M/s Maheshwari Builders & Developers, Bhopal V. The ACIT, 2(1), Bhopal

ITSSA 32/IND/2011

• Counselvise Citation: [2012] 124 COUNSELVISE.COM (IT) 7503 (ITAT-INDORE)
• Duration Of Justice: 9 month(s) 23 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 13-04-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2008-2009
• Appeal Filed On: 20-06-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: ARUN DEWAN
• Assessee Lawyers: S S DESHPANDE
• Keywords: Competent authority
• Section: 143(3); 80IB; 32; 15

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL , INDORE BENCH, INDORE BEFORE SHRI JOGINDER SINGH, J.M. AND SHRI R.C.SHARM A, A.M. PAN NO. : AAKPM9274E I.T .(SS) .A.NO S . 31 & 32 /IND/2011 A.Y S . : 2007 - 08 & 2008 - 09 M/S.MAHESHWARI BUILDERS & DEVELOPERS, BHOPAL. VS ACIT, 2(1), BHOPAL. APPELLANT RESPONDENT APPELLANT BY : SHRI S.S.DESHPANDE, C. A. RESPONDENT BY : SHRI ARUN DEWAN, SR. DR DATE OF HEARING : 10.04.2012 DATE OF PRONOUNCEMENT : 13 . 0 4 .201 2 O R D E R PER R. C. SHARMA, A.M. THESE ARE THE APPEALS FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A) DATED 9.3.2011 FOR THE ASSESSMENT Y EARS 2007- 08 AND 2008-09 IN THE MATTER OF ORDER PASSED U/S 15 3C READ WITH SECTION 143(3) OF THE INCOME-TAX ACT, 1961. -: 2: - 2 2. THE ONLY GRIEVANCE OF THE ASSESSEE RELATES TO DECLI NE OF CLAIM OF DEDUCTION U/S 80IB(10) OF THE INCOME-TAX A CT, 1961, ON THE PLEA THAT PROJECT COMPLETION CERTIFICATE WAS NOT OBTAINED BY ASSESSEE BEFORE THE PRESCRIBED DATE FRO M THE COMPETENT AUTHORITY. 3. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORDS PERUSED. IN BOTH THE YEARS UNDER CONSIDERATION, THE ASSESSING OFFICER DECLINED CLAIM OF DEDUCTION U/S 80IB(10) BY OBSERVING THAT THE ASSESSEE HAS NOT FURNISHED PROJECT COMPLET ION CERTIFICATE AS PER REQUIREMENT OF SECTION 80IB(10). BY THE IMPUGNED ORDER, THE LD. CIT(A) AFTER CONSIDERING DE TAILED SUBMISSION OF THE ASSESSEE CONFIRMED THE ACTION OF THE ASSESSING OFFICER FOR DECLINE OF CLAIM OF DEDUCTION U/S 80IB(10) ON THE PLEA OF NON FURNISHING OF PROJECT C OMPLETION CERTIFICATE FROM MUNICIPAL AUTHORITIES. 4. AGAINST THE ABOVE ORDER, THE ASSESSEE IS IN FURTHER APPEAL BEFORE US. IT WAS CONTENDED BY THE LD. AUTHO RIZED REPRESENTATIVE THAT THE ASSESSEE HAS DULY COMPLETE D THE PROJECT BEFORE 3.03.2009 AND A CERTIFICATE BY ARCHI TECT FOR COMPLETION OF PROJECT BEFORE 31.3.2009 WAS ALSO FUR NISHED -: 3: - 3 BEFORE THE ASSESSING OFFICER. HE FURTHER SUBMITTED THAT THE ASSESSEE HAS COMPLETED THE SAID PROJECT AND OUT OF 48 RESIDENTIAL UNITS, 36 UNITS WERE DULY SOLD IN THE P REVIOUS YEAR RELEVANT TO ASSESSMENT YEAR 2007-08, TWO UNITS WERE SOLD RELEVANT TO ASSESSMENT YEAR 2008-09 AND REMAINING 1 0 UNITS WERE SOLD IN PREVIOUS YEAR RELEVANT TO ASSESSMENT Y EAR 