ITO, Patiala V. M/s Ambey Developers, Patiala

ITA 852/CHANDI/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 8376 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 5 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-03-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 11-02-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 10-10-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K MITTAL
• Section: 80IB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, CHANDIGARH BEFORE SHRI H.L. KARWA, VICE PRESIDENT AND MS. RANO JAIN, ACCOUNTANT MEMBER ITA NO.688/CHD/2014 ( ASSESSMENT YEAR : 2009-10) & ITA NO.852/CHD/2014 ( ASSESSMENT YEAR : 2010-11) THE INCOME TAX OFFICER, VS. M/S AMBEY DEVELOPER PVT. LTD., WARD-1, NEAR SAI MARKET, PATIALA. PATIALA. PAN: AAFCA3286L (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI S.K. MITTAL, DR RESPONDENT BY : SHRI TEJ MOHAN SINGH DATE OF HEARING : 11.02.2016 DATE OF PRONOUNCEMENT : 14.03.2016 O R D E R PER RANO JAIN, A.M . : THESE TWO APPEALS FILED BY THE REVENUE ARE DIRECTED AGAINST THE SEPARATE ORDERS OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS), PATIALA DATED 30.5.2014 AND 29.8.2014, RELATING TO ASSESSMENT YEA RS 2009-10 AND 2010-11 RESPECTIVELY. 2. THE ISSUE INVOLVED IN BOTH THESE APPEALS FILED BY THE REVENUE ARE SAME. THEREFORE, BOTH THESE APPEAL S WERE 2 HEARD TOGETHER AND ARE BEING DISPOSED OFF BY THIS C OMMON ORDER FOR THE SAKE OF CONVENIENCE. ITA NO.688/CHD/2014 : 3. BRIEFLY, THE FACTS OF THE CASE ARE THAT THE ASSESSEE IS A BUILDER. DURING THE YEAR, IT CLAIMED DEDUCTION UNDER SECTION 80IB OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT), AMOUNTING TO RS.1,50,69,453/- . THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAD FIL ED COMPLETION CERTIFICATE FROM MUNICIPAL TOWN PLANNER, MUNICIPAL CORPORATION, PATIALA DATED 30.12.2011 ALONGWITH A LETTER FROM THE ASSESSEE WRITTEN TO COMMISSIONER, MUNICIPAL CORPORATION, PATIALA DATED 29.3.2010 REQUESTING FOR COMPLETION CERTIFICATE. TH E ASSESSING OFFICER CONTENDED THAT THE HOUSING PROJEC T APPROVED ON 1.4.2005 SHOULD HAVE BEEN COMPLETED WIT HIN FIVE YEARS FROM THE END OF THE MONTH IN WHICH THE H OUSING PROJECT WAS APPROVED. THE ASSESSING OFFICER FURTHER CONTENDED THAT THE COMPLETION CERTIFICATE DOES NOT MENTION THE DATE OF COMPLETION AND, THEREFORE, THE CLAIM OF THE ASSESSEE REGARDING COMPLETION OF THE PROJECT WITHIN THE STIPULATED TIME IS NOT VERIFIABLE. THE ASSESSE E RELIED ON THE CASE OF M/S SANGHVI & DOSHI ENTERPRISES AND SUBMITTED THAT WHEN THE ASSESSEE MAKES AN APPLICATI ON FOR COMPLETION CERTIFICATE, GRANT OF COMPLETION CER TIFICATE AFTER VERIFICATION ON SUBSEQUENT DATE WOULD RELATE BACK TO THE DATE ON WHICH APPLICATION IS MADE. REJECTING T HE CONTENTION OF THE ASSESSEE, THE ASSESSING OFFICER 3 DISALLOWED THE DEDUCTION UNDER SECTION 80IB(10) TO THE ASSESSEE. 