SHRI ABHAY DARE, Bhopal V. THE ACIT 1, Bhopal

ITA 813/IND/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 98972 (ITAT-INDORE)
• Duration Of Justice: 7 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-08-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 29-07-2015
• Assessment Year: 2010-2011
• Appeal Filed On: 29-12-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: G S GAUTAM
• Assessee Lawyers: M K SHARMA
• Keywords: Competent authority
• Section: 80IB

Judgement Text

ABHAY DARE ITA NO. 813/IND/2014 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 NO. 813/IND/2014 A.Y.2010-11 ABHAY DARE BHOPAL PAN ADQPD 5119C ::: APPELLANT VS ASSTT.COMMR. OF INCOME TAX 1 BHOPAL ::: RESPONDENT APPELLANT BY SHRI M.K. SHARMA RESPONDENT BY SHRI G.S. GAUTAM DATE OF HEARING 29.7.2015 DATE OF PRONOUNCEMENT 1 7 .8.2015 O R D E R PER SHRI B.C. MEENA, AM THIS APPEAL HAS BEEN PREFERRED BY THE ASSESSEE AGAINST THE ORDER OF THE LEARNED CIT(A)-I, BHOPAL, DATE D 30.10.2014. ABHAY DARE ITA NO. 813/IND/2014 2 2. THE SUM AND SUBSTANCE OF THE GROUNDS OF APPEAL IS THAT THE LEARNED CIT(A) HAS ERRED IN CONFIRMING THE OR DER OF THE ASSESSING OFFICER REJECTING THE CLAIM OF THE ASSE SSEE AMOUNTING TO RS.81,89,877/- U/S 80IB(10) OF THE ACT . 3. BRIEFLY, THE FACTS OF THE CASE ARE THAT THE ASSESSEE IS AN INDIVIDUAL ENGAGED IN THE BUSINESS OF CONSTRUCTION. HE HAD FILED HIS RETURN OF INCOME FOR THE ASSESSMENT YEAR 20 10-11 ELECTRONICALLY ON 14.10.2010 DECLARING TOTAL TAXABLE I NCOME AT RS. 1,94,120/- AND AGRICULTURAL INCOME AT RS. 3,00,863/-. THE ASSESSEE DISCLOSED GROSS TOTAL INCOME AT RS. 84,84,00/- AND CLAIMED DEDUCTION U/S 80IB(10) OF THE ACT AMOUNTING TO RS. 81,89,877/- AND DEDUCTION U/S 80 C OF THE ACT AT RS. 1,00,000/-. THE CASE WAS SELECTED F OR SCRUTINY BY ISSUE OF NOTICE U/S 143(2) OF THE ACT. THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE CLAIMED DEDUCTION U/S 80IB(10) OF THE ACT ON THE HOUSING PR OJECT IN THE NAME OF DWARKA GARDEN, MADHUBAN RESIDENCY, SAGAR. ABHAY DARE ITA NO. 813/IND/2014 3 THE PERMISSION OF THE HOUSING PROJECT WAS GRANTED BY SAGAR MUNICIPAL CORPORATION ON 3.4.2007 HAVING AN AREA OF 4.08 ACRES. THE ASSESSING OFFICER, HOWEVER, NOTICED THAT THE ASSESSEE HAD FURNISHED COMPLETION CERTIFICATE FROM THE SAGAR MUNICIPAL CORPORATION ONLY IN RESPECT OF PART OF T HE HOUSING PROJECT. HE FURTHER OBSERVED THAT THE ASSESSE E HAD NOT STARTED CONSTRUCTION ACTIVITY IN RESPECT OF ANOTHE R PART OF THE HOUSING PROJECT. TAKING NOTE OF THIS FACT, THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE DID NOT COMPLETE THE CONSTRUCTION WORK OF THE ENTIRE HOUSIN G PROJECT AS APPROVED BY THE LOCAL AUTHORITY I.E. SAGAR MUNICIPAL CORPORATION BUT COMPLETED CONSTRUCTION OF O NE PART OF THE HOUSING PROJECT. THE LEARNED ASSESSING O FFICER, THEREFORE, HELD THAT SINCE THE ASSESSEE DID NOT FULFI LL THE REQUIREMENTS OF CLAUSE (A) OF SECTION 80IB(10) OF THE ACT, THE ASSESSEE WAS NOT ENTITLED TO DEDUCTION U/S 80IB(1 0) OF THE ACT. ABHAY DARE ITA NO. 813/IND/2014 4 3.1 THE ASSESSING OFFICER ALSO OBSERVED THAT THE ABOV E PROJECT WAS CONSISTING OF INDEPENDENT RESIDENTIAL HOU SES BUT THE ASSESSEE SOLD INDIVIDUAL PLOTS AND ON THOSE PL OTS CONSTRUCTED RESIDENTIAL HOUSES AT AN AGREED PRICE. IN THIS FACTUAL BACKGROUND, THE ASSESSING OFFICER HELD THE ASSE SSEE AS A WORK CONTRACTOR AND NOT AS A DEVELOPER WHICH IS A CONDITION PRECEDENT FOR CLAIMING DEDUCTION U/S 80IB( 10) OF THE ACT. 3.2 ON THE BASIS OF THE ABOVE OBSERVATIONS, THE ASSESSING OFFICER COMPLETED THE ASSESSMENT U/S 143(3 ) OF THE ACT ON THE TOTAL INCOME OF THE ASSESSEE AT RS.83,84,000/- BY DISALLOWING THE CLAIM OF DEDUCTION U/S 80IB(10) OF THE ACT. 4. AGGRIEVED BY THE ABOVE ACTION OF THE ASSESSING OFF ICER, THE ASSESSEE PREFERRED FIRST APPEAL BEFORE THE LEARNED CIT(A). ABHAY DARE ITA NO. 813/IND/2014 5 4.1 THE LEARNED CIT(A) AFTER DISCUSSING THE ISSUE AT L ENGTH IN PARA 6 OF HIS APPELLATE ORDER, HELD THAT THE ASSESSEE DID NOT COMPLETE THE CONSTRUCTION OF THE PROJECT AS APPRO VED BY THE LOCAL AUTHORITY ON OR BEFORE THE STIPULATED DATE AS REQUIRED UNDER CLAUSE (A) OF SECTION 80IB(10) OF THE A CT BY FURTHER OBSERVING THAT THE ASSESSEE HAD ACTED AS A MERE CONTRACTOR AND NOT AS A DEVELOPER AND BUILDER OF THE HOUSING PROJECT AS ENVISAGED U/S 80IB(10) OF THE ACT. HE, THEREFORE, HELD THAT THE ASSESSEE WAS NOT ELIGIBLE FOR CLAIMING DEDUCTION U/S 80IB(10) OF THE ACT ON THE PR OFITS DERIVED FROM A PORTION/PART OF THE HOUSING PROJECT APPROVED BY THE LOCAL AUTHORITY. AS SUCH, THE DISALLO WANCE OF THE CLAIM OF DEDUCTION U/S 80IB(10) OF THE ACT WAS UPHELD BY THE LEARNED CIT(A). 