M/s Agrawal Builders, Bhopal V. The DCIT,Central, Bhopal

ITSSA 78/Ind/2020

• Counselvise Citation: [2022] 104 COUNSELVISE.COM (IT) 2867 (ITAT-INDORE)
• Duration Of Justice: 2 year(s) 2 month(s) 11 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 08-09-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 24-07-2022
• Assessment Year: 2012-2013
• Appeal Filed On: 28-06-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained expenditure; Capital asset; Business income; Income from undisclosed sources; Loose papers; Deemed to accrue or arise in india; Additional evidence; Question of law; Competent authority
• Section: 69; 132; 10; 69C; 139; 143(3); 142(1); 153A; 80IB; 250; 143(2); 139(1); 72; 13; 22; 153C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE (CONDUCTED THROUGH VIRTUAL COURT) BEFORE Ms. MADHUMITA ROY, JUDICIAL MEMBER & SHRI BHAGIRATH MAL BIYANI, ACCOUNTANT MEMBER I.T(SS).A. Nos.78 to 80/Ind/2020 (Assessment Years: 2012-13,2013-14&2015-16) M/s. Agrawal Builders, “The Sagare”, E-2/4, Arera Colony, Bhopal (M.P.) Vs. DCIT-Central & DCIT- Central-II, Bhopal, Madhya Pradesh-462011 PAN No.AAEFA8222A (Appellant) .. (Respondent) Appellant by : Shri Sumeet Neema & Gagan Tiwari, A.R. Respondent by : Shri P.K. Mitra, CIT-DR Date of Hearing 25.07.2022 Date of Pronouncement 09.09.2022 O R D E R PER Ms. MADHUMITA ROY - JM: The bunch of appeals preferred by the assessee are directed against the orders all dated 28.02.2020 passed by the Ld. CIT(A)-3, Bhopal arising out of the orders passed by the DCIT, Central -II, Bhopal dated 31.01.2014, 30.03.2016 and 29.12.2017 under Section 153A r.w.s. 143(3) of the Income Tax Act, 1961(hereinafter referred to as “the Act”) for A.Ys. 2012-13, 2013-14 & 2015-16 respectively. All the appeals are related to the same assessee and the issues involved therein are identical. Thus, all are heard analogously and are being disposed of by a common order for the sake of convenience. IT(SS)A Nos.78to80/Ind/2020 Agrawal Builders vs. DCIT Asst. Years–2012-13,2013-14& 2015-16 - 2 – 2. There is a delay of 58 days in preferring the instant appeals filed before us by the appellant. The assessee has filed applications for condonation of delay wherefrom it appears that there is a communication gap between the assessee and his CA followed by complete lock down due to Covid-19 pandemic. Such explanation rendered by the assessee has not been controverted by the learned DR. Hence, taking into consideration the entire aspect of the matter and keeping in view the situation arising out of said pandemic and the judgment passed by the Hon’ble Apex Court, we condone the delay. IT(SS)A No. 78/Ind/2020 (A.Y. 2012-13) is taken as a lead case 3. During the course of assessment proceedings, notice under Section 153A of the Act dated 09.10.2012 was issued to the assessee to file returns for A.Ys. 2006-07 to 2011-12, whereupon the assessee duly filed its return of income. Subsequently, notices under Section 143(2) dated 10.09.2013 and a detailed questionnaire under Section 142(1) were served upon the assessee on 30.09.2013. Written notes of submission with supporting documents were filed by the assessee. Seized books of accounts/documents, material were duly confronted to the assessee during the course of assessment proceeding. 4. The assessee has challenged the addition of Rs. 20,89,92,423/- for the year under consideration on account of disallowance of claim under Section 80IB(10) of the Act. During the course of assessment proceedings the AO asked the assessee to furnish the complete details of its eligibility for claim of deduction under Section 80IB(10) in response whereof the assessee explained the same under its reply dated 10.01.2014 alongwith the details of the project, and the details of IT(SS)A Nos.78to80/Ind/2020 Agrawal Builders vs. DCIT Asst. Years–2012-13,2013-14& 2015-16 - 3 – year wise sales booked and deduction claimed. The assessee also submitted that the necessary conditions for the claim of exemption under Section 80IB(10) has been fulfilled by the assessee for the relevant period. The assessee further filed the Audit Report under Section 10CCB of the relevant period alongwith other several documents. However, such submission made by the assessee was not found acceptable by the Ld. AO. Holding the assessee failed to fulfill all the conditions laid down in clauses (a), (b), (c) & (d) of sub-Section (10) of Section 80IB of the Act, the Ld. AO rejected the claim which was, in turn, confirmed by the First Appellate Authority. Hence, the instant appeal before us. 5. We have heard the rival submissions made by the respective parties, and we have also perused the relevant materials available on record. 