 OF 2016 (P&H) WHEREIN THE SPECIFIC ISSUE HAD COME UP FOR CONSIDERATION APART FROM DEC ISIONS OF GUJRAT AND BOMBAY HIGH COURT IN CIT VS TARNETAR CORPORATION A ND CIT VS HINDUSTAN SAMUH AWAS LTD. RESPECTIVELY. 8. THE LD. CIT-DR HAD VEHEMENTLY RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW AND HAD CANVASSED THAT THE ASSESSEE IS SUPPOSED TO KNOW FROM WHERE THE APPROVAL IS TO BE SOUGHT AND BY TRYING T O RELY UPON THE SUBSEQUENT APPROVAL WHICH IS AFFIRMING THE ORIGINAL APPROVAL OF DATED 14.10.2005, IT WAS SUBMITTED, THE ASSESSEE WAS TRYING TO E XTEND THE TIME WHICH IS WELL FIXED BY THE STATUTE. IT WAS ALSO HIS SUBMISS ION THAT THE ASSESSEE MAY BE CALLED UPON TO EXPLAIN AS TO ON WHICH DA TE, THE ENTIRE FLATS STOOD SOLD. 9. THE LD. AR IN REPLY SUBMITTED THAT THE SALE OF FLATS IS IN CONTINUOUS FLUX AS THEY ARE FREQUENTLY RESOLD AND IF SOME FLATS WERE L YING UNSOLD, THE SAID ARGUMENTS CANNOT BE A GROUND FOR DENYING THE BENE FIT BECAUSE AS FAR AS THE ASSESSEE IS CONCERNED, PROJECT IS COMPLETE I.E. IN REG ARD TO ITS CONSTRUCTION. SALE OF THE FLATS WOULD DEPEND UPON THE MAR KET CONDITIONS AND THIS CANNOT BE A NEW GROUND TO REVISIT THE ISSUE. I T HAS BEEN HIS ARGUMENT THAT THE THIRD PARTY EVIDENCES ON RECORD SUFFIC IENTLY DEMONSTRATE THAT THE PROJECT STOOD LARGELY COMPLETED. THE ARGUMEN TS ADVANCED ON BEHALF OF THE ASSESSEE REFERRING TO THE APPROVAL SOUGHT FROM TH E ZIRARKPUR MUNICIPAL CORPORATION, IT WAS SUBMITTED, IS IN THE BACKGROUND WHERE THE ASSESSEE IS NOT HAVING MUCH EXPERIENCE ABOUT THE LOCAL LA WS AND HAD ENGAGED IN THE ACTIVITY RELYING UPON THE INFORMATIONS GIV EN TO HIM FROM TIME TO TIME AND SINCE THE ASSESSEE HAS GIVEN UP THAT ARGUM ENT AND HAS INSTEAD ARGUED THAT EVEN WHEN THE FIRST APPROVAL DATE OF 14.10.20 05 IS ADHERED TO EVEN THEN THE PROJECT STOOD COMPLETED WITHIN THE STATUTORY LI MITS AND MOST OF THE EVIDENCE IS THIRD PARTY EVIDENCE ON RECORD AND THE FACTUAL POSITION IS SUPPORTED BY PARA 5.10 IN 2009-10 HAS BEEN NOTED BY T HE AO. A PERUSAL OF WHICH, IT WAS SUBMITTED, WOULD SHOW THAT IN EFFECT OVER 60% OF THE COST OF PROJECT STOOD INCURRED UPTO 2007 I.E. WELL BEFORE 31.03.200 9. FOR READY REFERENCE, RELEVANT EXTRACT RELIED UPON IS REPRODUCED HEREUNDER : 5.10 IN THE CASE UNDER CONSIDERATION ASSESSEE HAS ALSO STARTED CONSTRUCTION ACTIVITY ACCORDING TO THE SANCTION GRANTED ON 14/10 /2005. THEREFORE IT IS VERY CLEAR THAT ASSESSEE CONSIDERED THE FIRST APPROVAL A S VALID AND LEGAL APPROVAL AND PLANNED WHOLE CONSTRUCTION ACTIVITIES ACCOR DINGLY. AS PER ASSESSEE'S OWN SUBMISSION ASSESSEE HAS ALSO MADE MORE THAN 5 0% OF EXPENDITURE (RS. 40,90,44,343/-OUT OF RS. 63,94,69,498/-) ON THIS PR OJECT WELL BEFORE GETTING SECOND APPROVAL ON 24/10/2007. AS 50% WORK FOR PRO JECT ON WHICH 80-IB ITA 635&637CHD/2017 A.Y.2009-10 & 2012-13 PAGE 6 OF 13 DEDUCTION IS CLAIMED COMPLETED BEFORE THE ASSESSEE GOT SECOND APPROVAL ON 24/10/2005 AND AS PER ASSESSEE'S SUBMISSION FIRST A PPROVAL GRANTED IS ILLEGAL ASSESSEE'S HALF CONSTRUCTED PROJECT BECOME ILLEGAL, AB-INITIO. IN THIS SCENARIO ALSO ASSESSEE'S CLAIM FOR 80-IB DEDUCTION IS NOT JUSTIFIED. 10. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE POSITION OF LAW ON THE ISSUE IS WELL SETTLED BY THE JURISDICTIONAL HIGH COURT. THE COURT IN VERY CATEGORIC TERMS HAS HELD THAT IF THE ASSESSEE IS OTHERWISE ABLE TO DEMONSTRATE COMPLETION OF THE PROJEC T ON THE APPLICATION MADE TO THE LOCAL AUTHORITY WITHIN STIPULATED TIME, BUT FOR THE REQUIREMENT OF ISSUANCE OF CERTIFICATE, THE ASSESSEE CANNOT BE FAULTED FOR THIS DELAY. FOR READY REFERENCE, WE REPRODUCED PARA 8 OF THE SAID DECISION : 8. ADVERTING TO THE INTERPRETATION AND MEANING TO BE ASSIGNED TO EXPLANATION (II) TO