M/s J.C. Sharma & Sons, Bhopal V. The ACIT, 3(1), Bhopal

ITSSA 240/IND/2012

• Counselvise Citation: [2015] 122 COUNSELVISE.COM (IT) 1021 (ITAT-INDORE)
• Duration Of Justice: 3 year(s) 1 month(s) 22 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 03-08-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 07-07-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 11-06-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: R A VERMA
• Assessee Lawyers: N D PATWA
• Keywords: Initiation of penalty proceedings; Competent authority; Documents seized
• Section: 153A; 234B; 80IB; 132

Judgement Text

M/S J.C. SHARMA & SONS ITA NOS. 238 TO 241/IND/2012 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 IT(SS)A NO. 238 TO 241/IND/2012 A.YS. 2005-06, 2006-07,2007-08 & 2008-09 M/S J.C. SHARMA & SONS BHOPAL PAN AAEFJ 6447L ::: APPELLANT VS ASSTT.COMMR. OF INCOME TAX 3(1) BHOPAL ::: RESPONDENT APPELLANT BY SHRI ASHISH GOYAL AND SHRI N.D. PATWA RESPONDENT BY SHRI R.A. VERMA DATE OF HEARING 7.7.2015 DATE OF PRONOUNCEMENT 3 .8.2015 O R D E R PER BENCH THERE IS A DELAY OF 5 DAYS IN FILING THESE APPEALS. BEFORE US, THE LEARNED COUNSEL FOR THE ASSESSEE SUBMI TTED M/S J.C. SHARMA & SONS ITA NOS. 238 TO 241/IND/2012 2 THAT THE ASSESSEE HAS DELIVERED THE APPEAL PAPERS TO MADHUR COURIER SERVICES ON 31.5.2012 AND THE LAST DA TE FOR FILING OF THESE APPEALS WAS 6.6.2012. THUS, THERE WAS SUFFICIENT TIME IN WHICH THE APPEALS SENT BY COURIER FROM BHOPAL TO INDORE COULD REACH. HOWEVER, THE COURIER DELIVERED THESE APPEALS IN THE OFFICE OF ITAT ON 11.6 .2012. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT T HIS DELAY WAS BEYOND THE CONTROL OF THE ASSESSEE AS THE ASSESSEE HAS SUBMITTED THE APPEAL PAPERS THROUGH COURIE R WELL IN TIME. 2. AFTER HEARING BOTH THE SIDES, WE CONDONED THE DEL AY AND HEARD THESE APPEALS ON MERITS. 3. ALL THESE APPEALS EMANATE FROM THE COMMON ORDER DATED 27.2.2012. SINCE THESE APPEALS EMANATE FROM THE COMMON ORDER OF THE LEARNED CIT(A), WE DISPOSE THEM OFF BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. M/S J.C. SHARMA & SONS ITA NOS. 238 TO 241/IND/2012 3 4. THE ASSESSEE IS A DEVELOPER WHO PURCHASED THE AGRICULTURAL LANDAT VILLAGE DHAMKHERA. THE ASSESSEE APPLIED FOR CHANGE OF USE OF LAND AND OBTAINED PERMISSIO N FOR NON-AGRICULTURAL USE OF THE LAND FROM THE COLLECTO R, BHOPAL. THE ASSESSEE ALSO GOT REGISTERED AS COLONIZER FOR DEVELOPMENT OF THE LAND INTO A COLONY. THE ASSESSEE HAS DEVELOPED ABHINAV KIRTI HOMES COLONY. THERE WAS SEARC H AND SEIZURE OPERATION U/S 132 OF THE ACT AT THE PREMIS ES OF THE ASSESSEE GROUP. THE ASSESSING OFFICER ISSUED NO TICES U/S 153A READ WITH SECTION 153C OF THE ACT FOR THE ASSESSMENT YEARS 2002-03 TO 2007-08. 5. IN ITA NOS. 238, 239 AND 240/IND/2012 THERE IS A COMMON GROUND I.E. GROUND NO. 1 IN WHICH THE ASSESSE E HAS CHALLENGED THE CONFIRMATION OF ACTION OF THE ASSESS ING OFFICER IN ISSUING NOTICES U/S 153C OF THE ACT FOR THE REASON THAT IT HAS BEEN ISSUED WITHOUT ADOPTING PROPER M/S J.C. SHARMA & SONS ITA NOS. 238 TO 241/IND/2012 4 BASIS AND SATISFACTORY REASONS AND THE COPY OF SATISFACTORY NOTE, IF ANY, WAS NOT PROVIDED TO THE ASSESSEE. 