Shree Venkatesh Developers, Pune V. Income-Tax Officer Ward 1 (3), Pune

ITA 860/PUN/2012

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 2889 (ITAT-PUNE)
• Duration Of Justice: 3 year(s) 8 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-01-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 09-09-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 02-05-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: DHEERAJ KUMAR JAIN
• Keywords: Competent authority; Reassessment proceedings
• Section: 143(3); 133A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, PUN E , , !'!! # , $ % BEFORE SHRI R.K. PANDA, AM AND SHRI VIKAS AWASTHY, JM / ITA NOS. 857 TO 860/PN/2012 $& ' !(' / ASSESSMENT YEARS : 2003-04 TO 2006-07 SHREE VENKATESH DEVELOPERS, FLAT NO. 101, SHREE LAXMI VILA, 1170/32 REVENUE COLONY, SHIVAJINAGAR, PUNE-411005 PAN : AARFS3027N ....... / APPELLANT )& / V/S. INCOME TAX OFFICER, WARD 1(3), PUNE / RESPONDENT ASSESSEE BY : SHRI SUNIL GANOO REVENUE BY : SHRI DHEERAJ KUMAR JAIN / DATE OF HEARING : 17-11-2015 / DATE OF PRONOUNCEMENT : 15-01-2016 * / ORDER PER VIKAS AWASTHY, JM : THESE SET OF FOUR APPEALS FOR THE ASSESSMENT YEARS 2003 -04 TO 2006-07 HAVE BEEN FILED BY THE ASSESSEE AGAINST THE ORD ERS OF COMMISSIONER OF INCOME TAX (APPEALS)-I, PUNE FOR THE RESP ECTIVE ASSESSMENT YEARS. ALL THE IMPUGNED ORDERS ARE DATED 1 7-02-2011. SINCE, THE ISSUES INVOLVED IN ALL THE APPEALS ARE IDENTICAL, TH ESE APPEALS ARE TAKEN UP TOGETHER FOR ADJUDICATION. 2 ITA NOS. 857 TO 860/PN/2012, A.YS. 2003-04 TO 2006-07 2. IN THE GROUNDS OF APPEAL, THE ASSESSEE HAS RAISED VA RIOUS GROUNDS. THE LD. AR OF THE ASSESSEE HAS FILED APPLICATIONS T O WITHDRAW GROUND NOS. 1 TO 4 AND 12 IN ITA NO. 857/PN/2012 FOR TH E ASSESSMENT YEAR 2003-04, GROUND NOS. 1 TO 4, 12, 13 AND 14 IN ITA NO. 858/PN/2012 FOR THE ASSESSMENT YEAR 2004-05 AND GROU ND NOS. 1 TO 4, 11, 12 & 13 IN ITA NOS. 859 & 860/PN/2012 FOR THE ASSES SMENT YEARS 2005-06 & 2006-07, RESPECTIVELY. THE APPLICATIONS OF TH E ASSESSEE ARE ACCEPTED, THE ABOVE MENTIONED GROUNDS RAISED IN THE RES PECTIVE ASSESSMENT YEARS ARE DISMISSED AS WITHDRAWN. AS FAR AS OTHER GROUNDS RAISED IN THE APPEALS, THEY ALL RE LATE TO SINGLE ISSUE I.E. DISALLOWANCE OF DEDUCTION CLAIMED U/S. 80IB(10) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT). 3. THE FACTS OF THE CASE AS EMANATING FROM THE RECORD A RE: THE ASSESSEE IS A PARTNERSHIP FIRM ENGAGED IN THE BUSINESS AS PROMOTER AND DEVELOPER OF REAL ESTATE. THE ASSESSEE DEVELOPED HOUSING PROJECT UNDER THE NAME LAXMI VIHAR AT HADAPSAR, PUNE COMPRISING OF 10 8 RESIDENTIAL UNITS. THE COMMENCEMENT CERTIFICATE IN RESPECT O F THE ABOVE SAID PROJECT WAS ISSUED TO THE ASSESSEE BY PUNE MUNICIP AL CORPORATION (PMC) ON 01-02-2002. THE ASSESSEE ALLEGEDLY COMPLETED TH E PROJECT PRIOR TO 31 ST MARCH, 2008 AND CLAIMED DEDUCTION U/S. 80IB(10) OF THE ACT. THE ASSESSEE FOLLOWS PROJECT COMPLETION METHOD OF AC COUNTING AND ACCORDINGLY OFFERED PROFITS FOR TAXATION ON THE COMPLETION O F FLATS AND THEIR SALE. THE ASSESSEE OFFERED THE FOLLOWING INCOME FROM SA LE OF FLATS IN THE IMPUGNED ASSESSMENT YEARS. ASSESSMENT YEARS PROFITS FROM SALE OF FLATS 2003-04 RS.8,19,720/- 2004-05 