5. AGAINST THE ABOVE ORDER OF THE LEARNED CIT(A), NOW THE ASSESSEE HAS COME UP IN APPEAL BEFORE THE TRIBUNAL. ABHAY DARE ITA NO. 813/IND/2014 6 6. BEFORE US, THE LEARNED COUNSEL FOR THE ASSESSEE D UE TO DISPUTE IN RESPECT OF PHASE-II PORTION OF LAND, THE AS SESSEE FILED A CASE IN THE COURT WHICH WAS PENDING AND AS SUCH THE ASSESSEE COULD NOT COMPLETE PHASE-II PORTION FOR WHICH ALSO THE COMPETENT AUTHORITY HAD GRANTED NECESSARY PERMISSION. IN SUCH A SITUATION, PHASE-I OF THE PROJEC T WAS DULY COMPLETED BY THE ASSESSEE AND ALL THE CONDITIONS INCLUDING AREA OF LAND AS REQUIRED U/S 80IB(10) OF THE ACT WERE FULFILLED BY THE ASSESSEE. THE AUTHORITIES BELOW REJECTED THE CLAIM OF THE ASSESSEE ON THE GROUND THAT COMPLETION SHOULD HAVE BEEN DONE FOR WHOLE OF THE PR OJECT AND AS SUCH DENIED DEDUCTION IN RESPECT OF THE STAND ALONE PROJECT PORTION (PHASE-I) SIMPLY FOR THE REASON THAT COMPLETION CERTIFICATE FOR PHASE I WAS GRANTED BY THE COMPETENT AUTHORITY BUT NOT FOR PHASE-II. THE ASSESSE E HAS COMPLIED WITH ALL THE CONDITIONS OF SECTION 80IB(10) OF THE ACT IN RESPECT OF ONE PART OF THE HOUSING PROJECT, T HEREFORE, ABHAY DARE ITA NO. 813/IND/2014 7 IT SHALL BE TREATED AS STAND ALONE PROJECT HOUSING PROJECT ON WHICH DEDUCTION U/S 80IB(10) OF THE ACT HAS TO BE STATUTORILY ALLOWED. FOR THIS PROPOSITION, THE LEARNE D COUNSEL FOR THE ASSESSEE RELIED UPON THE DECISION OF ITAT PUNE BENCH OF THE TRIBUNAL IN THE CASE OF SIDHIVINAYA K KOHINOOR VENTURE VS. ACIT (2015) 54 TAXMANN.COM 32(ITAT PUNE). HE, THEREFORE, FURTHER SUBMITTED TH AT THIS ACTION OF THE LOWER AUTHORITIES WAS AGAINST THE VERY SPI RIT OF SECTION 80IB(10) OF THE ACT. 6.1 SO FAR AS THE ISSUE AS TO WHETHER THE ASSESSEE WAS A BUILDER/CONTRACTOR WAS CONCERNED, THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSING OFFICER HAS NOT BROUGHT ANY MATERIAL ON RECORD TO SHOW THAT THE ASSESSEE WAS A CONTRACTOR AND NOT A BUILDER . 7. ON THE OTHER HAND, THE LEARNED DR SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. ABHAY DARE ITA NO. 813/IND/2014 8 8. WE HAVE HEARD BOTH THE SIDES. SO FAR AS THE FINDING OF THE ASSESSING OFFICER THAT THE ASSESSEE WAS CONTRACTOR AND NOT A BUILDER, WE FIND THAT THE ASSESSING OFFICER HAS NOT GIVEN ANY SPECIFIC FINDING IN SUPPORT OF HIS CONCLUS ION. THE ASSESSEE GOT THE APPROVAL IN HIS OWN NAME FROM THE COMPETENT AUTHORITY I.E. MUNICIPAL CORPORATION, SAGAR. T HE ASSESSEE HAS DEVELOPED THE ROADS, ELECTRICITY, SEWERAG E AND OTHER FACILITIES. THE ASSESSEE HAS GIVEN POSSESSION TO THE BUYERS ONLY ON COMPLETION OF THE UNIT. THE ASSESSEE HAS ENTERED INTO AGREEMENT FOR SALE OF THE HOUSES UNDER T HE PROJECT, THE LAND WAS TRANSFERRED IN THE NAME OF THE BU YERS AND POSSESSION WAS HANDED OVER TO THE BUYERS AFTER COMPLETION OF SUCH HOUSES. ALL THESE FACTS ARE ENOUGH TO SHOW THAT THE ASSESSEE WAS A BUILDER AND NOT A CONTRACTOR. SO FAR AS THE ISSUE OF NON-COMPLETION OF THE ENTIRE PROJECT IS CONCERNED, WE FIND THAT SINCE A PART OF THE PROJECT UNDER LITIGATION, THE ASSESSEE WAS NOT IN A PO SITION ABHAY DARE ITA NO. 813/IND/2014 9 TO START CONSTRUCTION ON THE LAND PURCHASED BY IT. ON ANOTHER PART OF THE LAND WHICH WAS NOT UNDER LITIGATION, THE ASSESSEE CONSTRUCTED THE RESIDENTIAL HOUSES AND HANDED OVER THE SAME TO THE BUYERS IN TIME. THE ASSESSEE HAS CLAIMED DEDUCTION U/S 80IB(10) ONLY IN RESPECT OF PAR T I OF THE PROJECT WHICH WAS COMPLETE. SO FAR AS PART-II IS CONCERNED, SINCE THE LAND WAS IN DISPUTE AND THE MATTE R WAS BEFORE THE COURT, THE ASSESSEE WAS NOT IN A POSITIO N TO COMPLETE THE PROJECT THOUGH THE PERMISSION FOR THE SAME WAS OBTAINED FROM THE COMPETENT AUTHORITY. ITAT, PUNE BENCH IN THE CASE OF SIDDHIVINAYAK KOHINOOR VENTURE V S. ADDL. CIT; 54 