4. BEFORE THE LEARNED CIT (APPEALS), BESIDES MAKIN G ELABORATE SUBMISSIONS ON THE MERITS OF THE CASE, TH E ASSESSEE RELIED ON A NUMBER OF JUDGMENTS FOR THE PROPOSITION THAT APPROVAL ONCE GRANTED SHOULD RELAT E BACK TO THE DATE OF APPLICATION. A REMAND REPORT WAS CA LLED FOR BY THE ASSESSING OFFICER, WHO REITERATED THE SA ME CONTENTION AS RAISED IN THE ASSESSMENT ORDER. THE LEARNED CIT (APPEALS), AFTER CONSIDERING THE SUBMISSION OF THE ASSESSEE AND REMAND REPORT OF THE ASSESSING OFFICER ALLOWED THE APPEAL OF THE ASSESSEE, MAINLY RELYING ON THE FOLLOWING CASES : I) SANGHVI & DOSHI ENTERPRISES VS. ITO & ORS. ITA NOS.259 TO 263/MDS/2010, DATED 19.5.2011 II) ACIT VS. SURENDER DEVELOPERS ITA NOS.2743 TO 2745/DEL/2010 5. AGGRIEVED BY THIS, THE DEPARTMENT HAS COME IN APPEAL BEFORE US, RAISING THE FOLLOWING GROUNDS OF APPEAL : 1. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT(A) HAS FAILED TO APPRECIATE THAT EXPLANATION (I I) BELOW SECTION 80IB(10) STATES THAT THE DATE OF ISSUE OF COMPLETION CERTIFICATE BY THE LOCAL AUTHORITY WILL BE TAKEN TO BE THE DATE OF COMPLETION OF CONSTRUCTIO N AND IN THIS CASE, SINCE ADMITTEDLY THE COMPLETION CERTIFICATE WASISSUEDAFTER31.3.2011INRESPECT OF A PROJECT WHICH WAS FIRST APPROVED ON 06.10.2005, THE CONDITION OF COMPLETION OF CONSTRUCTION WITHIN 5 YEARS OF THE END OF THE FINANCIAL YEAR IN WHICH THE PROJECT W AS 4 FIRST APPROVED WAS NOT SATISFIED AND THE DEDUCTION U/S 80IB(10) WAS NOT ALLOWABLE TO THE ASSESSEE. 2. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE LD. CIT (A) HAS ERRED IN DELETING THE ADDITION OF RS.1,50,69,453/-MADE BY THE AO ON ACCOUNT OF DISALLOWANCE OF DEDUCTION CLAIMED U/S 80IB OF THE I NCOME TAX ACT, 1961, WITHOUT APPRECIATING THAT THE HOUSING PROJECT APPROVED BY LOCAL AUTHORITY ON OR AFTER 1.4 .2005 SHOULD HAVE BEEN COMPLETED WITHIN FIVE YEARS FROM T HE END OF YEAR IN WHICH THE HOUSING PROJECT IS APPROVE D, WHICH THE ASSESSEE FAILED TO SUBSTANTIATE WITH ANY DOCUMENTARY EVIDENCE, AND IN THE ABSENCE OF WHICH C LAIM OF THE ASSESSEE REGARDING COMPLETION OF PROJECT IS NOT VERIFIABLE. 3. IT IS PRAYED THAT THE ORDER OF LD. CIT(A) BE SET ASIDE AND THAT OF THE AO RESTORED. 4. THE APPELLANT CRAVES LEAVE TO ADD OR AMEND ANY G ROUNDS OF APPEAL BEFORE THE APPEAL IS HEARD AND FINALLY DI SPOSED OF. 6. THE LEARNED D.R. WHILE RELYING ON THE ORDER OF THE ASSESSING OFFICER, STATED THAT IN THE CIRCUMSTA NCES WHEN THE CONDITIONS SPECIFICALLY PROVIDED IN THE ST ATUTE ARE NOT COMPLIED WITH, THE DEDUCTION CANNOT BE ALLO WED. 7. THE LEARNED COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE LOWER AUTHORITIES. HE ALSO SUBMITTED THAT THE CERTIFICATE LATER GRANTED T O HIM IS GRANTED WITHOUT RAISING ANY OBJECTION. OUR ATTENTI ON WAS ALSO INVITED TO PAGE-18 