SECTION 80IB(10(A) OF THE ACT, ESSENTIALLY IT HAS T O BE SEEN WHETHER THE TERM 'SHALL' USED THEREIN IS TO BE TREATED AS MANDATORY OR IT IS IN T HE NATURE OF A DIRECTORY REQUIREMENT. IN OUR OPINION, THOUGH THE WORD USED IN EXPLANATION (I I) TO SECTION 80IB(10)(A) OF THE ACT IS 'SHALL', BUT IT WOULD NOT NECESSARILY MEAN THAT IN EVERY CASE, IT SHALL BE TAKEN TO BE MANDATORY REQUIREMENT INSTEAD WOULD DEPEND UPON THE INTENT OF THE LEGISLATURE AND NOT THE LANGUAGE IN WHICH THE PROVISION IS CLOTHED. THE MEANING AND THE INTENT OF THE LEGISLATURE WOULD BE GATHERED NOT ON THE BASIS OF T HE PHRASEOLOGY OF THE PROVISION BUT KEEPING INTO CONSIDERATION ITS NATURE, ITS DESIGN A ND THE CONSEQUENCES WHICH WOULD FOLLOW FROM INTERPRETING IT IN A PARTICULAR WAY ALO NE. THE PURPORT OF THE SAID EXPLANATION (II) TO SECTION 80IB(10)(A) OF THE ACT IS TO SAFEGUARD THE INTEREST OF THE REVENUE WHEREVER THE CONSTRUCTION HAS NOT BEEN COMP LETED WITHIN THE STIPULATED PERIOD. THUS, IT CANNOT MEAN THAT THE REQUIREMENT IS MANDAT ORY IN NATURE AND WOULD DISENTITLE AN ASSESSEE TO THE BENEFIT OF SECTION 80IB(10)(A) OF T HE ACT EVEN IN RESPECT OF THOSE CASES WHERE THE ASSESSEE HAD COMPLETED THE CONSTRUCTION W ITHIN THE STIPULATED PERIOD AND HAD MADE AN APPLICATION TO THE LOCAL AUTHORITY WITHIN T HE PRESCRIBED TIME. THE ISSUANCE OF THE REQUISITE CERTIFICATE WAS WITHIN THE DOMAIN OF THE COMPETENT AUTHORITY OVER WHICH THE ASSESSEE HAD NO CONTROL. FROM THE FINDINGS RECORDED BY THE CIT(A) AS AFFIRMED BY THE TRIBUNAL, IT WAS CLEAR THAT THE CONSTRUCTION HAD BE EN COMPLETED BEFORE THE STIPULATED DATE I.E. 31.3.2010. IT WAS ALSO NOT DISPUTED THAT THE C ERTIFICATE OF COMPLETION WAS APPLIED ON 29.3.2010 WHICH WAS ISSUED TO THE ASSESSEE ON 31.12 .2011. THE ASSESSEE IN SUCH CIRCUMSTANCES COULD NOT BE DENIED THE BENEFIT OF SE CTION 80IB(10)(A) OF THE ACT. THE CIT(A) AND THE TRIBUNAL HAD RIGHTLY ADJUDICATED THE ISSUE IN FAVOUR OF THE ASSESSEE- RESPONDENT. LEARNED COUNSEL FOR THE APPELLANT REVEN UE HAS NOT BEEN ABLE TO SHOW ANY ILLEGALITY OR PERVERSITY IN THE FINDINGS RECORDED B Y THE CIT(A) AS WELL AS THE TRIBUNAL, WARRANTING INTERFERENCE BY THIS COURT. 11. REVERTING TO THE FACTS OF THE CASE, WE NOTE THAT AD MITTEDLY THE COMPLETION CERTIFICATE AVAILABLE WITH THE ASSESSEE IS DATED 0 1.06.2012 AND 17.10.2012 WHICH IS BEYOND THE STIPULATED PERIOD IN TERMS O F THE APPROVAL OF THE PROJECT DATED 01.04.2005 WHICH, IN TERMS OF SECTION 80 IB(10) REQUIRES THAT THE PROJECT BE COMPLETED WITHIN FIVE YEARS FROM THE END OF THE FINANCIAL YEAR IN WHICH IT WAS APPROVED. WE FIND THAT THE FACTUM OF PROJECT C OMPLETION WITHIN TIME ON THE BASIS OF APPLICATION MOVED BEFORE GAMADA ON 18.05.2009 IS NO LONGER RES-INTEGRA AS THE CO-ORDINATE BE NCH IN ITA 636/CHD/2017 PERTAINING TO 2010-11 ASSESSMENT YEAR WH ICH IS PART OF THE CONSOLIDATED ORDER WHEREIN TWO APPEALS ARE BEING CONSIDER ED IN THE PRESENT PROCEEDINGS HAS ALREADY CONSIDERED THE VERY SAME FACTS AND NEAR SIMILAR ITA 635&637CHD/2017 A.Y.2009-10 & 2012-13 PAGE 7 OF 13 ARGUMENTS HAVE COME FOR THE CONSIDERATION THAT THE ASS ESSEE WAS ENTITLED TO CLAIM DEDUCTION U/S 80IB(10). WE NOTE THAT BEFORE THE CO-O RDINATE BENCH, ON BEHALF OF THE ASSESSEE, FOLLOWING ARGUMENTS ARE FOUND TO HAVE BEEN ADVANCED : 6. BEFORE US, THE LD. COUNSEL FOR ASSESSEE STATED T HAT IT HAD FULLY COMPLIED WITH THE AFORESAID CONDITIONS. THE LD. COU NSEL FOR ASSESSEE POINTED OUT THAT UNDISPUTEDLY THE FIRST APPROVAL FO R THE HOUSING PROJECT HAD BEEN OBTAINED BY THE ASSESSEE FROM PUDA ON 14.1 0.2005 AND ACCORDINGLY, AS PER THE PROVISIONS OF SECTION 80IB( 10) OF THE ACT, THE ASSESSEE WAS REQUIRED TO OBTAIN COMPLETION CERTIFIC ATE IN RESPECT OF THE HOUSING PROJECT BY 31.3.2011. THE LD. COUNSEL FOR A SSESSEE CONTENDED THAT THE IMPUGNED HOUSING PROJECT HAD BEEN COMPLETE D WITHIN THE STIPULATED TIME WHICH WAS EVIDENT FROM THE FOLLOWIN G DOCUMENTS: 1) POSSESSION CERTIFICATES GIVEN TO MORE THAN 600 ALLOTTEES OUT OF THE TOTAL NUMBER OF FLATS CONSTRUC TED OF 782, BY 31.3.2011. 