6. WE HAVE HEARD BOTH THE SIDES. THE ASSESSEES CLAIM THAT NO INCRIMINATING DOCUMENTS WERE FOUND DURING THE COURSE OF SEARCH AND THE PROCEEDINGS U/S 153C OF THE ACT ARE NOT FACTUALLY CORRECT. THERE ARE CERTAIN DOCUMENTS SEIZED DURING THE SEARCH WHICH REFLECT CERTAIN RECEIP TS WHICH ARE NOT REFLECTING IN THE BOOKS OF ACCOUNTS. S INCE THERE WERE INCRIMINATING DOCUMENTS WHICH WERE SEIZED DURING THE SEARCH OPERATION, THE LEARNED CIT(A) WAS JUSTIFIED IN SUSTAINING THE ISSUE OF NOTICE ISSUED U /S 153C OF THE ACT AS LEGAL AND VALID. 7. GROUND NO. 2 IN ITA NOS. 238 FOR THE ASSESSMENT Y EARS 2005-06 AND GROUND NO. 3 IN ITA NO. 240/IND/2012 FOR THE ASSESSMENT YEAR 2007-08 RELATE TO SUSTAINING THE ADDITIO N ON ACCOUNT OF RECEIPTS OF BANK OCR (OWNERS CONTRIBUTI ON RECEIPT) OF RS. 1 THE LEARNED COUNSEL FOR THE ASSESSE E IN M/S J.C. SHARMA & SONS ITA NOS. 238 TO 241/IND/2012 5 ASSESSMENT YEAR 2005-06 AND RS. 39,08,000/- FOR ASSESSMENT YEAR 2007-08. DURING THE COURSE OF SEARCH, CERTAIN PRINTED RECEIPT BOOKS OF M/S T.C. SHARMA & SON S (ASSESSEE) WERE FOUND AND SEIZED. IN THESE RECEIPTS, THE AMOUNT HAS BEEN SHOWN AS RECEIVED FROM THE PURCHASERS. THE PAYMENTS WERE IN CASH. THE RECEIPTS WERE SIGNED AND THE ASSESSING OFFICER FOUND THAT THESE RECEIPTS WERE NOT ACCOUNTED FOR IN REGULAR BOOKS OF ACCOUNTS OF THE ASSES SEE. HENCE, THE ADDITION WAS MADE. THE ASSESSEE SUBMITTED THAT IN ORDER TO ENABLE THE PURCHASER FOR DISBURSEMENT OF LOAN FROM THE BANK WHERE THEY WERE AVAILING BANK LOAN, TH E DOCUMENTARY PROOF OF HAVING RECEIVED THE MARGIN MONEY ON THE TOTAL PROJECT IS REQUIRED BY THE BANK. ALTHOUGH TH E CUSTOMER DOES NOT PAY ANY MARGIN IN ADVANCE BUT IN ORDE R TO RECEIVE THE DISBURSEMENT FROM THE BANK, THE ASSESS EE FURNISHED TO THE BANK THE RECEIPT SHOWING THE MARGIN MONEY RECEIVED. IN REALITY, NO MARGIN MONEY WAS RECEI VED M/S J.C. SHARMA & SONS ITA NOS. 238 TO 241/IND/2012 6 BY THE ASSESSEE. THEREFORE, THE SAME WAS NOT ACCOUNTED FOR IN THE BOOKS BY THE ASSESSEE. SUCH METHODOLOGY W AS BEING FOLLOWED FOR 2/3 YEARS BY ASSESSEE. HE PLEADED T O DELETE THE ADDITION. LD. DR PLEADED TO SUSTAIN THE OR DERS OF THE AUTHORITIES BELOW. 8. AFTER HEARING BOTH THE SIDES, WE ARE OF THE VIEW T HAT THIS ISSUE NEEDS VERIFICATION AT THE LEVEL OF THE ASS ESSING OFFICER WHEREIN THE CROSS-VERIFICATION FROM THE BANK WITH REGARD TO MARGIN MONEY IS REQUIRED TO BE ESTABLISHED. T HE REQUIREMENT OF CERTIFICATION WITH RESPECT TO DISBURSE MENT OF LOAN NEEDS VERIFICATION. THE INVESTIGATION FROM THE PURCHASERS IS NECESSARY TO KNOW THE CORRECT FACTS. CONSIDERING ALL THESE ASPECTS, WE REMAND THIS ISSUE TO THE FILE OF THE ASSESSING OFFICER FOR VERIFICATION AND TH EN DECIDE THE ISSUE. 9. IN ITA NOS.239, 240 & 241/IND/2012 THERE IS A COMMON ISSUE WITH REGARD TO NOT ALLOWING THE DEDUCTIO N M/S J.C. SHARMA & SONS ITA NOS. 238 TO 241/IND/2012 7 U/S 80IB(10) OF THE ACT. THIS ISSUE HAS BEEN RAISED I N GROUND NO. 2 IN ITA NO. 239 AND 240/IND/2012 AND IN GROUND NO. 1 IN ITA NO. 241/IND/2012. THE GROUNDS OF APPEAL RAISED ARE THE SAME EXCEPT THE DIFFERENCE IN THE FIGURES. THE COMMON GROUNDS ARE AS UNDER :- (I) THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(APPEALS) ERRED IN CONFIRMING THE ACTION OF THE A.O. FOR ISSUING THE NOTICE U/S 153C WITHOUT APPRECIATING FACTS PROPERLY AS THE SAME WAS ISSUED WITHOUT