IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A , PUNE , , BEFORE MS. SUSHMA CHOWLA, JM AND SHRI PRADIP KUMAR KEDIA , A M . / ITA NO. 807 /PN/201 4 / ASSESSMENT YEAR : 20 1 0 - 1 1 MR. SATYANARAYAN RAMSWARUP AGARWAL, PLOT NO.15, GEET SWAROOP KANIFNATH SOCIETY, HADAPSAR, PUNE 411028 . / APPELLANT PAN: AAPPA6151M VS. THE INCOME TAX OFFI CER, WARD 1(3) , PUNE . / RESPONDENT / APPELLANT BY : SHRI PRAMOD SINGHTE / RESPONDENT BY : SHRI DHEERAJ KUMAR JAIN / DATE OF HEARING : 1 9 . 0 1 .201 6 / DAT E OF PRONOUNCEMENT: 21 . 0 3 .201 6 / ORDER PER SUSHMA CHOWLA, J M : TH IS APPEAL FILED BY THE ASSESSEE IS AGAINST THE ORDER OF CIT (A) - I , PUNE , DATED 29 . 11 .20 1 3 RELATING TO ASSESSMENT YEAR 20 1 0 - 1 1 AGAINST ORDER PASSED UNDER SECTION 1 4 3(3) OF THE IN COME - TAX ACT , 1961 (IN SHORT THE ACT) . 2 . THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: - 1 . ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED COMMISSIONER O F INCOME TAX HAS ERRED IN REJECTING APPELLANTS CLAIM OF DEDUC TION MADE U/S 80IB(10) OF THE INCOME TAX ACT, 1961 FOR A SUM OF RS.91,51,079/ - BY DISREGARDING APPELLANTS CONTENTION IN THIS REGARD. ITA NO. 807 /PN/20 1 4 SH RI SATYANARAYAN RAMSWAROOP AGARWAL 2 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT(APPEALS) ERRED IN NOT FOLLOWING THE ORD ERS OF JURISDICTIONAL TRIBUNAL WHICH ARE FOLLOWED BY HIS PREDECESSOR IN ASSESSEES OWN APPEAL FOR A.Y. 2009 - 10. THE APPELLANT CRAVES FOR TO LEAVE , ADD, ALTER, MODIFY , DELETE ABOVE GROUND OF APPEAL BEFORE OR AT THE TIME OF HEARING, IN THE INTEREST OF NATUR AL JUSTICE . 3. THE ISSUE RAISED IN THE PRESENT APPEAL IS IN RELATION TO THE CLAIM OF DEDUCTION UNDER SECTION 80IB(10) OF THE ACT. 4. BRIEFLY, IN THE FACTS OF THE PRESENT CASE, THE ASSESSEE WAS CARRYING ON THE ACTIVITY OF BUILDER AND DEVELOPER AND WAS ALS O CONSULTANT IN VARIOUS CONSTRUCTION ACTIVITIES. FOR THE YEAR UNDER CONSIDERATION, THE ASSESSEE HAD E - FILED THE RETURN OF INCOME DECLARING TOTAL INCOME OF RS. 13,58,990/ - AND AGRICULTURAL INCOME OF RS. 2,17,700/ - . THE ASSESSEE HAD CLAIMED DEDUCTION UNDER S ECTION 80IB(10) OF THE ACT AT RS.91,51,076/ - . DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSEE WAS ASKED TO JUSTIFY HIS CLAIM OF DEDUCTION UNDER SECTION 80IB(10) OF THE ACT I.E. THE YEAR OF APPROVAL, SIZE OF PLOT AREA, SIZE OF RESIDENTIAL UNIT, DA TE OF COMPLETION AND AREA OF COMMERCIAL UNITS INCLUDED IN THE HOUSING PROJECT. IN REPLY, THE ASSESSEE EXPLAINED THAT THE SCHEME WAS BEING DEVELOPED AT S.NO.36/5 , KALE PADAL, NEAR INDRAYANI NAGAR, HADAPSAR, PUNE. THE SAID SCHEME WAS STARTED ON 11.03.2005 ON A PLOT OF LAND ADMEASURING MORE THAN ONE ACRE, WHICH WAS APPROVED ON 11.03.2005 . THE BUILT UP AREA OF EACH FLAT DID NOT EXCEED 1500 SQ.FT. AND HENCE, THE ASSESSEE MADE THE AFORESAID CLAIM OF DEDUCTION UNDER SECTION 80IB(10) OF THE ACT. FURTHER, THE SA ID HOUSING PROJECT HAD TO BE COMPLETED WITHIN FOUR YEARS FROM THE END OF FINANCIAL YEAR IN WHICH THE HOUSING PROJECT WAS APPROVED BY THE LOCAL AUTHORITY, HENCE, THE CONSTRUCTION SHOULD BE COMPLETED BY 31.03.2009 . THE ASSESSEE CLAIMED THAT IT HAD RECEIVED THE COMPLETION CERTIFICATE FROM THE LOCAL AUTHORITY ON 20.12.2007 AND 19.03.2009 . IT WAS FURTHER POINTED OUT BY THE ITA NO. 807 /PN/20 1 4 SH RI SATYANARAYAN RAMSWAROOP AGARWAL 3 ASSESSEE BEFORE THE ASSESSING OFFICER THAT AS PER LAYOUT PLAN OF THE SAID HOUSING PROJECT, THE TOTAL PLOT AREA WAS 4350 SQ.MTRS. AND IN THE SAID LAYOUT, PUNE MUNICIPAL CORPORATION HAD DEMARCATED ROAD WIDENING LINE FROM THE SAID PLOT AND AREA COVERED WAS 182.99 SQ.MTRS., AGAINST WHICH THE ASSESSEE WAS ENTITLED TO CORRESPONDING FSI FROM THE SAID PLOT. THE LAND UNDER CONSIDERATION WAS AGRICULTU RAL LAND, AGAINST WHICH THE ASSESSEE HAD RECEIVED SANCTION VIDE NA ORDER DATED 17.10.2005 , WHEREIN IT WAS STIPULATED THAT THE WORK OF DEVELOPMENT FOR THE FIRST BUILDING COULD BE STARTED WITH THE CONDITION THAT UNLESS AND UNTIL THE RESERVATION OF ROAD AREA WAS TRANSFERRED IN THE NAME OF PMC ON 7/12 EXTRACT, DEVELOPER WAS NOT PERMITTED TO UTILIZE THE RELATABLE FSI. THE ASSESSEE CLAIMS THAT THE PLAN FOR THE WORK OF THIRD BUILDING GOT DELAYED SINCE NO ACTION WAS TAKEN BY THE PMC FOR COMPLETING FORMALITIES. TH E ASSESSEE CLAIMS THAT IN VIEW THEREOF, THERE WAS REVIS ION IN PLANS AND EVENTUALLY PERMISSION WAS RECEIVED FROM PMC FOR REVISED SANCTION FOR SECOND BUILDING ON 01.10.2007 . SINCE NO FSI WAS RELEASED TO THE ASSESSEE TILL 2009, THE ASSESSEE CLAIMS TO HAVE DR OPPED THE IDEA OF COMPLETING THIRD BUILDING AND CARRIED OUT THE PROJECT WITH ONLY TWO BUILDINGS ON PLOT OF AREA OF ONE ACRE. BOTH THESE BUILDINGS WERE COMPLETED BEFORE 31.03. 