2) CERTIFICATE OF ELECTRICITY CONNECTION RELEASED T O 602 FLATS OWNERS OUT OF THE TOTAL NUMBER OF FLATS CONST RUCTED OF 782, BY 31.3.2011. 3) FIRE SAFETY CERTIFICATE ISSUED, DATED 27.1.2009, BY THE OFFICE OF FIRE STATION AFTER CHECKING THE FIRE SAFE TY ARRANGEMENT INSIDE THE IMPUGNED PROJECT AND FINDING THEM SATISFACTORY. 4. CERTIFICATE OF AIR POLLUTION CONTROL DATED 11.6. 2009 ISSUED TO THE IMPUGNED PROJECT BY PUNJAB POLLUTION CONTROL BOARD. 5. CERTIFICATE OF REGISTRATION OF THE RESIDENTS WEL FARE SOCIETY OF THE IMPUGNED HOUSING PROJECT DATED 23.9. 2010. 6. APPLICATION SUBMITTED FOR ISSUANCE OF COMPLETION CERTIFICATE FOR THE IMPUGNED PROJECT DATED 9.3.2009 . 7) APPLICATION FOR PERMISSION TO OCCUPY BUILDING,UN DER BUILDING BYE-LAWS, FOR THE IMPUGNED PROJECT DATED 2 0.01.2009 AND FORMING PART OF THE APPLICATION SUBMITTED FOR I SSUANCE OF COMPLETION CERTIFICATE, SUBMITTING THEREIN THAT THE BUILDING HAD BEEN COMPLETED IN ALL RESPECTS ACCORDING TO THE SANCTIONED PLAN AND WAS FIT FOR USE FOR WHICH IT HA D BEEN ERECTED. 8) FORM-E, BEING A CERTIFICATE REQUIRED UNDER THE BUILDING BYELAWS NO.3.12(III), ISSUED BY A REGISTER ED ARCHITECT CERTIFYING THAT THE IMPUGNED PROJECT HAD BEEN COMPLETED ON 15.9.2008 IN ACCORDANCE WITH SANCTIONE D PLAN AND SUBMITTED ALONGWITH APPLICATION FOR ISSUANCE OF COMPLETION CERTIFICATE. 9) COMPLETION CERTIFICATE BY A REGISTERED ARCHITECT OR ENGINEER IN FORM-C CERTIFYING THAT THE PROJECT WAS SUPERVISED AND COMPLETED BY IT ON 15-09-08 IN ACCOR DANCE WITH PUNJAB REGIONAL AND TOWN PLANNING AND DEVELOPM ENT ACT,1995. 10) LETTER WRITTEN BY THE ASSESSEE TO THE ADDITIONA L CHIEF ADMINISTRATOR, GMADA DATED 18.5.2009 REQUESTING TO COMPLETE THE EXTERNAL DEVELOPMENT WORK RELATING TO THE IMPUGNED PROJECT AND THEREAFTER TO ISSUE COMPLETI ON CERTIFICATE AT THE EARLIEST SO AS TO AVOID ANY LITI GATION AGAINST THE ASSESSEE BY THE ALLOTTEES OF THE PROJECT WHO WE RE ITA 635&637CHD/2017 A.Y.2009-10 & 2012-13 PAGE 8 OF 13 DEMANDING COMPLETION OF EXTERNAL DEVELOPMENT WORK A ND THE ISSUANCE OF COMPLETION CERTIFICATE. 11) A LETTER ISSUED BY GMADA IN RESPONSE TO INFORM ATION DEMANDED BY SHRI YOGESHWAR VASHISHT UNDER RTI ACT, 2005 STATING THAT THE LICENCE FOR THE IMPUGNED PROJECT W AS GIVEN ON 14.10.2005 AND THE COMPLETION CERTIFICATE HAD BEEN APPLIED FOR ON 9.3.2009. COPIES OF ALL THE ABOVE DOCUMENTS WERE PLACED BEFOR E US AT PAPER BOOK PAGE NO.76-91. THE LD. COUNSEL FOR ASSESSEE ST ATED THAT THE AFORESAID DOCUMENTS CLEARLY SHOWED THAT THE PROJECT HAD BEEN COMPLETED BY 2009 THOUGH THE CERTIFICATE FROM THE C ONCERNED AUTHORITY HAD BEEN OBTAINED MUCH LATER FOR NO DEFAU LT OF THE ASSESSEE. THEREFORE, FOR ALL PURPOSES THE PROJECT O F THE ASSESSEE SHOULD BE TREATED AS BEING COMPLETED WITHIN FIVE YE ARS OF OBTAINING THE APPROVAL, AS STIPULATED IN THE ACT, ENABLING TH E ASSESSEE TO CLAIM DEDUCTION U/S 80IB(10) OF THE ACT. RELIANCE I N THIS REGARD WAS PLACED ON THE DECISION OF THE HON'BLE JURISDICTIONA L HIGH COURT IN THE CASE OF PR. COMMISSIONER OF INCOME TAX, PATIAL A VS M/S AMBEY DEVELOPERS PVT. LTD. ,ITA NO.263 OF 2016(O &M) DATE D 20-07-17, POINTING OUT THAT IT WAS HELD THEREIN THAT THE COND ITION FOR OBTAINING CERTIFICATE FROM THE CONCERNED AUTHORITY WAS NOT COMPULSORY AND IF THE ASSESSEE HAD SUBSTANTIALLY CO MPLIED WITH THE CONDITIONS OF COMPLETING THE PROJECT WITHIN STIPULA TED TIME, IT