RS.48,45,430/- 2005-06 RS.1,26,11,770/- 2006-07 RS.1,28,99,010/- 3 ITA NOS. 857 TO 860/PN/2012, A.YS. 2003-04 TO 2006-07 INITIALLY, THE RETURNS OF THE ASSESSEE WERE ACCEPTED BY THE DEPARTMENT U/S. 143(3) OF THE ACT FOR ALL THE IMPUGNED ASSE SSMENT YEARS. THEREAFTER, A SURVEY ACTION U/S. 133A ON 06-06- 2008 WAS CARRIED OUT AT THE BUSINESS PREMISES OF THE ASSESSEE AN D THE ASSESSMENTS WERE REOPENED ON THE GROUND THAT THE CLA IM U/S. 80IB(10) WAS NOT IN ORDER. IN THE REASSESSMENT PROCEEDINGS THE CLAIM OF THE ASSESSEE U/S. 80IB(10) WAS WITHDRAWN FOR THE REASON, THA T THE ASSESSEE HAD NOT COMPLETED THE PROJECT BEFORE THE DUE DATE. TH E ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE COMMISSIONER OF I NCOME TAX (APPEALS). THE COMMISSIONER OF INCOME TAX (APPEALS) UPHELD TH E FINDINGS OF THE ASSESSING OFFICER AND DISMISSED THE APPEALS OF THE ASSESSEE. NOW, THE ASSESSEE IS IN SECOND APPEAL BEFORE T HE TRIBUNAL ASSAILING THE FINDINGS OF COMMISSIONER OF INCOME TAX (APPEALS). 4. SHRI SUNIL GANOO APPEARING ON BEHALF OF THE ASSESSEE SUB MITTED THAT THE COMMENCEMENT CERTIFICATE IN RESPECT OF THE PROJ ECT LAXMI VIHAR WAS ISSUED BY THE PMC ON 01-02-2002. A COPY OF THE COMMENCEMENT CERTIFICATE IS PLACED AT PAGES 41 AND 42 OF THE PAPER BOOK. SINCE, THE PROJECT WAS APPROVED PRIOR TO 01-04-2 005. THERE WAS NO REQUIREMENT FOR OBTAINING COMMENCEMENT CERTIFICATE. THE AMENDED PROVISIONS OF THE ACT REQUIRING ASSESSEES TO OBTAIN COMPLE TION CERTIFICATE IN RESPECT OF PROJECTS TO CLAIM DEDUCTION U/S. 8 0IB(10) IS EFFECTIVE ONLY FROM THE DATE OF AMENDMENT I.E. 01-04-2005. THE LD. AR CONTENDED THAT EVEN OTHERWISE THE PROJECT WAS COMPLET ED ON 16-05-2005. THERE WAS DELAY IN COMPLETION OF ONLY 6 FLATS WHICH WERE SUBSEQUENTLY COMPLETED WELL BEFORE THE DUE DATE. THE AS SESSEE HAD APPLIED FOR COMPLETION CERTIFICATE TO THE PMC ON 16-05-200 5. A COPY OF THE APPLICATION IS PLACED ON RECORD AT PAGE 7 OF THE PAP ER BOOK. THE 4 ITA NOS. 857 TO 860/PN/2012, A.YS. 2003-04 TO 2006-07 COMPLETION CERTIFICATE IN RESPECT OF 6 FLATS WAS ISSUED BY TH E PMC ON 09-10-2009. A COPY OF CERTIFICATE IS PLACED AT PAGE 39 O F THE PAPER BOOK. A PERUSAL OF THE FINAL COMPLETION CERTIFICATE WOULD SHOW THAT THE SAME WAS ISSUED IN RESPONSE TO THE APPLICATION DATED 16- 05-2005 MADE BY THE ASSESSEE. THE LD. AR FURTHER REFERRED TO THE IN FORMATION SOUGHT UNDER THE RIGHT TO INFORMATION ACT, WHEREIN IT HAS BEEN M ENTIONED THAT THE APPLICATION FOR OCCUPATION CERTIFICATE WAS MADE ON 16-0 5-2005 AND NO OBJECTION WAS FOUND IN THE SAID MATTER. THE LD. AR CON TENDED THAT IN THE FIRST INSTANCE THE ASSESSEE WAS NOT REQUIRED TO O BTAIN COMPLETION CERTIFICATE FROM THE PMC TO CLAIM DEDUCTION U/S. 80IB(10) AND SECONDL Y, THE ASSESSEE HAD COMPLETED THE PROJECT WELL BEFORE 31-0 3-2008. THEREFORE, THE ASSESSEE WAS ELIGIBLE TO CLAIM DEDUCTION U/S . 80IB(10) OF THE ACT. THE LD. AR IN ORDER TO SUPPORT OF HIS SUBMISSIONS PLACED RELIANCE ON THE FOLLOWING DECISIONS : I. COMMISSIONER OF INCOME TAX VS. SARKAR BUILDERS, 375 ITR 39 2 (SC); II. M/S. SATISH BORA & ASSOCIATES VS. ASSISTANT COMMISSIONER O F INCOME TAX, ITA NOS. 713 & 714/PN/2010 DECIDED ON 07-0 1- 2011 (ITAT, PUNE); III. INCOME TAX OFFICER VS. M/S. PARAS CONSTRUCTION, ITA NOS. 58 4 TO 588/PN/2013 FOR THE ASSESSMENT YEARS 2003-04 TO 2007 -08 DECIDED ON 31-07-2015. 