M/s. Ramsukh Properties, Pune V. DCIT, Cir.-2, Pune

ITA 697/PUN/2011

• Counselvise Citation: [2012] 120 COUNSELVISE.COM (IT) 0021 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 4 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-10-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 27-09-2012
• Assessment Year: 2008-2009
• Appeal Filed On: 20-05-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MRS VINITA MENON
• Assessee Lawyers: DR P DANIAL
• Keywords: Reasonable cause

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV, JM AND SHRI R.K. PANDA, AM ITA NO. 697/PN/2011 (ASSESSMENT YEAR: 2008-09) M/S. RAMSUKH PROPERTIES D BUILDING, SIDDESHWAR NAGAR AIRPORT ROAD, VISHRANTWADI, PUNE-411 014 PAN AAHFR 6007 R APPELLANT VS. DY. CIT CIR. 2, PUNE RESPONDENT APPELLANT BY: DR. P. DANIAL RESPONDENT BY: MRS. VINITA MENON DATE OF HEARING: 28-9-2012 DATE OF PRONOUNCEMENT: ___-10-2012 ORDER PER SHAILENDRA KUMAR YADAV, JM THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)- II PUNE DATED 22-3-2011 FOR A.Y. 2008-09 CONFIRMING THE ORDER OF THE A.O IN NOT ALLOWING THE DEDUCTION U/S 80-IB(10) OF THE ACT. 2. THE ASSESSEE IS A FIRM ENGAGED IN THE BUSINESS O F BUILDERS AND PROMOTERS. THE ASSESSEE HAS RAISED THE ISSUE OF DENIAL OF DEDUCTION U/S 80-IB(10) OF THE A CT AMOUNTING TO RS. 28,47,585/- ON THE BASIS THAT THE PROJECT WAS NOT COMPLETE WITHIN THE STIPULATED PERI OD OF TIME. AN IDENTICAL CLAIM WAS MADE BY THE ASSESS EE FOR THE A.Y. 2007-08 WHICH WAS DENIED BY THE 2 ITA NO 697/PN/11 RAMSUK H PROPERTIES A.Y. 2008-09 AUTHORITIES BELOW ON THE GROUND THAT PROJECT WAS NO T COMPLETE WITHIN THE STIPULATED TIME. ON APPEAL, THE TRIBUNAL VIDE ITS ORDER IN ITA NO. 84/PN/2011 FOR A .Y. 2007-08 DATED 25-7-2012 HELD THAT THE ASSESSEE IS ENTITLED FOR BENEFIT U/S 80-IB(10) OF THE ACT IN RE SPECT OF 173 FLATS COMPLETED BEFORE PRESCRIBED LIMIT. IN THE PRESENT CASE, IT IS THE CLAIM OF ASSESSEE THAT THE A.O HAS DENIED PROPORTIONATE DEDUCTION U/S 80-IB(10) OF THE ACT. ON APPEAL, THE CIT(A) HAS CONFIRMED THE ACTION OF THE A.O BY FOLLOWING THE JUDGMENT OF BOMB AY HIGH COURT IN THE CASE OF BRAHMA ASSOCIATES & OTHER S (2009) 122 TTJ 433 (PUNE) (SB). 3. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. 4. WE FIND THAT SIMILAR ISSUE HAS BEEN DECIDED IN FAVOUR OF THE ASSESSEE BY THIS BENCH OF THE TRIBUNA L IN ASSESSEES OWN CASE IN ITA NO. 84/PN/2011 FOR A.Y. 2007-08 DATED 25-7-2012 BY OBSERVING AS UNDER: 6. AFTER GOING THROUGH RIVAL SUBMISSIONS AND MATERIAL ON RECORD, WE FIND THAT THE ASSESSEE IS A FIRM ENGAGED IN BUSINESS OF BUILDER AND PROMOTER. THE ISSUE BEFORE US IS REGARDING ALLOWABILITY OF DEDUCT ION U/S.80IB(10) OF THE ACT ON PARTIALLY COMPLETE PROJE CT. THE ASSESSING OFFICER HAS DENIED THE DEDUCTION ON T HE GROUND THAT PROJECT WAS NOT COMPLETE WITHIN THE