SHOULD BE TREATED AS SUFFICIENT COMPLIANCE WITH THE CONDITION OF SECTION 80IB(10) OF THE ACT ENABLING THE ASSESSEE T O CLAIM THE DEDUCTION OF ITS PROJECTS AS SPECIFIED THEREIN. COP Y OF THE ORDER WAS PLACED BEFORE US. 7. THE LD. D.R., ON THE OTHER HAND RELIED UPON THE ORDER OF THE CIT (A) POINTING OUT THEREFROM THAT THE ASSESSEE GO T FIRST APPROVAL FOR THE IMPUGNED PROJECT ON 14.10.2005 FROM PUDA WH ICH WAS THE COMPETENT AUTHORITY AND RECKONED FROM THAT DATE COM PLETION CERTIFICATE WAS TO BE OBTAINED BY THE ASSESSEE BY 3 1.3.2011 BUT THE ASSESSEE HAD NOT COMPLETED THE PROJECT IN THIS PERI OD THE COMPLETION CERTIFICATE HAVING GIVEN TO IT ONLY ON 1.6.2012 AND 17.10.2012 WHICH IS AFTER FIVE YEARS OF SANCTIONING OF THE PR OJECT. THEREFORE, CLEARLY THE ASSESSEE HAD NOT COMPLIED WITH THE COND ITIONS OF SECTION 80IB OF THE ACT AND AUTHORITIES BELOW HAD, THEREFOR E, RIGHTLY DENIED DEDUCTION CLAIMED BY THE ASSESSEE UNDER THE SAID SE CTION . 11.1 IT IS SEEN THAT THE CO-ORDINATE BENCH HAS CONSIDER ED THE ISSUE IN THE FOLLOWING MANNER : 8. WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED THE ORDERS OF THE AUTHORITIES BELOW AND GONE THROUGH THE CASE LAW S REFERRED TO BEFORE US. THE ISSUE BEFORE US RELATES TO CLAIM OF DEDUCTION OF PROFITS UNDER SECTION 80IB(10) OF THE ACT, BEING PR OFITS EARNED ON UNDERTAKING AND DEVELOPING HOUSING PROJECT. THE SEC TION STIPULATES CERTAIN CONDITIONS TO BE FULFILLED FOR CLAIMING DED UCTION ON PROFITS FROM HOUSING PROJECTS. IN THE IMPUGNED CASE, THE CO NTENTION OF THE REVENUE FOR DENYING THE CLAIM OF DEDUCTION IS THAT THE ASSESSEE HAS NOT FULFILLED THE CONDITION SPECIFIED IN THE SECTIO N OF HAVING COMPLETED THE HOUSING PROJECTS WITHIN FIVE YEARS FR OM THE END OF THE FINANCIAL YEAR IN WHICH APPROVAL FOR THE SAME WAS O BTAINED BY THE LOCAL AUTHORITY. THE FACTS WHICH ARE NOT DISPUTED A RE THAT THE PROJECT IN RELATION TO WHICH THE DISPUTE HAS ARISEN IS PENTA VIP TOWERS PROJECT, THE APPROVAL FOR COMMENCING WHICH WAS GIVEN BY PUDA ON 14.10.2005 AND THE COMPLETION CERTIFICATE W AS GIVEN ON 1.6.2012 AND 17.10.2012. UNDENIABLY, THE FIVE PERIO D FOR THE COMPLETION OF THE PROJECT, AS STIPULATED UNDER THE ACT, ENDED ON 31.3.2011. THE CONTENTION OF THE ASSESSEE IS THAT IT HAD COMPETED ITA 635&637CHD/2017 A.Y.2009-10 & 2012-13 PAGE 9 OF 13 THE PROJECT WITHIN STIPULATED TIME AND EVIDENCES TO THIS EFFECT HAD ALSO BEEN FILED IN THE FORM OF COMPLETION CERTIFICA TE OF THE FLAT OWNERS OF MAJORITY OF FLATS, CERTIFICATE OF ELECTRI CITY CONNECTION, CERTIFICATE OF FIRE SAFETY IN THE PROJECT, THE FORM ATION OF RESIDENTS WELFARE ASSOCIATION IN THE PROJECT, ALL ISSUED PRIO R TO 31.3.2011 AND APPLICATION FOR COMPLETION CERTIFICATE FILED MUCH B EFORE THE END OF FIVE YEARS PERIOD. THE CONTENTION OF THE ASSESSEE W AS THAT MERELY BECAUSE THE COMPLETION CERTIFICATE HAD NOT BEEN OBT AINED FROM THE LOCAL AUTHORITY WITHIN FIVE YEARS PERIOD THE ASSESS EE SHOULD NOT BE DENIED THE CLAIM OF DEDUCTION, WHEN OTHERWISE IT WA S EVIDENT FROM THE RECORD THAT THE PROJECT HAD ACTUALLY BEEN COMPL ETED BEFORE THE STIPULATED PERIOD OF FIVE YEARS. THE CONTENTION OF THE REVENUE, ON THE OTHER HAND, WAS THAT THE CONDITION FOR OBTAININ G COMPLETION CERTIFICATE FROM THE LOCAL AUTHORITY WITHIN STIPULA TED PERIOD OF FIVE YEARS WAS AN ESSENTIAL/MANDATORY CONDITION IN ABSEN CE OF WHICH AN ASSESSEE WAS NOT ENTITLED TO CLAIM DEDUCTION UNDER SECTION 80IB OF THE ACT. 9. WE ARE CONVINCED WITH THE ARGUMENTS OF THE LD. C OUNSEL FOR THE ASSESSEE. UNDOUBTEDLY, THE EVIDENCES FILED BY T HE ASSESSEE PROVE THAT THE PROJECT WAS COMPLETED WELL BEFORE THE END OF FIVE YEARS PERIOD I.E. 31.3.2011. IT IS NOT DISPUTED THAT THE ASSESSEE HAD APPLIED