ADOPTING PROPER BASIS AND SATISFACTORY REASONS AND THE COPY OF SATISFACTION NOTE IF ANY WAS NOT PROVIDED TO THE ASSESSEE AT THE TIME OF ASSESSMENT PROCEEDINGS NOR AT THE TIME OF APPELLATE PROCEEDINGS. (II) THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(APPEALS) ERRED IN SUSTAINING THE ADDITION OF RS.15,74,406/- BEING DISALLOWANCE M/S J.C. SHARMA & SONS ITA NOS. 238 TO 241/IND/2012 8 OF DEDUCTION CLAIMED U/S 80IB(10) WITHOUT CONSIDERING THE EXPLANATION OFFERED BY THE ASSESSEE AND WITHOUT APPRECIATING THE FACTS PROPERLY AND PARTICULARLY HOLDING THAT THE APPELLAN T DOES NOT FULFILL THE FOLLOWING CONDITIONS : (I) THE PROJECT IS NOT BUILD AND DEVELOPED BY THE APPELLANT (II) PROJECT COMPLETION CERTIFICATE IS NOT OBTAINED FROM THE LOCAL AUTHORITY AS PROVIDED IN THE CONDITION (A) OF SECTION 80IB(10) (III) SHOPS AND COMMERCIAL ESTABLISHMENT IN THE PROJECTS EXCEEDS THE ARE ALLOWED TO BE BUILT AS PROVIDED IN CONDITION (D) OF SECTION 80IB(10) IT IS SUBMITTED THAT ALL THE AFORESAID REQUIREMENTS HAS BEEN COMPLIED BY THE APPELLANT PROPERLY AND NECESSARY M/S J.C. SHARMA & SONS ITA NOS. 238 TO 241/IND/2012 9 EXPLANATION IN THIS MANNER HAS ALREADY BEEN SUBMITTED BEFORE THE A.O. AS WELL AS BEFORE THE LEARNED CIT(A). (IV) THAT UNDER THE CIRCUMSTANCES, CHARGING OF INTEREST U/S 234A OF RS. 5,602/-, U/S 234B OF RS.2,63,287/- AND U/S 234C OF RS. 20,727/- IS NOT JUSTIFIED. (V) THAT UNDER THE CIRCUMSTANCES, INITIATION OF PENALTY PROCEEDINGS U/S 271(1) IS NOT JUSTIFIED. 10. WE HAVE HEARD BOTH THE SIDES RAISED ON THE ISSUES WHICH HAVE BEEN RAISED IN THE GROUNDS OF APPEAL. THE F IRST ISSUE IS WHETHER THE ASSESSEE HAS DEVELOPED OR BUILT THE PROJECT OR IT HAS WORKED MERELY AS A CONTRACTOR. THE ASSESSEE HAS PURCHASED THE LAND KHASRA NO. 274/2/1, 275/1/2 FROM ABDUL SALIM AT CHOPRA KALA ADMEASURING 2.33 ACRES, KHASRA NO. 274/2, 275/2/2 FROM SMT. JORA M/S J.C. SHARMA & SONS ITA NOS. 238 TO 241/IND/2012 10 BEGUM ADMEASURING 3.3. ACRES DURING THE PREVIOUS YEAR 2003-04. THE ASSESSEE GOT THE PROJECT SANCTIONED. TH E ASSESSEE GOT APPROVED HOUSING PROJECT ON 17.6.2004 I N ITS OWN NAME AS COLONIZER. THE PROJECT WAS COMPLETED IN F. Y. 2007-08, AS PER THE SANCTIONED PLAN FROM MUNICIPAL CORPORATION, BHOPAL. NONE OF THE RESIDENTIAL UNITS WAS SANCTIONED FOR MORE THAN 1500 SQ.FT. THE ASSESSEE COMPLETED THE PROJECT IN THE STIPULATED PERIOD OF FO UR YEARS AS PER THE APPROVED PLANS. THE ASSESSEE HAS DEVELOPED AND COMPLETED THE INFRA-STRUCTURE, APPROACH ROAD, WATER LI NE SEWERAGE LINE AND ELECTRIFICATION WORK AS PER THE NORM S LAID DOWN BY 28.1.2008. THE POSSESSION LETTER WAS ALSO ISS UED TO THE CUSTOMERS ON THE COMPLETION OF THE RESIDENTI AL UNITS IN ALL RESPECT. THESE POSSESSION LETTERS WERE SIGNED BY ALL THE CUSTOMERS. THE PURCHASERS GOT PERMANENT ELECTRICI TY CONNECTION FROM M.P. ELECTRICITY BOARD AS CUSTOMER. THE PERMANENT ELECTRICITY CONNECTIONS ARE GIVEN ONLY ON THE M/S J.C. SHARMA & SONS ITA NOS. 238 TO 241/IND/2012 11 COMPLETION OF THE HOUSES/FLATS. THE PERSONS WHO HAVE PURCHASED THESE UNITS HAVE PAID PROPERTY TAXES TO THE MUNICIPAL CORPORATION, BHOPAL. ALL THESE EVIDENCES SHO W THAT THE ASSESSEE HAS CONSTRUCTED AND DEVELOPED THE PROJECT AND COMPLETED WELL WITHIN TIME PROVIDED U/S 80IB(10) OF THE