2009- 10. THUS, ALL THE RESIDENTIAL UNITS WERE SOLD BEFOR E 31.3.2009. HE FURTHER INVITED OUR ATTENTION TO THE PARTICULARS OF THE CUSTOMERS TO WHOM SUCH UNITS WERE SOLD ALONGWITH TH E DATE OF SALE AND VALUE AS GIVEN IN THE AGREEMENT SO SUBMITT ED BEFORE LOWER AUTHORITIES. AS PER LD. AUTHORIZED REPRESENTA TIVE, WHATEVER WAS WITHIN THE POWER OF THE ASSESSEE I.E. TO SUBMIT A REQUEST TO ISSUE CERTIFICATE OF COMPLETION TO MUNIC IPAL AUTHORITY, BHOPAL, THE ASSESSEE HAS ALREADY DONE BY FILING APPLICATION TO THE MUNICIPAL CORPORATION, BHOPAL. H OWEVER, THE MUNICIPAL CORPORATION, BHOPAL, HAS NOT YET ISSU ED THE CERTIFICATE NOR COMMUNICATED ANY REASON FOR NOT ISS UING THE SAME. UNDER THESE CIRCUMSTANCES, AS PER LD. AUTHORI ZED REPRESENTATIVE, THE MATTER SHOULD BE RESTORED TO TH E FILE OF THE ASSESSING OFFICER WITH A DIRECTION TO THE ASSESSING OFFICER TO -: 4: - 4 ENQUIRE THE FACTUAL POSITION FROM MUNICIPAL CORPORA TION AND TO DECIDE THE MATTER AFRESH. HE ALSO PLACED ON RECO RD THE ORDER PASSED BY THE COORDINATE BENCH OF THE I.T.A.T. DELH I IN THE CASE OF GIRIJA COLONIZERS IN I.T.A.NO. 2417 TO, 242 2/DEL/2011 ORDER DATED 9 TH DECEMBER, 2011, WHEREIN THE TRIBUNAL HAS CONFIRMED THE ORDER OF THE CIT(A) FOR GRANT OF DEDU CTION U/S 80IB(10) EVEN WHEN NO SUCH CERTIFICATE OF COMPLETIO N WAS ISSUED BY MUNICIPAL CORPORATION WITHIN THE STATUTOR Y TIME LIMIT. 5. ON THE OTHER HAND, THE LD. SENIOR DR CONTENDED THA T FURNISHING OF PROJECT COMPLETION CERTIFICATE IS THE MANDATORY REQUIREMENT FOR GRANT OF DEDUCTION U/S 80IB(10), WH ICH THE ASSESSEE HAS GROSSLY FAILED TO FULFILL, THEREFORE, THERE IS NO REASON TO INTERFERE IN THE ORDER OF LOWER AUTHORITI ES FOR DECLINE OF CLAIM OF DEDUCTION U/S 80IB(10). 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND HAVE GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AN D FOUND FROM RECORD THAT THE CLAIM OF DEDUCTION U/S 80IB(10 ) WAS DECLINED ON THE PLEA THAT THE ASSESSEE HAS NOT OBTA INED PROJECT COMPLETION CERTIFICATE FROM MUNICIPAL CORPORATION, BHOPAL. -: 5: - 5 HOWEVER, VARIOUS AGREEMENTS WERE PLACED ON RECORD T O INDICATE THAT POSSESSION OF RESIDENTIAL UNIT WAS GIVEN TO TH E RESPECTIVE BUYERS BEFORE THE 31.3.2009. 7. IN THE CASE OF GIRIJA COLONIZER (SUPRA), AS RELIED ON BY THE LD. AUTHORIZED REPRESENTATIVE , THE I.T.A.T. DE LHI BENCH, HAVE TAKEN THE VIEW THAT WHERE RESIDENTIAL UNITS WE RE COMPLETE AND GIVEN POSSESSION OF AND WHERE ASSESSEE HAS GOT THE COMPLETION CERTIFICATE FROM THE MUNICIPAL CORPORATI ON, EVEN THOUGH BELATEDLY, BECAUSE MUNICIPAL CORPORATION MAY TAKE CONSIDERABLE TIME TO VERIFY THE COMPLETION OF RESID ENTIAL UNITS, ASSESSEE FIRMS VALID CLAIM OF DEDUCTION IN RESPECT OF HOUSING PROJECT WHICH WAS COMPLETED PRIOR TO THE SPECIFIED DATE CANNOT BE DECLINED. FOLLOWING