FOR COMPLETION CERTIFICATE ALONGWITH THE AR CHITECT CERTIFICATE IN THE PRESCRIBED FORM, ETC ON 9.3.2009. IT IS ALSO NOT DISPUTED THAT OUT OF THE TOTAL NUMBER OF FLATS CONSTRUCTED OF 782 , POSSESSION OF 624 FLATS HAD BEEN GIVEN BY 31.3.2011 PROVING THAT THE PROJECT HAD BEEN COMPLETED BY THE END OF THAT PERIOD. ADMITTEDL Y AND UNDISPUTEDLY 602 ELECTRICITY CONNECTIONS HAD BEEN R ELEASED TO FLAT OWNERS IN THE IMPUGNED PROJECT. ALSO FIRE FIGHTING SYSTEM HAD BEEN INSTALLED IN THE PROJECT BY 12.12.2008 WHICH IS EVI DENT FROM THE COPY OF LETTER SUBMITTED BY THE ASSESSEE TO THE AFORESAI D STATION OFFICER REQUESTING IT TO ISSUE FINAL NOC/COMPLETION CERTIFI CATE IN THIS REGARD WHICH WAS DULY ISSUED ON 27.1.2009 BY THE OFFICE OF THE FIRE STATION, DERABASSI STATING IN ITS CERTIFICATE THAT AN OFFICI AL OF THE OFFICE HAD VISITED AND CHECKED FIRE SAFETY ARRANGEMENT INSIDE PENTA HOMES AND FOUND THEM SATISFACTORY AT THE TIME OF INSPECTION. FURTHER EVEN POLLUTION CONTROL CERTIFICATE HAD BEEN ISSUED TO TH E PROJECT BY THE PUNJAB POLLUTION CONTROL BOARD ON 11.6.2009. EVEN T HE ASSESSEE HAD APPLIED FOR THE ISSUANCE OF COMPLETION CERTIFICATE TO THE IMPUGNED PROJECT, TO THE CONCERNED LOCAL AUTHORITY I.E. GAMA DA ON 9.3.2009. THE REVENUE HAS NOT BROUGHT TO OUR NOTICE ANY OBJEC TIONS ISSUED BY THE CONCERNED LOCAL AUTHORITY WHICH RESULTED IN DEL AY IN ISSUING THE COMPLETION CERTIFICATE. THEREFORE, CLEARLY THE ASSE SSEE HAD COMPLETED ITS PROJECT AND APPLIED WELL IN ADVANCE F OR THE COMPLETION CERTIFICATE AND THE DELAY IN OBTAINING THE SAME BEY OND 31-03-11,WAS NOT AS A RESULT OF ANY FAULT OF THE ASSESSEE. IT IS THUS CLEARLY EVIDENT FROM THE ABOVE THAT FOR ALL PURPOSES THE PROJECT OF THE ASSESSEE WAS COMPLETED IN 2009 ,WHICH WAS WELL BEFORE THE END OF THE STIPULATED PERIOD OF FIVE YEARS I.E. 31.3.2011. MERELY BECAUSE A CERTIFICATE WAS ISSUED LATER BY THE COMPETENT AUTHORITY AND THAT TO O FOR NO FAULT OF THE ASSESSEE WHO HAD APPLIED FOR THE SAME WELL WITH IN STIPULATED TIME. THE ASSESSEE CANNOT BE DENIED DEDUCTION U/S 8 0IB(10) OF THE ACT. THE HON'BLE JURISDICTIONAL HIGH COURT IN THE C ASE OF PR.CIT VS. AMBEY DEVELOPER PVT. LTD. IN ITA NO.263 OF 2016 (P& M) WHILE DEALING WITH AN IDENTICAL ISSUE HELD THAT THE TERM SHALL USED IN SECTION 80IB(10)(A) OF THE ACT FOR OBTAINING COMPLE TION CERTIFICATE FROM THE LOCAL AUTHORITY NEED NOT BE READ AS A MAND ATORY CONDITION. THE HON'BLE HIGH COURT HAS SAID THAT THE MEANING OF THE TERM SHALL WOULD DEPEND UPON INTENT OF THE LEGISLATURE AND NOT THE LANGUAGE IN WHICH THE PROVISION IS CLOTHED. THE HON 'BLE HIGH COURT HELD THAT THE PURPORT OF THE SAID REQUIREMENT OF OB TAINING COMPLETION CERTIFICATE WAS TO SAFEGUARD INTEREST OF THE REVENUE ITA 635&637CHD/2017 A.Y.2009-10 & 2012-13 PAGE 10 OF 13 WHEREVER THE CONSTRUCTION HAD NOT BEEN COMPLETED WI THIN STIPULATED PERIOD AND THUS IT WOULD BE SUFFICIENT COMPLIANCE I F THE ASSESSEE HAD OTHERWISE DEMONSTRATED COMPLETION OF THE PROJECT AN D HAD ALSO MADE APPLICATION TO THE LOCAL AUTHORITY WITHIN STIPULATE D TIME BUT THE REQUIRED CERTIFICATE WAS OBTAINED LATER ON FOR NO F AULT OF THE ASSESSEE. THE RELEVANT FINDINGS OF THE HON'BLE HIGH COURT AT PARA 8 OF THE ORDER ARE AS UNDER: 8. ADVERTING TO THE INTERPRETATION AND MEANING TO BE ASSIGNED TO EXPLANATION (II) TO SECTION 80IB(10(A) OF THE ACT, ESSENTIALLY IT HAS T O BE SEEN WHETHER THE TERM 'SHALL' USED THEREIN IS TO BE TREATED AS MANDATORY OR IT IS IN THE NATURE OF A DIRECTORY REQUIREMENT. IN OUR OPINION, THOUGH THE W ORD USED IN EXPLANATION (II) TO SECTION 80IB(10)(A) OF THE ACT IS 'SHALL', BUT IT WOULD NOT NECESSARILY MEAN THAT IN EVERY CASE, IT SHALL BE TAKEN TO BE MA NDATORY REQUIREMENT INSTEAD WOULD