TAXMANN.COM 32 (PUNE TRI) HELD AS UND ER :- - IN ORDER TO UNDERSTAND THE MEANING OF THE EXPRESSION HOUSING PROJECT FOR THE PURPOSE OF SECTION 80-IB(10) OF THE ACT, IN THE ABSENCE OF ANY DEFINITION SECTION 80-IB(10) OF THE ACT OR EVEN IN THE LOCAL DEVELOPMENT CONTROL RULES FOR ABHAY DARE ITA NO. 813/IND/2014 10 PCMC, IT HAS TO BE CONSTRUED AS COMMONLY UNDERSTOOD. THE PLEA OF THE REVENUE THAT EXPRESSION HOUSING PROJECT SHOULD BE UNDERSTOOD TO MEAN THE PROJECT AS APPROVED BY THE LOCAL AUTHORITY IS NOT JUSTIFIED BECAUSE EVIDENTLY THE DEVELOPMENT CONTROL RULES OF THE LOCAL AUTHORITY I.E. PCMC DOES NOT DEFINE A HOUSING PROJECT . - A BUILDING OR A GROUP OF BUILDINGS COMPRISED IN A LARGER PROJECT APPROVED BY A LOCAL AUTHORITY CAN BE CONSTRUED AS A HOUSING PROJECT FOR THE PURPOSE OF CONSIDERING A CLAIM OF DEDUCTION U/S. 80-IB(10) OF THE ACT. CONSIDERED IN THIS BACKGROUND, IN THE INSTANT CASE, THE PLEA OF THE ASSESSEE THAT SWRH PROJECT IS AN INDEPENDENT PROJECT FOR THE PURPOSE OF CONSIDERING A CLAIM OF DEDUCTION U/S. 80-IB(10) OF THE ACT CANNOT BE ABHAY DARE ITA NO. 813/IND/2014 11 SHUT-OUT MERELY BECAUSE PCMC APPROVED IT ALONGWITH THE S3 PROJECT. - THEREFORE, WHILE EVALUATING THE COMPLIANCE WITH THE CONDITION OF COMPLETION OF CONSTRUCTION OF THE PROJECT CONTAINED IN SECTION 80-IB(10)(A)(I) OF THE ACT, ASSESSEES PLEA THAT SWRH PROJECT BE CONSTRUED AS A HOUSING PROJECT, ESPECIALLY WHEN THE CLAIM FOR DEDUCTION U/S. 80-IB(10) OF THE ACT IS CONFINED TO THE PROFITS OF SWRH PROJECT IS UPHELD (PARA 30) - APART FROM THE AFORESAID, FACTUALLY SPEAKING ALSO, IT EMERGES THAT SWRH PROJECT HAS BEEN DEVELOPED AND EXECUTED BY THE ASSESSEE INDEPENDENT OF THE S3 PROJECT. FIRSTLY, BY ITS VERY NATURE THE TWO PROJECTS ARE ITA NOS. 1112 & 1527/PN/2011 A.Y. 2006-07 & 2007-08 22 DIFFERENT INASMUCH AS SWRH PROJECT CONSISTS OF ABHAY DARE ITA NO. 813/IND/2014 12 ROW HOUSES ON A CONTIGUOUS PLOT SIZE OF MORE THAN ONE ACRE; WHEREAS, THE S3 PROJECT CONSISTS OF ONLY MULTI-STOREYED FLATS. SECONDLY, IT IS ALSO NOTABLE THAT ASSESSEE MARKETED AND ADVERTISED THE TWO PROJECTS SEPARATELY. AT PAGES 255 TO 260 OF THE PAPER BOOK IS PLACED THE BROCHURE OF SWRH PROJECT IN WHICH THERE IS NO REFERENCE TO THE S3 PROJECT CONSISTING OF FLATS. SIMILARLY, THE BROCHURE IN RESPECT OF S3 PROJECT PLACED IN THE PAPER BOOK AT PAGES 471 TO 475 ALSO DOES NOT CONTAIN ANY REFERENCE TO THE SWRH PROJECT CONSISTING OF ROW HOUSES. ON PAGE 263 OF THE PAPER BOOK IS A COPY OF A NEWSPAPER ADVERTISEMENT RELEASED BY THE ASSESSEE REGARDING THE SWRH PROJECT OF ROW HOUSES, WHICH DOES NOT CONTAIN ANY REFERENCE TO S3 PROJECT COMPRISING OF FLATS. THIRDLY, EVEN IN ABHAY DARE ITA NO. 813/IND/2014 13 THE AUDIT REPORT FILED IN FORM NO. 10CCB CERTIFYING THE CLAIM OF DEDUCTION U/S. 80-IB(10) OF THE ACT, THE DEDUCTION HAS BEEN COMPUTED BY CONSIDERING SWRH PROJECT AS A SEPARATE PROJECT. - IN THIS REPORT, SIZE OF THE PLOT OF LAND IS STATE D TO BE 55950 SQ.MTRS., WHICH IS THE PLOT-AREA ON WHICH THE SWRH PROJECT CONSISTING OF 295 ROW HOUSES IS CONSTRUCTED. CONSIDERING ALL THE AFORESAID FACTORS, WE FIND AMPLE FORCE IN THE PLEA OF THE ASSESSEE THAT SWRH PROJECT WAS NOT ONLY PERCEIVED BUT ALSO DEVELOPED AND EXECUTED AS A SEPARATE PROJECT INDEPENDENT OF THE S3 PROJECT, AND THUS ASSESSEE WAS JUSTIFIED IN CONSIDERING SWRH PROJECT AS HOUSING PROJECT FOR THE PURPOSES OF SECTION 80- IB(10) OF THE ACT. ABHAY DARE ITA NO. 813/IND/2014 14 - THE CASE SET UP BY THE REVENUE IS THAT TWO PROJECTS HAVE BEEN SANCTIONED BY A COMMON APPROVAL AND THUS THE PCMC HAS VIEWED THE TWO PROJECTS AS A SINGLE COMPOSITE PROJECT. IT IS CONTENDED BY THE REVENUE THAT THE EXPRESSION HOUSING PROJECT, THOUGH NOT DEFINED IN SECTION 80IB(10) OF THE ACT, SHOULD BE TAKEN TO BE THE PROJECT PERSE, AS APPROVED BY A LOCAL AUTHORITY FOR THE PURPOSES OF SECTION 80IB(10) OF THE ACT. NO DOUBT, FOR A HOUSING PROJECT TO BE ELIGIBLE FO R DEDUCTION U/S. 80IB(10) OF ITA NOS. 1112 & 1527/PN/2011 A.Y. 2006-07 & 2007-08 23 THE ACT, IT IS REQUIRED TO BE APPROVED BY A LOCAL AUTHORITY, SO HOWEVER, THE PHRASEOLOGY OF SECTION 80IB(10) OF THE ACT DOES NOT REFLECT A LEGISLATIVE INTENT THAT THE PROJECT SHOULD BE AS APPROVED