M/s. Agrasen Group of Constructions, Aurangabad V. Commissioner of Income-tax,

ITA 956/PUN/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 2460 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 10 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-03-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 29-03-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 09-05-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K SINGH
• Keywords: Reasonable cause; Corroborative evidences; Assessment record; Prejudicial to interest
• Section: 143(3); 80IB; 263; 10

Judgement Text

] ]] ] IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE , !', $ % BEFORE MS. SUSHMA CHOWLA, JM AND SHRI PRADIP KUMAR KEDIA, AM ITA NO.956/PN/2014 ASSESSMENT YEAR : 2009-10 M/S AGRASEN GROUP OF CONSTRUCTIONS, RAMTARA BUILDING, SHAHANOORWADI, AURANGABAD. PAN : AAKFA8043R . APPELLANT VS. THE INCOME TAX OFFICER, WARD 2(3), AURANGABAD. . RESPONDENT / APPELLANT BY : NONE / RESPONDENT BY : SHRI S.K. SINGH, CIT / DATE OF HEARING : 29.03.2016 / DATE OF PRONOUNCEMENT: 31.03.2016 & / ORDER PER PRADIP KUMAR KEDIA, AM : THE ABOVE CAPTIONED APPEAL FILED BY THE ASSESSEE IS AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX, AURANGABAD (IN SHORT T HE COMMISSIONER) DATED 08.01.2014 RELATING TO ASSESSMENT YEAR 2009-1 0 PASSED UNDER SECTION 263 OF THE INCOME-TAX ACT, 1961 (IN SHORT THE ACT). 2. IN THIS APPEAL, THE ASSESSEE HAS RAISED THE FOLL OWING GROUNDS OF APPEAL :- 1] ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE HON'B1E COMMISSIONER OF INCOME TAX, AURANGABAD HAS ERRED IN SETTING ASIDE THE ORDER OF THE ASSESSING OFFICER, WARD 2(3), AURANGABAD ORDER DATE D 31/10/2011. 2] ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE LEARNED CIT, AURANGABAD HAS ERRED IN TREATING THE ORDER PASSED B Y THE A.O. DATED 31/10/2011 AS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENU E. 3] ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE HON'BLE CIT, AURANGABAD HAS NOT REALIZED THE FACT THAT THE ASSES SING OFFICER HAS MADE ASSESSMENT 2 ITA NO.956/PN/2014 TAKING INTO CONSIDERATION ALL THE FACTS AND FIGURES OF THE CASE INCLUDING THE RECORDS CALLED FOR VERIFICATION BY HIM. THE ASSESSING OFFIC ER HAS MADE THE ASSESSMENT AFTER CALLING THE REQUISITE INFORMATION AS PER QUESTIONER WHICH WAS DULY VERIFIED BY HIM AND HE HAS MADE THE ASSESSMENT AFTER FULLY EXERCISI NG THE STATUTORY POWERS AND OBLIGATIONS CASTED UPON HIM. 4] THE ASSESSEE HAS FURNISHED ALL DETAILS AND INFOR MATION BEFORE THE HON'BLE CIT RESPONDING TO THE LETTER OF PROPOSAL FOR ACTION U/S.263. THOUGH ALL THE QUARRIES RAISED BY THE CIT WERE EXPLAINED PROPERLY, EVEN THE Y THE CIT TREATED THE ORDER OF THE ASSESSING OFFICER AS ERRONEOUSLY AND PREJUDICIAL TO INTEREST OF REVENUE AND SET ASIDE THE ASSESSMENT ARBITRARILY. IN VIEW OF THE ABOVE THE ORDER PASSED BY THE HONB1 E CIT U/S.263 DATED 08/01/2014, IS NOT SUSTAINABLE AND IS AGAINST THE S PIRIT OF PROVISION OF SEC. 263 OF THE I.T. ACT. THE APPELLANT CRAVES THE PERMISSION TO ADD, AMEND, MODIFY, ALTER, REVISE, SUBSTITUTE, DELETE ANY OR ALL GROUNDS OF THE APPEAL , IF DEEMED NECESSARY AS THE TIME OF HEARING OF THE APPEAL. 