DEPEND UPON THE INTENT OF THE LEGISLATURE AND NOT THE LANGUAGE IN WHICH THE PROVISION IS CLOTHED. THE MEANING AND THE INTEN T OF THE LEGISLATURE WOULD BE GATHERED NOT ON THE BASIS OF THE PHRASEOLOGY OF THE PROVISION BUT KEEPING INTO CONSIDERATION ITS NATURE, ITS DESIGN AND THE C ONSEQUENCES WHICH WOULD FOLLOW FROM INTERPRETING IT IN A PARTICULAR WAY ALO NE. THE PURPORT OF THE SAID EXPLANATION (II) TO SECTION 80IB(10)(A) OF THE ACT IS TO SAFEGUARD THE INTEREST OF THE REVENUE WHEREVER THE CONSTRUCTION H AS NOT BEEN COMPLETED WITHIN THE STIPULATED PERIOD. THUS, IT CANNOT MEAN THAT TH E REQUIREMENT IS MANDATORY IN NATURE AND WOULD DISENTITLE AN ASSESSEE TO THE B ENEFIT OF SECTION 80IB(10)(A) OF THE ACT EVEN IN RESPECT OF THOSE CAS ES WHERE THE ASSESSEE HAD COMPLETED THE CONSTRUCTION WITHIN THE STIPULATED PE RIOD AND HAD MADE AN APPLICATION TO THE LOCAL AUTHORITY WITHIN THE PRESC RIBED TIME. THE ISSUANCE OF THE REQUISITE CERTIFICATE WAS WITHIN THE DOMAIN OF THE COMPETENT AUTHORITY OVER WHICH THE ASSESSEE HAD NO CONTROL. FROM THE FINDING S RECORDED BY THE CIT(A) AS AFFIRMED BY THE TRIBUNAL, IT WAS CLEAR THAT THE CON STRUCTION HAD BEEN COMPLETED BEFORE THE STIPULATED DATE I.E. 31.3.2010. IT WAS A LSO NOT DISPUTED THAT THE CERTIFICATE OF COMPLETION WAS APPLIED ON 29.3.2010 WHICH WAS ISSUED TO THE ASSESSEE ON 31.12.2011. THE ASSESSEE IN SUCH CIRCUM STANCES COULD NOT BE DENIED THE BENEFIT OF SECTION 80IB(10)(A) OF THE ACT. THE CIT(A) AND THE TRIBUNAL HAD RIGHTLY ADJUDICATED THE ISSUE IN FAVOUR OF THE ASSESSEE-RESPONDENT. LEARNED COUNSEL FOR THE APPELLANT REVENUE HAS NOT B EEN ABLE TO SHOW ANY ILLEGALITY OR PERVERSITY IN THE FINDINGS RECORDED B Y THE CIT(A) AS WELL AS THE TRIBUNAL, WARRANTING INTERFERENCE BY THIS COURT. 10. IN VIEW OF THE ABOVE SINCE THE HON'BLE JURISDIC TIONAL HIGH COURT IN THE CASE OF AMBEY DEVELOPER PVT. LTD. (SUP RA)ABOVE HAS CATEGORICALLY HELD THAT THE ASSESSEE HAVING DEMONST RATED COMPLETION OF THE PROJECT AND HAVING APPLIED FOR CO MPLETION CERTIFICATE WELL WITHIN STIPULATED DATE, IT SHALL B E ENTITLED TO CLAIM DEDUCTION U/S 80IB(10) OF THE ACT AND AS PER THE FA CTS IN THE PRESENT CASE THE ASSESSEE HAD DEMONSTRATED COMPLETION OF TH E PROJECT IN THE YEAR 2009 AND HAD ALSO SHOWN TO HAVE APPLIED FOR CO MPLETION CERTIFICATE IN 2009 ITSELF WHILE IT WAS REQUIRED TO OBTAIN THE CERTIFICATE BY 31.3.2011, IT CAN BE SAFELY SAID THA T THE ASSESSEE HAD APPLIED WITH THE CONDITIONS OF HAVING OBTAINED COMP LETION CERTIFICATE WITHIN FIVE YEARS FROM THE DATE OF APPR OVAL OF THE PROJECT AND HENCE WAS ENTITLED TO CLAIM DEDUCTION OF PROFIT S U/S 80IB(10) OF THE ACT. GROUND NO.2 RAISED BY THE ASSESSEE IS, THE REFORE, ALLOWED. 11.2 ACCORDINGLY, SINCE ON FACTS, THERE IS NO DISPUTE, WE FIN D THAT IN THE PECULIAR FACTS AND CIRCUMSTANCES OF THE PRESENT CASE, IN T ERMS OF THE POSITION OF LAW AS APPRECIATED BY THE JURISDICTIONAL HIGH COURT IN TH E CASE OF AMBEY DEVELOPER PVT. LTD. AND THE VIEW TAKEN BY THE CO-ORDINA TE BENCH, DEDUCTION ITA 635&637CHD/2017 A.Y.2009-10 & 2012-13 PAGE 11 OF 13 U/S 80IB(10) DESERVES TO BE ALLOWED. GROUND NO. 2 OF THE ASSESSEE, ACCORDINGLY IS ALLOWED. 