M/s. Dhareshwar Promoters & Builders, Pune V. ACIT, Cir.-4, Pune

ITA 831/PUN/2011

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 4336 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 11 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-05-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 07-11-2012
• Assessment Year: 2002-2003
• Appeal Filed On: 14-06-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUNIL PATHAK
• Assessee Lawyers: ANN KAPTHUAMA
• Keywords: Business income
• Section: 80IB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCHES A, PUNE BEFORE SHRI G.S. PANNU, ACCOUNTANT MEMBER AND SHRI R.S. PADVEKAR, JUDICIAL MEMBER ITA NO. 820/PN/2011 (ASSESSMENT YEAR: 2002-03) ASST. COMMISSIONER OF INCOME TAX CIRCLE 4, PUNE. . APPELLANT VS. M/S DHARESHWAR PROMOTERS & BUILDERS YASH RESIDENCY, S.NO. 128/2C SUS ROAD, NEAR ABHINAV MAHAVIDAYALAYA, PASHAN, PUNE 411 021 PAN : AADFD3276A . RESPONDENT ITA NO. 831/PN/2011 (ASSESSMENT YEAR: 2002-03) M/S DHARESHWAR PROMOTERS & BUILDERS YASH RESIDENCY, S.NO. 128/2C SUS ROAD, NEAR ABHINAV MAHAVIDAYALAYA, PASHAN, PUNE 411 021 PAN : AADFD3276A . APPELLANT VS. ASST. COMMISSIONER OF INCOME TAX CIRCLE 4, PUNE. . RESPONDENT APPELLANT BY : MS. ANN KAPTHUAMA RESPONDENT BY : MR. SUNIL PATHAK DATE OF HEARING : 09-05-2013 DATE OF PRONOUNCEMENT : 23-05-2013 ORDER PER G. S. PANNU, AM THE CAPTIONED CROSS-APPEALS, EACH BY THE REVENUE A ND THE ASSESSEE, PERTAINING TO THE ASSESSMENT YEAR 2002-03, WERE HEA RD TOGETHER AND ARE BEING DISPOSED-OFF BY WAY OF A CONSOLIDATED ORDER F OR THE SAKE OF CONVENIENCE AND BREVITY. 2. IN THE CAPTIONED CROSS-APPEALS, THE COMMON ISSUE RAISED IS WITH REGARD TO ASSESSEES CLAIM FOR DEDUCTION UNDER SECTION 80I B(10) OF THE INCOME TAX ITA NOS. 820 & 831/PN/2011 M/S DHARESHWAR PROMOTERS & BUILDERS A.Y. 2002-03 ACT, 1961 (IN SHORT THE ACT) AMOUNTING TO RS. 15, 95,015/-. THE ASSESSING OFFICER NOTED THAT THE ASSESSEE WAS CARRYING ON THE BUSINESS OF DEVELOPMENT AND CONSTRUCTION OF RESIDENTIAL PROJECT NAMELY YAS H RESIDENCY AT PUNE. FOR THE PERIOD UNDER CONSIDERATION, ASSESSEE HAD SHOWN A NET PROFIT OF RS. 15,95,015/- ON THE TOTAL SALES OF RS. 1,25,38,7 00/- WITH RESPECT TO THE AFORESAID PROJECT AND THE ENTIRE AMOUNT OF PROFIT W AS CLAIMED AS DEDUCTION UNDER SECTION 80IB(10) OF THE ACT. THE ASSESSING OF FICER HAS DENIED THE CLAIM OF THE ASSESSEE ON THE GROUND THAT SUCH CLAIM WAS V IOLATIVE OF THE THREE CONDITIONS ENUMERATED IN CLAUSES (A)(I), (B) & (D) OF SECTION 80IB(10) OF THE ACT. 3. THE AFORESAID THREE OBJECTIONS ARE ENUMERATED AS FOLLOWS. FIRSTLY, AS PER THE ASSESSING OFFICER, THE PROJECT OF THE ASSES SEE WAS APPROVED BY THE LOCAL AUTHORITY BEFORE 01.04.2004 AND THEREFORE IN TERMS OF THE CONDITION PRESCRIBED BY SECTION 80IB(10)(A)(I) READ WITH EXPL ANATION (II) THEREOF, CONSTRUCTION OUGHT TO HAVE BEEN COMPLETED ON OR BEF ORE 31.03.2008. AS THE SAME WAS NOT DONE THEREFORE IT VIOLATED THE CONDITI ON LAID DOWN IN SECTION 80IB(10)(A)(I) READ WITH EXPLANATION (II) THEREOF. 