BY A LOCAL AUTHORITY. ABHAY DARE ITA NO. 813/IND/2014 15 - THE REQUIREMENT OF SECTION 80IB(10) OF THE ACT TO THE EFFECT THAT PROJECT SHOULD BE APPROVED BY A LOCAL AUTHORITY IS FULFILLED NO SOONER WHEN THE HOUSING PROJECT CONSIDERED BY AN ASSESSEE IS APPROVED BY A LOCAL AUTHORITY. MOREOVER, THE EXPRESSION HOUSING PROJECT IS NOT DEFINED IN THE DEVELOPMENT CONTROL RULES FOR PCMC I.E. THE LOCAL AUTHORITY IN THE CASE BEFORE US AND THUS, THE SAID ENACTMENT CANNOT BE RESORTED TO FOR THE PURPOSE OF UNDERSTANDING THE MEANING OF EXPRESSION HOUSING PROJECT CONTAINED IN SECTION 80IB(10) OF THE ACT. THEREFORE, SO LONG AS THE CLAIM OF DEDUCTION IS IN RELATION TO A HOUSING PROJECT, WHICH HAS BEEN APPROVED BY THE LOCAL AUTHORITY, IT WOULD SATISFY THE REQUIREMENT OF SECTION 80IB(10) OF THE ACT. PERTINENTLY, IF THE PROPOSITION OF THE REVENUE IS TO BE UPHELD, THE ABHAY DARE ITA NO. 813/IND/2014 16 SAME WOULD BE QUITE CONTRARY TO THE MANNER IN WHICH THE EXPRESSION HOUSING PROJECT CONTAINED IN SECTION 80IB(10) OF THE ACT HAS BEEN UNDERSTOOD BY THE HONBLE BOMBAY HIGH COURT IN THE CASE OF VANDANA PROPERTIES (SUPRA) AND ALSO BY THE HONBLE MADRAS HIGH COURT IN VISWAS PROMOTERS PVT. LTD. (SUPRA) AND ARUN EXCELLO FOUNDATIONS (P) LTD. (SUPRA). IT MAY ALSO BE PERTINENT TO OBSERVE THAT THE HONBLE BOMBAY HIGH COURT IN M/S. VANDANA PROPERTIES (SUPRA) NOT ONLY NOTED THAT THE EXPRESSION HOUSING PROJECT IS NOT DEFINED U/S. 80IB(10) OF THE ACT BUT ALSO NOTED THAT THE SAME WAS NOT DEFINED EVEN UNDER THE RELEVANT LOCAL REGULATIONS BEFORE IT, VIZ. THE MUMBAI MUNICIPAL CORPORATION ACT, 1988 AND THE DEVELOPMENT CONTROL REGULATIONS FOR GREATER MUMBAI, 1991. THUS, THE HONBLE ABHAY DARE ITA NO. 813/IND/2014 17 HIGH COURT PROCEEDED TO OBSERVE THAT THE EXPRESSION HOUSING PROJECT IN SECTION 80IB(10) WOULD HAVE TO BE CONSTRUED AS COMMONLY UNDERSTOOD. EVEN IN THE CASE BEFORE US, THERE IS NO DISPUTE THAT THE EXPRESSION HOUSING PROJECT IS NOT DEFINED IN THE DEVELOPMENT CONTROL RULES FOR PCMC AND THEREFORE, THE CONCEPT OF HOUSING PROJECT AS SOUGHT TO BE UNDERSTOOD BY THE ASSESSING ITA NOS. 1112 & 1527/PN/2011 A.Y. 2006-07 & 2007-08 24 OFFICER BASED ON THE EXPLANATION OF CHIEF ENGINEER, PCMC IS NOT RELEVANT FOR THE PURPOSES OF SECTION 80IB(10) OF THE ACT. - THUS, THE ARGUMENT OF THE REVENUE TO THE EFFECT THAT SINCE SWRH AND S3 PROJECTS HAVE BEEN APPROVED BY PCMC UNDER A COMMON APPROVAL, THE TWO PROJECTS SHOULD BE COMBINED AND ABHAY DARE ITA NO. 813/IND/2014 18 CONSIDERED AS A SINGLE PROJECT FOR THE PURPOSE OF SECTION U/S. 80IB(10) OF THE ACT, IN OUR OPINION IS MISPLACED. (PARA 32) - IN CONCLUSION, WE HOLD THAT SWRH PROJECT IS TO BE CONSIDERED AS AN INDEPENDENT HOUSING PROJECT FOR EVALUATING ASSESSEES CLAIM FOR DEDUCTION U/S. 80-IB(10) OF THE ACT. THE ONLY ASPECT NOW TO BE EXAMINED IS AS TO WHETHER ASSESSEE HAS COMPLETED CONSTRUCTION OF THE SAID PROJECT BEFORE 31.03.2008, AS REQUIRED BY SECTION 80-IB(10)(A)(I) OF THE ACT. (PARA 33) - ON THE ABOVE ASPECT, THE CLAIM OF THE REVENUE IS THAT PRIOR TO 31.03.2008, ASSESSEE HAS OBTAINED COMPLETION CERTIFICATE ONLY IN RESPECT OF 293 OUT OF 295 TOTAL ROW HOUSES AND THUS, IT HAS TO BE INFERRED THAT ASSESSEE HAS NOT FULFILLED THE CONDITION PRESCRIBED IN SECTION 80-IB(10)(A)(I) OF ABHAY DARE ITA NO. 813/IND/2014 19 THE ACT. AS NOTED EARLIER OUT OF 295 ROW HOUSES THE COMPLETION CERTIFICATE IN RESPECT OF 293 ROW HOUSES WAS OBTAINED PRIOR TO 31.03.2008 BUT EVEN WITH REGARD TO THE REMAINING TWO ROW HOUSES THE APPLICATION FOR OBTAINING COMPLETION CERTIFICATE WAS MADE TO THE LOCAL AUTHORITY ON 26.03.2008. THE ASSESSEE CLAIMED BEFORE THE LOWER AUTHORITIES THAT CONSTRUCTION OF THE REMAINING TWO ROW HOUSES WAS ALSO COMPLETE BEFORE 31.03.2008, A PLEA WHICH HAS NOT BEEN ACCEPTED. BEFORE US, LEARNED COUNSEL FOR THE ASSESSEE POINTED OUT THAT SUBSEQUENT TO THE IMPUGNED ORDER OF THE CIT(A), ON 28.06.2012 IN PURSUANCE TO THE APPLICATION OF THE ASSESSEE SUBMITTED ON 26.03.2008, THE COMPLETION CERTIFICATE HAS BEEN ISSUED BY PCMC FOR THE REMAINING TWO ROW HOUSES ALSO, A COPY OF THE ABHAY DARE ITA NO. 813/IND/2014 20 SAID CERTIFICATE IS PLACED AT PAGE 293 OF THE PAPER BOOK. THE AFORESAID