12. IN THE RESULT, ITA 635/CHD/2017 IS ALLOWED. ITA 637/CHD/2017 13. REFERRING TO THE INDEPENDENT SURVIVING ISSUE IN ITA 637 /CHD/2017, IT IS SEEN THAT THE RELEVANT FACTS ARE DISCUSSED AT PAGES 11 TO 13 OF THE ASSESSMENT ORDER. A PERUSAL OF WHICH SHOWS THAT THE A SSESSEE WAS REQUIRED TO JUSTIFY THE EXPENDITURE OF RS. 20,23,712/- CLAIMED UNDE R TRAVELLING EXPENSES. THE ASSESSEE'S EXPLANATION THAT IT WAS AN EX PENDITURE FOR UPDATING THE DIRECTORS WITH THE LATEST DESIGN AND STRUCT URE AND LATEST TECHNOLOGY BEING USED IN REAL ESTATE BUSINESS WAS NOT AC CEPTED ON THE GROUNDS THAT THERE WAS NO EVIDENCE AS TO WHAT CONFERE NCE, SEMINAR ETC. WAS ATTENDED AND WHAT LATEST TECHNOLOGY WAS ACQUIRED ETC. THE RECEIPTS OF THE EXPENSES ON FOREIGN TOUR SUPPORTED BY BILLS WERE STATED TO BE NOT SUFFICIENT. IT WAS FURTHER NOTICED THAT THE ASSESSEE HAD TRAVELLED ALONGWITH HIS WIFE MRS. MEETIKA SINGH, ALSO A DIRECTOR, ALONGWITH THREE MORE PERSON S AND HER CHILDREN. THE RELEVANT DISCUSSION FROM THE ASSESSMENT ORD ER IS EXTRACTED HEREUNDER : THIS ITSELF INDICATES THAT THE ASSESSEE'S TRAVEL E XPENDITURE HAS NOTHING TO DO WITH THE PURPOSE OF BUSINESS AS NO RELEVANCE TO THE BUSINESS WITH THE TRAVELLING WAS ESTABLISHED BY THE ASSESSEE. THE ASS ESSEE HAS INCURRED THESE EXPENDITURE FOR THE PERSONAL PURPOSE FOR EXAMPLE IT IS FOUND THAT FROM THE BILLS/VOUCHERS SUBMITTED BY THE ASSESSEE THAT MRS. MEETIKA SINGH (DIRECTOR) HAS TRAVELLED OUTSIDE INDIA WITH THREE MORE PERSONS . DURING THE ASSESSMENT PROCEEDINGS, THE AUTHORIZED REPRESENTATIVE HAS STAT ED THAT SHE TRAVELLED OUTSIDE INDIA ALONGWITH HER CHILDREN. THE ASSESSEE IS NOT ABLE TO SUBSTANTIATE HIS ARGUMENT WITH ANY PROOF, THEREFORE, THIS EXPEND ITURE IS CONSIDERED AS PERSONAL EXPENSES OF THE ASSESSEE AND NOT BEING FOR THE PURPOSE OF BUSINESS AND PROFESSION WHOLLY AND EXCLUSIVELY. THEREFORE, R S.20,23,712/- CLAIMED BY THE ASSESSEE AS TRAVELLING EXPENSES ARE HEREBY DISA LLOWED U/S 37(1) AND ADDED TO THE RETURN INCOME OF THE ASSESSEE. 14. IN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY, THE ISS UE APPEARS TO HAVE BEEN CONSIDERED, ARGUED AND DECIDED IN THE FOLLOWING MANNER : 09. GROUND NO. 6 AGITATES AGAINST THE DISALLOWAN CE OF TRAVELLING EXPENSED CLAIMED BY THE ASSESSEE AMOUNTING TO RS. 2 0,23,712/-. DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSEE WAS GIVEN SHOW CAUSE NOTICE DATED 20.02.2015 AND ASKED TO SUBMIT REPLY IN THAT REGARD , WHICH IS REPRODUCED AS UNDER:- 'YOU HAVE MADE AN EXPENDITURE OF RS. 20,25,712/- DU RING THE YEAR UNDER CONSIDERATION UNDER THE HEAD TRAVELLING EXPEN SES. YOU HAVE NOT SUBMITTED ANY PROOF LIKE BILLS AND VOUCHERS IN THIS REGARD ALSO YOU HAVE STATED THAT TO KEEP THE MANAGEMENT UPDATED ON DESIGNING AND STRUCTURE AND LATEST TECHNOLOGY BEING USED IN REAL ESTATE BUSINESS THE DIRECTOR HAVE TO VISIT ABROAD. USE OF LATEST TECH NOLOGY HELPS NOT ONLY REDUCED COST BUT ENVIRONMENT FRIENDLY ALSO. AS SUCH ALL THE TRAVELLING ITA 635&637CHD/2017 A.Y.2009-10 & 2012-13 PAGE 12 OF 13 EXPENSES WERE WHOLLY AND EXCLUSIVELY FOR BUSINESS P URPOSES OF THE ASSESSEE. FURTHER YOU ARE AGAIN ASKED TO GIVE THE FOLLOWING DETAILS IN THIS REGARD :- (I) ANY INVITATION TO SEE DESIGN AND STRUCTURE OF ANY PARTICULAR BUILDING AT PARTICULAR PLACE FROM ANY AUTHORITY, (II) ANY PROOF OF LEARNING AND ATTENDING ANY CONFER ENCE SEMINAR, MEETING, EXHIBITION ETC. (IIJ) PROOF REGARDING ACQUISITION OF LATEST TECHNOL OGY, (IV) ANY REPORT PREPARED AFTER THE VISIT AND IMPLEMENTATION OF THE LEARNED TECHNOLOGY OR STRUCTURE OR DESIGN.' THE AO FOUND THAT THE TRAVELLING EXPENSES DEBITED B Y THE APPELLANT HAVE NOTHING TO DO WITH ITS BUSINESS PURPOSE AS THE SAME WAS NOT ESTAB LISHED BY IT. HE HELD DIRECTOR HAS INCURRED THESE EXPENSES FOR PERSONAL PURPOSES AND T HEREFORE, THE SAME ARE NOT ALLOWABLE U/S 37(1) OF THE ACT. GROUND 6, THE GRIEVANCE PROJECTED THROUGH THIS GRO UND IS THAT THE ID AO WAS NOT JUSTIFIED TIN DISALLOWING TRAVELLING EXPENSES WHEN COMPLETE EVIDENCE WAS PLACED ON RECORD,-THE FACTS OF THE CASE ARE THAT DURING THE P ERIOD RELEVANT TO THE ABOVE ASSESSMENT YEAR AN AMOUNT OF RS. 20,23,712/- WAS IN CURRED ON FOREIGN TRAVEL EXPENSES, THE DETAIL OF WHICH WAS SUPPLIED DURING THE COURSE OF ASSESSMENT/PROCEEDINGS. IT