3. AT THE TIME OF HEARING, NONE APPEARED ON BEHALF OF THE ASSESSEE INSPITE OF SERVICE OF NOTICE. THE LD. DEPARTMENTAL REPRESE NTATIVE, SHRI S.K. SINGH APPEARED ON BEHALF OF THE RESPONDENT/REVENUE. INIT IALLY, THE NOTICE WAS ISSUED FIXING THE CAPTIONED APPEAL FOR HEARING ON 13.10.20 15, ON WHICH DATE, NONE APPEARED ON BEHALF OF THE ASSESSEE AND THE APPEAL W AS RE-FIXED FOR HEARING ON 07.01.2016 AND AFTER THAT ON 29.03.2016. HOWEVER, ON 29.03.2016, NEITHER ASSESSEE ATTENDED NOR THERE WAS ANY REQUEST FOR ADJ OURNMENT. IN THESE CIRCUMSTANCES, WE ARE OF THE VIEW THAT THE ASSESSEE IS NOT INTERESTED IN PROSECUTING HIS APPEAL. IN THE ABSENCE OF ANY APPE ARANCE BY THE ASSESSEE IN PERSON OR THROUGH AUTHORIZED REPRESENTATIVE INSPITE OF SERVICE OF NOTICE, WE PROCEED TO DISPOSE OF THE APPEAL EX-PARTE QUA THE ASSESSEE AFTER HEARING THE RESPONDENT/REVENUE ON MERITS IN TERMS OF RULE 24 OF THE INCOME TAX (APPELLATE TRIBUNAL) RULES, 1963. 4. THE RELEVANT FACTS CONCERNING THE CASE ARE THAT THE ASSESSEE IS A FIRM ENGAGED IN THE BUSINESS CONSTRUCTION MAINLY CONSTRU CTION OF RESIDENTIAL HOUSES. THE RETURN OF INCOME FOR ASSESSMENT YEAR 2009-10 SH OWING TOTAL INCOME OF RS.NIL AFTER CLAIMING DEDUCTION UNDER CHAPTER VI-A UNDER SECTION 80IB AMOUNTING TO RS.24,64,386/- WAS FILED BY THE ASSESS EE FIRM ON 26.09.2009. THEREAFTER, THE ASSESSMENT WAS FINALIZED UNDER SECT ION 143(3) ON 31.10.2011 BY ACCEPTING THE INCOME RETURNED. THE COMMISSIONER OBSERVED THAT ON 3 ITA NO.956/PN/2014 VERIFICATION OF THE ASSESSMENT RECORD FOR THE RELEV ANT ASSESSMENT YEAR, HE WAS OF THE VIEW THAT ORDER UNDER SECTION 143(3) DATED 3 1.10.2011 PASSED BY THE ASSESSING OFFICER IS ERRONEOUS IN SO FAR AS IT IS P REJUDICIAL TO THE INTEREST OF THE REVENUE. ACCORDINGLY, HE ISSUED SHOW-CAUSE NOTICE DATED 28.11.2013. THE RELEVANT PART IS REPRODUCED HEREUNDER :- (I) ON VERIFICATION OF CASE RECORDS, IT IS OBSERVE D THAT YOU HAD GOT THE APPROVAL FOR COMMENCEMENT OF DEVELOPMENT FROM AURAN GABAD MUNICIPAL CORPORATION ON 21.01.2000. THEREFORE, AS PER THE PR OVISIONS OF SEC. 80IB(10) OF THE ACT; YOU SHOULD GET THE COMPLETION CERTIFICA TE FROM THE LOCAL AUTHORITY ON OR BEFORE 31.03.2008. HOWEVER, IT APPEARS FROM P ARA 3 OF THE ASSESSMENT ORDER THAT THE AO HAS MADE FOLLOWING REMARKS:- 'THE COMPLETION CERTIFICATE HAS NOT BEEN ISSUED BY THE AMC. HOWEVER, THE ASSESSEE HAS APPLIED FOR THE SAME WITHIN TIME. THE OTHER CONDITIONS OF SEC. 801B(10) HAVE BEEN VERIFIED. THE REFORE THE ASSESSEE'S CLAIM OF DEDUCTION IS ALLOWED. ' FROM THE ABOVE FACT, IT IS CRYSTAL CLEAR THAT YOU D O NOT HAVE POSSESSED COMPLETION CERTIFICATE EVEN ON THE DATE OF PASSING OF ASSESSMENT ORDER U/SEC. 143(3) OF THE ACT I.E. THREE AND HALF YEARS AFTER THE DUE DATE PRESCRIBED FOR COMPLETION CERTIFICATE. IN THE ABSENCE OF COMPLETIO N CERTIFICATE FROM THE LOCAL AUTHORITY, THE DEDUCTION U/SEC. 801B(10) AMOUNTING TO RS. 24,64,386/- CLAIMED BY YOU AND ACCORDINGLY ALLOWED BY THE AO WHILE FINA LIZING THE ASSESSMENT DESERVES TO BE DISALLOWED. 