5. ON THE OTHER HAND SHRI DHEERAJ KUMAR JAIN REPRESEN TING THE DEPARTMENT VEHEMENTLY SUPPORTED THE FINDINGS OF THE CO MMISSIONER OF INCOME TAX (APPEALS) IN REJECTING THE CLAIM OF ASSESSEE U /S. 80IB(10) OF THE ACT. THE LD. DR SUBMITTED THAT THERE IS NO DISPUTE A BOUT THE DATE OF COMMENCEMENT OF THE PROJECT. SINCE, THE PROJECT STAR TED BEFORE 1 ST 5 ITA NOS. 857 TO 860/PN/2012, A.YS. 2003-04 TO 2006-07 APRIL, 2004 THE PROJECT SHOULD HAVE BEEN COMPLETED BY 31 -03-2008. WHEREAS, IN THE CASE OF THE ASSESSEE THE FINAL COMPLETION CERTIFICATE WAS ISSUED BY THE PMC ON 09-10-2009. THEREFORE, THE ASSESS EE IS NOT ELIGIBLE TO CLAIM DEDUCTION UNDER THE PROVISIONS OF SECTION 80 IB(10) ON THE PROJECT UNDER QUESTION. IN SUPPORT OF HIS SUBMISSION S THE LD. DR PLACED RELIANCE ON THE DECISION OF HON'BLE MADHYA PRADESH HIGH COURT IN THE CASE OF COMMISSIONER OF INCOME TAX VS. GLOBAL REALIT Y REPORTED AS 62 TAXMANN.COM 204 (MP) AND THE DECISION OF LUCKNOW BE NCH OF THE TRIBUNAL IN THE CASE OF FORTUNA FOUNDATION ENGINEER & CON SULTANTS (P.) LTD. VS. ASSISTANT COMMISSIONER OF INCOME TAX REPORTED AS 155 TTJ 501 (LUCKNOW). THE LD. DR SUBMITTED THAT THE HON'BLE MADH YA PRADESH HIGH COURT IN THE CASE OF COMMISSIONER OF INCOME TAX VS. GLOBAL REALITY (SUPRA) HAS HELD THAT THE STIPULATION FOR OBTAIN ING COMPLETION CERTIFICATE FROM THE LOCAL AUTHORITY BEFORE CUTOFF DATE IS MANDATORY. WHERE THE COMPLETION CERTIFICATE OF HOUSING PRO JECT WAS ISSUED AFTER CUTOFF DATE BY LOCAL AUTHORITY MENTIONING THE DATE OF COMPLETION OF THE PROJECT BEFORE THE CUTOFF DATE, IT DOES NOT FULFILL THE CONDITION SPECIFIED IN SECTION 80IB(10)(A) AND THE ASSESSEE IS NOT ENTITLED TO CLAIM DEDUCTION U/S. 80IB(10) OF THE ACT. THE LD. DR SUBMITTED THAT IN VIEW OF THE DECISION OF HON'BLE MADHYA PRADESH HIGH COURT, THE APPEALS OF THE ASSESSEE ARE LIABLE SHOULD BE DISMISSED. 6. THE LD. AR REFUTTING THE SUBMISSIONS MADE ON BEHALF OF T HE DEPARTMENT SUBMITTED THAT THE FACTS OF THE CASE OF THE ASSESSEE ARE DISTINGUISHABLE FROM THE FACTS IN THE CASE OF COMMISSIONER OF INCOME TAX VS. GLOBAL REALITY (SUPRA). THEREFORE, THE DECISION RENDER ED IN THE SAID CASE IS NOT APPLICABLE IN THE FACTS AND CIRCUMSTANCES OF THE CASE IN HAND. THE LD. AR FURTHER SUBMITTED THAT THE HON'BLE DELHI HIGH COURT 6 ITA NOS. 857 TO 860/PN/2012, A.YS. 2003-04 TO 2006-07 AND THE HON'BLE MADRAS HIGH COURT HAS GIVEN DECISION ON THIS ISSUE IN FAVOUR OF THE ASSESSEE. IT IS A WELL SETTLED LAW THAT WHE RE TWO VIEWS ARE POSSIBLE, THE VIEW IN FAVOUR OF THE ASSESSEE HAS TO BE FOLLOW ED. TO SUPPORT HIS SUBMISSIONS, THE LD. AR PLACED RELIANCE ON THE D ECISION OF HON'BLE SUPREME COURT OF INDIA IN THE CASE OF COMMISSIONER OF INCOME TAX VS. VEGETABLE PRODUCTS LIMITED REPORTED AS 88 ITR 192 (SC). 