4. SECONDLY, AS PER THE ASSESSING OFFICER, THE PLOT OF LAND ON WHICH THE IMPUGNED PROJECT HAS BEEN DEVELOPED IS OF A SIZE LE SS THAN ONE ACRE, WHICH WAS VIOLATIVE OF THE CONDITION PRESCRIBED IN SECTIO N 80IB(10)(B) OF THE ACT. 5. THIRDLY, AS PER THE ASSESSING OFFICER, THE BUILT -UP AREA OF THE SHOPS AND OTHER COMMERCIAL ESTABLISHMENTS INCLUDED IN THE IMP UGNED HOUSING PROJECT WAS 4880 SQ.FT., WHICH WAS VIOLATIVE OF THE NORM PR ESCRIBED IN SECTION 80IB(10)(D) OF THE ACT. 6. FOR THE AFORESAID THREE REASONS, THE ASSESSEES CLAIM FOR DEDUCTION UNDER SECTION 80IB(10) OF THE ACT AMOUNTING TO RS. 15,95,015/- WAS DENIED BY THE ASSESSING OFFICER. WHILE DENYING THE CLAIM, THE ASSESSING OFFICER HAS ALSO ITA NOS. 820 & 831/PN/2011 M/S DHARESHWAR PROMOTERS & BUILDERS A.Y. 2002-03 REFERRED TO THE STAND OF THE DEPARTMENT FOR THE ASS ESSMENT YEARS 2003-04 AND 2004-05 WHEREIN SIMILAR CLAIM WAS DENIED BY THE ASS ESSING OFFICER AND THE SAME WAS CONFIRMED BY THE CIT(A). 7. IN THE AFORESAID BACKGROUND, ASSESSEE CARRIED TH E MATTER IN APPEAL BEFORE THE CIT(A). THE CIT(A) DID NOT FIND ANY MERI T IN THE OBJECTION OF THE ASSESSING OFFICER RELATING TO THE SIZE OF THE PLOT OF LAND I.E. SECTION 80IB(10)(B) OF THE ACT AND WITH RESPECT TO THE NORM OF THE BUILT-UP AREA OF SHOPS AND OTHER COMMERCIAL ESTABLISHMENTS INCLUDED HOUSING PROJECT I.E. SECTION 80IB(10)(D) OF THE ACT AND INSTEAD UPHELD T HE PLEA OF THE ASSESSEE. HOWEVER, WITH REGARD TO THE OBJECTION THAT THE ASSE SSEE WAS REQUIRED TO COMPLETE THE CONSTRUCTION OF THE PROJECT BY 31.03.2 008 AND THE SAME WAS NOT DONE AND THEREFORE ASSESSEE VIOLATED THE CONDITION PRESCRIBED UNDER SECTION 80IB(10)(A)(I) OF THE ACT, THE STAND OF THE ASSESSI NG OFFICER WAS UPHELD. AGAINST THE FORMER STAND OF THE CIT(A), THE REVENUE IS IN APPEAL BEFORE US, WHEREAS THE ASSESSEE IS IN APPEAL BEFORE US WITH RE GARD TO THE LATTER STAND OF THE CIT(A), IN TERMS OF WHICH THE CLAIM DEDUCTION U NDER SECTION 80IB(10) OF THE ACT HAS BEEN ULTIMATELY DISALLOWED BY THE CIT(A ). 8. BEFORE US, IT WAS A COMMON POINT BETWEEN THE PAR TIES THAT SO FAR AS THE OBJECTION OF THE ASSESSING OFFICER RELATING TO CLAU SES (B) AND (D) OF SECTION 80IB(10) OF THE ACT IS CONCERNED, THE SAME WERE SUB JECT MATTER OF CONSIDERATION BY THE TRIBUNAL IN THE ASSESSEES OWN CASE VIDE ITA NO. 111 & 1353/PN/2007 DATED 21.10.2011 FOR ASSESSMENT YEARS 2003-04 & 2004-05, WHEREIN THE STAND OF THE ASSESSEE HAS BEEN UPHELD. 