5. IN RESPONSE TO THE SHOW-CAUSE NOTICE, WRITTEN SU BMISSIONS WERE FILED ON BEHALF OF THE ASSESSEE AS NOTED BY THE COMMISSIONER IN PARA 2 OF ITS ORDER. THE RELEVANT PORTION OF THE WRITTEN SUBMISSIONS IS REPR ODUCED HEREUNDER :- IN THIS REGARD WE WOULD LIKE TO SUBMIT THAT DURING THE ASSESSMENT PROCEEDINGS THE SAID ISSUE WAS RAISED BY THE ASSESSING OFFICER AND IT WAS DULY EXPLAINED TO THE ASSESSING OFFICER THAT THERE WERE CERTAIN REASONS B EYOND THE CONTROL OF ASSESSEE TO GET THE COMPLETION CERTIFICATE, THOUGH THE PROJECT WAS COMPLETED BEFORE THE DATE AND APPLICATION WAS ALSO MADE BEFORE THE DUE DATE. THE MUNICIPAL CORPORATION AURANGABAD WAS AND IS STILL NOT IN THE POSITION TO ISSUE COMPLETION CERTIFICATE AS THERE IS A LEGAL CASE FILED AGAINST THE MUNICIPAL C ORPORATION AND ON THE PARTNERS ON THE FIRM WHO WERE THE OWNERS OF THE LAND, BY THE TH IRD PARTY CALLED NAGPAL PROJECTS AND CONSTRUCTION PVT. LTD. THE CASE WAS FILLED ON 0 9-04-2007 IN THE HONORABLE DISTRICT COURT AURANGABAD. AS THE SAID CASE HAS NOT REACHED FINALITY, THE AURANGABAD MUNICIPAL CORPORATION IS NOT IN A POSITI ON TO ISSUE COMPLETION CERTIFICATE. IT IS WELL SETTLED PRINCIPAL THAT, WHEN AN ASSESSEE IS PREVENTED BY SUFFICIENT REASONABLE CAUSE, WHICH COMPLETED IMPOSSIBILITY ON PART OF THE ASSESSEE TO HAVE COMPLETION CERTIFICATE IN TIME, THE PROVISION OF TA XING STATUE SHOULD BE CONSTRUED HARMONIOUSLY WITH OBJECT OF THE STATUE TO EFFECTUAT E LEGISLATIVE INTENSION. THEREFORE, THE ASSESSEE IS ENTITLE FOR THE BENEFIT U/S 801B (1 0). A SIMILAR ISSUE HAD COME BEFORE THE HONORABLE INCOM E TAX APPELLATE TRIBUNAL PUNE BENCH 'A' PUNE IN CASE OF RAMSUKH PROPERTIES VS DEP UTY COMMISSIONER OF INCOME 4 ITA NO.956/PN/2014 TAX (2012) 138 ITD 278 (PUNE) WHEREIN THE HONORABLE TRIBUNAL HAS HELD AS FOLLOWS: 'LIBERAL INTERPRETATION SHOULD BE USED IN FAVOR OF ASSESSEE WHEN HE IS INCAPACITATED IN COMPLETING PROJECT IN TIME FOR REA SONS BEYOND HIS CONTROL. ASSESSEE SUBMITTED CERTAIN MODIFICATIONS/RECTIFICAT IONS FOR TOP FLOORS OF BUILDING. SAID MODIFICATION/RECTIFICATION COULD NOT BE COMPLETED AS LOCAL AUTHORITY COULD NOT APPROVE MODIFICATION AS THEIR F ILES HAVE BEEN TAKEN OVER BY CONCERN INTELLIGENCE DEPARTMENT FOR INVESTIGATIO N OF VIOLATION OF URBAN LAND CEILING ACT APPLICABLE TO LAND IN QUESTION AT RELEVANT POINT OF TIME. SAME FACT HAS NOT BEEN DISPUTES BY REVENUE. THUS, ASSESS EE WAS PREVENTED BY SUFFICIENT REASONABLE CAUSE WHICH COMPELLED IMPOSSI BILITY ON PART OF ASSESSEE TO HAVE COMPLETION CERTIFICATE IN TIME. RE VISION OF PLAN IS VESTED RIGHT OF ASSESSEE WHICH CANNOT BE TAKEN AWAY BY STR ICT PROVISIONS OF STATURE. PROVISIONS OF TAXING STATUTE SHOULD BE CONSTRUED HA RMONIOUSLY WITH OBJECT OF STATUE TO EFFECTUATE LEGISLATIVE INTENTION. THEREFO RE, ASSESSEE IS ENTITLED FOR BENEFIT U/S. 80B(10) IN RESPECT OF 173 FLATS COMPLE TED BEFORE PRESCRIBED LIMIT. APPEAL ALLOWED. AS THE DECISION IS OF THE JURISDICTION TRIBUNAL, IT IS BINDING IN-NATURE TO THE ASSESSEE AS WELL AS TO THE DEPARTMENT. FURTHER THE ASSESSING OFFICER HAD VERIFIED ALL OTHE R CONDITIONS AND HAD COME TO THE CONCLUSION