6. The assessee is a partnership firm and has shown income from construction of housing project. A search under Section 132 of the Act was conducted on the business premises of the assessee firm and also on the premises of the other concerns/business associates on 21.10.2011. In fact, the assessee firm is a member of Sagar Group of Bhopal, engaged in the business of real estate developer and builder and a civil contractor. This group also runs various educational institutions at Bhopal under various societies. The flagship concerns of the group are Agrawal Construction Company, Agrawal builders etc. which are engaged in the business of contractor. The assessee has claimed deduction under Section 80IB(10) of the Act in the return of income for A.Ys. 2006-07 to 2012-13 filed in response to the notice under Section 153A of the Act. The detail of the claim of deduction is as follows: A.Y. 80IB(10) – Deduction claimed by the assessee IT(SS)A Nos.78to80/Ind/2020 Agrawal Builders vs. DCIT Asst. Years–2012-13,2013-14& 2015-16 - 4 – (In Rs.) 2006-07 1,45,55,378/- 2007-08 1,01,35,079/- 2008-09 3,45,41,045/- 2009-10 3,13,00,501/- 2010-11 1,68,52,456/- 2011-12 3,26,57,512/- 2012-13 20,89,92,423/- On 30.09.2013 the assessee was asked to submit the complete details of eligibility for claim of deduction under Section 80IB(10) for A.Y. 2006-07 to 2012-13 and was issued show-cause as to why deduction should not be rejected and addition should not be made on this account. The assessee submitted the following before the Ld. AO: “14.2 The assessee vide reply dated 10/01/2014 stated that:- With reference to above-mentioned assessment proceedings the reply of the assessee regarding queries raised during the assessment proceedings are as under. 1. Regarding the deduction claimed by the assessee under section 80IB(10) the submission of the assessee is that the assessee had complied all the conditions mentioned in the said section and the assessee is eligible for the said deduction. The assessee had submitted all the relevant documents along with his previous replies. A detailed chart containing the details of the permission, completion, turnover and the deduction claimed as under. DETAILS OF PROJECTS Name of Project Sagar Royal Homes Sagar Royal Villas – Pkt I Sagar Royal Villas – PKT-II Location of the Project BawadiaKalan, Hoshangabad Road Bhopal BawadiaKalan, Hoshangabad Road Bhopal BawadiaKalan, Hoshangabad Road Bhopal Area 6.04 Acres 5.15 Acres 5.92 Acres TNCP Approval No. LP/38/29/TNCP/2002/1 597 TNCP/2006/1140 & TNCP/2006/1342 TNCP/2006/114 0 & TNCP/2006/134 2 Date of TNCP Approval 23/05/2002 07/04/2006 & 22/04/2006 07/04/2006 & 22/04/2006 BMC Approval NC1053-06804-0802 NC5314-392-62006, NC5314-1129- 102006 & NC5211- NC5314-144- 42010 & NC5211-1682- IT(SS)A Nos.78to80/Ind/2020 Agrawal Builders vs. DCIT Asst. Years–2012-13,2013-14& 2015-16 - 5 – 172-52011 112010 Date of BMC Approval 06/08.2002 05.06.2006, 31.10.2006 & 28.04.2011 05.06.2006, 31.10.2006 & 28.04.2011 Number of Units 224 Bungalows 72 Bungalows 103 Bungalows & 180 Flats Commencing Year of the Project 2002-03 2006-07 2007-08 Completion Year of the Project 2007-08 2011-12 2011-12 Date of Intimation of completion to competent authority 16.01.2008 14.03.2012 14.03.2012 Year Wise Sales Booked and deduction claimed Financial Year Sagar Royal Homes Sagar Royal Villa-PK-I Sagar Royal Villas-PK-II Total Amount of Deduction Claimed 2005-06 55368350 - - 55368350 14555378 2006-07 - 50394164 - 50394164 10135079 2007-08 - 69853697 49093050 118946747 34541045 2008-09 - 20380000 91419898 111799898 31300501 2009-10 - 26765000 80167200 106932200 16852456 2010-11 - 37537041 136903448 174440489 32657512 2011-12 - 65663800 244499709 310163509 208992423 2. As the assessee had complied all the conditions necessary for claiming the exemption u/s 80IB(10) and he is eligible for the exemption under the said section for the relevant period. All the necessary documents in support of the claim of the assessee are being filed along with the audit report us 10CCB of the relevant period. 3. In reply to the question asked by your good-self "whether you have obtained completion certificate for your project "Sagar Royal Homes" from the prescribed authority?, We would like to submit that, we had complied al! the conditions and stipulations mentioned in the said section for the relevant assessment year i.e. Assessment year 2004-05. Our submission is that the whole of the section 80 IB (10) was substituted vide Finance (No.2) Act 2004 w.e.f. 01.04.2005. The Notes on Clauses and Memorandum explaining the provisions of Finance (No. 2) Bill 2004, categorically state that these amendments to s. 80-IB (10) is applicable w.e.f. 1st April, 2005 and not retrospectively. IT(SS)A Nos.78to80/Ind/2020 Agrawal Builders vs. DCIT Asst. Years–2012-13,2013-14& 2015-16 - 6 – 4. Thus on the plain reading of the sub section applicable for the assessment year 2004-05, the first year when the assessee had claimed the deduction, we can interpret that there was no such condition that the project should be completed by a specified date and the completion certificate should be obtained .from the prescribed authority. 5. This condition is being applicable from the assessment year 2005-06 and that too on the projects being approved after April 1 st 2005. Our project "Sagar Royal Homes" was being approved in the year 2002, How any condition being inserted w.e.f. April 1 st 2005is applied to the project approved and eligibility for the deduction fixed prior to April 1 st 2005. 