9. CLAUSE (B) OF SECTION 80IB(10) PRESCRIBES THAT T HE HOUSING PROJECT IS TO BE ON A SIZE OF THE PLOT OF LAND WHICH HAS A MINIMU M AREA OF ONE ACRE. AS PER THE ASSESSING OFFICER, AREA OF THE PLOT OF LAND WAS LESS THAN ONE ACRE AND IN SUPPORT, THE ASSESSING OFFICER REFERRED TO HIS EARL IER STAND IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEARS 2003-04 & 2004-05. FO R THE ASSESSMENT YEARS ITA NOS. 820 & 831/PN/2011 M/S DHARESHWAR PROMOTERS & BUILDERS A.Y. 2002-03 2003-04 & 2004-05, THE TRIBUNAL VIDE ITS ORDER DATE D 21.10.2011 (SUPRA) ADJUDICATED THE AFORESAID OBJECTION OF THE ASSESSIN G OFFICER IN THE FOLLOWING MANNER :- 11. SO FAR AS THE DISPUTE REGARDING AREA OF THE LA ND MEANT FOR THE PROJECT IS CONCERNED, AS DISCUSSED ABOVE, THE A.O R EMAINED OF THE VIEW THAT IT IS LESS THAN 1 ACRE OF LAND. IN THIS REGARD, HE NO TED THAT THE AREA OF THE PLOT DEMARCATED IN THE REVISED PLAN SANCTIONED ON 17.4.2 001 WAS 4044.770 SQ. MTS. AND AFTER EXCLUDING AREA OF 536.89 SQ.MTS. RESERVED FOR D.P. ROAD, THE NET AREA OF LAND AVAILABLE FOR CONSTRUCTION WAS 35 07.88 SQ. MTS. THE A.O., THEREFORE, HELD THAT THE TOTAL AREA OF LAND AVAILAB LE FOR CONSTRUCTION EVEN IF CONSIDERED AS 4044.77 SQ. MTS. EQUIVALENT TO 43537 .90 SQ.FT. WAS LESS THAN 1 ACRE BECAUSE 1 ACRE IS EQUIVALENT TO 43561.31 SQ.FT S. THE SUBMISSION OF THE LD. A.R. IN THIS REGARD REMAINED THAT LAND USED BY THE ASSESSEE FOR THE PROJECT IS EXACTLY 1 ACRE. IN SUPPORT, HE REFERRED COPIES OF AGREEMENT FOR PURCHASE OF LAND DATED 4.9.2000 AND 7/12 EXTRACT MADE AVAILABLE AT PAGE NOS. 1 TO 14 OF THE PAPER BOOK. HAVING GONE THROUGH THAT, WE FIND THAT THE AREA OF LAND MEANT FOR THE PROJECT HAS BEEN SHOWN AS 1 ACRE OF LAND. HE HAS ALSO REFERRED COPIES OF VARIOUS PLANS MADE AVAILABLE AT PAGE NOS. 15 TO 18 OF THE PAPER BOOK. HAVING GONE THROUGH THESE PLANS, WE FIND THAT IN TH E REVISED PLAN MADE AVAILABLE AT PAGE NO. 17, THE SANCTIONING AUTHORITY HAS MENTIONED THE AREA AS 4044.77 SQ. MTS. WHILE IN THE INITIAL PLANS SANCTIO NED, THE AREA IS MENTIONED AS 4046.865 SQ. MTS (PAGE NOS. 16 & 17 OF THE PAPER BO OK), WHICH IS IN CONFORMITY WITH THE AREA SHOWN IN THE AGREEMENT FOR PURCHASE OF LAND AND 7/12 EXTRACT. 