7. WE HAVE HEARD THE SUBMISSIONS MADE BY THE REPRESEN TATIVES OF RIVAL SIDES AND HAVE PERUSED THE ORDERS OF THE AUTHORITIE S BELOW. WE HAVE ALSO CONSIDERED THE DECISIONS ON WHICH BOTH THE SIDE S HAVE PLACED RELIANCE. IN THE PRESENT SET OF APPEALS THE ONLY ISSUE RAISED BY THE ASSESSEE IS DENIAL OF DEDUCTION U/S. 80IB(10) FOR NON-COMPLET ION OF PROJECT BEFORE THE DUE DATE. UNDISPUTEDLY, THE COMMEN CEMENT CERTIFICATE WAS ISSUED TO THE ASSESSEE IN RESPECT OF PROJ ECT LAXMI VIHAR ON 01-02-2002. AS PER THE CONTENTION OF THE ASSESSEE THE PROJECT WAS COMPLETED IN ALL RESPECTS ON 16-05-2005 AND ACCORDINGLY AN APPLICATION WAS MADE TO THE PMC FOR ISSUANCE OF COMPLETION CERTIFICATE . HOWEVER, THE PMC ISSUED COMPLETION CERTIFICATE IN RESPONSE TO THE S AID APPLICATION OF THE ASSESSEE ON 09-10-2009. 8. AS PER THE PROVISIONS OF SECTION 80IB(10)(A) THE PROJE CT COMMENCED BEFORE 01-04-2004 SHOULD BE COMPLETED ON OR BEFORE 31-03-2008, TO BE ELIGIBLE TO CLAIM DEDUCTION. IN THE INSTA NT CASE, THE FINAL COMPLETION CERTIFICATE WAS ISSUED BY THE PMC ON 09-10- 2009. THE ASSESSEE HAS ALSO PLACED ON RECORD A LETTER/COMMUNICATIO N FROM PMC DATED 31-01-2011, IN RESPONSE TO THE APPLICATION OF THE ASSESSEE UNDER RIGHT TO INFORMATION ACT. IN THE SAID LETTER THE PMC HAS MENTIONED THA T AN APPLICATION WAS MADE ON 16-05-2005 FOR OCCUPATION CER TIFICATE OF 7 ITA NOS. 857 TO 860/PN/2012, A.YS. 2003-04 TO 2006-07 THE BUILDING, NO OBJECTION IS FOUND TO THE SAID MATTER. THE RELEVANT EXTRACT OF THE TRANSLATED COPY OF THE LETTER FROM THE PM C PLACED ON RECORD AT PAGE 38 OF THE PAPER BOOK BY THE ASSESSEE IS REPRODUCED HERE- IN-BELOW: ADDL. CITY ENGINEER'S OFFICE, PUNE MUNICIPAL CORPORATION, OUTWARD NO. ZONE 4/4124, DATED: 31/1/11. TO, SHRI. ARUN NIMHAN FLAT NO. 101, SHREE LAXMI VILLA, S.NO. 1170/32 REVENUE COLONY, SHIVAJINAGAR, PUNE 5. SUBJECT: OCCUPATION CERTIFICATE IN R/O PUNE PETH HADAPSAR, SURVEY NO.163A/1 REFERENCE: YOUR APPLICATION NO. MA/550 DATED 27/1/2011 AND GOVT. RIGHT TO INFORMATION ACT, 2005. WE HAVE RECEIVED YOUR APPLICATION UNDER REFERENCE O N THE SUBJECT MATTER OF RIGHT OF INFORMATION. HAVING INVESTIGATED INTO THE CONSTRUCTION MATTER ON SUBJECT PROPERTY, AN APPLICATION HAS BEE N MADE ON 16/5/2005 FOR OCCUPATION CERTIFICATE ON THE BUILD ING ON THE AFORESAID PROPERTY, 0 THROUGH ARCHITECT VISHWAS KULKARNI, BEI NG INWARD NO. 29 DATED 16/5/2005. NO OBJECTION HAS BEEN FOUND TO THE SAID MATTER. AFTER HAVING PAID RS.2/- PER PAGE OF THE RECORDS A VAILABLE WITH THE PMC, IN THE PMC TREASURY AND HAVING MADE A CTUAL EXPENSES TOWARDS XEROX COPIES OF THE PAPERS, YOU SHALL BE GIVEN THE AVAILABLE PAPERS WITH THIS OFFICE AS PER APPLICATION UNDER REFERENCE. THIS FACT IS BEING IN-FORMED TO YOU IN CONNECTION T HE APPLICATION UNDER REFERENCE. SD/-XXX PUBLIC INFORMATION OFFICERS AND DY. ENGINEER. CONSTRUCTION DEVELOPMENT DIVISION ZONE NO. 4 PUNE MUNICIPAL CORPORATION THE ASSESSEE HAS ALSO PLACED ON RECORD COPY OF POSSESS ION RECEIPTS AND THE MONTHLY ELECTRICITY CONSUMPTION BILLS ISSUE D BY 8 ITA NOS. 857 TO 860/PN/2012, A.YS. 2003-04 TO 2006-07 MAHARASHTRA STATE ELECTRICITY DISTRIBUTION COMPANY LTD. TO SHOW THAT THE SIX FLATS IN RESPECT OF WHICH COMPLETION CERTIFICATE WAS ISSUED BY PMC ON 09-10-2009 WHERE COMPLETE, THE ALLOTTEES HAD TAK EN POSSESSION AND WERE OCCUPIED BY THE FAMILIES PRIOR TO 31-0 3-2008. NOTHING HAS BEEN BROUGHT ON RECORD BY THE DEPARTMENT TO SHOW THAT THERE WAS ANY DEFICIENCY OR OBJECTION POINTED OUT BY THE PMC FOR NOT GRANTING THE COMPLETION CERTIFICATE. THUS, THE DELAY IN ISS UANCE OF