2009 AND THEREFORE, ELIGIBLE FOR DEDUCTION UNDER SECTION 80IB(10) OF THE ACT. 5. THE ASSESSING OFFICER WAS OF THE VIEW THAT THE ASSESSEE IS NOT ENTITLED TO CLAIM OF DEDUCTION UNDER SECTION 80IB(10) OF THE ACT SINCE THE SIZE OF PLOT ON WHICH HOUSING PROJECT APPROVED W AS 3952 SQ.MTS. AS PER THE BUILDING PLANS SANCTIONED BY PMC, THE S IZE OF PLOT WAS 4134.99 SQ.MTRS., OUT OF WHICH 182.99 SQ.MTRS. WAS ACQUIRED FOR ROAD WIDENING, HENCE, THE BALANCE PLOT AREA WAS 3952 SQ.MTRS. , WHICH WAS LESS THAN ONE ACRE OF PLOT SIZE. SECOND OBJECTION OF THE ASSESSING OFFICER FOR REJECTION OF CLAIM OF D EDUCTION WAS THAT THE HOUSING ITA NO. 807 /PN/20 1 4 SH RI SATYANARAYAN RAMSWAROOP AGARWAL 4 PROJECT WAS SANCTIONED INITIALLY FOR THREE BUILDINGS COVERING 3358.62 SQ.MTRS. OF TOTAL BUILT UP AREA I.E. COMPRISING OF 71 RESIDENTIAL TENEMENT S AND 16 COMMERCIAL ESTABLISHMENTS. HOWEVER, THE ASSESSEE REVISED THE PLAN IN 200 7 IN WHICH TWO BUILDINGS COVERING 2398.16 SQ.MTRS. OF TOTAL BUILT UP AREA , ONE BUILDING COVERING 966.62 SQ.MTRS. WAS SANCTIONED. AS PER THE ASSESSING OFFICER, AGAINST THE SANCTIONED THREE BUILDINGS OF TOTAL BUILT UP AREA OF 3358.62 SQ.MTRS. IN 2005 , THE A SSESSEE HAD COMPLETED CONSTRUCTION OF TWO BUILDINGS OF TOTAL BUILT UP AREA OF 2398.16 SQ.MTRS. ONLY AND HENCE, PARTLY CONSTRUCTED THE HOUSING PROJECT. FURTHER, THE COMMERCIAL ESTABLISHMENT IN THE HOUSING PROJECT AS PER THE SANCTIONED PLAN BY THE PMC WAS 2 10.92 SQ.MTRS., WHICH WAS MORE THAN 3% OF AGGREGATE BUILT UP AREA AS PERMITTED UNDER SECTION 80IB(10) OF THE ACT. FURTHER, THE ASSESSEE HAD COMMENCED THE CONSTRUCTION OF THIRD BUILDING IN 2010 - 11 AND AS PER THE ASSESSING OFFICER, THE HOUSING PROJECT WAS N OT COMPLETED WITHIN PRESCRIBED FOUR YEARS FROM THE DATE OF FIRST APPROVAL OF HOUSING PROJECT AND THE CONTENTION OF ASSESSEE THAT IT HAD ABANDONED THE CONSTRUCTION OF THIRD BUILDING WAS FACTUALLY INCORRECT AND MISLEADING. SINCE THE ASSESSEE HAD NOT COMPLET ED THE BUILDING WITHIN STIPULATED TIME, THE ASSESSING OFFICER DENIED THE DEDUCTION UNDER SECTION 80IB(10) OF THE ACT. FURTHER CLAIM OF THE ASSESSEE BEFORE THE ASSESSING OFFICER WAS THAT ON SIMILAR FACTS, THE CIT(A) IN ASSESSMENT YEAR 2009 - 10 HAS ALLOWED C LAIM OF THE ASSESSEE. HOWEVER, THE SAME WAS NOT ACCEPTED BY THE ASSESSING OFFICER SINCE THE ORDER OF CIT(A) WAS CHALLENGED BEFORE THE TRIBUNAL. 6 . THE CIT(A) CONSIDERED THE OBJECTIONS OF ASSESSING OFFICER ONE BY ONE UNDER PARA 5.7.2 AT PAGES 12 ONWARDS O F THE APPELLATE ORDER. THE FIRST POINT NOTED BY THE CIT(A) WAS THE SIZE OF PLOT ON WHICH THE PROJECT WAS DEVELOPED . I N VIEW OF VARIOUS JUDICIAL PRECEDENTS, THE CIT(A) OBSERVED THAT THE AREA FOR ITA NO. 807 /PN/20 1 4 SH RI SATYANARAYAN RAMSWAROOP AGARWAL 5 DEVELOPMENT OF ROADS FORM ED PART OF PROJECT PLAN AS APPROVED BY THE LOCAL AUTHORITY , HENCE, THE TOTAL SIZE OF PLOT AVAILABLE AT THE TIME OF SANCTION OF BUILDING WAS 4134.99 SQ.MTRS, WHICH WAS MORE THAN ONE ACRE AND HENCE, THIS CONDITION WAS FULFILLED. 7 . THE SECOND ISSUE WAS COMMERCIAL AREA EXCEEDING 3% OF AGGRE GATE BUILT UP AREA. THE CIT(A) NOTED THAT PUNE BENCH OF TRIBUNAL IN THE CASE OF OPEL SHELTER PVT. LTD. IN ITA NO.219/PN/2009 HELD THAT CLAUSE (D) TO SECTION 80IB(10) OF THE ACT AMENDED W.E.F. 01.04.2005 WAS NOT APPLICABLE TO HOUSING PROJECTS COMMENCED PRI OR TO AMENDMENT AND HENCE, THE ADMISSIBILITY OF DEDUCTION UNDER SECTION 80IB(10) OF THE ACT HAD TO BE CONSIDERED AS PER LAW PREVALENT IN WHICH HOUSING PROJECT HAD COMMENCED. THE CIT(A) FURTHER NOTED THAT IN THE PRESENT CASE, THE ASSESSEE HAD RECEIVED COMM ENCEMENT CERTIFICATE ON 03.02.2005 AND 11.03.2005 COMPRISING OF THREE BUILDINGS AND ONE OF THE CONDITIONS WAS TO SURRENDER THE AREA OF 182.99 SQ.MTRS. TO PMC FOR ROAD WIDENING, AGAINST WHICH THE ASSESSEE WAS PERMITTED TO UTILIZED THE RELATABLE FSI. THE CL AIM OF THE ASSESSEE THAT IT HAD DROPPED THE BUILDING C' BECAUSE OF NON - RECEIPT OF FSI CERTIFICATION, WAS CONSIDERED BY THE CIT(A) AND ALSO THE REVISED SANCTION PLAN RECEIVED FROM PMC BY THE ASSESSEE ON 01.10.2007 . FURTHER, THE CLAIM OF THE ASSESSEE BEFOR E THE CIT(A) WAS THAT IT HAD CARRIED OUT THE PROJECT ONLY WITH TWO BUILDINGS AND BOTH THESE BUILDINGS WERE COMPLETED BEFORE 31.03.2009 . THE CIT(A) FURTHER NOTED THAT THE SAID PLOT OF LAND WAS AN AGRICULTURAL LAND AND THE SANCTION VIDE NA ORDER WAS RECEIVE D ON 17.10.2005 , AFTER WHICH ONLY WORK OF BOTH THE BUILDINGS STARTED, WHICH CLEARLY ESTABLISHED THAT THE HOUSING PROJECT COULD HAVE BEEN COMMENCED ONLY AFTER 17.10.2005 . RELIANCE WAS PLACED ON THE RATIO LAID DOWN BY PUNE BENCH OF TRIBUNAL IN THE CASE OF N IRMITI CONSTRUCTION REPORTED I N 4 SOT 383 (PUNE) , WHEREIN , PRELIMINARY ITA NO. 807 /PN/20 1 4 SH RI SATYANARAYAN RAMSWAROOP AGARWAL 6 SANCTION FROM THE LOCAL AUTHORITY FOR DEVELOPMENT OF HOUSING PROJECT WAS CONTEMPLATED WAS CONVERTED INTO NON - AGRICULTURAL LAND ON 30.01.199 9 AND THE NA PERMISSION WAS OBTAINED ON 30.06. 