1 ACRE IS = 43,460 SQ. FT. WHICH COM ES TO 4046 SQ. MTS. WE THUS HOLD THAT THE LAND DEVELOPED IS 1 ACRE. WE ALSO FI ND SUBSTANCE WHICH IS SUPPORTED BY THE CBDT CIRCULAR NO.5 DATED 15.7.2005 (PAGE NO. 54) STATING THAT THE AREA OCCUPIED BY THE D.P ROAD SHOULD NOT B E EXCLUDED WHILE CALCULATING THE AREA OF THE PLOT. SECONDLY, AREA O F THE PLOT SHOULD NOT BE TAKEN UP WITH REFERENCE TO THE DEMARCATION OF THE LAND DO NE BY THE AUTHORITY BUT IT SHOULD BE TAKEN WITH REFERENCE TO THE AREA OF THE S ITE ON WHICH THE HOUSING PROJECT IS CONSTRUCTED. AS ALREADY MENTIONED, THAT THE SALE DEED AND 7/12 EXTRACTS CLEARLY INDICATES THE AREA AT 1 ACRE. IN THIS REGARD, WE ALSO FIND SUPPORT FROM THE DECISION OF THE PUNE BENCH OF THE TRIBUNAL IN THE CASE OF BUNTY BUILDERS VS. ITO (SUPRA) HOLDING THAT THE HOU SING PROJECT CONSISTS DEVELOPMENT PLAN ROADS AND GRANT OF OTHER FACILITIE S, THEREFORE, THOSE AREA SHOULD EXIST WITHIN THE PRESCRIBED LIMIT AND TO BE CONSIDERED AS PART AND PARCEL OF THE PROJECT. WE THUS DO NOT FIND SUBSTANCE IN T HE OBJECTION OF THE AUTHORITIES BELOW AND DENIAL OF THE CLAIMED DEDUCTI ON BY THEM ON THE BASIS THAT THE LAND AREA OF THE PROJECT WAS LESS THAN 1 A CRE. ITA NOS. 820 & 831/PN/2011 M/S DHARESHWAR PROMOTERS & BUILDERS A.Y. 2002-03 10. FOLLOWING THE AFORESAID PRECEDENT, WHICH HAS BEEN RENDERED UNDER IDENTICAL FACTS AND CIRCUMSTANCES IN ASSESSEES OWN CASE, WE HEREBY AFFIRM THE DECISION OF THE CIT(A) HOLDING THAT THE ASSESSE ES PROJECT IS ON THE PLOT OF LAND WHICH IS OF ONE ACRE AND THEREFORE IT COMPLIES WITH THE PROVISIONS OF SECTION 80IB(10)(B) OF THE ACT. 11. FURTHER, WITH REGARD TO THE OBJECTION OF THE AS SESSING OFFICER THAT THE BUILT-UP AREA OF SHOPS AND OTHER COMMERCIAL ESTABLI SHMENTS INCLUDED IN THE HOUSING PROJECT EXCEEDS THE LIMITS PRESCRIBED IN SE CTION 80IB(10)(D) OF THE ACT IS CONCERNED, THE TRIBUNAL IN ITS ORDER DATED 21.10 .2011 (SUPRA) HAS HELD AS UNDER :- 7. REGARDING THE COMMERCIAL AREA CONSTRUCTED AS FOUND BY THE A.O, THE SUBMISSION OF THE ASSESSEE BEFORE THE A.O REMAINED THAT CONSTRUCTION OF RESIDENTIAL AS WELL AS COMMERCIAL P REMISES WAS DONE AS PER THE PLAN REVISED BY THE PMC AND NO CONSTRUCTION HAS BEEN DONE MORE THAN THE SANCTIONED PLAN. IT WAS SUBMITTED THAT THE DIF FERENCE IN THE AREA BETWEEN WHAT HAD BEEN ACTUALLY REFLECTED AS PER THE AGREEME NT/SALE DEEDS WITH CUSTOMERS AND THAT DEDUCTION BY THE A.O ON PHYSICAL INSPECTION RESULTED INTO INCLUSION OF BASEMENT AREA, TOP TERRACE AREA ETC., IN THE TOTAL AREA. THE A.O HAS CONSIDERED THE ACCESS OF BASEMENT AREA AND TOP TERRACE AREA TO THE RESTAURANT AS THE TOTAL AREA FOR COMMERCIAL CONSTRU CTION. AS PER THE RULE OF THE PMC, THE SAID RESTAURANT WAS TO HAVE ACCESS TO BASEMENT AS WELL AS TOP TERRACE. THE A.O WAS WRONG IN DRAWING INFERENCE TH AT THE SAID AREAS WERE TO BE USED BY THE RESTAURANT. FURTHER, THE CONSTRUCTI ON IN FRONT OF THE RESTAURANT REFERRED BY THE A.O WAS TEMPORARY AND COULD BE DEMO LISHED BY THE PMC AT ANY TIME AND THE DEVELOPER DID NOT PROCESS ANY LEGA L RIGHT TO SALE THE SAME. IT WAS ALSO POINTED OUT THAT THE A.O