STIPULATED TIME. THERE IS NO DISPUTE WITH REGARD T O OTHER CONDITIONS LAID U/S.80IB(10) OF THE ACT, I.E. , COMMENCEMENT OF PROJECT, AREA OF LAND OF PROJECT, E TC. ASSESSEES HOUSING PROJECT WAS APPROVED VIDE COMMENCEMENT CERTIFICATE NO.3837/04 DATED 13.01.2005 OUT OF WHICH COMPLETION CERTIFICATE WAS OBTAINED AND FURNISHED BEFORE THE ASSESSING OFFICER FOR 173 OUT OF 205 FLATS. SAME WAS REJECTED BY THE ASSESSING OFFICER AND CONFIRMED BY THE CIT(A). THE REQUEST FOR GRANTING WHOLE DEDUCTION IN RESPECT OF WHOLE PROJECT HAS RIGHTLY BEEN REJECTED BECAUSE DEDUCTION U/S.80IB(10) COULD NOT BE GRANTED TO 3 ITA NO 697/PN/11 RAMSUK H PROPERTIES A.Y. 2008-09 ASSESSEE ON INCOMPLETE CONSTRUCTION AT RELEVANT POI NT OF TIME. REGARDING PROPORTIONATE DEDUCTION IN RESP ECT OF 173 OF 205 FLATS OF PROJECT COMPLETED AS RECOGNI ZED BY LOCAL AUTHORITY, I.E., PMC IN ITS COMPLETION CER TIFICATE NO.BCO/03/01333 DATED 31.03.2008, THE LD. AUTHORISED REPRESENTATIVE HEAVILY RELIED ON DECISIO N OF BENGAL AMBUJA HOUSING DEVELOPMENT LTD. (SUPRA), BRIGADE ENTERPRISES P. LTD. (SUPRA), AIR DEVELOPER (SUPRA), SHETH DEVELOPERS (SUPRA) AND ALSO G.V.CORPORATION (SUPRA), WHEREIN DEDUCTION U/S.80IB(10) WAS DENIED AS SIZE OF SOME OF THE RESIDENTIAL UNITS EXCEEDED PRESCRIBED LIMIT AS LAID DOWN U/S.80IB(10) OF THE ACT. ABOVE MENTIONED DECISIONS ARE APPLICABLE IN THEIR OWN SPHERE, I.E. ON POINT O F EXCESS AREA OF SOME OF THE FLATS WHICH HOLD GOOD IN ITS OWN SPHERE. HOWEVER, IN CASE BEFORE US, DEDUCTION U/S.80IB(10) OF THE ACT HAS BEEN REJECTED ON THE GROUND THAT CONDITION OF COMPLETION OF PROJECT BEFO RE THE DUE DATE I.E., 31.03.2008 AS LAID DOWN U/S.80IB(10)(C) OF THE ACT, HAS NOT BEEN COMPLIED B Y ASSESSEE WHICH IS BASIC CONDITION FOR ALLOWABILITY OF DEDUCTION U/S.80IB(10) OF THE ACT. WE FIND THAT IN CASE OF JOHAR HASSAN ZOJWALLA (SUPRA), WHEREIN CONDITION OF COMPLETION AS LAID DOWN IN SECTION 80IB(10)(A) COUL D NOT BE COMPLIED WITH BECAUSE OF A STAY BEING GRANTE D BY MRTP COURT. THUS FAULT OF INCOMPLETION OF CONSTRUCTION WAS NOT ATTRIBUTABLE TO ASSESSEE. IN CASE SUCH A CONTINGENCY EMERGES WHICH MAKES THE COMPLIANCE WITH PROVISION IMPOSSIBLE, THEN BENEFIT BESTOWED ON AN ASSESSEE CANNOT BE COMPLETELY DENIED . SUCH LIBERAL INTERPRETATION SHOULD BE USED IN FAVOU R OF ASSESSEE WHEN HE IS INCAPACITATED IN COMPLETING PROJECT IN TIME FOR THE REASONS BEYOND HIS CONTROL. IN CASE BEFORE US, AS STATED ON BEHALF OF ASSESSEE, TH AT ASSESSEE SUBMITTED CERTAIN MODIFICATIONS/RECTIFICAT IONS FOR TOP FLOORS OF BUILDING. THE SAID MODIFICATION/RECTIFICATION COULD NOT BE COMPLETED A S LOCAL AUTHORITY COULD NOT APPROVE THE MODIFICATION AS THEIR FILES HAVE BEEN TAKEN OVER BY CONCERN INTELLI GENCE DEPARTMENT FOR INVESTIGATION OF VIOLATION OF URBAN LAND CEILING ACT APPLICABLE TO LAND IN QUESTION AT RELEV ANT POINT OF TIME. THIS