THAT THE DEDUCTION IS ALLOWED. IT CANNOT BE SAID THAT THERE IS NO APPLICATION OF MIND AND HAS COME TO ANY INCORRECT C ONCLUSION. HE WAS WELL AWARE OF THE FACTS THAT THE CERTIFICATE WAS NOT ISSUED THOUG H ASSESSEE HAD APPLIED FOR THE SAME WITHIN TIME. IT WAS EXPLAINED TO HIM THAT THE CIRC UMSTANCES WERE BEYOND THE CONTROL OF THE ASSESSEE AND INABILITY OF THE AURANGABAD MUN ICIPAL CORPORATION TO ISSUE CERTIFICATE, HENCE ASSESSEE CANNOT BE MADE TO SUFFE R AS ALL OTHER CONDITIONS WERE SATISFIED AND TO PROVE ITS BONAFIDE APPLICATION HAD BEEN MADE BEFORE TIME. HENCE THE DECISION OF THE ASSESSING OFFICER TO ALLO W THE DEDUCTION WAS CORRECT AND WITH DUE APPLICATION OF MIND. THE ORDER PASSED BY T HE ASSESSING OFFICER IS NOT ERRONEOUS AND NOT PREJUDICIAL TO THE INTEREST OF RE VENUE. WE ARE ENCLOSING COPY OF THE ORDER OF THE HONORABLE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH 'A' PUNE IN CASE OF RAMSUKH PRO PERTIES FOR YOUR PERUSAL AND RECORD. WE ARE ALSO ENCLOSING COPY OF THE CASE FILE D BEFORE THE DISTRICT COURT AURANGABAD AGAINST THE MUNICIPAL CORPORATION AND TH E PARTNERS OF THE FIRM. IN VIEW OF THE ABOVE IT IS PRAYED THAT THE PROCEEDI NG U/S. 263 MAY PLEASE BE DROPPED. THE ASSESSEE HAS ENCLOSED A COPY OF SUIT FILED BY N AGAPAL PROJECTS & CONSTRUCTION PVT. LTD. AGAINST THE PARTNERS AND AMC , AURANGABAD, BEFORE THE HON'BLE HIGH COURT. AURANGABAD. IN SUPPORT OF THE A BOVE, THE ASSESSEE HAS ALSO RELIED UPON THE DECISION OF THE HON. ITAT, PUN E 'A' BENCH, PUNE IN THE CASE OF RAMSUKH PROPERTIES VS. DCIT. 6. HOWEVER, THE COMMISSIONER WAS NOT PERSUADED BY T HE WRITTEN SUBMISSIONS OF THE ASSESSEE AND DIRECTED THE ASSESS ING OFFICER FOR WITHDRAWAL/DISALLOWANCE OF DEDUCTION UNDER SECTION 80IB(10) AMOUNTING TO RS.24,64,386/- ADD TO THE TOTAL INCOME OF THE ASSES SEE. THE RELEVANT FINDINGS OF THE COMMISSIONER IS REPRODUCED HEREUNDER :- 5 ITA NO.956/PN/2014 3.1.1 THE WRITTEN SUBMISSIONS OF THE ASSESSEE HAV E BEEN DULY PERUSED. IT APPEARS FROM THE RECORD THAT DURING THE COURSE OF A SSESSMENT PROCEEDINGS, IT WAS CONTENDED THAT THE ASSESSEE FIRM HAS APPLIED FOR CO MPLETION ON 28 TH MARCH, 2008 TO THE MUNICIPAL CORPORATION, WHICH IS AWAITED. IT WAS ALSO EXPLAINED THAT THE PROJECT WAS COMPLETED BEFORE 31 ST MARCH, 2008, WHICH IS EVIDENT FROM CONSTRUCTION AC COUNT OF FINANCIAL YEAR 2008-09 I.E. A. Y. 2009-10, AS NO EXPENDITURE HAS BEEN INCURRED ON THE PROJECT. IN OTHER PLACE OF WRITTEN SUBMISSIONS, IT WAS EXPLAINED BY THE ASSESSEE THAT THE PROJECT WAS COMPLETED ON 31.03.2008. THERE APPEARS A CONTRADICTION IN THE SUBMISSION OF THE ASSESSEE, AS ON THE ONE HAND IT WAS CLAIMED THAT THE PROJECT WAS COMPLETED BEFORE 31 ST MARCH AND APPLIED FOR COMPLETION CERTIFICATE ON 28.03.2008, WHEREAS ON THE OTHER HAND IT WAS CLAIME D THAT THE PROJECT WAS COMPLETED ON 3L.03.2008. FURTHER, MERE NON-DEBITING ANY EXPENDITURE TO THE CONSTRUCTION ACCOUNT DOES NOT LEAD TO FULFILLMENT O F CONDITIONS AS LAID DOWN ULS. 80IB(10) OF THE ACT. HOWEVER, IT APPEARS FROM THE R ECORD THAT WHILE FINALIZING THE CASE U/S. 143(3), THE AO HAS ACCEPTED THE ABOVE SUB