THROUGH OVERSIGHT HAS INCLUDED THE AREA OF 363 SQ.FT. OF THE SMALL HALL AREA TWICE TO ARRIVE A T THE TOTAL AREA OF THE COMMERCIAL UNITS. IT WAS SUBMITTED THAT IF THESE S UBMISSIONS ARE CONSIDERED, THE ACTUAL AREA OF THE LAND OF THE COMMERCIAL UNIT WOULD BE 4072 SQ.FT. ONLY. 8. REGARDING THE OBSERVATION OF THE A.O BASED ON TH E AMENDMENT TO SECTION 80IB(10) BY THE FINANCE ACT 2004, IT WAS CONTENDED THAT THIS AMENDMENT WAS APPLICABLE W.E.F. 1.4.2005 AND THUS NOT APPLICABLE DURING THE A.YS. UNDER CONSIDERATION. THE LD CIT(A) HAS UPHEL D THE ACTION OF THE A.O IN DENIAL OF THE CLAIMED DEDUCTION U/S. 80IB(10). 9. CONSIDERING THE ABOVE SUBMISSIONS, WE FIND THAT UNDISPUTEDLY, THE PROVISIONS OF 80 IB(10) CAME INTO OPERATION W.E .F. 1.4.2005 WERE NOT ITA NOS. 820 & 831/PN/2011 M/S DHARESHWAR PROMOTERS & BUILDERS A.Y. 2002-03 APPLICABLE DURING THE A.YS. I.E. 2003-04 AND 2004-0 5 UNDER CONSIDERATION. IT HAS BEEN NOW HELD BY THE SPECIAL BENCH OF THE TRIBU NAL IN THE CASE OF BRAHMA ASSOCIATES, 122 TTJ (S.B) PUNE, 433, APPROVE D BY THE HONBLE JURISDICTIONAL BOMBAY HIGH COURT IN ITS DECISION DA TED 22.2.2011 (SUPRA) HOLDING THAT CLAUSE (D) INSERTED TO SECTION 80IB(10 ) W.E.F. 1.4.2005 IS PROSPECTIVE AND NOT RETROSPECTIVE AND HENCE CANNOT BE APPLIED FOR THE PERIOD PRIOR TO 1.4.2005. IN THIS DECISION, IT HAS BEEN AL SO HELD THAT UPTO 31 ST MARCH 2005 (SUBJECT TO FULFILLING OTHER CONDITIONS), DEDU CTION U/S. 80 IB (10) IS ALLOWABLE TO HOUSING PROJECT APPROVED BY THE LOCAL AUTHORITY HAVING RESIDENTIAL UNITS WITH COMMERCIAL USER TO THE EXTENT PERMITTED UNDER D.C. RULES/REGULATIONS FRAMED BY THE RESPECTIVE LOCAL AU THORITY. IN THE CASE OF BRAHMA ASSOCIATES, WHEREIN THE A.Y. INVOLVED WAS BE FORE THE PROVISIONS OF CLAUSE (D) TO SECTION 80 IB (10) COMING TO EFFECT TO 1.4.2005 I.E. A.Y. 2005-06. BEFORE INSERTION OF CLAUSE (D) TO THIS SECTION W.E. F. 1.4.2005, THERE WAS NO RESTRICTION OF CONSTRUCTION OF COMMERCIAL AREA IN T HE PROJECT. THE TRIBUNAL HELD THAT UPTO 31 ST MARCH 2005, DEDUCTION U/S. 80 IB(10) WOULD BE ALL OWABLE TO THE PROJECTS APPROVED BY THE LOCAL AUTHORITY HAVING RES IDENTIAL BUILDING WITH COMMERCIAL USER UPTO 10% OF THE TOTAL BUILT UP AREA OF THE PLOT. THE HONBLE JURISDICTIONAL HIGH COURT IN THIS REGARD WAS PLEASE D TO HOLD THAT IN THE ABSENCE OF ANY PROVISIONS UNDER THE INCOME TAX ACT, THE TRIBUNAL WAS NOT JUSTIFIED IN HOLDING THAT UPTO 31 ST MARCH 2005, DEDUCTION U/S. 80 IB (10) WOULD BE ALLOWABLE TO THE PROJECTS APPROVED BY THE LOCAL AUTHORITY IN RESIDENTIAL BUILDING WITH COMMERCIAL USER UPTO 10% OF THE TOTAL BUILT UP AREA OF THE PLOT. ON QUERY RAISED BY THE BENCH, LD. A.R. SUBMITTED T HAT THE COMMERCIAL AREA CONSTRUCTED IN