CERTIFICATE PROVIDES THAT IT IS BEING ISSUED W.E.F. 26.03.2008. ON THIS BASIS, IT HAS BEEN VEHEMENTLY ARGUED THAT THE CONSTRUCTION WAS COMPLETE EVEN ITA NOS. 1112 & 1527/PN/2011 A.Y. 2006-07 & 2007-08 25 AT THE TIME OF SUBMISSION OF APPLICATION TO PCMC ON 26.03.2008, AND THE DELAY IN ISSUANCE OF COMPLETION CERTIFICATE BY PCMC COULD NOT BE ATTRIBUTED TO THE ASSESSEE INASMUCH AS NO OBJECTIONS WERE CONFRONTED TO THE ASSESSEE AT ANY STAGE. - BE THAT AS IT MAY, WE FIND THAT THE SAID CERTIFICATE DATED 28.06.2012 WAS NOT BEFORE THE LOWER AUTHORITIES AND IS AN ADDITIONAL PIECE OF EVIDENCE NOW SOUGHT TO BE RELIED BY THE ASSESSEE. WE DEEM IT FIT AND PROPER TO ADMIT ABHAY DARE ITA NO. 813/IND/2014 21 SUCH EVIDENCE BECAUSE THE CERTIFICATE IS ISSUED BY A LOCAL AUTHORITY DULY CONSTITUTED IN LAW AND IT IS RELEVANT TO DECIDE THE ISSUE ON HAND. MOREOVER, IT DOES NOT ENABLE THE ASSESSEE TO MAKE OUT A NEW CASE INASMUCH AS THE SAME HAS BEEN OBTAINED FROM PCMC IN RESPONSE TO AN APPLICATION MADE OF AN EARLIER DATE, WHICH IS IN THE KNOWLEDGE OF THE AUTHORITIES BELOW, AND IS MERELY IN SUPPORT OF ASSESSEES ASSERTIONS MADE CONSISTENTLY BEFORE THE LOWER AUTHORITIES THAT THE CONSTRUCTION OF THE TWO ROW HOUSES WAS COMPLETE IN ALL RESPECTS BEFORE 31.03.2008 AND THAT IT HAD APPLIED FOR OBTAINING THE COMPLETION CERTIFICATE IN TIME I.E. ON 26.03.2008. - THUS, WE FIND THAT THE DELAY IN ISSUING COMPLETION CERTIFICATE CANNOT BE ATTRIBUTED TO ASSESSEE SO AS TO DENY THE DEDUCTION CLAIMED ABHAY DARE ITA NO. 813/IND/2014 22 U/S. 80IB(10) OF THE ACT ON THE BASIS THAT THE CONSTRUCTION WAS NOT COMPLETE BEFORE 31.03.2008, ESPECIALLY WHEN THERE IS NO OBJECTION RAISED BY PCMC REGARDING NON- COMPLETION OF CONSTRUCTION (PARA 34) - THE EXPLANATION (II) TO SECTION 80-IB(10)(A) OF T HE ACT REQUIRES THAT THE DATE OF COMPLETION OF CONSTRUCTION OF A HOUSING PROJECT SHALL BE TAKEN TO THE DATE ON WHICH THE COMPLETION CERTIFICATION IN RESPECT OF SUCH HOUSING PROJECT IS ISSUED BY THE LOCAL AUTHORITY. ON THE BASIS OF THE AFORESAID, THE CLAIM OF THE REVENUE IS THAT AS ON 31.03.2008, THE PCMC HAD NOT ISSUED THE COMPLETION CERTIFICATE FOR THE TWO ROW HOUSES AND THEREFORE THE ASSESSEE DID NOT COMPLY WITH THE STIPULATED PERIOD OF COMPLETION OF CONSTRUCTION. ABHAY DARE ITA NO. 813/IND/2014 23 - THE MOOT QUESTION IS AS TO WHETHER IN THE FACE OF THE AFORESAID FACT SITUATION NOTED BY US, CAN IT BE SAID THAT ASSESSEES PROJECT DID NOT COMPLY WITH THE CONDITION PRESCRIBED IN SECTION 80- IB(10)(A)(I) READ WITH EXPLANATION (II) THEREOF SO AS TO HOLD THAT THE CONSTRUCTION WAS NOT COMPLETE BEFORE 31.03.2008. IN A SOMEWHAT SIMILAR SITUATION, THE PUNE BENCH OF THE TRIBUNAL IN THE CASE OF HINDUSTAN SAMUHA AWAS LTD. VS. ITO IN ITA NOS.945 TO 950/PN/2010 DATED 31.08.2011, ALLOWED THE CLAIM OF THE ASSESSEE CONSIDERING THAT (I) THE CERTIFICATE OF THE ARCHITE CT CONFIRMING THAT THE CONSTRUCTION WAS COMPLETE; AND, (II) THE APPLICATION FOR OBTAINING COMPLETION CERTIFICATE WAS MOVED BEFORE THE LOCAL AUTHORITY BEFORE THE SPECIFIED DATE. THE TRIBUNAL NOTED THAT DELAY IN ISSUING COMPLETION CERTIFICATE WAS ABHAY DARE ITA NO. 813/IND/2014 24 NOT ATTRIBUTABLE TO THE ASSESSEE OR TO ANY NON- COMPLETION OF CONSTRUCTION. - THE DECISION OF THE PUNE BENCH OF THE TRIBUNAL IN THE CASE OF HINDUSTAN SAMUHA AWAS LTD. (SUPRA) IS CLEARLY APPLICABLE IN THE PRESENT CASE INASMUCH AS THE ASSESSEE APPLIED FOR OBTAINING COMPLETION CERTIFICATE FOR THE TWO ROW HOUSES BEFORE 31.03.2008 I.E. ON 26.03.2008 AND THE SAID APPLICATION WAS BASED ON A CERTIFICATE ISSUED BY THE ARCHITECT. FACTUALLY ALSO, THE FACTS ON RECORD, SUPPORTED BY THE PROPERTY TAX BILLS, ARCHITECTS CERTIFICATE, OCCUPATION BY USERS, ETC. SUPPORT THE POSITION THAT PRIOR TO 31.03.2008 CONSTRUCTION OF THE TWO ROW HOUSES WAS COMPLETE - PERTINENTLY, THE COMPLETION CERTIFICATE OF PCMC REGARDING THE TWO ROW HOUSES IN QUESTION WHICH ABHAY DARE ITA NO. 813/IND/2014 25 IS DATED 28.06.2012, CLEARLY STATES THAT IT IS ISSUED WITH EFFECT FROM ITA NOS. 1112 & 1527/PN/2011 A.Y. 2006-07 & 2007-08 27 26.03.2008. THEREFORE, EVEN THE PCMC CERTIFICATION SUPPORTS THE POSITION THAT THE CONSTRUCTION WAS COMPLETE AS ON 26.03.2008 