MISSIONS OF THE ASSESSEE AND HAS ALLOWED DEDUCTION CLAIMED U/S. 80IB (10) AMOUNT ING TO RS.24,64,386/-. THIS ACT ON THE PART OF THE AO LEADS TO INCORRECT CONCLUSION AND NON-APPLICATION OF MIND, AS HE HAD ALLOWED DEDUCTION ON MERE WRITTEN SUBMISSION S OF THE ASSESSEE, WITHOUT VERIFYING THE BASIC CONDITION, AS LAID DOWN IN THE I. T. ACT, 1961. IN THE CASE OF CIT VS. EMERY STONE MFG. CO. [1995] 213 ITR 843 (RAJ.). IT WAS HELD BY THE HON'BLE RAJASTHAN HIGH COURT THAT 'WHEREIN IT WAS HELD THAT ALLOWING CERTAIN DEDUCTIONS WITHOUT PROVING THE CLAIM OR WITHOUT PROPER VERIFIC ATION OR IN IGNORANCE OF THE PROVISIONS OF LAW ARE THE VARIOUS INSTANCES ON THE BASIS OF WHICH THE ORDER COULD BE CONSIDERED PREJUDICIAL TO THE REVENUE AND COULD BE SET RIGHT IN REVISIONAL JURISDICTION'. FURTHER, IT APPEARS FROM THE RECORD THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS NOWHERE BY THE ASSESSEE HAS BROUGHT ON RECORD ANY CORROBORATIVE EVIDENCE IN SUPPORT OF THE WRITTEN SU BMISSIONS. BEFORE THE UNDERSIGNED ALSO, THE ASSESSEE HAS FAILED TO PRODUC E ANY DOCUMENTARY EVIDENCE I.E. 1) A COPY OF APPLICATION SUBMITTED BEFORE THE AURAN GABAD MUNICIPAL CORPORATION FOR ISSUE OF COMPLETION CERTIFICATE 2) THE INABILIT Y ON THE PART OF AURANGABAD MUNICIPAL CORPORATION FOR ISSUE OF COMPLETION CERTI FICATE, IN SUPPORT OF THE WRITTEN SUBMISSIONS MADE. THERE WAS NO ANY CORROBORATIVE EV IDENCE ON RECORD WHICH SUGGEST THAT THE PROJECT WAS COMPLETED WITHIN TIME, AS PRESCRIBED IN SEC. 80IB(10) OF THE ACT OR EVEN ON THE DATE OF PASSING OF THIS ORDE R. IT IS A FACT THAT THE BASIC CONDITIONS FOR ALLOWING DEDUCTION U/S. 80IB(10) HAS NOT BEEN FULLY SATISFIED, AS SUB- SECTION 10(A) STATES THAT IN A CASE WHERE A HOUSE P ROJECT HAS BEEN APPROVED BY THE LOCAL AUTHORITY BEFORE THE 1 ST DAY OF APRIL, 2004, THE PROJECT SHOULD BE COMPLETE D ON OR BEFORE THE 31 ST MARCH, 2008. THE EXPLANATION (II) TO SUB-SECTION 1 0 OF SECTION 80IB, SPECIFICALLY STATES THAT THE DATE OF COMPLETI ON OF CONSTRUCTION OF HOUSING PROJECT SHALL BE TAKEN TO BE THE DATE ON WHICH THE COMPLETION CERTIFICATE IN RESPECT OF SUCH HOUSING PROJECT IS ISSUED BY THE LOCAL AUTHORI TY. THEREFORE, THE BASIC CONDITION AS PRESCRIBED BY THE LAW HAS NOT BEEN SATISFIED IN THE CASE OF ASSESSEE. THE FACTS OF THE CASE RELIED UPON BY THE ASSESSEE IN THE CASE OF RAMSUKH PROPERTIES VS. DCIT, DECIDED BY THE ITAT, PUNE BENCH, PUNE, REPORTED IN 33 CCH 489, ARE DISTINGUISHABLE FROM THE FACTS OF THE INSTANT CASE, AS IN THE INSTANT CASE, THE ASSESSEE HAS FAILED TO OBTAIN COMPLETION CERTIFICATE WITHIN TIME, WHEREAS IN THE CASE RELIED UPON, THE ASSESSEE HAS CLAIMED DEDUCTION ULS. 80IB( 10) FOR THE PROJECT CONSISTED OF SIX BUILDINGS HAVING 205 FLATS, OUT OF WHICH THE CO MPLETION CERTIFICATE WAS OBTAINED AND FURNISHED BEFORE AO FOR 173 FLATS. THE HON'BLE ITAT ALLOWED THE BENEFIT ULS. 80I8(10) IN RESPECT OF 173 FLATS COMPLETED BEFORE T HE PRESCRIBED LIMIT ON THE BASIS OF PRINCIPLE OF PROPORTIONALITY OR PRO RATA BASIS AND DEDUCTION CLAIMED U/S. 80IB WAS REJECTED FOR BALANCE FLATS FOR NON-COMPLETION OF CE RTIFICATE WITHIN PRESCRIBED TIME IN RESPECT OF THESE FLATS. THEREFORE, THE FACTS OF THE CASE RELIED UPON ARE TOTALLY DIFFERENT FROM ASSESSEE'S CASE. FROM THE PLAIN READING OF SEC . 