1999 . THE TRIBUNAL IN SUCH CIRCUMSTANCES, HELD THAT THE ASSESSEE HAD COMMENCED THE DEVELOPMENT AND CONSTRUCTION OF PROJECT ONLY AFTER 01.10.1998 AND APPLYING THE SAID SIMILE TO THE FACTS OF THE PRESENT CASE BE FORE HIM, THE CIT(A) HELD THAT THOUGH INITIAL BUILDING PLAN WAS SANCTIONED ON 03.02.2005 OR 11.03.2005 , THE ACTUAL DEVELOPMENT OF PROJECT COMMENCED ONLY AFTER NA ORDER DATED 17.10.2005 AND THEREFORE, THE RESTRICTION ON COMMERCIAL AREA, WHICH WAS INTRODUCED W.E.F. 01.04.2005 WAS APPLICA BLE TO THE PROJE CTS DEVELOPED BY THE ASSESSEE. THE CIT(A) ALSO NOTES THAT THE ENTIRE BUILDING PLAN WAS REVISED SUBSEQUENT TO THE INTRODUCTION OF CLAUSE (D) TO SECTION 80IB(10) OF THE ACT W.E.F. 01.04.2005 AND NOTHING PREVENTED THE ASSESSEE FROM CARRYING OUT THE SAID REST RICTION CONTAINED IN CLAUSE (D) TO SECTION 80IB(10) OF THE ACT. THE ASSESSEE WAS HELD TO HAVE CONSTRUCTED COMMERCIAL AREA IN EXCESS OF 2000 SQ.FT. OR 5% OF BUILT UP AREA, WHICH WAS THE LIMIT PRESCRIBED UNDER THE ACT. 8 . THE NEXT OBJECTION OF THE ASSESS ING OFFICER CONSIDERED BY THE CIT(A) WAS THE PROJECT NOT BEING COMPLETED ON OR BEFORE 31.03.2009 . SINCE THE ASSESSEE HAD ONLY CONSTRUCTED TWO BUILDINGS I.E. A AND B , TOTAL BUILT UP AREA WAS 2398.16 SQ.MTRS. ONLY TILL THE TIME STIPULATED IN CLAUSE (A) TO SECTION 80IB(10) OF THE ACT I.E. 31.03.2009, WHICH WAS EQUAL TO 71.40% OF TOTAL BUILT UP AREA OF 3358.62 SQ.MTRS. APPROVED BY THE FIRST SANCTIONED PLAN. THE CONTENTION OF THE ASSESSEE THAT IT WAS PREVENTED FROM REASONABLE CAUSE FROM NON - COMPLETION OF B UILDING C' WAS ALSO TAKEN NOTE OF THE CIT(A). HE THUS, HELD THAT THE DEDUCTION HAD TO BE GRANTED TO THE PART OF PROJECT, WHICH WAS COMPLETE IN ALL RESPECTS AND THE QUESTION OF PROPORTIONATE DEDUCTION OR FULL DEDUCTION WOULD ITA NO. 807 /PN/20 1 4 SH RI SATYANARAYAN RAMSWAROOP AGARWAL 7 ARISE ONLY IF THE BASIC CONDIT IONS LAID D OWN IN SECTION 80IB(10) OF THE ACT WERE COMPLIED WITH. SINCE IN THE CASE OF THE ASSESSEE, THE COMMERCIAL AREA IN THE PROJECT EXCEEDED 2000 SQ.FT., AND WHICH BASIC CONDITION WAS NOT FULFILLED, HENCE, THE ASSESSEE WAS NOT ENTITLED TO CLAIM OF DED UCTION UNDER SECTION 80IB(10) OF THE ACT . THE OTHER ISSUE THAT THE DEDUCTION WAS ALLOWABLE ON PROPORTIONATE BASIS IN RESPECT OF BUILDING NOS.A AND B, AS PER THE CIT(A) HAD BECOME ACADEMIC AND THE RE WAS NO NECESSITY TO ADJUDICATE THE SAME. 9 . THE ASSESSEE IS IN APPEAL AGAINST THE ORDER OF CIT(A). 10 . THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE POINTED OUT THAT THE ASSESSEE HAD CONSTRUCTED TWO BUILDINGS AND BUILDING A IN WHICH THERE WERE ONLY TWO COMMERCIAL ESTABLISHMENTS AND IN BUILDING B , 7 FLATS AND THERE WAS NO SALE OF UNITS IN BUILDING C' . BOTH A AND B , AS PER THE ASSESSEE, WERE COMPLETED BY 31.03.2009 AND HENCE, THE ASSESSEE WAS ENTITLED TO THE CLAIM OF DEDUCTION UNDER SECTION 80IB(10) OF THE ACT. IT WAS FURTHER POINTED OUT BY TH E LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE THAT THE PLANS WERE APPROVED PRIOR TO 01.04.2005 AND CONSEQUENTLY, PROVISIONS OF CLAUSE (D) TO SECTION 80IB(10) OF THE ACT, WHICH W ERE INSERTED AFTER 01.04.2005 WERE NOT APPLICABLE. RELIANCE IN THIS REG ARD WAS PLACED ON THE RATIO LAID DOWN BY THE HONBLE SUPREME COURT IN CIT VS. SARKAR BUILDERS (2015) 375 ITR 392 (SC) . IT WAS POINTED OUT THAT SINCE THE ASSESSEE HAD NOT RECEIVED FSI, THE BUILDING C' COULD NOT BE STARTED WITHIN TIME FRAME AND FURTHER WHE N THE SAME WAS COMPLETED, NO DEDUCTION UNDER SECTION 80IB(10) OF THE ACT HAS BEEN CLAIMED. 1 1 . THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE PLACING RELIANCE ON THE ORDERS OF AUTHORITIES BELOW POINTED OUT THAT COMMENCEMENT WAS ITA NO. 807 /PN/20 1 4 SH RI SATYANARAYAN RAMSWAROOP AGARWAL 8 ON 03.02.2005 AN D IT HAD TO BE COMPLETED BEFORE 31.03.2009 AND SINCE THE PROJECT WAS NOT COMPLETED BY 31.03.2009 SINCE IT COMPRISED OF BUILDINGS A, B AND C', THE ASSESSEE WAS NOT ENTITLED TO CLAIM OF DEDUCTION UNDER SECTION 80IB(10) OF THE ACT. THE LEARNED DEPARTMEN TAL REPRESENTATIVE FOR THE REVENUE RAISED THE ISSUE THAT THE ASSESSEE WAS NOT ENTITLED TO THE CLAIM OF DEDUCTION UNDER SECTION 80IB(10) OF THE ACT IN THE ABSENCE OF COMPLETION CERTIFICATE. HE PLACED RELIANCE ON THE RATIO LAID DOWN BY THE HONBLE HIGH COUR T OF MADHYA PRADESH IN CIT VS. GLOBAL REALITY (2015) 62 TAXMANN.COM 204 (MP) . 