OF THE CIT (APPEALS)S ORDE R, WHEREBY 5 IT HAS BEEN STATED THAT IN THE IMMEDIATELY NEXT ASS ESSMENT YEAR, THE ASSESSING OFFICER HAD MADE ENQUIRY FROM T HE MUNICIPAL CORPORATION, PATIALA, REGARDING THE DATE OF COMPLETION OF THE PROJECT. IN REPLY TO THE SAID EN QUIRY, THE OFFICE OF THE MUNICIPAL CORPORATION HAS DESCRIB ED THE PROCESS OF GRANTING CERTIFICATE, WHICH TAKES TIME T O GET TECHNICAL CLEARANCE. THIS WAS SHOWN TO US TO EMPHA SIS THE FACT THAT GETTING THE COMPLETION CERTIFICATE IS NOT IN THE HANDS OF THE ASSESSEE. RELIANCE WAS PLACED ON THE SAME JUDGMENTS, WHICH WERE PLACED BEFORE THE LOWER AUTHORITIES. 8. WE HAVE HEARD THE LEARNED REPRESENTATIVES OF BOTH THE PARTIES, PERUSED THE FINDINGS OF THE AUTHO RITIES BELOW AND CONSIDERED THE MATERIAL AVAILABLE ON RECO RD. THOUGH THERE ARE A NUMBER OF JUDGMENTS IN FAVOUR OF THE ASSESSEE IN THE SAID CIRCUMSTANCES, WE WOULD LIKE T O REFER TO THE JUDGMENT OF GUJARAT HIGH COURT IN THE CASE O F CIT VS. TARNETAR CORPORATION, REPORTED IN (2014) 362 IT R 174 (GUJ), WHERE THE HON'BLE HIGH COURT OBSERVES AS UND ER : IN THE PRESENT CASE, THEREFORE, THE FACT THAT THE ASSESSEE HAD COMPLETED THE CONSTRUCTION WE 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 C LAUSE (A) TO SECTION 80IB(10) LINKS THE COMPLETION OF THE CONSTRUCTION TO THE BU PERMISSION BEING GRANTED BY THE LOCAL AUTH ORITY. 6 HOWEVER, NOT EVERY CONDITION OF THE STATUTE CAN BE SEEN AS MANDATORY. IF SUBSTANTIAL COMPLIANCE THEREOF IS ESTA BLISHED ON RECORD, IN A GIVEN CASE, THE COURT MAY TAKE THE VI EW 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 ASS ESSEE HAD NOT ONLY COMPLETED THE CONSTRUCTION TWO YEARS BEFORE THE FINAL DATE AND HAD APPLIED FOR BU PERMISSION. SUCH BU PER MISSION 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 B E HELD TO BE ILLEGAL. 9. THE FACTS OF THE PRESENT CASE ARE ON A STRONG FOOTING, IN THE SENSE THAT THE APPROVAL HAS NOT BEE N REFUSED TO IT AND IN FACT, HAS BEEN GRANTED TO IT O N A LATER DATE, THAT TOO WITHOUT RAISING ANY OBJECTION. SINC E THE FACTS ARE THE SAME, RESPECTFULLY FOLLOWING THE ORDE R OF THE HON'BLE HIGH COURT, WE CONFIRM THE ORDER OF THE LEA RNED CIT (APPEALS). 10. THE APPEAL OF THE REVENUE IN ITA NO.688/CHD/2014 IS DISMISSED. ITA NO.852/CHD/2014 : 11. IT IS RELEVANT TO OBSERVE HERE THAT THE ISSUES IN THIS APPEAL ARE SIMILAR TO THE ISSUES IN ITA NO.688/CHD/2014 AND THE FINDINGS GIVEN IN ITA NO.688/CHD/2014 SHALL APPLY TO THIS CASE ALSO WITH EQUAL 7 FORCE. 12. IN THE RESULT, BOTH THE APPEALS OF THE REVENUE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 14 TH DAY OF MARCH, 2016. SD/- SD/- (H.L.KARWA) (RANO JAIN) VICE PRESIDENT ACCOUNTANT MEMBER DATED : 14 TH MARCH, 2016 *RATI* COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT(A)/THE CIT/THE D R. ASSISTANT REGISTRAR, ITAT, CHANDIGARH