COMPLETION CERTIFICATE BY THE PMC CANNOT BE ATTRIBUTED TO THE ASSESSEE IN THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE. 9. APART FROM MERITS OF THE CASE ON FACTS, WE FURTHER OB SERVE THAT THE ASSESSEE HAD COMMENCED THE PROJECT PRIOR TO 01-0 4-2004. THE PROVISIONS OF SECTION 80IB(10) HAVE BEEN AMENDED W.E.F. 01-04 -2005 BY THE FINANCE ACT (NO. 2) OF 2004, WHEREBY THE CONDITION FOR O BTAINING COMPLETION CERTIFICATE WAS INSERTED. THE HON'BLE SUPREME C OURT OF INDIA IN THE CASE OF COMMISSIONER OF INCOME TAX VS. SARKA R BUILDERS (SUPRA) HAS HELD THAT THE DEPARTMENT CANNOT DENY THE B ENEFIT OF SECTION 80IB(10) APPLYING THE PRINCIPLE OF RETROACTIVITY, EVEN WHEN T HE PROVISION HAS NO RETROSPECTIVITY. 10. WE FIND THAT THE ISSUE IN HANDS IS COVERED BY THE DE CISION OF CO- ORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF INCOME TAX OFFICER VS. M/S. PARAS CONSTRUCTION (SUPRA), WHEREIN THE TRIBUNAL IN SIM ILAR CIRCUMSTANCES AFTER PLACING RELIANCE ON THE DECISION RENDER ED IN THE CASE OF RUNWAL DEVELOPERS VS. ACIT IN ITA NO. 1339/PN/201 0 DECIDED ON 30-12-2014 HAS HELD AS UNDER: 6. WE FIND THAT THE ISSUE RAISED IN THE PRESENT AP PEAL IS SIMILAR TO THE DISPUTE DECIDED BY THE CO-ORDINATE BENCH IN THE CASE OF RUNWAL DEVELOPERS VS. ACIT (SUPRA). IN THE SAID CASE THE PROJECT HAD COMMENCED W.E.F. 12-12-2003 AND ACCORDINGLY IT WAS REQUIRED TO BE COMPLETED ON OR BEFORE 31-03-2008. THE ASSESSING O FFICER DISALLOWED 9 ITA NOS. 857 TO 860/PN/2012, A.YS. 2003-04 TO 2006-07 THE CLAIM OF DEDUCTION U/S. 80IB(10) TO THE ASSESSE E ON THE GROUND THAT THE COMPLETION CERTIFICATE WAS GIVEN BY THE LOCAL A UTHORITY AFTER 31-03- 2008. THE TRIBUNAL HELD THAT THE ASSESSEE MADE APP LICATION TO THE CONCERNED AUTHORITY FOR ISSUANCE OF COMPLETION CERT IFICATE BEFORE 31-03- 2008. THE ASSESSEE HAD TAKEN ALL THE NECESSARY STE PS REQUIRED TO BE DONE BEFORE SEEKING THE COMPLETION CERTIFICATE. NO N-ISSUANCE OF COMPLETION CERTIFICATE BY THE COMPETENT AUTHORITY B EFORE 31-03-2008 WAS FOR REASONS BEYOND THE CONTROL OF THE ASSESSEE. ON CE, THE ASSESSEE HAS OBTAINED NO OBJECTION CERTIFICATE FROM THE CONCERNE D DEPARTMENTS, THE OBTAINING OF COMPLETION CERTIFICATE IS MERELY A FOR MALITY. THE DELAY IN ISSUANCE OF COMPLETION CERTIFICATE BY THE COMPETENT AUTHORITY CANNOT BE ATTRIBUTED TO THE ASSESSEE. THE TRIBUNAL FURTHER R ELIED ON THE DECISION OF HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS. CHD DEVELOPERS LTD. (SUPRA) AND HELD THAT SINCE THE PROJECT WAS APPROVE D PRIOR TO 2005, THE CONDITION OF OBTAINING COMPLETION CERTIFICATE INSER TED BY FINANCE ACT, 2004 WILL NOT BE APPLICABLE. THE RELEVANT EXTRACT OF THE ORDER OF TRIBUNAL IS AS UNDER: 7. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS. THE CRUX OF THE CONTROVERSY IN THE PRESENT APPEAL RELATES TO TH E PROVISIONS OF SUB- CLAUSE (I) OF CLAUSE (A) TO SECTION 80-IB(10) OF TH E ACT READ WITH EXPLANATION (II) THEREOF. AS PER THE REVENUE, HAVI NG REGARD TO SUB-CLAUSE (I) OF CLAUSE (A) TO SECTION 80-IB(10) OF THE ACT, THE CONSTRUCTION OF THE HOUSING PROJECT WAS TO BE COMPLETED ON OR BEFORE 31 .03.2008. SUB- CLAUSE (I) OF CLAUSE (A) TO SECTION 80-IB(10) OF TH E ACT PRESCRIBES THAT WHERE A HOUSING PROJECT IS APPROVED ON OR BEFORE 01 .04.2004 THEN THE DEVELOPMENT AND CONSTRUCTION OF SUCH HOUSING PROJEC T SHALL BE COMPLETED ON OR BEFORE 31.03.2008. EXPLANATION (II) BELOW CL AUSE (A) OF SECTION 80- IB(10) OF THE ACT PROVIDES THAT THE DATE OF COMPLET ION OF CONSTRUCTION OF THE HOUSING PROJECT SHALL BE TAKEN TO BE THE DATE O N WHICH THE COMPLETION CERTIFICATE IN RESPECT OF SUCH HOUSING PROJECT IS I SSUED BY THE LOCAL AUTHORITY. 