WAS A/SO EXPLAINED THAT THE VISITS WERE MADE OR KEEPING THE MANAGEMENT UPDATED ON DESIGNING AND STRUCTURE AND LATEST TECHNOLOGY BEING USED IN R EAL ESTATE BUSINESS. THE INFORMATION WAS COLLECTED FROM VARIOUS SOURCES BY THE VISITING PERSONS BY MAKING SPOT VISITS AND MAKING ENQUIRIES FROM THE BUILDERS UNDER THE GARB O F CUSTOMER. SINCE THE COMPANY IS INTO THE CONSTRUCTION BUSINESS AND WAS PREPARING TO COME UP WITH NEW PROJECTS THE INFORMATION WAS RELEVANT FOR THE CONDUCT OF THE BUS INESS. IT WAS FURTHER EXPLAINED THAT NO PART OF THE EXPENDITURE INCURRED COULD BE S AID TO BE PERSONAL IN NATURE. THE DISALLOWANCE HAS, THEREFORE, BEEN MADE WITHOUT BRIN GING ON RECORD ANY ADVERSE EVIDENCE. IN FACT THE DECISION TAKEN IS PERVERSE TO THE FACTS ON RECORD. IT IS THEREFORE, REQUESTED THAT THE ADDITION MAY KINDLY BE DELETED O R IN THE ALTERNATIVE REDUCED ACCORDINGLY.' 9.2 I HAVE CONSIDERED THE RIVAL ARGUMENTS AS ALSO T HE EVIDENCE ON RECORD. THE AO HAS HELD THAT THE BUSINESS PURPOSE OF THE TRAVELLING EX PENSES HAS NOT BEEN ESTABLISHED. IT IS SEEN THAT THE APPELLANT HAS GIVEN GENERAL ARGUMENTS REGARDING THE PURPOSE OF FOREIGN VISITS UNDERTAKEN BY ITS DIRECTOR AND OTHERS. EXCEP T MAKING GENERAL CLAIMS, NO DOCUMENTARY EVIDENCE TO ESTABLISH BUSINESS PURPOSE OF THE TRAVELLING UNDERTAKEN BY THE DIRECTOR AND OTHER PERSONS HAS EVER BEEN SUBMITTED BY THE APPELLANT THE RELATIONSHIP OF OTHER PERSONS WITH THE APPELLANT COMPANY HAS ALS O NOT BEEN SPECIFIED. AS ADMITTED BY THE COUNSEL, DURING ASSESSMENT PROCEEDINGS, DIRECTOR'S FAMILY ALSO ACCOMPANIED HER ON FOREIGN VISITS. THUS, IN THE ABSENCE OF PROOF OF BUSINESS P URPOSE IN RESPECT OF TRAVELLING EXPENSES, NO INTERFERENCE IS CALLED FOR IN THE CONCLUSION DRAWN BY THE A.O. CONSEQUENTLY, THE DISALLOWANCE MADE BY HIM IS UPHELD. 15. WE FIND ON HEARING THE PARTIES AND CONSIDERING THE EVID ENCE RELIED UPON, NAMELY DOCUMENTS APPENDED AT PAGES 30 TO 35 TH AT THE ISSUES NEED ELABORATION. IT IS SEEN THAT THE BILLS RAISED BY TOUCH WOO D TRAVELS ARE ATTACHED AND THESE BY NO STRETCH CAN BE SAID TO THRO W LIGHT ON THE ISSUES. ACCORDINGLY, IT IS EVIDENT THAT THE ISSUE HAS NEITHER BEEN CONSIDERED NOR ARGUED WITH REFERENCE TO THE RELEVANT FACTS. IN THE INTERESTS OF J USTICE, PARTIES ARE DIRECTED TO REFER TO SPECIFIC VISITS SPECIFYING THE PERSONS TRAVE LLING AND THE COUNTRIES TRAVELLED TO AS MERE FILING OF BILLS RAISED BY TRAVEL AGENT CANNOT BE SAID TO BE SUFFICIENT COMPLIANCE. THE ISSUE IS RESTORED TO T HE AO TO DECIDE THE SAME ON THE BASIS OF FACTS AND EVIDENCES. THE EXPEN SES OF CHILDREN OR PERSONAL EXPENSES, IT GOES WITHOUT SAYING, HAVE TO BE DISA LLOWED. THE ITA 635&637CHD/2017 A.Y.2009-10 & 2012-13 PAGE 13 OF 13 ASSESSEE IN ITS OWN INTEREST IS DIRECTED TO PLACE FULL FACTS AND EVIDENCES ON RECORD. THE DOCUMENTS FILED ADMITTEDLY ARE NOT SUFFICIENT A ND COMPLETE. ACCORDINGLY, IN THE INTEREST OF SUBSTANTIAL JUSTICE, WE DE EM IT APPROPRIATE TO SET ASIDE THE ISSUE BACK TO THE FILE OF THE AO DIRECTING TH E ASSESSEE TO PLACE SUPPORTING FACTS AND EVIDENCES AS RELYING UPON GENERALIZE D ARGUMENTS WOULD BE OF NO HELP. THE GROUND NO. 3 IS, ACCORDINGLY, ALLOWED FOR S TATISTICAL PURPOSES. 16. IN THE RESULT, ITA 635/CHD/2017 IS ALLOWED AND ITA 63 7/CHD/2017 IS PARTLY ALLOWED FOR STATISTICAL PURPOSES ORDER PRONOUNCED IN THE OPEN COURT ON 30.11. 2018. SD/- SD/- ( . .. . & ) ( ! ) (DR. B.R.R. KUMAR) (DIVA SINGH) '( #/ ACCOUNTANT MEMBER ' #/ JUDICIAL MEMBER + , (+ ! ,- .- / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT - 2. / THE RESPONDENT - 3. $ / / CIT 4. $ / ()/ THE CIT(A) 5. -23 4, & 4, 67839/ DR, ITAT, CHANDIGARH 6. 38 :%/ GUARD FILE (+ $ / BY ORDER, ; #/ ASSISTANT REGISTRAR ITAT,CHANDIGARH.