1 2 . THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE IN REJOINDER POINTED OUT THAT IT WAS NOT THE CASE OF AUTHORITIES BELOW THAT THE DEDUCTION UNDER SECTION 80IB(10) OF TH E ACT WAS NOT ALLOWABLE IN THE ABSENCE OF COMPLETION CERTIFICATE. THE ASSESSEE HAVING COMPLETED THE PROJECT WITHIN STIPULATED PERIOD, WAS ENTITLED TO THE CLAIM OF DEDUCTION. IT WAS ALSO POINTED OUT BY THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSE E THAT THE TRIBUNAL IN ASSESSEES OWN CASE IN ITA NO. 330/PN/2013 , RELATING TO ASSESSMENT YEAR 2009 - 10 VIDE ORDER DATED 28.04.2014 HAD ALLOWED THE CLAIM OF ASSESSEE FOR CLAIMING DEDUCTION UNDER SECTION 80IB(10) OF THE ACT , WHEREIN THE FIRST ISSUE ADJUDICATE D BY THE TRIBUNAL WAS THE PLOT AREA, WHICH WAS NOT THE ISSUE BEFORE US AND THE SECOND ISSUE WAS VIOLATION OF TERMS OF APPROVAL OF HOUSING PROJECT THAT AS AGAINST THE APPROVAL FOR THREE BUILDINGS, ONLY TWO BUILDINGS WERE BUILT WITHIN STIPULATED TIME. ANOTH ER ISSUE WHICH WAS CONSIDERED BY THE TRIBUNAL WAS THE COVERAGE OF COMMERCIAL ESTABLISHMENT AND IT WAS HELD THAT THE AMENDMENT IN CLAUSE (D) TO SECTION 80IB(10) OF THE ACT WAS PROSPECTIVE IN NATURE AND WOULD NOT HAVE RETROSPECTIVE EFFECT. THE CIT(A) HAD AL LOWED THE CLAIM OF ASSESSEE IN THIS REGARD, WHICH WAS UPHELD BY THE TRIBUNAL IN ASSESSMENT YEAR 2009 - 10. THE NEXT OBJECTION WAS NON - COMPLETION OF HOUSING PROJECT BY WAY OF ITA NO. 807 /PN/20 1 4 SH RI SATYANARAYAN RAMSWAROOP AGARWAL 9 CONSTRUCTION OF THREE BUILDINGS IN THE YEAR 2010 - 11 . IN THIS REGARD, PROPRATA DEDU CTION WAS ALLOWED TO THE ASSESSEE, IN TURN, RELYING ON THE RATIO LAID DOWN IN OTHER DECISIONS OF TRIBUNAL. 1 3 . WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE ASSESSEE WAS A BUILDER AND DEVELOPER OF A PROJECT NAMED AS SATYARAJ AANGAN . THE BUILDING PLAN FOR THE SAID PLOT OF LAND ADMEASURING MORE THAN ONE ACRE WAS APPROVED BY THE LOCAL AUTHORITY ON 11.03.2005 . AS PER CLAUSE (A) TO SECTION 80IB(10) OF THE ACT, WHERE A HOUSING PROJECT HAS BEEN APPROVED ON OR AFTER 01.04.2004 BUT NOT LATE R THAN 31.03.2005 , THEN THE CONSTRUCTION OF SUCH PROJECT SHOULD BE COMPLETED WITHIN FOUR YEARS FROM THE END OF FINANCIAL YEAR IN WHICH THE HOUSING PROJECT IS SO APPROVED BY THE LOCAL AUTHORITY. IN VIEW THEREOF, THE PROJECT BEING APPROVED ON 11.03.2005 IS TO BE COMPLETED BY 31.03.2009 . THE ASSESSEE CLAIMS TO HAVE RECEIVED COMPLETION CERTIFICATE FROM THE LOCAL AUTHORITY ON 20.12.2007 AND 19.03.2009, WHICH IS NOT DISPUTED BY ANY AUTHORITY. THE FIRST OBJECTION RAISED BY THE ASSESSING OFFICER WAS THE SIZE OF PLOT BEING LESS THAN ONE ACRE. THE AREA EARMARKED FOR ROAD WIDENING IS EXCLUDED FROM TOTAL AREA AVAILABLE WITH THE ASSESSEE. THE CIT(A) IN THIS REGARD HAS GIVEN A FINDING THAT THE AREA OF PLOT IS INCLUSIVE OF ROADS EARMARKED FOR DEVELOPMENT AND HENCE, TH E TOTAL AREA IS MORE THAN ONE ACRE AVAILABLE FOR HOUSING PROJECT AND HENCE, THE CONDITION LAID DOWN IN CLAUSE (B) TO SECTION 80IB(10) OF THE ACT STANDS FULFILLED. FURTHER, THE SAID PROJECT AS POINTED OUT BY US IN THE PARAS HEREINABOVE WAS APPROVED ON 11.0 3.2005 AND THE PROFITS FROM THE PART OF PROJECT WERE DECLARED IN 2009 - 10 AND THE ASSESSEE HAD CLAIMED DEDUCTION UNDER SECTION 80IB(10) OF THE ACT IN THIS REGARD. THE TRIBUNAL IN ASSESSEES OWN CASE VIDE ORDER DATED 28.04.2014 VIDE PARAS 4 AND 5 HAS HELD T HAT TH E SIZE OF SAID PLOT WAS 4134.00 SQ.MTRS., OUT OF WHICH 182.99 SQ.MTRS. WAS ACQUIRED ITA NO. 807 /PN/20 1 4 SH RI SATYANARAYAN RAMSWAROOP AGARWAL 10 FOR ROAD WIDENING BY THE PMC , MAKING BALANCE SIZE OF PLOT 3952 SQ.MTRS. HOWEVER, IT WAS HELD THAT THE AREA EARMARKED FOR ROAD AND AMENITIES IS INCLUDED IN PROJECT AP PROVED BY THE LOCAL AUTHORITY AND HENCE, IT MEANS THAT THE PLOT AREA OF ONE ACRE IS AVAILABLE FOR HOUSING PROJECT INCLUSIVE OF AMENITIES. THE ISSUE HAVING BEEN DECIDED BY THE CIT(A), AGAINST WHICH THE REVENUE IS NOT IN APPEAL AND THE TRIBU NAL IN ASSESSEE S OWN CASE IS THUS, DECIDED IN FAVOUR OF THE ASSESSEE. 1 4 . THE NEXT OBJECTION WAS TO THE COMMERCIAL AREA BEYOND PERMISSIBLE LIMITS. THE SAID CLAIM OF THE ASSESSEE WAS REJECTED ON THE SURMISE THAT THOUGH INITIAL BUILDING PLANS WERE APPROVED ON 11.03.200 5 FOR THE CONSTRUCTION OF THREE BUILDINGS A, B AND C', BUT THE SAME WERE REVISED THEREAFTER IN 2007 ON 01.10.2007 AND HENCE, THE AMENDMENT BROUGHT IN BY WAY OF INSERTION OF CLAUSE (D) TO SECTION 80IB(10) OF THE ACT WAS APPLICABLE, UNDER WHICH THE COMM ERCIAL AREA COULD NOT BE EXCEED 3% OF AGGREGATE BUILT UP AREA OF HOUSING PROJECT OR 2500 SQ.FT., WHICHEVER WAS HIGHER. THE CASE OF THE ASSESSING OFFICER WAS THAT AS PER THE SANCTIONED PLAN OF PMC, COMMERCIAL ESTABLISHMENT IN THE HOUSING PROJECT WAS 210.92 SQ.MTRS., WHICH WAS MORE THAN 3% OF AGGREGATE BUILT UP AREA AS PERMITTED UNDER SECTION 80IB(10) OF THE ACT, HENCE, VIOLATIVE OF THE SAID PROVISIONS. THE CIT(A) HAS FURTHER OBSERVED THAT WHERE THE ASSESSEE HAD INITIALLY RECEIVED COMMENCEMENT CERTIFICATE O N 03.02.2005 AND 11.03.2005 FOR THE CONSTRUCTION OF THREE BUILDING A, B AND C' , WHERE BUILDING C' WAS NOT CONSTRUCTED AND THE PLANS FOR OTHER BUILDINGS WERE REVISED BY PMC ON 01.10.2007 , THEN THE REVISED PROVISIONS OF SECTION 80IB(10) OF THE ACT WERE APPLICABLE AS THEY CAME INTO EFFECT FROM 01.04.2005 AND WHERE THE SAME HAS BEEN VIOLATED, THE ASSESSEE