8. IN THE PRESENT CASE, IT IS AN ADMITTED POSITION THAT THE HOUSING PROJECT OF THE ASSESSEE KNOWN AS RUNWAL DAFFODILS COMMENCED WITH EFFECT FROM 12.12.2003 AND THEREFORE CONSTRUCTION O F SUCH A HOUSING PROJECT WAS REQUIRED TO BE COMPLETED ON OR BEFORE 3 1.03.2008 AS STIPULATED IN SUB-CLAUSE (I) OF CLAUSE (A) TO SECTI ON 80-IB(10) OF THE ACT. IT IS ALSO NOT DENIED BY THE ASSESSEE THAT THE RELEVAN T COMPLETION CERTIFICATE HAS NOT BEEN ISSUED BY THE LOCAL AUTHORITY I.E. PMC ON OR BEFORE 31.03.2008. HOWEVER, THE CASE SETUP BY THE ASSESSE E IS THAT THE PROJECT OF THE ASSESSEE WAS APPROVED AND IT COMMENCED ON 12 .12.2003, WHICH PERTAINS TO A PERIOD PRIOR TO 01.04.2005 I.E. THE D ATE ON WHICH THE AMENDMENT WHICH INSISTED ON PRODUCTION OF COMPLETIO N CERTIFICATE WAS BROUGHT INTO FORCE. IN ORDER TO APPRECIATE THE AFO RESAID PLEA OF THE ASSESSEE, WE MAY REFER TO THE PROVISIONS OF SECTION 80-IB(10) OF THE ACT AS IT STOOD PRIOR TO THE AMENDMENT BROUGHT BY THE F INANCE (NO.2) ACT OF 2004, W.E.F. 01.04.2005 :- (10) THE AMOUNT OF PROFITS IN CASE OF AN UNDERTAKI NG DEVELOPING AND BUILDING HOUSING PROJECTS APPROVED B EFORE THE 31ST DAY OF MARCH, 2005 BY A LOCAL AUTHORITY, SHALL BE HUNDRED PER CENT. OF THE PROFITS DERIVED IN ANY PREVIOUS YE AR RELEVANT TO ANY ASSESSMENT YEAR FROM SUCH HOUSING PROJECT IF, - (A) SUCH UNDERTAKING HAS COMMENCED OR COMMENCES DEVELOPMENT AND CONSTRUCTION OF THE HOUSING PROJECT ON OR AFTER TILE 1ST DAY OF OCTOBER, 1998; (B) THE PROJECT IS ON THE SIZE OF A PLOT OF LAND WHICH HAS MINIMUM AREA OF ONE ACRE; AND (C) THE RESIDENTIAL UNIT HAS A MINIMUM BUILT-UP AREA OF ONE THOUSAND SQUARE FEET WHERE SUCH RESIDENTIAL UNIT IS SITUATED WITHIN THE CITIES OF DELHI OR MUMBAI OR WITHIN TWEN TY-FIVE KILOMETRES FROM THE MUNICIPAL LIMITS OF THESE CITIE S AND ONE THOUSAND AND FIVE HUNDRED SQUARE FEET AT ANY OTHER PLACE. 10 ITA NOS. 857 TO 860/PN/2012, A.YS. 2003-04 TO 2006-07 9. SUBSEQUENTLY, FINANCE (NO.2) ACT OF 2004, WHICH WAS BROUGHT INTO FORCE W.E.F. 01.04.2005, AMENDED THE PROVISION S OF SECTION 80-IB(10) OF THE ACT; AND, POST-AMENDMENT SECTION 80-IB(10) O F THE ACT READ AS UNDER :- (10) THE AMOUNT OF DEDUCTION IN THE CASE OF AN UND ERTAKING DEVELOPING AND BUILDING HOUSING PROJECTS APPROVED B EFORE THE 31ST DAY OF MARCH, 2008 BY A LOCAL AUTHORITY SHALL BE HUNDRED PER CENT. OF THE PROFITS DERIVED IN THE PREVIOUS YE AR RELEVANT TO ANY ASSESSMENT YEAR FROM SUCH HOUSING PROJECT IF, - (A) SUCH UNDERTAKING HAS COMMENCED OR COMMENCES DEVELOPMENT AND CONSTRUCTION OF THE HOUSING PROJECT ON OR AFTER THE 1ST DAY OF OCTOBER, 1998 AND COMPLETES SU CH CONSTRUCTION - (I) IN A CASE WHERE A HOUSING PROJECT HAS BEEN APPR OVED BY THE LOCAL AUTHORITY BEFORE THE 1ST DAY OF APRIL, 2004, ON OR BEFORE THE 31ST DAY OF MARCH, 2008; (II) IN