80IB OF THE ACT, IT IS APPARENT THAT AS PER CLAUSE (A), DEDUCTION ULS. 80IB (10) IN RESPECT OF A HOUSING PROJECT SHALL 6 ITA NO.956/PN/2014 BE AVAILABLE TO THE ASSESSEE, PROVIDED THE PROJECT IS APPROVED BY THE LOCAL AUTHORITY AFTER 01.04.2004 AND HAS BEEN COMPLETED WITHIN A PE RIOD OF 4 YEARS AND SUCH COMPLETION HAS BEEN CERTIFIED BY THE LOCAL AUTHORIT Y. THE USE OF THE WORD 'SHALL IN EXPLANATION (II) MAKES THE FURNISHING OF COMPLETION CERTIFICATE ISSUED BY THE LOCAL AUTHORITY MANDATORY TO PROVE THAT THE DEVELOPMENT A ND CONSTRUCTION OF THE HOUSING PROJECT IS COMPLETE IN ALL RESPECT. THE HON'BLE ITA T, HYDERABAD BENCH 'A', HYDERABAD, AFTER DISCUSSING THE RATIO LAID DOWN IN THE FOLLOWING DECISIONS OF THE HON'BLE APEX COURT, IN THE CASE OF IPCA LABORATORIE S LTD. VS. DY. CIT (2004) 266 ITR 521, PETRON ENGG. CONSTRUCTION (P) LTD. VS. CBD T (1989) 175 ITR 523, PANDIAN CHEMICAL LTD. VS. CIT (2003) 262 ITR 523 AN D CIT VS. N.C. BUDHARAJA & CO., (1993) 204 ITR 412 HAS DECIDED IN THE CASE OF SAINATH ESTATES (P) LTD. VS. DEPUTY COMMISSIONER OF INCOME-TAX, HYDERABAD, ON 08 FEB., 2013 THAT 'CONSIDERING THE TOTALITY OF THE FACTS AND CIRCUMST ANCES IN THE LIGHT OF THE JUDICIAL PRONOUNCEMENTS AND KEEPING IN VIEW THE RELEVANT STA TUTORY PROVISION AS CONTAINED U/S. 80IB(10), WE ARE OF THE VIEW THAT THE ASSESSEE IS NOT ENTITLED TO CLAIM DEDUCTION UNDER THE SAID PROVISION AS THE COMPLETION CERTIFIC ATE ISSUED BY THE LOCAL AUTHORITY CERTIFYING THE COMPLETION OF THE PROJECT HAS NOT BE EN SUBMITTED BY THE ASSESSEE. ACCORDINGLY, WE SUSTAIN THE ORDER OF THE CIT(A) 7. NONE APPEARED ON BEHALF OF THE ASSESSEE. THE LD . DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE, ON ITS PART, RELIED UPON THE ORDER OF THE COMMISSIONER. 8. WE HAVE CAREFULLY CONSIDERED THE ORDER OF THE CO MMISSIONER. THE SHORT ISSUE INVOLVED IN THE PRESENT APPEAL IS WHETHER THE ASSESSEE IS ELIGIBLE FOR CLAIMING DEDUCTION UNDER SECTION 80IB(10) OF THE AC T OR NOT. IT IS THE CASE OF THE COMMISSIONER THAT THE ASSESSEE IS NOT ELIGIBLE FOR CLAIMING IMPUGNED DEDUCTION AS IT HAS FAILED TO SUBMIT COMPLETION CE RTIFICATE ISSUED BY THE LOCAL AUTHORITY CERTIFYING THE COMPLETION OF PROJECT WITH IN SPECIFIED TIME AS REQUIRED UNDER THE PROVISIONS OF SUB-SECTION (10)(A) AND EXP LANATION (2) TO SECTION 80IB(10) OF THE ACT. WE SIMULTANEOUSLY NOTICE FROM THE ORDER OF THE COMMISSIONER THAT THE ASSESSEE FIRM HAS APPLIED FOR COMPLETION CERTIFICATE WITH THE AURANGABAD MUNICIPAL CORPORATION ON 28 TH MARCH, 2008 WHICH WAS NOT RECEIVED AND AWAITED. HOWEVER, IT IS THE CASE OF THE ASSESSEE THAT THE PROJECT WAS COMPLETED BEFORE 31 ST MARCH, 2008 AND NO CONSTRUCTION EXPENDITURE HAS BEEN INCURRED IN THE SUBSEQUENT YEA R CONCERNING THE PROJECT. THE ASSESSEE ALSO POINTED OUT THAT THE ASSESSING OF FICER HAS CLEARLY OBSERVED IN IS ORDER THAT THE ISSUE HAS BEEN EXAMINED AND HE WAS SPECIFICALLY OBSERVED THAT ALL CONDITIONS OF SECTION 80IB(10) HAS