IS NOT ENTITLED TO THE CLAIM OF DEDUCTION UNDER SECTION 80IB(10) OF THE ACT. WE FIND NO MERIT IN THE ORDER OF CIT(A) IN THIS ITA NO. 807 /PN/20 1 4 SH RI SATYANARAYAN RAMSWAROOP AGARWAL 11 REGARD. FIRST OF ALL, THI S OBJECTION HAS BEEN MET WITH BY THE TRIBUNAL IN ASSESSEES OWN CASE IN ASSESSMENT YEAR 2009 - 10 AND IT WAS HELD AS UNDER: - 7. THE NEXT OBJECTION OF ASSESSING OFFICER IS THAT THE ASSESSEE HAS EXCEEDED THE LIMITS OF COMMERCIAL ESTABLISHMENTS BEYOND PERMISSI BLE LIMIT. THE ASSESSING OFFICER OBSERVED THAT AS PER SANCTIONED PLAN BY PMC DATED 03.02.2005, COMMERCIAL ESTABLISHMENT IN HOUSING PROJECT IS 210.92 SQ. MTRS. WHICH IS MORE THAN 3% OF AGGREGATE BUILT UP AREA AS PERMITTED U/S.80IB(10). THE MATTER WAS CARR IED BEFORE FIRST APPELLATE AUTHORITY, WHEREIN THE VARIOUS CONTENTIONS WERE RAISED ON BEHALF OF ASSESSEE AND HAVING CONSIDERED THE SAME, THE CIT(A) OBSERVED THAT HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. BRAHMA ASSOCIATES (2011) 333 ITR 289 (BOM), WH EREIN, IT HAS BEEN HELD THAT UP TO 31.03.2005 (SUBJECT TO FULFILLING OF OTHER CONDITIONS) DEDUCTION U/S.80IB(10) IS ALLOWABLE TO HOUSING PROJECT APPROVED BY LOCAL AUTHORITY HAVING RESIDENTIAL UNITS WHICH WITH COMMERCIAL USER TO THE EXTENT PERMITTED UNDER D C RULES / REGULATIONS FRAMED BY RESPECTIVE AUTHORITY. THE JURISDICTIONAL BOMBAY HIGH COURT IN THE CASE OF BRAHMA ASSOCIATES HELD THAT AMENDMENT IN CLAUSE (D) OF SUB - SECTION SPECIFYING COMMERCIAL AREA UP TO 10% OF PROJECT IN HOUSING PROJECT APPLIES TO THE PROJECT APPROVED AFTER 01.04.2005 AND THE AMENDMENT AFFECTED BY FINANCE ACT (NO.2) OF 2004 W.E.F. 01.04.2005 WOULD NOT HAVE RETROSPECTIVE EFFECT AND THAT APPROVAL OF HOUSING PROJECT PRIOR TO 01.04.2005 WITH COMMERCIAL USER PERMITTED UNDER DC RULES / REGULA TIONS FRAMED BY RESPECTIVE LOCAL AUTHORITY WOULD STILL BE EXEMPT U/S.80IB(10). THIS ISSUE OF COMMERCIAL LIMIT IS FORTIFIED BY THE DECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF BRAHMA ASSOCIATES (SUPRA). THIS REASONED FINDING OF CIT(A) ON THE ISSUE OF COMMERCIAL LIMIT NEEDS NO INTERFERENCE FROM OUR SIDE. WE UPHOLD THE SAME. 1 5 . THE TRIBUNAL HAD ALREADY ALLOWED THIS CLAIM OF ASSESSEE ON THE 1 5 . THE TRIBUNAL HAD ALREADY ALLOWED THIS CLAIM OF ASSESSEE ON THE ARGUMENT THAT THIS PROJECT WAS APPROVED BY PMC ON 03.02.2005 I.E. PRIOR TO 01.04.2005 , UNDER WHICH THERE WER E NO RESTRICTIONS ON THE CONSTRUCTION OF COMMERCIAL UNITS IN THE BUILDING PROJECT AND HENCE, THE AMENDED PROVISIONS OF SECTION ARE NOT APPLICABLE . WE FIND MERIT IN THE CLAIM OF ASSESSEE IN THIS REGARD THAT WHERE THE INITIAL PROJECT WAS SANCTIONED BY PMC O N 11.03.2005 AND THE SECOND PLAN IS ADMITTEDLY A REVISED PLAN, WHICH WAS SANCTIONED BY PMC ON 01.10.2007 AND AS PER EXPLANATION TO SECTION 80IB(10)(A) OF THE ACT , THE CONDITION LAID DOWN IS THAT WHERE ANY APPROVAL IN RESPECT OF HOUSING PROJECT IS OBTAINED MORE THAN ONCE, SUCH HOUSING PROJECT SHALL BE DEEMED TO HAVE BEEN APPROVED ON THE DATE ON WHICH THE BUILDING PLAN OF SUCH HOUSING PROJECT WAS FIRST APPROVED BY THE LOCAL AUTHORITY . IT IS NOT THE CASE OF DEPARTMENT THAT THE TIME LIMIT FOR COMPLETION OF SAI D DEVELOPMENT OF HOUSING PROJECT STARTS FROM 01.10.2007 , IT IS REPEATEDLY THE CASE OF BOTH THE AUTHORITIES BELOW THAT WHERE ITA NO. 807 /PN/20 1 4 SH RI SATYANARAYAN RAMSWAROOP AGARWAL 12 THE BUILDING PLANS WERE SANCTIONED ON 11.03.2005 I.E. BEFORE 01.04.2005 , THEN THE SAME HAVE TO BE COMPLETED ON OR BEFORE 31.03.2009 . SINCE THE ASSESSEE HAD NOT CONSTRUCTED BUILDING C' BEFORE 31.03.2009, IT IS ONE OF THE CONDITIONS FOR DENIAL OF DEDUCTION UNDER SECTION 80IB(10) OF THE ACT TO THE ASSESSEE THAT THE PROJECT HAS NOT BEEN COMPLETED BY 31.03.2009 . IF WE TAKE THE STAND OF C IT(A) AS CORRECT THAT AFTER REVISION OF PLANS ON 01.10.2007 , THE AREA AS PRESCRIBED IN THE ACT FOR COMMERCIAL ESTABLISHMENT SHOULD HAVE BEEN ADHERED TO, THEN THE DATE OF COMPLETION OF PROJECT WOULD STAND EXTENDED TO 31.03.2013 , WHEREAS ADMITTEDLY, THE ASSE SSEE HAS CONSTRUCTED BUILDING C' AND SOLD SOME UNITS IN ASSESSMENT YEAR 2010 - 11 AND HAS BEEN FOUND TO BE NOT ELIGIBLE TO THE CLAIM OF DEDUCTION UNDER SECTION 80IB(10) OF THE ACT . T HE ASSESSEE HIMSELF HAS NOT CLAIMED ANY DEDUCTION UNDER SECTION 80IB(10) O F THE ACT IN RESPECT OF BUILDING C'. IN THE ABOVE SAID FACTS AND CIRCUMSTANCES OF THE CASE, WE FIND NO MERIT IN THE ORDER OF CIT(A) IN OVERLOOKING THE OBSERVATIONS OF CIT(A) IN ASSESSMENT YEAR 2009 - 10 AND NOW ALSO THE ORDER OF TRIBUNAL, WHICH HAD UPHELD THE FINDINGS OF CIT(A) IN THIS REGARD ON THE ISSUE OF COMMERCIAL LIMITS IN THE HOUSING PROJECT CONSTRUCTED BY THE ASSESSEE. WE FIND SUPPORT FROM THE RATIO LAID DOWN BY THE HONBLE SUPREME COURT IN CIT VS. SARKAR BUILDERS (SUPRA) , WHEREIN IT HAS BEEN HELD AS UNDER: - (C) THE PROVISIONS OF SECTION 80 - IB(10) MENTION NOT ONLY A PARTICULAR DATE BEFORE WHICH SUCH A HOUSING PROJECT IS TO BE APPROVED BY THE LOCAL AUTHORITY, EVEN A DATE BY WHICH THE HOUSING PROJECT IS TO BE COMPLETED, IS FIXED. THESE DATES HAVE A S PECIFIC PURPOSE WHICH GIVES TIME TO THE DEVE LOPERS TO ARRANGE THEIR AFFAIRS IN SUCH A MANNER THAT THE HOUSING PROJECT IS STARTED AND FINISHED WITHIN THOSE STIPULATED DATES. THIS PLANNING, IN THE CONTEXT OF FACTS IN THESE APPEALS, HAD TO BE MUCH BEFORE APR IL 1, 2005. (D) (E) (F) CLAUSE (D) MAKES IT CLEAR THAT A HOUSING PROJECT INCLUDES SHOPS AND COMMERCIAL ESTABLISHMENTS ALSO. BUT FROM THE DAY THE SAID PROVISION WAS INSERTED, THEY WANTED TO LIMIT THE BUILT - UP AREA OF SHOPS AND ESTABLISH MENTS TO 5 PER CENT. OF THE AGGREGATE BUILT - UP AREA OR 2,000 SQ.FT., WHICH EVER IS LESS. HOWEVER, THE LEGISLATURE ITSELF FELT THAT THIS MUCH COMMERCIAL SPACE WOULD NOT MEET THE REQUIREMENTS OF THE RESIDENTS. THEREFORE, IN THE YEAR 2010, PARLIAMENT HAS FURTHER AMENDED THI S PROVISION BY PROVIDING THAT IT SHOULD NOT EXCEED 3 PER ITA NO. 807 /PN/20 1 4 SH RI SATYANARAYAN RAMSWAROOP AGARWAL 13 CENT. OF THE AGGREGATE BUILT - UP AREA OF THE HOUS ING PROJECT OR 5,000 SQUARE FEET, WHICHEVER IS HIGHER. THIS IS A SIGNIFICANT MODIFICATION MAKING COMPLETE DEPARTURE FROM THE EARLIER YARDSTICK. ON THE ONE HAND, THE PERMISSIBLE BUILT - UP AREA OF THE SHOPS AND OTHER COMMERCIAL SHOPS IS INCREASED FROM 2,000 SQUARE FEET TO 5,000 SQUARE FEET. ON THE OTHER HAND, THOUGH THE AGGREGATE BUILT - UP AREA FOR SUCH SHOPS AND ESTABLISHMENT IS REDUCED FROM 5 PER CENT. TO 3 PER CENT., WHAT IS SIGNIFICANT IS THAT IT PER MITS THE BUILDERS TO HAVE 5,000 SQUARE FEET OR 3 PER CENT. OF THE AGGREGATE BUILT - UP AREA, 'WHICHEVER IS HIGHER'. IN CONTRAST, THE PROVISION EARLIER WAS 5 PER CENT. OR 2,000 SQ.FT., 'WHICHEVER IS LESS'. (G) FROM THIS PROVISION, THEREFOR, IT IS CLEAR THAT THE HOUSING PROJECT CONTEMPLATED UNDER SUB - SECTION (10) OF SECTION 80 - IB INCLUDES COMMERCIAL ESTABLISHMENTS OR SHOPS ALSO. NOW, BY WAY OF AN AMENDMENT IN THE FORM OF CLAUSE (D), AN ATTEMPT IS MADE TO RESTRICT THE SIZE OF THE SAID SHOPS AND/ OR COMMERCIAL ESTABLISHMENTS. THEREFORE, BY NECESSARY IMPLICATION, THE SAID PROVISION HAS TO BE READ PROSPECTIVELY AND NOT RETROSPECTIVELY. AS IS CLEAR FROM THE AMENDMENT, THIS PROVISION CAME INTO EFFECT ONLY FROM THE DAY T HE PROVISION WAS SUBSTITUTED. THEREFORE, IT CANNOT BE APPLIED TO THOSE PROJECTS WHICH WERE SANCTIONED AND COMMENCED PRIOR TO APRIL 1, 2005, AND COM PLETED BY THE STIPULATED DATE, THOUGH SUCH STIPULATED DATE IS AFTER APRIL 1, 2005. 1 6 . THE THIRD ASPECT OF THE ISSUE IS NON - COMPLETION OF HOUSING PROJECT BEFORE STIPULATED DATE. THIS ISSUE WAS ALSO CONSIDERED BY THE TRIBUNAL VIDE PARAS 8 TO 8.2 AND THE ASSESSEE WAS HELD TO BE ENTITLED TO PRORATA DEDUCTION UNDER SECTION 80IB(10) OF THE ACT. THE RELEVANT FINDI NGS OF THE TRIBUNAL , READ AS UNDER: - 8. THE NEXT ISSUE IS WITH REGARD TO NON - COMPLETION OF HOUSING PROJECT. THE ASSESSING OFFICER STATED THAT THE ASSESSEE HAS COMMENCED THE CONSTRUCTION OF THIRD BUILDING IN THE YEAR 2010 - 11 AND IT CLEARLY SHOWS THAT THE ASSESSEE HAS NOT COMPLETED THE HOUSING PROJECT WITHIN PRESCRIBED FOUR YEARS FROM THE DATE OF FIRST APPROVAL OF HOUSING PROJECT. THE ASSESSING OFFICER OBSERVED THAT IF AT ALL THE ASSESSEE WANTED HE COULD HAVE COMPLETED THE TOTAL HOUSING PROJECT EXCEPT THE SO CALLED 189 SQ. MTRS. OF LAND UNDER ROAD WIDENING. THE ACTION OF ASSESSEE PROVES THAT HE HAD PARTIALLY COMPLETED THE CONSTRUCTION OF BUILDING AND CARRIED OUT ON THE SAME TILL 2010 - 11 BY WHICH, IT IS PROVED BEYOND DOUBT THAT HE HAD NOT COMPLETED HOUSING PROJECT WITHIN THE PRESCRIBED PERIOD OF FOUR YEARS. THE MATTER WAS CARRIED BEFORE FIRST APPELLATE AUTHORITY, WHEREIN THE VARIOUS CONTENTIONS WERE RAISED ON BEHALF OF ASSESSEE AND HAVING CONSIDERED THE SAME, THE CIT(A) GRANTED RELIEF TO THE ASSESSEE ON THI S ACCOUNT AS WELL. THE SAME HAS BEEN OPPOSED BEFORE US ON BEHALF OF REVENUE. ON THE OTHER HAND, THE LEARNED AUTHORIZED REPRESENTATIVE HAS SUPPORTED THE ORDER OF CIT(A) ON THE ISSUE. 