THE PROJECT IS AROUND 12% OF THE B UILT UP AREA. WE THUS RESPECTFULLY FOLLOWING THE DECISION OF THE HONBLE JURISDICTIONAL BOMBAY HIGH COURT IN THE CASE OF CIT VS. BRAHMA ASSOCIATES (SUP RA) HOLD THAT THE A.O WAS NOT JUSTIFIED IN DENYING THE CLAIMED DEDUCTION U/S. 80 IB (10) OF THE ACT TO THE ASSESSEE ON THE BASIS THAT THE COMMERCIAL AREA CONS TRUCTED BY THE ASSESSEE WAS MORE THAN 5% OF THE TOTAL BUILT UP AREA OR 2000 SQ.FT, WHICHEVER IS LESS, AS PER CLAUSE (D) TO SECTION 80IB(10) OF THE ACT. 12. THE AFORESAID DISCUSSION SHOWS THAT AS PER THE TRIBUNAL, THE ASSESSING OFFICER COULD NOT HAVE APPLIED THE NEWLY AMENDED CL AUSE (D) OF SECTION 10IB(10) OF THE ACT TO THE INSTANT CLAIM OF THE ASS ESSEE, BECAUSE THE PROJECT OF THE ASSESSEE WAS APPROVED BY THE LOCAL AUTHORITY PR IOR TO 31.03.2005 WHEREAS THE AMENDED SECTION 10IB(10)(D) WAS BROUGHT ON THE STATUTE WITH EFFECT FROM 01.04.2005. IN THE PRESENT CASE, IT IS AN ADMITTED POSITION THAT THE PROJECT OF THE ASSESSEE WAS APPROVED BY THE PUNE MUNICIPAL COR PORATION (I.E. THE LOCAL AUTHORITY) ON 17.10.2000 AND THE CONSTRUCTION WAS C OMMENCED ON THE SAME DATE I.E. WELL BEFORE THE OPERATION OF THE AMENDED SECTION 80IB(10)(D) OF THE ITA NOS. 820 & 831/PN/2011 M/S DHARESHWAR PROMOTERS & BUILDERS A.Y. 2002-03 ACT. FOLLOWING THE PRECEDENT WHICH IS IN LINE WITH THE JUDGEMENT OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. BR AHMA ASSOCIATES (2011) 333 ITR 289 (BOM.), THE OBJECTION OF THE ASSESSING OFFI CER IS NOT TENABLE AND THE CIT(A) MADE NO MISTAKE IN NEGATING THE SAME. IN SO FAR AS THE APPEAL OF THE REVENUE IS CONCERNED THE SAME IS DISPOSED-OFF IN TH E AFORESAID MANNER AND IS ACCORDINGLY DISMISSED. 13. NOW, WE MAY TAKE UP THE OBJECTION OF THE ASSESS ING OFFICER WITH REGARD TO THE PROVISIONS OF SECTION 80IB(10)(A)(I) OF THE ACT. AS PER THE ASSESSING OFFICER SINCE THE PROJECT OF THE ASSESSEE WAS APPRO VED PRIOR TO 01.04.2004, IT SHOULD HAVE BEEN COMPLETED BY 31.03.2008 IN TERMS O F THE CONDITION PRESCRIBED IN SECTION 80IB(10)(A)(I) OF THE ACT. TH E ASSESSING OFFICER FURTHER NOTED THAT SINCE THE REQUISITE OCCUPANCY/ COMPLETIO N CERTIFICATE WAS NOT ISSUED BY THE LOCAL AUTHORITY BEFORE 31.03.2008, IT COULD NOT BE SAID THAT THE PROJECT OF THE ASSESSEE WAS COMPLETED WITHIN THE SPECIFIED PER IOD. IN THIS CONNECTION, THE LEARNED COUNSEL FOR THE ASSESSEE POINTED OUT TH AT THE LOWER AUTHORITIES WERE WRONG IN REJECTING THE CLAIM OF THE ASSESSEE O N THE AFORESAID GROUND FOR THE REASON THAT THE POSITION OF LAW INVOKED BY THE LOWER AUTHORITIES WAS INTRODUCED ONLY BY THE FINANCE (NO.2) ACT, 2004 WIT H EFFECT FROM 01.04.2005 AND PRIOR TO IT, THERE WAS NO REQUIREMENT OF COMPLE TION OF