WHICH, IN OUR VIEW, IS IN SUBSTANTIVE COMPLIANCE WITH THE REQUIREMENTS OF SECTION 80-IB(10)(A)(I) READ WITH EXPLANATION (II) THEREOF. (PARA 36) - NOW, IN SO FAR AS THE BALANCE OF 293 ROW HOUSES IS CONCERNED THERE IS NO DISPUTE THAT THE COMPLETION CERTIFICATE HAS BEEN ISSUED BY PCMC PRIOR TO 31.03.2008. THEREFORE, CONSIDERED IN RESPECT OF ENTIRE 295 UNITS COMPRISED IN SWRH PROJECT, THE DATE OF COMPLETION OF CONSTRUCTION IS TO BE UNDERSTOOD AS ON OR BEFORE 31.03.2008 THEREBY COMPLYING WITH THE REQUIREMENT OF ABHAY DARE ITA NO. 813/IND/2014 26 SECTION 80-IB(10)(A)(I) READ WITH EXPLANATION (II) THEREOF. (PARA 37) - IN VIEW OF THE AFORESAID DISCUSSION, WE THEREFORE HOLD THAT ASSESSEE IS ELIGIBLE FOR DEDUCTION U/S. 80-IB(10) OF THE ACT OF RS.12,76,88,137/- WITH RESPECT TO THE PROFITS DERIVED FROM SWRH PROJECT (PARA 38) IN THE CASE OF VISWAS PROMOTERS (P) LTD. VS. ACIT; (2 013) 29 TAXMANN.COM 19 (MADRAS) IT WAS HELD AS UNDER:- IT IS HELD THAT THE TRIBUNAL IS NOT CORRECT IN ITS VIEW, THAT BY REASON OF THE UNITS BEING IN EXCESS OF 1500 SQ. FT., THE ENTIRE CLAIM OF THE ASSESSEE IN RESPECT OF THE TWO PROJECTS WOULD STAND REJECTED UNDER SECTION 80IB(10 ). THUS, GOING BY THE DEFINITION OF HOUSING PROJECT UNDER EXPLANATION TO SECTION 80HHBA AS TO THE CONTRUCTION OF ANY BUILDING AND THE WORDINGS IN SECTION 80IB(10) THE ABHAY DARE ITA NO. 813/IND/2014 27 QUESTION OF REJECTION IN ENTIRETY OF THE PROJECT ON ACCOUNT OF ANY ONE OF THE BLOCKS NOT COMPLYING WITH THE CONDITIONS, DOES NOT ARISE. EVEN IN THE CASE OF EACH ONE OF THE BLOCKS, WHEREVE R THERE ARE FLATS WHICH SATISFIED THE CONDITIONS PARTICULARLY OF THE NATURE STATED UNDER SECTION 80IB(10) THE ASSESSEE WOULD BE ELIGIBLE FOR GRANT OF RELIEF UNDER SECTION 80IB(10) ON A PROPORTIONATE BA SIS. THUS, IT IS HELD THAT THE ASSESSEE IS ENTITLED TO S UCCEED BOTH ON THE PRINCIPLE OF PROPORTIONALITY AS WELL AS BY REASON OF THE CONSTRUCTION ON THE MEANING OF THE EXPRESSION HOUSING PROJECT AS REFERRING TO CONSTR UCTION OF ANY BUILDING AND THE WORDINGS IN SECTION 80IB(10 ). IN THE CIRCUMSTANCES IT IS HELD THAT THE MERE FACT THA T ONE OF THE BLOCKS HAVE UNITS EXCEEDING BUILT UP AREA OF 1500 SQ. FT PER SE WOULD NOT RESULT IN NULLIFYING THE CL AIM OF THE ASSESSEE FOR THE ENTIRE PROJECTS. CONSEQUENTLY, IN ABHAY DARE ITA NO. 813/IND/2014 28 RESPECT OF EACH OF THE BLOCKS, THE ASSESSEE IS ENTI TLED TO HAVE THE BENEFIT OF DEDUCTION IN RESPECT OF RESIDEN TIAL UNITS SATISFYING THE REQUIREMENT UNDER SECTION 80IB(10. (PARA 14) IN THE LIGHT OF THE ABOVE REASONING, THE SUBSTANTIA L QUESTIONS OF LAW IS ANSWERED IN FAVOUR OF THE ASSES SEE AS TO THAT THE ASSESSEE IS ENTITLED TO THE CLAIM OF DEDUCTION IN RESPECT OF ALL THE BLOCKS FORMING PART OF THE PROJECTS CALLED AGRINI AND VAJRA BUT TO THE EXTENT OF EACH OF THE BLOCKS SATISFYING THE CONDITIONS UNDER SECTI ON 80IB(10) THE ASSESSEE WOULD BE ENTITLED TO THE RELI EF ON A PROPORTIONATE BASIS (PARA 15) IN THE CASE OF CIT VS. ARUN EXCELLO FOUNDATIONS (P) L TD.; (2013) 29 TAXMANN.COM 149 (MADRAS), IT WAS HELD AS UNDE R :- ABHAY DARE ITA NO. 813/IND/2014 29 . GOING BY SECTION 80-IB(10) OF THE ACT, AS IT STOOD DURING THE ASSESSMENT YEAR, FOUR THINGS ARE CLEAR, NAMELY EXPRESSION 'HOUSING PROJECT' CANNOT RECEIVE A RESTRICTED MEANING, AS HAD BEEN PROPOUNDED BY THE REVENUE. THE MEANING OF THE EXPRESSION 'HOUSING PROJECT', AS GIVEN UNDER SECTION 80HHBA OF THE ACT, HENCE, WOULD GOVERN THE CASE HEREIN. HENCE, THE HOUSING PROJECT WOULD INCLUDE COMMERCIAL BUILDINGS ALSO. SECONDLY, THERE IS NO RESTRICTION THAT THE BU ILT-UP AREA FOR THE HOUSING PROJECT CANNOT HAVE ANY COMMERCIAL UNITS. THIRDLY, THE PROVISION OF LAW AS IT STOOD PRIOR TO THE AMENDMENT IN 2005 CONTAINED NO SUCH CEILING AS TO THE EXTENT OF THE BUILT-UP AREA OF THE SHOPS AND COMMERCIAL UNITS INCLUDED IN THE HOUSING PROJECT. FINALLY, THIS IS MADE CLEAR BY THE INSERTI ON OF THE CLAUSE (D) UNDER THE FINANCE ACT IN SECTION 80- IB(10) OF THE ACT, WHICH, FOR THE FIRST TIME SPOKE ABOUT ABHAY DARE ITA NO. 813/IND/2014 30 THE RESTRICTION ON THE COMMERCIAL AREA IN THE HOUSI NG PROJECT. HENCE, THE AMENDMENT MAKES CLEAR THAT THE LAW AS IT STOOD TILL 2005 DID NOT