ACT. CONSIDERING THIS FACTUAL POSITIO N AND ALSO THE FOLLOWING CASE LAWS, WE ALLOW THE CLAIM OF THE ASSESSEE IN ALL THESE YEARS :- HON'BLE SUPREME COURT IN THE CASE OF CIT VS. SARKAR BUILDERS DATED 15.5.2015 WHEREIN HON'BLE SUPREME COU RT HELD AS UNDER :- (G) FROM THIS PROVISION, THEREFORE, IT IS CLEAR TH AT THE HOUSING PROJECT CONTEMPLATED UNDER SUB- SECTION (10) OF SECTION 80IB INCLUDES COMMERCIAL ESTABLISHMENTS OR SHOPS ALSO. NOW, BY WAY OF AN AMENDMENT IN THE FORM OF CLAUSE (D), AN ATTEMPT IS MADE TO RESTRICT THE SIZE OF THE SAID SHOPS AND/OR M/S J.C. SHARMA & SONS ITA NOS. 238 TO 241/IND/2012 12 COMMERCIAL ESTABLISHMENTS. HEREFORE, BY NECESSARY IMPLICATION, THE SAID PROVISION HAS TO BE READ PROSPECTIVELY AND NOT RETROSPECTIVELY. AS IS CLEAR FROM THE AMENDMENT, THIS PROVISION CAME INTO EFFECT ONLY FROM THE DAY THE PROVISION WAS SUBSTITUTED. THEREFORE, IT CANNOT BE APPLIED TO THOSE PROJECTS WHICH WERE SANCTIONED AND COMMENCED PRIOR TO 01.04.2005 AND COMPLETED BY THE STIPULATED DATE, THOUGH SUCH STIPULATED DATE IS AFTER 01.04.2005. 21. THESE ASPECTS ARE DEALT WITH BY VARIOUS HIGH COURTS ELABORATELY AND CONVINCINGLY IN THEIR JUDGMENTS. IT IS NOT NECESSARY TO GO INTO THE DETAILED REASONING GIVEN BY THESE HIGH COURTS. HOWEVER, WE WOULD LIKE TO EXTRACT THE FOLLOWING DISCUSSION FROM THE JUDGMENT DATED 25.07.2014 OF THE BOMBAY HIGH COURT IN ITA NOS. 201 AND 308 OF M/S J.C. SHARMA & SONS ITA NOS. 238 TO 241/IND/2012 13 2012 WHERE THIS VERY ASPECT IS ANSWERED IN THE FOLLOWING MANNER : 36.THERE IS YET ANOTHER REASON FOR COMING TO THE AFORESAID CONCLUSION. TAKE A SCENARIO WHERE AN ASSESSEE FOLLOWING THE PROJECT COMPLETION METHOD OF ACCOUNTING, HAS COMPLETED THE HOUSING PROJECT APPROVED BY THE LOCAL AUTHORITY COMPLYING WITH ALL THE CONDITIONS AS SET OUT IN SECTION 80IB(10) AS IT STOOD PRIOR TO IST APRIL, 2005. IF WE WERE TO ACCEPT THE ARGUMENT OF THE REVENUE, THEN IN THAT EVENT, DESPITE HAVING COMPLETED THE ENTRIE CONSTRUCTION PRIOR TO IST APRIL, 2005 AND COMPLYING WITH ALL THE CONDITIONS OF SECTION 80IB(10) AS IT STOOD THEN, THE ASSESSEE WOULD BE DISENTITLED TO THE ENTIRE DEDUCTION CLAIMED IN RESPECT OF SUCH HOUSING PROJECT MERELY M/S J.C. SHARMA & SONS ITA NOS. 238 TO 241/IND/2012 14 BECAUSE HE OFFERED HIS PROFITS TO TAX IN THE A.Y. 2005-06 AND DENIED THE SAME FROM A.Y. 2005- 06 AND THEREAFTER. IT COULD NEVER HAVE BEEN THE INTENTION OF THE LEGISLATURE THAT THE DEDUCTION UNDER SECTION 80IB(10) AVAILABLE TO A PARTICULAR ASSESSEE WOULD BE DETERMINED ON THE BASIS OF THE ACCOUNTING METHOD FOLLOWED. THIS, TO OUR MIND AND AS RIGHTLY SUBMITTED BY MR. MISTRY, WOULD LEAD TO STARTLING RESULTS. WE THEREFORE HAVE NO HESITATION IN HOLDING THAT SECTION 80IB(10) IS PROSPECTIVE IN NATURE AND CAN HAVE NO APPLICATION TO A HOUSING PROJECT THAT IS APPROVED BEFORE 31 ST MARCH, 2005. AS THE DEDUCTION SOUGHT TO BE CLAIMED UNDER SECTION 80IB(10) IS INSEPARABLY LINKED WITH THE DATE OF APPROVAL OF THE HOUSING PROJECT, IT WOULD MAKE NO DIFFERENCE IF THE CONSTRUCTION OF M/S J.C. SHARMA & SONS ITA NOS. 238 TO 241/IND/2012 15 THE SAID PROJECT WAS COMPLETED ON OR AFTER IST APRIL, 2005 OR THAT THE PROFITS WERE OFFERED TO TAX AFTER IST APRIL, 2005 I.E. IN A.Y. 2005-06 OR THEREAFTER. WE THEREFORE FIND NO