PROJECT WITHIN A SPECIFIED PERIOD. THE CASE OF THE ASSESSEE IS FOR A SSESSMENT YEAR 2002-03 WHICH IS PRIOR TO THE AMENDMENT MADE TO SECTION 80I B(10) OF THE ACT. IN THE PRE-AMENDED PROVISIONS OF SECTION 80IB(10) THERE WA S NO OBLIGATION ON THE PART OF THE ASSESSEE OF FURNISHING A COMPLETION CER TIFICATE AS A CONDITION PRECEDENT FOR AVAILING OF DEDUCTION AND THAT SUCH A CONDITION WAS INTRODUCED ONLY BY THE FINANCE (NO.2) ACT, 2004 WITH EFFECT FR OM 01.04.2005. FURTHERMORE, THE LEARNED COUNSEL HAS SUBMITTED THAT THE HONBLE HIGH COURT OF MADRAS IN THE CASE OF CIT VS. JAIN HOUSING & CONSTR UCTIONS LTD. (2013) 30 TAXMAN 131 (MADRAS) HAS CONSIDERED AN IDENTICAL SIT UATION, WHEREIN THE STAND OF THE ASSESSEE WAS UPHELD. ITA NOS. 820 & 831/PN/2011 M/S DHARESHWAR PROMOTERS & BUILDERS A.Y. 2002-03 14. THE LEARNED DEPARTMENTAL REPRESENTATIVE, ON THE OTHER HAND POINTED OUT THAT THE AMENDED PROVISIONS HAVE PRESCRIBED A C OMPLETION PERIOD FOR A PROJECT WHICH WAS APPROVED PRIOR TO 01.04.2004 AND THEREFORE THE SAME WOULD APPLY IN ORDER TO TEST THE PRESENT CLAIM OF THE ASS ESSEE FOR DEDUCTION UNDER SECTION 80IB(10) OF THE ACT. 15. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSI ONS. UNDISPUTABLY, THE OBJECTION WITH REGARD TO THE COMPLETION OF PROJECT IS ON THE BASIS OF THE PROVISIONS OF SECTION 80IB(10)(A) OF THE ACT AS INS ERTED BY THE FINANCE (NO.2) ACT, 2004 WITH EFFECT FROM 01.04.2005. IT IS ALSO E VIDENT THAT SO FAR AS THE AFORESAID AMENDMENT IS CONCERNED THE LEGISLATURE HA S NOT PROVIDED THAT THE SAME IS RETROSPECTIVE IN ITS APPLICATION. PRIOR TO THE INSERTION OF THE AMENDED SECTION 80IB(10)(A) OF THE ACT WITH EFFECT FROM 01. 04.2005 THERE WAS NO REQUIREMENT AS REGARDS THE COMPLETION OF CONSTRUCTI ON OF A PROJECT. IN FACT, THE PRE-AMENDED PROVISIONS OF SECTION 80IB(10) VIS--VI S THE AMENDED PROVISIONS OF SECTION 80IB(10)(A) WITH EFFECT FROM 01.04.2005, HAVE BEEN CONSIDERED BY THE HONBLE MADRAS HIGH COURT IN THE CASE CIT VS. J AIN HOUSING & CONSTRUCTION LTD. (SUPRA) AND THE FOLLOWING DISCUSS ION IS WORTHY OF NOTICE :- 9. AS IS EVIDENT FROM THE SUBSTITUTION OF SECTION 80IB(10) OF THE ACT, PRIOR TO THE AMENDMENT, THERE WAS NO SUCH REQU IREMENT AS REGARDS FURNISHING OF COMPLETION CERTIFICATE AND THE DEDUCT ION PROVISION POINTED OUT TO THE GRANT OF 100% DEDUCTION ON THE PROFITS DERIVED FROM A HOUSING PROJECT, IF THE UNDERTAKING HAD COMMENCED DEVELOPMENT AND CONST RUCTION OF THE HOUSING PROJECT ON OR AFTER 1 ST OCTOBER, 1998. THUS, TILL 2005, THERE WAS NO CLAUSE DEALING WITH COMPLETION, IN WHICH EVENT, ONE CANNOT READ INTO THE PROVISION AS A CONDITION, WHICH IS NOT SPECIFICALLY PROVIDED FOR THEREIN. 