CONTEMPLATE ANY RESTRICTIONS AS TO THE EXTENT THAT THE COMMERCIAL ESTABLISHMENT SHOULD OCCUPY IN HOUSING PROJECT. THE ONLY CONDITION THAT THE PROVISION CONTEMPLATED IN C LAUSE (C) TO SECTION 80 IB(10), AS IT STOOD DURING THE RE LEVANT ASSESSMENT, WAS THAT IF THERE BE A HOUSING UNIT IN A HOUSING PROJECT, THE SAID UNIT SHALL NOT HAVE A BUI LT-UP AREA BEYOND WHAT IS CONTEMPLATED UNDER CLAUSE (C) OF SECTION 80-IB(10) OF THE ACT, WHICH MEANS, IN A GIVEN PROJECT, EVEN IF THE TOTAL BUILT-UP AREA OCCUPIED B Y THE COMMERCIAL ESTABLISHMENT IS 100% OR 90% OR MORE, BU T LESS THAN 100% AND THE RESIDENTIAL UNIT OCCUPIED A MINOR AREA ONLY, THE ASSESSEE WOULD NEVERTHELESS BE ENTITLED TO THE RELIEF OF 100% DEDUCTION UNDER THE SAID PROVISION. THE ONLY CONDITION IS THAT WHERE THERE I S ABHAY DARE ITA NO. 813/IND/2014 31 RESIDENTIAL UNIT, IN THE CASE OF CITIES LIKE DELHI AND MUMBAI OR PLACES WITHIN TWENTY FIVE KILOMETERS FROM THE MUNICIPAL LIMITS OF THESE CITIES, THE RESIDENTIAL U NIT SHALL BE OF AN EXTENT OF ONE THOUSAND SQUARE FEET OR ONE THOUSAND AND FIVE HUNDRED SQUARE FEET AT ANY OTHER PLACE, AS THE CASE MAY BE (PARA 39). . THUS, IN THE FACE OF THE CLEAR PROVISIONS AND GOI NG BY THE STRICT CONSTRUCTION, ONE CANNOT READ ANY LIMITA TION INTO THE EXPRESSION'HOUSING PROJECT' TO MEAN THE RESIDENTIAL PROJECT ALONE AND THAT IF AND WHEN THE PROJECTS HAVE MIXED BUILT-UP AREA OF COMMERCIAL AND RESIDENTIAL, THE QUESTION OF DISALLOWANCE WILL ARIS E ONLY IF AND WHEN THE RESIDENTIAL FLATS ARE BEYOND THE LI MIT AS PROVIDED UNDER SUB CLAUSE (C) OF SECTION 80-IB(10) OF THE ACT AND NOT OTHERWISE. EVEN HEREIN, THE DISALLOWANCE COULD BE ONLY PROPORTIONATE TO THE EXT ENT OF UNITS IN VIOLATION OF THE AREA PRESCRIBED UNDER CLA USE ABHAY DARE ITA NO. 813/IND/2014 32 (C). IN A PURE COMMERCIAL HOUSING PROJECT, THE QUES TION OF APPLICABILITY OF SUB-CLAUSE (C) DOES NOT ARISE AT A LL. (PARA 40) . GOING BY THE BACKGROUND OF THE EXPRESSION 'HOUSIN G PROJECT' AND VARIOUS CLAUSES CONTAINED IN SECTION 80- IB OF THE ACT, READ IN THE CONTEXT OF SUBSEQUENT INSERTION OF CLAUSE (D), INSERTED PROSPECTIVELY UND ER THE FINANCE ACT 2005, WE HAVE NO HESITATION IN ACCEPTING THE CASE OF THE ASSESSEE THAT 'HOUSING PR OJECT' HAS TO BE UNDERSTOOD AS A BUILDING PROJECT AND NEED NOT BE RESTRICTED TO RESIDENTIAL PROJECT ALONE, MEANING THEREBY, USER OF THE UNIT IS NOT OF RELEVANCE IN TH E MATTER OF GRANT OF RELIEF. THE PROJECT MAY BE EITHER OUT A ND OUT RESIDENTIAL PROJECT OR COMMERCIAL PROJECT OR MIX UP OF BOTH FOR, A HOUSING PROJECT, PURELY OF COMMERCIAL N ATURE, APPROVED BY THE LOCAL AUTHORITY, IS ALSO A HOUSING PROJECT, ENTITLED TO 100% DEDUCTION. SO TOO, IN PRO JECTS ABHAY DARE ITA NO. 813/IND/2014 33 CONTAINING RESIDENTIAL UNITS ALONE, WHERE THERE IS A PARTIAL COMPLIANCE, PROPORTIONATE TO THE COMPLIANCE , THE ASSESSEE WOULD BE ENTITLED TO HAVE THE DEDUCTION. I N THE CASE OF MIXED PROJECTS, THE ASSESSEE'S CLAIM HAS TO BE ALLOWED IN FULL, IF ALL THE RESIDENTIAL UNITS SATIS FIED CLAUSE (C); OTHERWISE, TO THE EXTENT OF COMPLIANCE, THE RELIEF HAS TO BE WORKED OUT. A HOUSING PROJECT OF COMMERCIAL PREMISES IS ENTITLED TO 100% DEDUCTION, THERE BEING NO NECESSITY OF LOOKING AT CLAUSE (C) F OR COMPLIANCE. THUS, THE ASSESSEE WOULD BE ENTITLED TO THE BENEFIT OF DEDUCTION ON SATISFACTION OF CLAUSES (A) , (B) AND (C) OF SECTION 80-IB(10) OF THE ACT AND THAT THE REQUIREMENT AS REGARDS CLAUSE (C) WOULD ARISE, WHER EIN, IN A GIVEN BUILDING, WHERE THERE IS A RESIDENTIAL U NIT, THE SAME HAS TO SATISFY THE MAXIMUM BUILT-UP AREA SPECIFIED UNDER SUB- CLAUSE (C) OF SECTION 80-IB(10) OF THE ACT. EVEN THOUGH THE PROVISIONS UNDER SUB CLAUS ES ABHAY DARE ITA NO. 813/IND/2014 34 (D), (E) AND (F) OF SECTION 80-IB(10) OF THE ACT ARE PROSPECTIVE IN NATURE, YET, FOR THE PURPOSE OF UNDERSTANDING THE SCOPE OF DEDUCTION UNDER THE PROVISIONS OF THE ACT, WE DO NOT HAVE ANY HESITATIO N IN DRAWING ASSISTANCE FROM THESE PROVISIONS TO DECIDE ON THE SCOPE OF SECTION 80IB OF THE ACT, AS IT STOOD AT THE MATERIAL POINT OF TIME. (PARA 47) . IN THE CIRCUMSTANCES, THE REVENUES APPEAL IS TO BE REJECTED AND THE ORDER OF THE TRIBUNAL IS TO BE CON FIRMED. (PARA 52) THE