SUBSTANCE IN THE ARGUMENT OF THE REVENUE THAT NOTWITHSTANDING THE FACT THAT THE HOUSING PROJECT WAS APPROVED PRIOR TO 31 ST MARCH 2005, IF THE CONSTRUCTION WAS COMPLETED ON OR AFTER IST APRIL, 2005 OR IF THE PROFITS ARE BROUGHT TO TAX IN THE A.Y. 2005-06 OR THEREAFTER, THE SAID HOUSING PROJECT WOULD HAVE TO COMPLY WITH THE PROVISIONS OF CLAUSE (D OF SECTION 80IB(10). TO OUR MIND, WE DO NOT THINK THAT THE CONDITION/RESTRICTION LAID DOWN IN CLAUSE (D) OF SECTION 80IB(10) HAS TO BE REVISITED AND/OR LOOKED AT AND COMPLIED WITH IN THE ASSESSMENT EYAR IN WHICH THYE PROFITS ARE M/S J.C. SHARMA & SONS ITA NOS. 238 TO 241/IND/2012 16 OFFERED TO TAX BY THE ASSESSEE. WHEN THE ASSESSEE CLAIMS A DEDUCTION UNDER SECTION 80IB(10) THE ASSESSEE IS REQUIRED TO COMPLY WITH SUCH A CONDITION ONLY IF IT IS ON THE STATUTE BOOK ON THE DATE OF THE APPROVAL OF THE HOUSING PROJECT AND IT HAS NOTHING TO DO WITH THE YEAR IN WHICH THE PROFITS ARE BROUGHT TO TAX BY THE ASSESSEE. WE HAVE COME TO THIS CONCLUSION ONLY BECAUSE WE FIND THAT CLAUSE (D) OF SECTION 80IB(10) IS INEXTRICABLY LINKED TO THE DATE OF THE APPROVAL OF THE HOUSING PROJECT AND THE SUBSEQUENT DEVELOPMENT/ CONSTRUCTION OF THE SAME AND HAS NOTHING TO DO WITH THE PROFITS DERIVED THEREFROM. WE MAY HASTEN TO ADD THAT IF A PARTICULAR CONDITION IS NOT INSEPARABLY LINKED TO THE DATE OF APPROVAL OF THE HOUSING PROJECT, DIFFERENT CONSIDERATIONS M/S J.C. SHARMA & SONS ITA NOS. 238 TO 241/IND/2012 17 WOULD ARISE. HOWEVER, WE ARE NOT CALLED UPON TO DECIDE ANY SUCH CONDITION AND HENCE WE ARE NOT LAYING DOWN ANY GENERAL PROPOSITION OF LAW SAVE AND EXCEPT THAT CLAUSE (D)OF SECTION 80IB(10) BEING A CONDITION LINKED TO THE DATE OF THE APPROVAL OF THE HOUSING PROJECT, WOULD NOT APPLY TO ANY HOUSING PROJECT THAT WAS APPROVED PRIOR TO 31 ST MARCH, 2005 IRRESPECTIVE OF THE FACT THAT THE PROFITS OF THE SAID HOUSING PROJECT ARE BROUGHT TO TAX AFTER THE SAID PROVISION WAS BROUGHT INTO FORCE. 22. AT THIS JUNCTURE, WE WOULD LIKE TO QUOTE THE FOLLOWING PASSAGE FROM COMMISSIONER OF INCOME TAX, U.P. VS. M/S SHAH SADIQ AND SONS (1987) 3 HON'BLE SUPREME COURT 516 : 14. UNDER THE INCOME TAX ACT OF 1922, THE ASSESSEE WAS ENTITLED TO CARRY FORWARD THE M/S J.C. SHARMA & SONS ITA NOS. 238 TO 241/IND/2012 18 LOSSES OF THE SPECULATION BUSINESS AND SET OFF SUCH LOSSES AGAINST PROFITS MADE FROM THAT BUSINESS IN FUTURE YEARS. THE RIGHT OF CARRYING FORWARD AND SET OFF ACCRUED TO THE ASSESSEE UNDER THE ACT OF 1922. A RIGHT WHICH HAD ACCRUED AND HAD BECOME VESTED CONTINUED TO BE CAPABLE OF BEING ENFORCED NOTWITHSTANDING THE REPEAL OF THE STATUTE UNDER WHICH THAT RIGHT ACCRUED UNLESS THE REPEALING STATUTE TOOK AWAY SUCH RIGHT EXPRESSLY OR BY NECESSARY IMPLICATION. THIS IS THE EFFECT OF SECTION 6 OF THE GENERAL CLAUSES ACT, 1897. 