BEEN CO MPLIED WITH EXCEPT THE 7 ITA NO.956/PN/2014 ISSUANCE OF COMPLETION CERTIFICATE BY THE AURANGABA D MUNICIPAL CORPORATION FOR WHICH THE APPLICATION HAS BEEN DULY MADE BY THE ASSESSEE IN TIME. 9. THE RELEVANT OBSERVATIONS OF THE ASSESSING OFFIC ER CONCERNING THE ISSUE IS REPRODUCED HEREUNDER :- 3. THE ASSESSEE FIRM IS IN THE BUSINESS OF CONSTRU CTION, MAINLY CONSTRUCTION OF RESIDENTIAL HOUSES FOR SALE. IN RESPONSE TO THE QU ESTIONNAIRE A DETAILED REPLY WAS SUBMITTED FROM TIME TO TIME, WHICH IS KEPT ON RECOR D. SHRI. VIKRAM AMIN, C.A. AND A.R. OF THE ASSESSEE ATTENDED AND STATED THAT THE C OMPLETION CERTIFICATE HAS NOT BEEN ISSUED BY THE AMC. HOWEVER, THE ASSESSEE HAS APPLI ED FOR THE SAME WITHIN TIME. THE OTHER CONDITIONS OF SEC 80IB(10) HAVE BEEN VERI FIED AND IT IS OBSERVED THAT THE SAME HAVE BEEN COMPLIED WITH BY THE ASSESSEE. IN T HIS REGARD THE A.C.I.T., CIRCLE-2, HAS GOT THE MEASUREMENTS OF UNITS DONE BY AN APPROV ED VALUER, SHRI. ALHAD DESHPANDE. THE VALUERS REPORT DT. 29-04-2011 IS P LACED ON RECORD. THEREFORE THE ASSESSEES CLAIM OF DEDUCTION U/S 80IB(10) OF THE I .T. ACT 1961, IS ALLOWED. 10. THE COMMISSIONER CONTRADICTED THE OBSERVATIONS OF THE ASSESSING OFFICER PRIMARILY ON TWO COUNTS NAMELY (I) COPY OF APPLICATION SUBMITTED BEFORE THE AURANGABAD MUNICIPAL CORPORATION FOR ISS UE OF COMPLETION CERTIFICATE HAS NOT PRODUCED BEFORE HIM AND (II) TH E INABILITY ON THE PART OF THE AURANGABAD MUNICIPAL CORPORATION FOR ISSUE OF COMPL ETION CERTIFICATE. THE COMMISSIONER FURTHER OBSERVED THAT THE PROJECT SHOU LD BE COMPLETED ON OR BEFORE 31 ST MARCH, 2008 FOR WHICH CORROBORATIVE EVIDENCES HAVE NOT BEEN PLACED ON RECORD. WE FIND THAT THE ASSESSING OFFIC ER HAS CLEARLY REFERRED TO THE FACT OF APPLICATION PRESENTED BEFORE THE AURANGABAD MUNICIPAL CORPORATION ON 28.03.2008. THIS FACT WAS REITERATED BY THE ASSESS EE BEFORE THE COMMISSIONER AS WELL. THEREFORE, IT IS DIFFICULT TO DRAW ADVERS E INFERENCE AGAINST THE ASSESSEE IN VIEW OF EXPRESS ASSERTIONS MADE IN THE ASSESSMEN T ORDER. HOWEVER, IT IS ONLY FAIR THAT AN OPPORTUNITY BE GIVEN TO THE ASSES SEE TO SATISFY THE ASSESSING OFFICER ABOUT FACTUM OF APPLICATION HAVING BEEN MAD E WITH AURANGABAD MUNICIPAL CORPORATION FOR OBTAINING THE PROJECT COM PLETION CERTIFICATE. THIS DISPOSES OF THE FIRST OBJECTION OF COMMISSIONER. T HE NEXT OBJECTION OF THE COMMISSIONER IS THAT THE CERTIFICATE FOR COMPLETION OF PROJECT OUGHT TO HAVE BEEN OBTAINED BEFORE THE DUE DATE I.E. 31.03.2008 W HEREAS SUCH CERTIFICATE WAS NOT PRODUCED EVEN UPTO THE TIME OF THE ASSESSMENT I .E. THREE AND HALF YEARS 8 ITA NO.956/PN/2014 AFTER THE DUE DATE PRESCRIBED FOR COMPLETION CERTIF ICATE. THE ASSESSEE HAS GIVEN ITS OWN REASONS OF LEGAL PROCEEDINGS AGAINST LOCAL AUTHORITY AS NOTED IN THE AFORESAID PARAS. NOTWITHSTANDING AFORESAID, WE OBS ERVE THAT ONCE THE APPLICATION FOR ISSUANCE OF COMPLETION OF CERTIFICA TE HAS BEEN MOVED BEFORE THE DUE DATE, THE REQUISITE COMPLIANCE ON BEHALF OF THE ASSESSEE IS DEEMED TO HAVE BEEN CARRIED OUT. THE REVENUE CANNOT INSIST UPON T HE ACTUAL RECEIPT OF COMPLETION