ASSESSEE COULD NOT BE ASKED TO COMPLY WITH THE CONDITION WHICH WAS BEYOND HIS CONTROL AS HELD BY HO N'BLE DELHI HIGH COURT IN THE CASE OF CIT VS. CHD DEVELOPE RS LTD.; 362 ITR 177 (DEL) THE HON'BLE DELHI HIGH COUR T HAS HELD AS UNDER :- ABHAY DARE ITA NO. 813/IND/2014 35 SECTION 80-IB(10) OF THE INCOME-TAX ACT, 1961, BEFORE SUBSTITUTION BY THE FINANCE (NO. 2)ACT, 2004 ALLOWED A HUNDRED PER CENT DEDUCTION OF THE PROFITS IN THE CASE OF AN UNDERTAKING DEVELOPING AND BUILDING HOUSING PROJECTS APPROVED BEFORE MARCH 31, 2005, BY A LOCAL AUTHORITY. BY THE FINANCE (NO. 2) ACT, 2004, WITH EFFECT FROM APRIL 1, 2005, THE CONDITIONS FOR GRAN T OF DEDUCTION WERE THAT IN A CASE WHERE A HOUSING PROJECT IS APPROVED BY THE LOCAL AUTHORITY BETWEEN APRIL 1, 2004 AND MARCH 31, 2005 THE PROJECT SHOULD BE COMPLETED WITHIN FOUR YEARS FROM THE END OF THE FINANCIAL YEAR IN WHICH IT IS APPROVED BY THE LOCAL AUTHORITY. THE ASSESSEE A REAL ESTATE DEVELOPER, OBTAINED APPROVAL FOR A HOUSING PROJECT ON MARCH 16, 2005 FROM THE DEVELOPMENT AUTHORITY. IT COMPLETED THE PROJECT IN 2008 AND BY ABHAY DARE ITA NO. 813/IND/2014 36 LETTER DATED NOVEMBER 5, 2008 APPLIED TO THE COMPETENT AUTHORITY FOR THE ISSUE OF THE COMPLETION CERTIFICATE. FOR THE ASSESSMENT YEAR 2007-08 ITS CLAIM TO DEDUCTION UNDER SECTION 80IB(10) OF THE INCOME TAX ACT, 1961 WAS DENIED INTER ALIA ON THE GROUND THAT THE ASSESSEE HAD VIOLATED THE CONDITIONS STIPULATED UNDER SECTION 80IB(10) INASMUCH AS IT HAD NOT OBTAINED THE COMPLETION CERTIFICATE FOR THE PROJECT FROM THE COMPETENT AUTHORITY WITHIN FOUR YEARS AS STIPULATED IN EXPLANATION (II). THE COMMISSIONER (APPEALS) UPHELD THE ASSESSMENT ORDER. THE TRIBUNAL HELD THAT THE ASSESSEE WAS EXPECTED TO COMPLETE THE PROJECT IN ACCORDANCE WITH THE APPROVED PLAN AT A PARTICULAR POINT OF TIME AND THE ASSESSEE WAS NOT EXPECTED TO DO OR TO FULFIL THE CONDITIONS WHICH WERE NOT IN EXISTENCE AT THE ABHAY DARE ITA NO. 813/IND/2014 37 RELEVANT POINT OF TIME OR MADE COMPULSORY BY AMENDMENT IN THE ACT FROM THE FUTURE DATE. SINCE THE ASSESSEE WAS TO COMPLETE THE PROJECTION ON OR BEFORE MARCH 31, 2009 AND A REQUEST WAS DULY MADE WITH THE COMPETENT AUTHORITY ON NOVEMBER 5, 2008 MENTIONING THAT THE PROJECT HAD BEEN COMPLETED AND THE COMPLETION CERTIFICATE MAY BE ISSUED AND IF THE CERTIFICATE WAS NOT ISSUED BY THE COMPETENT AUTHORITY THE ASSESSEE SHOULD NOT BE PENALIZED THEREFORE UNLESS AND UNTIL SOME CONTRARY FACTS WERE BROUGHT ON RECORD EVIDENCING THAT THE ASSESSEE CONTRAVENED THE CONDITIONS CONTAINED IN THE APPROVAL GRANTED BY SUCH COMPETENT AUTHORITY. HOWEVER, SINCE THE APPROVAL WAS GRANTED TO THE ASSESSEE ON APRIL 1, 2005, THE ASSESSEE WAS NOT EXPECTED TO FULFIL THE CONDITIONS WHICH WERE NOT ON THE STATUTE WHEN SUCH ABHAY DARE ITA NO. 813/IND/2014 38 APPROVAL WAS GRANTED TO THE ASSESSEE. THE TRIBUNAL ACCEPTED THE ASSESSEES CLAIM TO DEDUCTION UNDER SECTION 80-IB(10). ON APPEAL : HELD, DISMISSING THE APPEAL THAT THE APPROVAL FOR THE PROJECT WAS GIVEN BY THE DEVELOPMENT AUTHORITY ON MARCH 16, 2005. CLEARLY THE APPROVAL RELATED TO THE PERIOD PRIOR TO 2005 I.E. BEFORE THE AMENDMENT, WHICH INSISTED ON ISSUANCE OF THE COMPLETION CERTIFICATE BY THE END OF THE FOUR-YEAR PERIOD WAS BROUGHT INTO FORCE. THE APPLICATION OF SUCH STRINGENT CONDITIONS, WHICH ARE LEFT TO AN INDEPENDENT BODY SUCH AS THE LOCAL AUTHORITY WHO IS TO ISSUE THE COMPLETION CERTIFICATE, WOULD HAVE LED TO NOT ONLY HARDSHIP BUT ABSURDITY. AS A CONSEQUENCE, THE TRIBUNAL WAS NOT, THEREFORE, IN ERROR OF LAW WHILE HOLDING IN FAVOUR OF THE ASSESSEE. ABHAY DARE ITA NO. 813/IND/2014 39 9. IN VIEW OF THESE PECULIAR FACTS AND CIRCUMSTANCES, THE ASSESSEE DESERVES PROPORTIONATE DEDUCTION IN RESPECT OF PHASE-I OF THE PROJECT WHICH WAS COMPLETED AND FOR WHI CH ALL THE CONDITIONS NECESSARY FOR DEDUCTION U/S 80IB(1 0) OF THE ACT WERE COMPLIED WITH AND DEDUCTION ONLY IN RES PECT OF WHICH WAS CLAIMED BY THE ASSESSEE. WE ORDER ACCORDINGL Y. 4. IN THE RESULT, THE APPEAL OF THE ASSESSEE STANDS ALLO WED. PRONOUNCED IN OPEN COURT ON 17 TH AUGUST, 2015 SD SD (D.T. GARASIA) (B.C. MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER 17TH AUGUST, 2015 DN/-