A CASE WHERE A HOUSING PROJECT HAS BEEN, OR , IS APPROVED BY THE LOCAL AUTHORITY ON OR AFTER THE 1ST DAY OF APRIL, 2004 BUT NOT LATER THAN THE 31ST DAY OF MARC H, 2005, WITHIN FOUR YEARS FROM THE END OF THE FINANCI AL YEAR IN WHICH THE HOUSING PROJECT IS APPROVED BY THE LOC AL AUTHORITY. (III) IN A CASE WHERE A HOUSING PROJECT HAS BEEN AP PROVED BY THE LOCAL AUTHORITY ON OR AFTER THE 1ST DAY OF A PRIL, 2005, WITHIN FIVE YEARS FROM THE END OF THE FINANCI AL YEAR IN WHICH THE HOUSING PROJECT IS APPROVED BY THE LOC AL AUTHORITY. EXPLANATION- FOR THE PURPOSES OF THIS CLAUSE,- (I) IN A CASE WHERE THE APPROVAL IN RESPECT OF THE HOUSING PROJECT IS OBTAINED MORE THAN ONCE, SUCH HOUSING PROJECT SH ALL BE DEEMED TO HAVE BEEN APPROVED ON THE DATE ON WHICH T HE BUILDING PLAN OF SUCH HOUSING PROJECT IS FIRST APPROVED BY T HE LOCAL AUTHORITY; (II) THE DATE OF COMPLETION OF CONSTRUCTION OF THE HOUSING PROJECT SHALL BE TAKEN TO BE THE DATE ON WHICH THE COMPLETI ON CERTIFICATE IN RESPECT OF SUCH HOUSING PROJECT IS ISSUED BY THE LOCAL AUTHORITY; (B) THE PROJECT IS ON THE SIZE OF A PLOT OF LAND WH ICH HAS A MINIMUM AREA OF ONE ACRE: PROVIDED THAT NOTHING CONTAINED IN CLAUSE (A) OR CL AUSE (B) SHALL APPLY TO A HOUSING PROJECT CARRIED OUT IN ACCORDANC E WITH A SCHEME FRAMED BY THE CENTRAL GOVERNMENT OR A STATE GOVERNMENT FOR RECONSTRUCTION OR REDEVELOPMENT OF E XISTING BUILDINGS IN AREAS DECLARED TO BE SLUM AREAS UNDER ANY LAW FOR THE TIME BEING IN FORCE AND SUCH SCHEME IS NOTIFIED BY THE BOARD IN THIS BEHALF; (C) THE RESIDENTIAL UNIT HAS A MAXIMUM BUILT-UP ARE A OF ONE THOUSAND SQUARE FEET WHERE SUCH RESIDENTIAL UNIT IS SITUATED WITHIN THE CITIES OF DELHI OR MUMBAI OR WITHIN TWEN TY-FIVE KILOMETRES FROM THE MUNICIPAL LIMITS OF THESE CITIE S AND ONE THOUSAND AND FIVE HUNDRED SQUARE FEET AT ANY OTHER PLACE; (D) THE BUILT-UP AREA OF THE SHOPS AND OTHER COMMER CIAL ESTABLISHMENTS INCLUDED IN THE HOUSING PROJECT DOES NOT EXCEED THREE PER CENT. OF THE AGGREGATE BUILT-UP AREA OF T HE HOUSING PROJECT OF FIVE THOUSAND SQUARE FEET, WHICHEVER IS HIGHER. 10. IN THE INSTANT ASSESSMENT YEAR I.E. 2006-07, TH E ASSESSING OFFICER HAS SOUGHT TO DISALLOW THE DEDUCTION CLAIME D BY THE ASSESSEE ON 11 ITA NOS. 857 TO 860/PN/2012, A.YS. 2003-04 TO 2006-07 THE GROUND THAT THE COMPLETION CERTIFICATE IN TERMS OF EXPLANATION (II) HAS NOT BEEN OBTAINED. A SIMILAR SITUATION HAD ARISEN BEFORE THE HONBLE DELHI HIGH COURT IN THE CASE OF CHD DEVELOPERS LTD. (SUPRA). IN THE CASE BEFORE THE HONBLE DELHI HIGH COURT, THE PROJECT OF THE ASSESSEE WAS APPROVED ON 16.03.2005 AND THE ASSESSING OFFICER PR OCEEDED TO DISALLOW THE DEDUCTION CLAIMED FOR ASSESSMENT YEAR 2007-08 ON THE GROUND THAT THE COMPLETION CERTIFICATE IN TERMS OF EXPLANATION (II) WAS NOT GRANTED WITHIN THE STIPULATED PERIOD I.E. ON OR BEF ORE 31.03.2009. NOTABLY, IN THE CASE BEFORE THE HONBLE DELHI HIGH COURT, THE TIME-LIMIT FOR COMPLETION OF CONSTRUCTION OF THE HOUSING PROJE CT WAS GOVERNED BY SUB-CLAUSE (II) OF CLAUSE (A) TO SECTION 80-IB(10) OF THE ACT. THE HONBLE DELHI HIGH COURT NOTED THAT SINCE THE PROJECT OF TH E ASSESSEE WAS APPROVED PRIOR TO 2005 I.E. BEFORE THE AMENDMENT WH ICH INSISTED ON ISSUANCE OF COMPLETION