15. IN THIS CASE THE SAVING PROVISION IN THE REPEALING STATUTE IS NOT EXHAUSTIVE OF THE RIGHTS WHICH ARE SAVED OR WHICH SURVIVE THE REPEAL OF M/S J.C. SHARMA & SONS ITA NOS. 238 TO 241/IND/2012 19 THE STATUTE UNDER WHICH SUCH RIGHT HAD ACCRUED. IN OTHER WORDS, WHATEVER RIGHTS ARE EXPRESSLY SAVED BY THE SAVINGS PROVISION STAND SAVES. BUT THAT DOES NOT MEAN THAT RIGHTS WHICH ARE NOT SAVED BY THE SAVINGS PROVISION ARE EXGINGUISHED OR STAND IPSO FACTO TERMINATED BY THE MERE FACT THAT A NEW STATUTE REPEALING THE OLD STATUTE IS ENACTED. RIGHTS WHICH HAVE ACCRUED ARE SAVED UNLESS THEY ARE TAKEN AWAY EXPRESSLY. THIS IS THE PRINCIPLE BEHIND SECTION 6 OF THE GENERAL CLAUSES ACT, 1897. THE RIGHT TO CARRY FORWARD LOSSES WHICH HAD ACCRUED UNDER THE REPEALED INCOME TAX ACT OF 1922 IS NOT SAVED EXPRESSLY BY SECTION 297 OF THE INCOME TAX ACT, 1961. BUT IT IS NOT NECESSARY TO SAVE A RIGHT EXPRESSLY IN ORDER TO M/S J.C. SHARMA & SONS ITA NOS. 238 TO 241/IND/2012 20 KEEP IT ALIVE AFTER THE REPEAL OF THE OLD ACT OF 1922. SECTION 6(2) SAVES ACCRUED RIGHTS UNLESS THEY ARE TAKEN AWAY BY THE REPEALING STATUTE. WE DO NOT FIND ANY SUCH TAKING AWAY OF THE RIGHTS BY SECTION 297 EITHER EXPRESSLY OR BY IMPLICATION 23. THE AFORESAID DISCUSSION PERSUADES US TO CONCLUDE THAT THE JUDGMENTS OF THE HIGH COURTS, WHICH ARE IMPUGNED IN THESE APPEALS, TAKE CORRECT VIEW THAT THE ASSESSES WERE ENTITLED TO THE BENEFIT OF SECTION 80IB(10). AS A RESULT, THESE APPEALS FAIL A ND ARE HEREBY DISMISSED. IN THE CASE OF CHD DEVELOPERS LTD. VS. ACIT, CIRCLE 3(1), NEW DELHI, WHEREIN HON'BLE DELHI HIGH COURT HAS HELD AS UNDER :- M/S J.C. SHARMA & SONS ITA NOS. 238 TO 241/IND/2012 21 THE ASSESSEE IS EXPECTED TO COMPLETE THE PROJECT AS PER THE APPROVED PLAN AT A PARTICULAR POINT OF TIME AND THE ASSESSEE IS NOT EXPECTED TO DO OR TO FULFIL L THE CONDITIONS WHICH ARE NOT IN EXISTENCE AT THE RELEVA NT POINT OF TIME OR MADE COMPULSORY AFTER MAKING SOME AMENDMENT IN THE ACT FROM THE FUTURE DATE. SINCE TH E ASSESSEE WAS TO COMPLETE THE PROJECT ON OR BEFORE AND 31.03.2009 AND REQUEST WAS DULY MADE WITH THE COMPETENT AUTHORITY ON 05.11.2009 MENTIONING THAT THE PROJECT HAS BEEN COMPLETED AND COMPLETION CERTIFICATE MAY BE ISSUED AND IF THE SAME IS NOT ISSUED BY THE COMPETENT AUTHORITY THE ASSESSEE SHOULD NOT BE PENALIZED FOR THE SAME UNLESS AND UNT IL SOME CONTRARY FACTS ARE BROUGHT ON RECORD EVIDENCIN G THAT THE ASSESSEE CONTRAVENED THE CONDITIONS CONTAINED IN THE APPROVAL GRANTED BY SUCH COMPETENT AUTHORITY. AS PER SUB-SECTION (10) OF SECTION 80IB( 10), M/S J.C. SHARMA & SONS ITA NOS. 238 TO 241/IND/2012 22 THE BENEFIT WILL BE HUNDRED PERCENT SUBJECT TO FULFILLMENT OF CERTAIN CONDITIONS. HOWEVER, THIS CONDITION WAS SUBSTITUTED BY THE FINANCE (NO. 2) AC T OF 2009 WITH EFFECT FROM 01.04.2009 WHICH HAS BEEN FURTHER EXPLAINED BY SUB-CLAUSE (II) TO THE EXPLANA TION REGARDING COMPLETION CERTIFICATE. HOWEVER, SINCE TH E APPROVAL WAS GRANTED TO THE ASSESSEE ON 01.04.2005, THEREFORE, THE ASSESSEE IS NOT EXPECTED TO FULFILL THE CONDITIONS WHICH WERE NOT ON THE STATUTE WHEN SUCH APPROVAL WAS GRANTED TO THE ASSESSEE. THEREFORE, TH E APPEAL OF THE ASSESSEE DESERVES TO BE ALLOWED. IN THE CASE OF CIT VS. TARNETAR CORPORATION (2012) 26 TAXMAN.COM 180(GUJ.) IT WAS HELD THAT IN THE PRESENT CASE, THEREFORE, THE FACT THAT THE APPELLANT HAD COMPLETED THE CONSTRUCTION WELL BEFOR E 31 ST MARCH, 2008 IS NOT IN DOUBT. IT IS, OF COURSE, TRU E THAT FORMALLY BU PERMISSION WAS NOT GRANTED BY THE M/S J.C. SHARMA & SONS ITA NOS. 238 TO 241/IND/2012 23 MUNICIPAL AUTHORITY BY SUCH DATE. IT IS EQUALLY TRU E THAT EXPLANATION TO CLAUSE (A) TO SECTION 80IB(10) LINKS THE COMPLETION OF THE CONSTRUCTION TO THE BU