WAS THE PRECISE OBSERVATIONS OF THE TRIBUNAL AS CONTAINED IN PARA 9 AT PAGE 35, WHICH R EADS AS FOLLOWS :- IN THE PRESENT CASE, THE ASSESSEE VIDE APPLICATION DATED 26.11.2007 HAS REQUESTED THE MUNICIPAL CORPORATION FOR ISSUANCE OF COMPLETION CERTIFICATE IN RESPECT OF HOUSING PROJECTS NAMED AS 'SURENDRA ENCLAVE' -: 6: - 6 'SURENDRA VIHAR PHASE-I' AND 'SURENDRA GARDEN' COMPLETED BY THE ASSESSEE. THE MUNICIPAL CORPORATION HAD ISSUED THE COMPLETION CERTIFICATE ON 18.06.2010, 23.06.2010 AND 24.06.2010 III RESPECT OF PERMISSION NO.3737/27.03.2001, 299/04.09.1999 AND 580/02.11.1999 RESPECTIVELY. THE AO IN HIS REMAND REPORT DATED 08.02.2011 HAS STATED THAT AN ENQUIRY WAS MADE FROM THE CITY PLANNER, BHOPAL MUNICIPAL CORPORATION, WHO HAS REPORTED THAT THE ASSESSEE SUBMITTED APPLICATION FOR COMPLETION CERTIFICATE IN RESPECT OF ITS HOUSING PROJECTS ON 26.11.2007, THE ASSESSEE M/S. GIRIJA COLONISERS HAD COMPLIED WITH ALL THE FORMALITIES AND THE MUNICIPAL CORPORATION HAS TO CARRY OUT INSPECTION OF ALL THE CONSTRUCTED UNITS BEFORE ISSUING COMPLETION CERTIFICATE, AND M/S. GIRIJA COLONISERS HAD GIVEN POSSESSION OF MOST OF THE UNITS BEFORE -: 7: - 7 SUBMITTING THE APPLICATION FOR COMPLETION CERTIFICATE, AS A RESULT OF WHICH IT TOOK TIME FOR INSPECTION. IN THE LIGHT OF THE FACTS NARRATED IN AO'S REMAND REPORT AND FACTS AVAILABLE ON RECORD, THE LD. CIT(A) HAS TAKEN A VIEW THAT THE ASSESSEE HAS COMPLETED THE CONSTRUCTION MUCH PRIOR TO 31.03.2008 AND HAD FULFILLED ALL REQUIREMENTS/FORMALITIES OF THE COMPLETION CERTIFICATE AS NOTIFIED BY THE CORPORATION AT THE TIME OF FILLING 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 ASSESSEE'S APPLICATION DATED 26.11.2007 SUBMITTED FOR ISSUANCE OF COMPLETION CERTIFICATE OF ALL THE SAID PROJECTS. THEREFORE, IN THE LIGHT OF FACTS FOUND BY THE -: 8: - 8 LD. CIT(A) AND REASONS GIVEN BY HIM, AND RESPECTFULLY FOLLOWING THE AFORESAID DECISION OF ITAT, PUNE BENCH 'B', PUNE IN THE CASE OF HINDUSTAN SAMUHA A VAS LTD. (SUPRA), WE DO NOT FIND ANY REASON TO TAKE A VIEW OTHER THAN THE VIEW TAKEN BY THE LEARNED CIT(A) IN THE PRESENT CASE. WE, THEREFORE, UPHOLD THE ORDER OF THE LEARNED CIT(AL ARID DISMISS ALL THESE APPEALS FILED BY THE REVENUE. 8. IT IS CLEAR FROM THE FACTS OF THIS CASE THAT THE A SSESSEE HAD NOT ONLY COMPLETED THE PROJECT BEFORE STATUTORY DATE BUT ALSO APPLIED AND OBTAINED COMPLETION CERTIFICATE FR OM THE MUNICIPAL CORPORATION EVEN THOUGH BELATEDLY. AS PER THE FINDINGS RECORDED BY THE LD.CIT(A), THE ASSESSEE HA D ALSO FULFILLED ALL THE REQUIREMENTS/FORMALITIES OF THE C OMPLETION CERTIFICATES AS NOTIFIED BY THE CORPORATION WHILE F ILING APPLICATION FOR ISSUE OF COMPLETION CERTIFICATE ON 26.11.2007. NOT ONLY THIS, THE LD. CIT(A) HAS ALSO CALLED FOR T HE REMAND REPORT