CERTIFICATE BY THE END OF FO UR YEARS WAS BROUGHT INTO FORCE, THE CLAIM OF DEDUCTION COULD NOT BE DEN IED FOR THE SAID REASON. THE CASE OF THE ASSESSEE BEFORE US IS FULLY COVERED BY THE RATIO OF THE JUDGEMENT OF THE HONBLE DELHI HIGH COURT IN THE CA SE OF CHD DEVELOPERS LTD. (SUPRA). IN THIS BACKGROUND, WE THEREFORE FIN D NO REASONS TO UPHOLD THE OBJECTION OF THE LOWER AUTHORITIES IN ORDER TO DISALLOWANCE CLAIMED U/S 80-IB(10) OF THE ACT. 7. THE HON'BLE MADRAS HIGH COURT IN THE CASE OF CIT VS. JAIN HOUSING & CONSTRUCTIONS LTD. (SUPRA) HAD HELD THAT CONDITION TO FURNISH COMPLETION CERTIFICATE FOR GRANT OF DEDUCTION U/S. 80IB(10) WAS INTRODUCED BY FINANCE NO. (2) ACT, 2004 W.E.F. 01-04-2005 AND PRIOR TO IT THERE WAS NO SUCH REQUIREMENT. THE CLAIM OF ASSESSEE CANNOT BE REJECTED FOR ASSESSMENT YEAR 2004-05 ON THE GROUND THAT THE ASSE SSEE HAD NOT FURNISHED THE COMPLETION CERTIFICATE. 8. XXXXXXXXXX 9. XXXXXXXXXX 10. IN VIEW OF THE FACTS OF THE CASE AND THE DECISI ONS DISCUSSED ABOVE WE HOLD THAT NON OBTAINING OF COMPLETION CERTIFICAT E IN RESPECT OF PROJECT APPROVED PRIOR TO 01-04-2005 WILL NOT RENDER THE AS SESSEE INELIGIBLE FOR CLAIMING DEDUCTION U/S. 80IB(10) IN THE IMPUGNED AS SESSMENT YEARS. IN APPEALS FOR ASSESSMENT YEARS 2005-06 TO 2007-08, TH E REVENUE HAS RAISED GROUND WITH REGARD TO COMMERCIAL UNITS IN TH E PROJECT. SINCE, THE SAME HAS NOT BEEN PRESSED BY THE LD. DR. THE SAME ARE DISMISSED AS NOT PRESSED. THUS, IN THE FACTS OF THE CASE AND THE WELL SETTLED LAW DIS CUSSED ABOVE, WE ARE OF THE CONSIDERED OPINION THAT THE ASSESS EE IS ELIGIBLE TO CLAIM DEDUCTION U/S. 80IB(10) IN RESPECT OF ITS PROJECT, LAX MI VIHAR AT HADAPSAR, PUNE. 11. THE LD. DR HAS PLACED RELIANCE ON THE DECISION RENDER ED BY THE HON'BLE MADHYA PRADESH HIGH COURT IN THE CASE OF COMMISS IONER OF INCOME TAX VS. GLOBAL REALITY (SUPRA). WE FIND THAT THE FAC TS OF THE PRESENT CASE ARE AT VARIANCE WITH THE FACTS IN THE CASE OF INCOME TAX 12 ITA NOS. 857 TO 860/PN/2012, A.YS. 2003-04 TO 2006-07 VS. GLOBAL REALITY (SUPRA). THEREFORE, THE RATIO LAID DOWN IN TH E SAID CASE IS NOT APPLICABLE IN THE FACTS AND CIRCUMSTANCES OF TH E PRESENT CASE. IN ANY CASE, THE VIEW TAKEN BY THE HON'BLE DELHI H IGH COURT IN THE CASE OF COMMISSIONER OF INCOME TAX VS. CHD DEVELOPMEN TS LTD., 362 ITR 177 (DELHI) IN FAVOUR OF THE ASSESSEE IS ONE OF THE POSSIBLE VIEWS. THE SAME HAS BEEN FOLLOWED IN THE PRESENT CASE. IN VIEW OF THE JUDGMENT OF THE HON'BLE SUPREME COURT OF INDIA IN THE CA SE OF COMMISSIONER OF INCOME TAX VS. VEGETABLE PRODUCTS LIMITED (SUPRA), THE VIEW FAVOURABLE TO THE ASSESSEE HAS BEEN PREFERRED. 12. IN THE RESULT, THE IMPUGNED ORDERS ARE SET ASIDE AN D THE APPEALS OF THE ASSESSEE ARE PARTLY ALLOWED. ORDER PRONOUNCED ON FRIDAY, THE 15 TH DAY OF JANUARY, 2016. SD/- SD/- ( . . / R.K. PANDA) ( ! ' / VIKAS AWASTHY) #' / ACCOUNTANT MEMBER $ % #' / JUDICIAL MEMBER / PUNE; &# / DATED :15 TH JANUARY, 2016 RK *+,$-.'/'(- / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. ' () / THE CIT(A)-I, PUNE 4. ' / THE CIT-I, PUNE 5. !*+ %%,- , ,- , . /01 , / DR, ITAT, A BENCH, PUNE. 6. + 2 34 / GUARD FILE. // ! % // TRUE COPY// #5 / BY ORDER, %6 ,1 / PRIVATE SECRETARY, ,- , / ITAT, PUNE