8.1 AFTER GOING THROUGH THE RIVAL SUBMISSIONS AND MATERIAL ON RECORD, WE FIND THAT THE ISSUE BEFORE US IS WITH REGARD TO PRORATA DEDUCTION U/S.80IB(10). ON THE ISSUE OF PRORATA DEDUCTION, THE ITAT PUNE BENCH HAS ALLOWED PRORATA DEDUCTION U/S.80IB(10) IN THE CASE OF RAMSUKH PROPERTIES VS. DCIT, CIRCLE 1, PUNE IN ITA NO.84/P N/2011 VIDE ITS ORDER DATED 25.07.2012. FOR THE CONVENIENCE, THE RELEVANT PORTION OF THE ORDER READS AS UNDER: WE AGREE TO PROPOSITION PUT FORWARD BY LD. DEPARTMENTAL REPRESENTATIVE THAT PLAIN READING OF SECTION 80IB(10) OF THE ACT SUGGESTS ABOUT ONLY C OMPLETION OF CONSTRUCTION AND NO ADJECTIVE SHOULD BE USED ALONG WITH THE WORD COMPLETION. THIS STRICT INTERPRETATION SHOULD ITA NO. 807 /PN/20 1 4 SH RI SATYANARAYAN RAMSWAROOP AGARWAL 14 BE GIVEN IN NORMAL CIRCUMSTANCES. HOWEVER, IN CASE BEFORE US, ASSESSEE WAS PREVENTED BY REASONABLE CAUSE TO COMPLETE CONSTRUCTIO N IN TIME DUE TO INTERVENTION OF CID ACTION ON ACCOUNT OF VIOLATION OF PROVISIONS OF URBAN LAND CEILING ACT APPLICABLE TO LAND IN QUESTION. ASSESSEE WAS INCAPACITATED TO COMPLETE THE SAME IN TIME DUE TO REASONS BEYOND HIS CONTROL. ASSESSEE SHOULD NOT SUFFE R 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 FOR PRO MOTING ECONOMIC GROWTH HAS TO BE INTERPRETED LIBERALLY. AT THE SAME TIME, RESTRICTION THEREON TOO/ HAS TO BE CONSTRUED STRICTLY SO AS TO ADVANCE THE OBJECT OF PROVISION AND NOT TO FRUSTRATE THE SAME. THE PROVISIONS OF TAXING STATUTE SHOULD BE CONSTRUED HAR MONIOUSLY WITH THE OBJECT OF STATUTE TO EFFECTUATE THE LEGISLATIVE INTENTION. IN VIEW OF ABOVE FACTS AND CIRCUMSTANCES, 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 ASS ESSING OFFICER IS DIRECTED ACCORDINGLY.' 8.2 IN VIEW OF ABOVE, IT IS CLEAR THAT ASSESSEE RECEIVED APPROVAL FOR C BUILDING FROM PMC VIDE CERTIFICATE DATED 03.02.2005 BUT WORK ON C BUILDING COULD NOT START SINCE ADDITIONAL FSI IN LIEU OF ROAD WIDENING WAS NOT RECEIVED FROM PMC. THE ASSESSEE COULD NOT PLAN THE WORK FOR C BUILDING SINCE ENGINEERS AND ARCHITECTS COULD NOT DESIGN THE STRUCTURE OF BUILDING IN THE ABSENCE OF FSI. THE DETAILS OF FOLLOW UP DONE BY ASSESSEE WITH PMC HAVE BEEN DULY APPRECIATED BY CIT(A). THE LEGISLATIVE INTENT READ THAT THE CLEAR PROVISIONS OF THE REQUISITE SECTION, DO NOT PERMIT ANY PROPORTIONATE DEDUCTION U/S. 80IB(10) OF ACT. HOWEVER, IN VIEW OF THE DECISION IN RAMSUKH PROPERTIES (SUPRA) AS DISCUSSED ABOVE, THE CIT(A) RIGHTLY ALLOWED THE PROPORTIONATE DEDUCTION IN RESPECT OF PROJECT COMPLETED DURING THE IMPUGNED ASSESSMENT YEAR. THE PROVISIONS OF TAXING STATUTE SHOULD BE CONSTRUED HARMONIOUSLY WITH YEAR. THE PROVISIONS OF TAXING STATUTE SHOULD BE CONSTRUED HARMONIOUSLY WITH THE OBJECT OF STATUTE TO EFFECTUATE THE LEGISLATIVE INTENTION. UNDER THE CIRCUM STANCES, PROPORTIONATE DEDUCTION U/S.80IB(10) OF THE ACT IS JUSTIFIED. ACCORDINGLY, THE ORDER OF CIT(A) ON THIS ISSUE NEEDS NO INTERFERENCE FROM OUR SIDE. WE UPHOLD THE SAME. 1 7 . IN VIEW OF CATEGORICAL FINDING OF THE TRIBUNAL THAT WHERE THE PROJECT IN RESPECT OF BUILDINGS A AND B HAS BEEN COMPLETED BY 31.03.2009 AND WHERE NON - COMPLETION OF BUILDING C' WAS BEYOND THE CONTROL OF ASSESSEE, SINCE IT HAD NOT RECEIVED FSI WITHIN STIPULATED PERIOD, WE FIND NO MERIT IN THE ORDERS OF AUTHORITIES BELOW IN DE NYING DEDUCTION UNDER SECTION 80IB(10) OF THE ACT TO THE ASSESSEE FOR PRORATA UNITS COMPLETED BY THE ASSESSEE BEFORE STIPULATED DATE. THE ISSUE IN THIS REGARD IS SETTLED BY VARIOUS DECISIONS OF THE HIGH COURTS INCLUDING THE DECISION OF HONBLE BOMBAY HIGH COURT IN CIT VS. VANDANA PROPERTIES REPORTED IN 353 ITR 36 (BOM) , WHEREIN IT HAS BEEN HELD THAT THE ITA NO. 807 /PN/20 1 4 SH RI SATYANARAYAN RAMSWAROOP AGARWAL 15 DEVELOPER IS ENTITLED TO PRORATA DEDUCTION UNDER SECTION 80IB(10) OF THE ACT ON THE COMPLETED UNITS. 1 8 . ANOTHER ASPECT RAISED IN THE PRESENT APPEAL IS AN ISSUE NOT CONSIDERED BY THE ASSESSING OFFICER OR THE CIT(A) I.E. WHETHER THE ASSESSEE IS ENTITLED TO THE CLAIM OF DEDUCTION UNDER SECTION 80IB(10) OF THE ACT SINCE NO COMPLETION CERTIFICATE HAS BEEN RECEIVED BY THE ASSESSEE TILL THE STIPULATED DATE I.E. 3 1.03.2008 . FIRST OF ALL, IN THE ORDER OF ASSESSING OFFICER, THERE IS MENTION THAT THE ASSESSEE HAS RECEIVED THE COMPLETION CERTIFICATE BEFORE THE AFORESAID DATE. HOWEVER, THIS ASPECT NEEDS VERIFICATION. ON THE OTHER HAND, WE FIND MERIT IN THE PLEA OF TH E ASSESSEE THAT WHERE THE HOUSING PROJECT HAS BEEN CONSTRUCTED AND THE ASSESSEE HAS APPLIED FOR THE COMPLETION CERTIFICATE, IT IS DEEMED THAT THE SAID PROJECT HAS BEEN COMPLETED BEFORE THE APPOINTED DATE. IN THIS REGARD, WE FIND SUPPORT FROM THE RATIO LAI D DOWN BY PUNE BENCH OF TRIBUNAL IN M/S. GERA DEVELOPMENTS PVT. LTD. VS. JCIT IN ITA NO.598/PN/2013 AND DCIT VS. M/S. GERA DEVELOPMENTS PVT. LTD. IN ITA NO.768/PN/2013 , RELATING TO ASSESSMENT YEAR 2009 - 10 , ORDER DATED 31.12.2014 . THE TRIBUNAL IN TURN, REL IED ON THE RATIO LAID DOWN BY THE HONBLE GUJARAT HIGH COURT IN CIT VS. TARNETAR CORPORATION, (2014) 362 ITR 174 (GUJ). THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE ON THE OTHER HAND HAS PLACED RELIANCE ON THE RATIO LAID DOWN BY THE HONBLE HIG H COURT OF MADHYA PRADESH IN CIT VS. GLOBAL REALITY (SUPRA). HOWEVER, SINCE THE ISSUE IS COVERED BY THE ORDER OF HONBLE GUJARAT HIGH COURT (SUPRA) IN FAVOUR OF THE ASSESSEE, WHICH HAS BEEN APPLIED BY PUNE BENCH OF TRIBUNAL IN M/S. GERA DEVELOPMENTS PVT. LTD. VS. JCIT (SUPRA), WE FIND NO MERIT IN THE PLEA OF THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE AND THE SAME IS DISMISSED. THE RELEVANT FINDINGS OF THE PUNE BENCH OF TRIBUNAL IN M/S. GERA DEVEL OPMENTS PVT. LTD. VS. JCIT (SUPRA) ARE AS UNDER : - ITA NO. 807 /PN/20 1 4 SH RI SATYANARAYAN RAMSWAROOP AGARWAL 16 18. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIONS. QUITE CLEARLY, THE ENTIRE CASE OF THE ASSESSING OFFICER RESTS ON EXPLANATION (II) TO SECTION 80IB(10)(A) OF THE ACT WHICH PRESCRIBES THAT THE DATE OF COMPLETION OF CONSTRUCTION OF THE HOUSING PRO JECT SHALL BE TAKEN TO BE THE DATE ON WHICH THE COMPLETION CERTIFICATE IN RESPECT OF SUCH HOUSING PROJECT IS ISSUED BY THE LOCAL AUTHORITY. IN THE PRESENT CASE, THE LOCAL AUTHORITY, I.E. PUNE MUNICIPAL CORPORATION HAS NOT ISSUED THE REQUISITE COMPLETION C ERTIFICATE (TO BE UNDERSTOOD AS OCCUPANCY CERTIFICATE IN THE CONTEXT OF THE PMC) BEFORE THE STIPULATED DATE. HOWEVER, THE ASSESSEE HAS COUNTERED THE AFORESAID OBJECTION BY POINTING OUT THAT IN - FACT IT HAS COMPLETED THE CONSTRUCTION OF THE PROJECT ON 04 - 12 - 2007 I.E. MUCH BEFORE THE STIPULATED DATE OF COMPLETION CONTAINED IN SECTION 80IB(10)(A) OF THE ACT, IT HAD APPLIED TO THE PMC FOR OBTAINING OF THE OCCUPANCY CERTIFICATE BASED ON THE CERTIFICATE OF THE ARCHITECT AND THE OTHER NOCS REQUIRED FOR THE SAID PU RPOSE. THE CIT(A) HAS ALSO CALLED FOR INFORMATION U/S.133(6) OF THE ACT FROM THE PMC AND ITS RESPONSE DID NOT REVEAL ANY OBJECTION ON THE PART OF THE PMC THAT THE CONSTRUCTION WAS NOT COMPLETE WITH RESPECT TO THE SANCTIONED PLANS. THEREFORE, FACTUALLY SP EAKING, THERE IS NO CONTROVERSION TO THE ASSERTIONS OF THE ASSESSEE THAT ITS PROJECT WAS OTHERWISE COMPLETE AS PER THE SANCTIONED PLANS WITHIN THE STIPULATED DATE. IN THIS BACKGROUND, IN OUR VIEW, THE CIT(A) MADE NO MISTAKE IN ALLOWING THE CLAIM OF THE A SSESSEE AND HER APPROACH IS NOT ONLY CONSISTENT WITH THE DECISION OF THE PUNE BENCH OF THE TRIBUNAL IN THE CASE OF SATISH BORA AND ASSOCIATES (SUPRA) BUT IT IS ALSO IN LINE WITH THE JUDGEMENT OF THE HONBLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. TARNETA R CORPORATION, (2014) 362 ITR 174 (GUJ). THE RELEVANT PORTION OF THE JUDGEMENT OF THE HONBLE GUJARAT HIGH COURT IN THE CASE OF TARNETAR CORPORATION (SUPRA) IS REPRODUCED HEREINUNDER : - IN THE PRESENT CASE, THEREFORE, THE FACT THAT THE ASSESSEE HAD COMP LETED THE CONSTRUCTION WELL BEFORE 31 ST MARCH 2008 IS NOT IN DOUBT. IT IS, OF COURSE, TRUE THAT FORMALLY BU PERMISSION WAS NOT GRANTED BY THE MUNICIPAL AUTHORITY BY SUCH DATE. IT IS EQUALLY TRUE THAT EXPLANATION TO MUNICIPAL AUTHORITY BY SUCH DATE. IT IS EQUALLY TRUE THAT EXPLANATION TO CLAUSE (A) TO SECTION 80IB(10) LINKS TH E COMPLETION OF THE CONSTRUCTION TO THE BU PERMISSION BEING GRANTED BY THE LOCAL AUTHORITY. HOWEVER, NOT EVERY CONDITION OF THE STATUTE CAN BE SEEN AS MANDATORY. IF SUBSTANTIAL COMPLIANCE THEREOF IS ESTABLISHED ON RECORD, IN A GIVEN CASE, THE COURT MAY T AKE THE VIEW THAT MINOR DEVIATION THEREOF WOULD NOT VITIATE THE VERY PURPOSE FOR WHICH DEDUCTION WAS BEING MADE AVAILABLE. IN THE PRESENT CASE, THE FACTS ARE PECULIAR. THE ASSESSEE HAD NOT ONLY COMPLETED THE CONSTRUCTION TWO YEARS BEFORE THE FINAL DATE A ND HAD APPLIED FOR BU PERMISSION. SUCH BU PERMISSION WAS NOT REJECTED ON THE GROUND THAT CONSTRUCTION WAS NOT COMPLETED, BUT THE SOME OTHER TECHNICAL GROUND. IN THAT VIEW OF THE MATTER, GRANTING BENEFIT OF DEDUCTION CANNOT BE HELD TO BE ILLEGAL. 19. FO LLOWING THE AFORESAID DISCUSSION, WE THEREFORE FIND NO REASON TO INTERFERE WITH THE ULTIMATE CONCLUSION OF THE CIT(A) IN ALLOWING ASSESSEES CLAIM FOR DEDUCTION U/S.80IB(10) OF THE ACT AMOUNTING TO RS.23,87,480/ - . AS A CONSEQUENCE, THE ORDER OF THE CIT(A) IS HEREBY AFFIRMED AND REVENUE FAILS IN ITS APPEAL. 1 9 . APPLYING THE SAID RATIO, WE HOLD THAT WHERE THE ASSESSEE HAS COMPLETED THE PROJECT AND ALSO APPLIED FOR THE COMPLETION CERTIFICATE WITHIN STIPULATED DATE, ITA NO. 807 /PN/20 1 4 SH RI SATYANARAYAN RAMSWAROOP AGARWAL 17 THEN THE ASSESSEE IS ENTITLED TO THE CLAIM OF DEDUCTION UNDER SECTION 80IB(10) OF THE ACT. 20 . IN VIEW THEREOF, WE REVERSE THE ORDER OF CIT(A) IN DENYING DEDUCTION UNDER SECTION 80IB(10) OF THE ACT TO THE ASSESSEE ON COMPLETED FLATS OF THE P ROJECT. ACCORDINGLY, WE DIRECT THE ASSESSING OFFICER TO ALLOW PROPRATA CLAIM OF DEDUCTION UNDER SECTION 80IB(10) OF THE ACT. 2 1 . IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON THIS 21 ST DAY OF MARCH , 201 6 . SD/ - SD/ - (PRADIP KUMAR KEDIA) (SUSHMA CHOWLA) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / ; / PUNE ; DATED : 21 ST MARCH , 201 6 . GCVSR / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPEL LANT ; 2. / THE RESPONDENT; 3. ( ) / THE CIT (A) - I , PUNE ; 4. / THE CIT - I, PUNE ; 5. , , / DR A , ITAT, PUNE; 6. / GUARD FILE . / BY ORDER , // TRUE COPY // / SR. PRIVATE SECRETARY , / ITAT, PUNE