PERMISSION BEING GRANTED BY THE LOCAL AUTHORITY. HOWEVER, NOT EVERY CONDITION OF THE STATUTE CAN BE SEEN AS MANDATORY. IF SUBSTANTIAL COMPLETION THEREO F IS ESTABLISHED ON RECORD, IN A GIVEN CASE, THE COUR T MAY TAKE A VIEW THAT MINOR DEVIATION THEREOF WOULD NOT VITIATE THE VERY PURPOSE FOR WHICH THE DEDUCTIO N WAS BEING MADE AVAILABLE. IN THE PRESENT CASE, THE FACTS ARE PECULIAR. THE ASSESSEE HAS NOT ONLY COMPLETED THE CONSTRUCTION TW O YEARS BEFORE THE FINAL DATE AND APPLIED FOR BU PERMISSION. SUCH BU PERMISSION WAS NOT REJECTED ON THE GROUND THAT CONSTRUCTION WAS NOT COMPLETED, BUT ON SOME OTHER TECHNICAL GROUND. IN THAT VIEW OF M/S J.C. SHARMA & SONS ITA NOS. 238 TO 241/IND/2012 24 MATTER, GRANTING RELIEF OF DEDUCTION CANNOT BE HELD TO BE ILLEGAL. IN ACIT VS. SURENDRA DEVELOPERS IN ITA NOS. 2743 TO 2745/DEL/2010 IT WAS HELD AS UNDER :- THE LD. CIT(A), IT IS SEEN, HAS GRANTED RELIEF TO THE APPELLANT ON THE BASIS OF THE FACT THAT THOUGH THE APPELLANT HAD APPLIED FOR COMPLETION CERTIFICATE BEFORE THE LOCAL AUTHORITY6 IN TIME, THE SAID CERTI FICATE WAS NOT ISSUED IN TIME BY THE LOCAL AUTHORITY. SUCH ISSUANCE OF COMPLETION CERTIFICATE HAS BEEN HELD AN D IN OUR OPINION, CORRECTLY SO, TO BE BEYOND THE CONT ROL OF THE ASSESSEE. IN THE CASE OF HINDUSTAN SAMUDHA AWAS LTD. VS. ITO IN I TA NOS. 945 TO 950/PNP 2010 HON'BLE ITAT, PUNE BENCH HELD AS UNDER :- FROM THE ABOVE, ONE THING IS CLEAR THAT THE DATE TH AT APPEAR ON THE ARCHITECTS COMPLETION CERTIFICATE FI LED M/S J.C. SHARMA & SONS ITA NOS. 238 TO 241/IND/2012 25 BEFORE THE LOCAL AUTHORITY IS A RELEVANT ONE. IN TH E INSTANT CASE, THE SAID DATE IS 25.03.2008 AND THE APPELLANT FILED REQUISITE FORM BEFORE THE LOCAL AUTHORITY INTIMATING THE COMPLETION OF THE PROJECT. THE SAID CERTIFICATE/INTIMATION WAS ACCEPTED BY THE LOC AL AUTHORITY WITHOUT ANY AMENDMENTS OR OBJECTS. LOCAL AUTHORITY HAS NOT RAISED ANY QUERIES ON THE QUALITY CONSTRUCTION OF THE BUILDING OR THE COMPLETION OF T HE SAME AS PER THE PLANS APPROVED BY SUCH AUTHORITY. IN SUCH CIRCUMSTANCES, IN OUR OPINION, THE DELAY IN OBTAINING THE COMPLETION CERTIFICATE ON 10.10.2008 IS CERTAINLY NOT ATTRIBUTABLE TO THE APPELLANT AND OBTAINING THE SAID CERTIFICATE BEFORE 31.03.2008 IS BEYOND THE CONTROL OF THE APPELLANT. THE APPELLANT S JOB INCLUDES THE COMPLETION OF THE BUILDING IN ACCORDANCE WITH THE APPROVAL PLANS AND INTIMATION O F THE SAME TO THE LOCAL AUTHORITY BY WAY OF FILING TH E M/S J.C. SHARMA & SONS ITA NOS. 238 TO 241/IND/2012 26 REQUISITE FORMS TOGETHER WITH THE COMPLETION CERTIFICATE GIVEN BY THE ARCHITECT, THE SPECIALIST IN THE MATTER AND THE APPELLANT HAS DONE HIS JOB SCRUPULOUSLY IN THIS CASE. HOWEVER, THE LOCAL AUTHORITY HAS NEITHER OBJECTED TO THE SAID APPLICAT ION OF THE APPELLANT AND THE ARCHITECT BY RAISING ANY OBJECTION NOR ACCEPTED BY ISSUE OF SAID COMPLETION CERTIFICATE TILL 10.10.2008. THEREFORE, THE DELAY I N GRANT OF THE SAID CERTIFICATE IS CERTAINLY NOT ATTRIBUTABLE TO THE APPELLANT. THEREFORE, IN OUR OPINION, THE APPELLANT IS NOT DEFAULTER ON THIS ACC OUNT AND THUS THE A.O. HAS ERRED IN DENYING THE DEDUCTIO N U/S 80IB(10) OF THE ACT. ACCORDINGLY, THE ORDER OF THE CIT(A) HAS TO BE REVERSED. THUS, THE GROUNDS RAISED IN THE APPEAL ARE ALLOWED. M/S