FROM THE ASSESSING OFFICER WHEREIN THE ASSES SING OFFICER HAD AGREED THAT RESIDENTIAL UNITS COMPLETED IN ALL RESPECTS -: 9: - 9 WERE ALSO SOLD TO THE RESPECTIVE BUYERS BEFORE THE COMPLETION CERTIFICATE WAS APPLIED FROM MUNICIPAL CORPORATION. UNDER THESE FACTS, WHEN THE APPEAL WAS FILED BY THE DEPAR TMENT AGAINST THE ORDER OF CIT(A), THE TRIBUNAL UPHELD TH E ORDER OF CIT(A) FOR ALLOWING CLAIM OF DEDUCTION U/S 80IB(10) . HOWEVER, THE FACTS IN THE INSTANT CASE BEFORE US ARE QUITE DISTINGUISHABLE. IT IS UNDISPUTED FACT IN THE INSTA NT CASE THAT THE ASSESSEE HAS NOT GOT THE COMPLETION CERTIFICATE EVEN TILL DATE WHEN THE APPEAL WAS HEARD BY THE BENCH. NEITHE R THERE IS ANY FINDING BY ANY OF THE LOWER AUTHORITIES NOR ANY MATERIAL WAS PLACED BEFORE US TO INDICATE THAT THE ASSESSEE HAD FULFILLED ALL THE REQUIREMENTS/FORMALITIES OF THE COMPLETION CERTIFICATE AS NOTIFIED BY THE CORPORATION, WHILE APPLYING FOR ISSUE OF COMPLETION CERTIFICATE. NOTHING WAS BROUGHT ON RECO RD TO INDICATE THE REASONS AS TO WHY THIS CERTIFICATE WAS NOT ISSUED BY THE MUNICIPAL CORPORATION EVEN AFTER EXPIRY OF 4 -5 YEARS FROM THE DATE WHEN IT WAS REQUIRED TO BE ISSUED. ME RELY APPLYING FOR ISSUE OF COMPLETION CERTIFICATE WITHOU T PUTTING ON RECORD THE EFFORTS MADE THEREAFTER AND THE SHORTCOM INGS, IF ANY, POINTED OUT BY THE MUNICIPAL CORPORATION FOR N OT ISSUING -: 10: - 10 COMPLETION CERTIFICATE, THE CLAIM OF DEDUCTION U/S 80IB CANNOT BE ALLOWED IF SUCH CERTIFICATE IS NOT ISSUED EVEN A FTER 4-5 YEARS. THUS, THE CASE LAW CITED BY THE LD. AUTHORIZED REPR ESENTATIVE IN CASE OF GIRIJA COLONISERS (SUPRA) IS OF NO HELP TO THE ASSESSEE WHEREIN COMPLETION CERTIFICATE HAD BEEN ISSUED BY T HE LOCAL AUTHORITIES EVEN THOUGH BELATEDLY AND DETAILED FIND INGS HAD GIVEN BY CIT(A) FOR COMPLETION OF HOUSING PROJECT A FTER CALLING A REMAND REPORT FROM ASSESSING OFFICER. 9. IN VIEW OF THE ABOVE, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF LOWER AUTHORITIES FOR DECLINE OF CLAIM OF DEDUCTION U/S 80IB(10) FOR WANT OF COMPLIANCE OF MANDATORY CONDIT ION OF OBTAINING PROJECT COMPLETION CERTIFICATE BEFORE SPE CIFIED DATE FROM MUNICIPAL CORPORATION, BHOPAL. 10. THROUGH THE SALE DEED PUT ON RECORD, THE ASSESSEE H AD MERELY SHOWN THAT IT HAD SOLD RESIDENTIAL UNITS WHI CH CANNOT BE TAKEN AT PAR FOR HOLDING THAT THE ASSESSEE HAS C OMPLETED THE PROJECT AS A WHOLE WITHIN THE PRESCRIBED TIME P ERIOD WHICH IS A MANDATORY REQUIREMENT FOR GETTING BENEFIT OF C LAIM OF DEDUCTION U/S 80IB(10) OF THE ACT. -: 11: - 11 11. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE DISMISSED. THIS ORDER HAS BEEN PRONOUNCED IN THE OPEN COURT ON 13 TH APRIL, 2012. (JOGINDER SINGH) ( R.C.SHARMA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 13 TH APRIL, 2012. CPU* 1012