FACT HAS NOT BEEN DISPUTED ON BEHALF OF REVENUE. THUS, ASSESSEE WAS PREVENTED BY SUFFICIENT REASONABLE CAUSE WHICH COMPELLED THE IMPOSSIBILITY ON PART OF THE ASSESSEE TO HAVE COMPL ETION CERTIFICATE IN TIME. IT IS SETTLED LEGAL POSITION THAT THE LAW ALWAYS GIVE REMEDY AND THE LAW DOES WRONG TO NO ONE. WE AGREE TO PROPOSITION PUT FORWARD BY LD. DEPARTMENTAL REPRESENTATIVE THAT PLAIN READING OF SECTION 80IB(10) OF THE ACT SUGGESTS ABOUT ONLY COMPLETION OF CONSTRUCTION AND NO ADJECTIVE SHOULD BE 4 ITA NO 697/PN/11 RAMSUK H PROPERTIES A.Y. 2008-09 USED ALONGWITH THE WORD COMPLETION. THIS STRICT INTERPRETATION SHOULD BE GIVEN IN NORMAL CIRCUMSTANCES. HOWEVER, IN CASE BEFORE US, ASSESSE E WAS PREVENTED BY REASONABLE CAUSE TO COMPLETE CONSTRUCTION IN TIME DUE TO INTERVENTION OF CID ACT ION ON ACCOUNT OF VIOLATION OF PROVISIONS OF URBAN LAND CEILING ACT APPLICABLE TO LAND IN QUESTION. ASSESSE E WAS INCAPACITATED TO COMPLETE THE SAME IN TIME DUE TO REASONS BEYOND HIS CONTROL. ASSESSEE SHOULD NOT SU FFER FOR SAME. THE REVISION OF PLAN IS VESTED RIGHT OF ASSESSEE WHICH CANNOT BE TAKEN AWAY BY STRICT PROVISIONS OF STATUTE. THE TAXING STATUTE GRANTING INCENTIVES FOR PROMOTION OF GROWTH AND DEVELOPMENT SHOULD BE CONSTRUED LIBERALLY AND THAT PROVISION FO R PROMOTING ECONOMIC GROWTH HAS TO BE INTERPRETED LIBERALLY. AT THE SAME TIME, RESTRICTION THEREON T OO HAS TO BE CONSTRUED STRICTLY SO AS TO ADVANCE THE OBJEC T OF PROVISION AND NOT TO FRUSTRATE THE SAME. THE PROVIS IONS OF TAXING STATUTE SHOULD BE CONSTRUED HARMONIOUSLY WITH THE OBJECT OF STATUE TO EFFECTUATE THE LEGISLA TIVE INTENTION. IN VIEW OF ABOVE FACTS AND CIRCUMSTANCE S, WE HOLD THAT ASSESSEE IS ENTITLED FOR BENEFIT U/S.80IB(10) OF THE ACT IN RESPECT OF 173 FLATS COMPLETED BEFORE PRESCRIBED LIMIT. THE ASSESSING OFFICER IS DIRECTED ACCORDINGLY. ADMITTEDLY IN THE PRESENT CASE, THE ASSESSEE HAS BE EN GRANTED THE BENEFIT OF DEDUCTION U/S 80-IB(10) OF T HE ACT IN RESPECT OF 173 FLATS DURING THE ASSESSMENT Y EAR 2007-08 VIDE ORDER OF THE TRIBUNAL DATED 25-7-2012 AS DISCUSSED ABOVE. FOR THE YEAR UNDER CONSIDERATION, SALE OF THREE FLAT IS THE SUBJECT MATTER OF ALLOWAB ILITY OF DEDUCTION U/S 80-IB(10) OF THE ACT. THEREFORE, ON THE BASIS OF THE TRIBUNALS DECISION FOR THE EARLIER ASSESSMENT YEAR 2007-08, THE CLAIM OF THE ASSESSEE FOR THE YEAR UNDER IS ALLOWED. WE DIRECT ACCORDINGL Y. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. 5 ITA NO 697/PN/11 RAMSUK H PROPERTIES A.Y. 2008-09 DECISION PRONOUNCED IN THE OPEN COURT ON ____ OCTOBER 2012. (R.K. PANDA) (SHAILENDRA KUMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER PUNE, DATED: ____ SEPTEMBER 2012 ANKAM COPY TO:- ASSESSEE DEPARTMENT THE CIT (A) II PUNE THE CIT II PUNE THE D.R. B BENCH, I.T.A.T., PUNE. BY ORDER //TRUE COPY// SR. P.S. I.T.A.T., PUNE