J.C. SHARMA & SONS ITA NOS. 238 TO 241/IND/2012 27 HON'BLE ITAT, DELHI BCNCH IN THE CASE OF M/S GIRIJA COLONISERS IN ITA NOS. 2417 TO 2422/DEL/2011 HAS HE LD AS UNDER :- IN THE LIGHT OF THE FACTS NARRATED IN A.O.S REMAND REPORT AND FACTS AVAILABLE ON RECORD, THE LD. CIT(A ) HAS TAKEN A VIEW THAT THE APPELLANT HAS COMPLETED THE CONSTRUCTION MUCH PRIOR TO 31.03.2008 AND HAD FULFILLED ALL REQUIREMENTS/FORMALITIES OF THE COMPLETION CERTIFICATE AS NOTIFIED BY THE CORPORATI ON AT THE TIME OF FILING APPLICATION FOR ISSUANCE OF COMPLETION CERTIFICATE ON 26.11.2007. THE LD. CIT(A ) HAS ALSO RECORDED A FINDING THAT SALES OF ALL RESIDENTIAL UNITS IN RESPECT OF THREE PROJECTS WERE MATERIALIZED ON OR BEFORE 31.03.2008. THE MUNICIPAL AUTHORITY HAS NOT POINTED OUT ANY DEFECT AND IRREGULARITY IN THE APPELLANTS APPLICATION DATED 26.11.2007 SUBMITTED FOR ISSUANCE OF COMPLETION M/S J.C. SHARMA & SONS ITA NOS. 238 TO 241/IND/2012 28 CERTIFICATE OF ALL THE SAID PROJECTS. THEREFORE, IN THE LIGHT OF FACTS FOUND BY THE LD. CIT(A) AND REASONS GIVEN BY HIM AND RESPECTFULLY FOLLOWING THE AFORESAID DECISION OF ITAT, PUNE BENCH B IN THE CASE HINDUSTAN SAMUHA AWAS LIMITED (SUPRA), WE DO NOT FIND ANY REASON TO TAKE A VIEW OTHER THAN TH E VIEW TAKEN BY THE LD. CIT(A) IN THE PRESENT CASE. W E, THEREFORE, UPHOLD THE ORDER OF LD. CIT(A) AND DISMI SS ALL THESE APPEALS FILED BY THE REVENUE. VISAKHAPATNAM BENCH OF THE ITAT IN THE CASE OF M/S VISHNU BUILDERS VS. ACIT (ITA NOS. 178, 179 & 180/VIZAG/2011) ORDER DATED 27 TH JULY, 2011 OBSERVED THAT COMPLETION CERTIFICATE WAS NOT FILED BEFORE THE ASSES SING OFFICER AND THE PROOF OF MUNICIPAL TAX ASSESSMENT OF VARIOUS FLAT OWNERS ESTABLISHING THAT THE HOUSING PROJE CT WAS COMPLETED BEFORE SEPTEMBER, 2008 WAS FILED. SINCE THERE WAS NO PRACTICE OF ISSUING THE PROJECT COMPLETI ON M/S J.C. SHARMA & SONS ITA NOS. 238 TO 241/IND/2012 29 CERTIFICATE, THEREFORE, IT WAS HELD THAT IT WAS NOT A CO NDITION PRECEDENT OF FILING THE COMPLETION CERTIFICATE FOR AL LOWING DEDUCTION U/S 80IB(10) OF THE ACT. 11. GROUND NO. 5 IN ITA NO. 238/IND/2012 AND GROUND NO. 7 IN ITA NO. 240/IND/2012 AND GROUND NO. 4 IN ITA NO. 241/IND/2012 ARE GENERAL IN NATURE AND DO NOT REQUIRE ANY ADJUDICATION. THESE GROUNDS ARE, THEREFORE, DISMISSED AS SUCH. 12. GROUND NO. 3 IN ITA NO. 238/IND/2012, GROUND NO. 5 IN ITA NO. 240/IND/2012 AND GROUND NO. 3 IN IT A NO. 239/IND/2012 AND GROUND NO. 2 IN ITA NO. 241/IND/201 2 ARE WITH REGARD TO CHARGING OF INTEREST U/S 234A, 234B AND 234C OF THE ACT. 13. AFTER HEARING BOTH THE SIDES, WE HOLD THAT THE CHARGING OF INTEREST IS MANDATORY AND CONSEQUENTIAL IN NATURE. THESE GROUNDS ARE, THEREFORE, DISMISSED. M/S J.C. SHARMA & SONS ITA NOS. 238 TO 241/IND/2012 30 14. GROUND NO. 4 IN ITA NO. 238/IND/2012, GROUND NO. 6 IN ITA NO. 240/IND/2012; GROUND NO. 4 IN ITA NO. 239/IND/2012 AND GROUND NO. 3 IN ITA NO. 241/IND/201 2 ARE FOR INITIATING PENALTY PROCEEDINGS U/S 271(1)(C) O F THE ACT. THESE GROUNDS ARE PRE-MATURED. THESE ARE, THEREFO RE, DISMISSED. 15. IN THE RESULT, ALL THE APPEALS OF THE ASSESSEE STAN D PARTLY ALLOWED. PRONOUNCED IN OPEN COURT ON 3 RD AUGUST, 2015 SD SD (D.T. GARASIA) (B.C. MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER 3 RD AUGUST, 2015 DN/-