10. AS FAR AS THE PRESENT CASE IS CONCERNED, IT REL ATES TO THE ASSESSMENT YEAR 2004-05. THE SUBSTITUTION OF EXPLAN ATION TO CLAUSE (A) TO SUB-SECTION (10) OF SECTION 80IB OF THE INCOME TAX ACT WAS BROUGHT IN UNDER FINANCE NO. (2) ACT OF 2004, EFFECTIVE FROM 01.04.2 005. THUS, IN THE ABSENCE OF ANY SUCH REQUIREMENT READ INTO THE SECTION, WE F IND IT DIFFICULT TO ACCEPT THE CASE OF THE REVENUE THAT THE CLAIM FOR DEDUCTION HA S TO BE REJECTED ON THE GROUND THAT THE ASSESSEE HAD NOT FURNISHED THE COMP LETION CERTIFICATE. ITA NOS. 820 & 831/PN/2011 M/S DHARESHWAR PROMOTERS & BUILDERS A.Y. 2002-03 16. FOLLOWING THE AFORESAID JUDGMENT OF THE HONBLE MADRAS HIGH COURT WHICH FULLY COVERS THE CONTROVERSY BEFORE US, WE DO NOT FIND ANY JUSTIFICATION TO ACCEPT THE CLAIM OF THE REVENUE THAT THE ASSESSEES CLAIM FOR DEDUCTION IS TO BE REJECTED ON THE GROUND THAT THE ASSESSEE HAD NOT COMPLETED THE CONSTRUCTION AND OBTAINED THE COMPLETION CERTIFICAT E FROM THE LOCAL AUTHORITIES PRIOR TO 31.03.2008. AT THIS POINT, WE MAY ALSO NOT ICE THAT IN THE ASSESSMENT YEARS 2003-04 & 2004-05 ASSESSEES CLAIM FOR DEDUCT ION UNDER SECTION 80IB(10) OF THE ACT WITH RESPECT THE SAME PROJECT W AS ALSO DENIED BY THE ASSESSING OFFICER BUT THERE WAS NO OBJECTION RAISED WITH REGARD TO THE REQUIREMENT OF COMPLETION OF PROJECT, AS IS SOUGHT TO BE MADE OUT IN THE PRESENT YEAR. THUS, BY IMPLICATION IT FOLLOWS THAT FOR ASSESSMENT YEARS 2003-04 & 2004-05 THE DEPARTMENT ACCEPTED THE POSITION THAT THE CLAIM OF DEDUCTION COULD NOT BE REJECTED IN THE ABSENCE OF THE COMPLET ION CERTIFICATE BASED ON THE AMENDMENT MADE TO SECTION 80IB(10) OF THE ACT WITH EFFECT FROM 01.04.2005. BE THAT AS IT MAY, WE CONCLUDE BY HOLDING THAT FOLL OWING THE PARITY OF REASONING LAID DOWN BY THE HONBLE MADRAS HIGH COURT IN THE C ASE OF CIT VS. JAIN HOUSING & CONSTRUCTIONS LTD. (SUPRA), IN THE PRESEN T CASE, THE AFORESAID OBJECTION OF THE ASSESSING OFFICER IS UNTENABLE. 17. IN THE RESULT, WE SET ASIDE THE ORDER OF THE CI T(A) ON THE AFORESAID ASPECT AND DIRECT THE ASSESSING OFFICER TO ALLOW TH E CLAIM FOR DEDUCTION UNDER SECTION 80IB(10) OF THE ACT TO THE ASSESSEE, AS CLA IMED. 18. RESULTANTLY, WHEREAS THE APPEAL OF THE ASSESSEE IS ALLOWED, THAT OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 23 RD MAY, 2013. SD/- SD/- (R.S. PADVEKAR) (G.S. PANNU) JUDICIAL MEMBER ACCOUNTANT MEMBER PUNE, DATED: 23 RD MAY, 2013 ITA NOS. 820 & 831/PN/2011 M/S DHARESHWAR PROMOTERS & BUILDERS A.Y. 2002-03 SUJEET COPY OF THE ORDER IS FORWARDED TO : - 1) THE ASSESSEE; 2) THE DEPARTMENT; 3) THE CIT(A)-II, PUNE; 4) THE CIT-II, PUNE; 5) THE DR, A BENCH, I.T.A.T., PUNE; 6) GUARD FILE. BY ORDER //TRUE COPY// PRIVATE SECRETARY I.T.A.T., PUNE.