CERTIFICATE BEFORE THE DUE DATE WHICH IS NOT WITHIN THE CONTROL AND COMMAND OF THE ASSESSEE. THE POINT IN ISSUE IS SQU ARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF THE AURANGABAD BENC H OF HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. HINDUSTAN SAMUH A WAS LIMITED IN INCOME TAX APPEAL NO.1 OF 2012, ORDER DATED 02.02.2015. T HE RELEVANT PORTION OF THE ORDER CONCERNING THE POINT IS REPRODUCED HEREUNDER :- SUB-SECTION (10) MENTIONS THAT A HOUSING PROJECT S HOULD BE COMPLETE BEFORE 31.03.2008 SO AS TO GET THE EXEMPTION. COMPLETION OF HOUSING PROJECT IS A PHYSICAL ACT. IT CAN BE DEMONSTRATED ON THE SPOT AND ALSO T HROUGH A CERTIFICATE ISSUED BY AN ARCHITECT WHO IS APPOINTED FOR SUPERVISING THE CONS TRUCTION WORK. HE IS A PROFESSIONAL WHO WOULD DECLARE THAT THE PROJECT IS COMPLETE. UNFORTUNATELY, SUB- SECTION (10) AND THE EXPLANATION DO NOT GIVE ANY IM PORTANCE TO THE ISSUANCE OF SUCH COMPLETION CERTIFICATE BY THE CONCERNED ARCHITECT. IT GIVES IMPORTANCE ONLY TO THE CERTIFICATE OF MUNICIPAL AUTHORITY. IT IS COMMON K NOWLEDGE THAT AN APPLICATION FOR COMPLETION CERTIFICATE SUBMITTED TO THE MUNICIPAL A UTHORITIES IS ACCOMPANIED BY A COMPLETION CERTIFICATE ISSUED BY THE CONCERNED ARCH ITECT. NO DOUBT, THE MUNICIPAL AUTHORITIES THEN CAUSE INSPECTION OF THE SITE AND V ERIFY THE CLAIM. THEREAFTER, THEY ISSUE COMPLETION CERTIFICATE. BUT, IF A PROJECT IS REALLY COMPLETE BEFORE 31.03.2008 AND AN APPLICATION IS MOVED QUITE IN TIME, FOR SEEK ING COMPLETION CERTIFICATE FROM THE MUNICIPAL AUTHORITIES, AND IF THEY DO NOT TAKE STEPS URGENTLY AND DELAY THE ISSUANCE OF COMPLETION CERTIFICATE FROM THEIR SIDE, CAN IT BE SAID THAT SUCH CERTIFICATE WOULD ALONE DECIDE THE DATE OF COMPLETI ON OF THE PROJECT? THE ANSWER IS IN NEGATIVE. 11. IN VIEW OF THE BINDING DECISION OF THE HONBLE BOMBAY HIGH COURT AS NOTED ABOVE, THE ACTION OF THE ASSESSING OFFICER IN ACCEPTING THE CLAIM OF THE ASSESSEE WITHOUT ACTUAL RECEIPT OF COMPLETION CERTI FICATE CANNOT BE FAULTED. THEREFORE, NO ERROR ARISES IN THE ORDER OF THE ASSE SSING OFFICER TO THIS EXTENT. IN THE LIGHT OF THE AFORESAID DISCUSSION, WE MODIFY THE ORDER OF THE COMMISSIONER DATED 08.01.2014 AND HOLD THAT CLAIM O F DEDUCTION UNDER SECTION 80IB(10) OF THE ACT IS ALLOWED TO ASSESSEE SUBJECT TO THE SATISFACTION OF THE ASSESSING OFFICER ABOUT THE BONAFIDES OF THE AP PLICATION MOVED BEFORE THE 9 ITA NO.956/PN/2014 AURANGABAD MUNICIPAL CORPORATION FOR OBTAINING THE COMPLETION CERTIFICATE. NEEDLESS TO SAY, REASONABLE OPPORTUNITY SHALL BE GI VEN TO THE ASSESSEE WHILE DETERMINING THE ISSUE. 12. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DI SPOSED OF IN TERMS OF ABOVE. ORDER PRONOUNCED ON THIS 31 ST DAY OF MARCH, 2016. SD/- SD/- ( SUSHMA CHOWLA ) ( PRADIP KUMAR KEDIA ) / JUDICIAL MEMBER $ / ACCOUNTANT MEMBER PUNE ; DATED : 31 ST MARCH, 2016. & ' ()* +*( / COPY OF THE ORDER IS FORWARDED TO : 1) THE ASSESSEE; 2) THE DEPARTMENT; 3) THE CIT, AURANGABAD; 4) THE DR B BENCH, I.T.A.T., PUNE; 5) GUARD FILE. &, / BY ORDER , ' # //TRUE COPY// $ %& # '( / SR. PRIVATE SECRETARY ) '* , / ITAT, PUNE