6. Our project Sagar Royal Homes was completed by March 31 st 2008. We had handed over the possession to the all the customers. Our eligibility for the said project was determined in the assessment year 2004-05, based upon the -terms and conditions stipulated in the said section as applicable in that assessment year, and since then we are eligible for the deduction under the said section for the above mentioned project. Section 80 IB (10) is not a charging section it is mere an incentive section and once eligibility is fixed upon fulfillment of certain conditions mentioned could not change the status on the basis of further amendment. 7. We had applied for the completion certificate on 19.01.2008 (copy of which had already submitted) but we had not got the same from the competent authority. We would again like to submit that, Our said project were completed by the respective dates mentioned above is being evidences by following two evidences a. The project in charge (engineer) had been certified that our said project is being completed. b. We had handed over the possession to all the customers by the said dare which is being also evidenced by the possession certificates issued to the customers. The said date is being evidenced with the possession certificates issued to the customers, in which the customers has written and signed that they are being completely satisfied with the construction and they are taking over the possession of the house. c. All the occupants are residing in their respective units and they got the permanent electricity connection also, which is being awarded only on the completion of the house. All the occupants are paying property tax, which is also collection only from the completion date of property. 8. In reply to the question asked by your good-self "whether you have obtained completion certificate for your “Sagar Royal Vilas” from the prescribed authority? The submission of the assessee is that in the present case the scope of main sub- section 10 regarding the completion had been restricted by the explanation, which is never the indent of the legislature. The main section talks about completion of the project and explanation had restricted its scope by specified only one means to measure the completion of the project, attaining the completion certificate from IT(SS)A Nos.78to80/Ind/2020 Agrawal Builders vs. DCIT Asst. Years–2012-13,2013-14& 2015-16 - 7 – competent authority. There are several means to prove the project is complete and not only one as mentioned in the explanation. The submission of the assessee is that the intention of the legislature is more important i.e. to complete the project in the specified period, rather than the restriction imposed by the explanation i.e. to obtain the completion certificate. Whether the assesses had complete the project within the specified time or net could be judged by several means some of which are as under • To take the affidavit from the assessee that the project had been completed in the specified period. • To obtain certificates from the occupants of units of the project stating when they got the possession of their respective units, f as the at the date of possession the units alias project could not remain uncompleted) • To obtain the receipts of property tax paid by the occupants, (as the property tax is paid only after the completion of the residential units) • To obtain the electricity bills of the occupants, (as the permanent electricity connection is taken when the unit is ready for occupation) • To obtain the certificate from the architect of the project, who had supervised the project, (as he is the better person who can certify the completion of the project, because he is the person who is associated with the project since inception). • To obtain the sale deeds of the units, (as when the sale is complete, the project is itself complete.) From all the above the above evidences, 'which are already in possession of the department (seized during search along with customers flies) now it is very clear that the project of the assesses was completed by March 31 st , 2012. Because • All the customers had taken the possession of their houses and given letter m this respect that they are being fully satisfied from the construction, taking over the possession of their house, • The architect of the project had certified that She project of the assessee was complete in all respect on March 31 st , 2012. • All the residents had occupied their respective units and are paying property tax. • All the residents had residing in their houses and got the permanent electricity connection from MPEB. Thus the assesses has to submit that the project was totally completed before March 31 st , 2012 and the units have been sold out and possession was being given to the occupants before March 31 st , 2012. And unsold units were being kept as stock in trade in finished stage. Regarding obtaining the completion certificate the assessee had to submit that the project of the assessee had been approved by the Bhopal Municipal Corporation and it is the 'Competent Authority referred in the said explanation and the it being governed by "Madhya Pradesh Nagar PalikNigam Adhiniyam 1956”. Section 301 of the said act speaks about the completion certificate. IT(SS)A Nos.78to80/Ind/2020 Agrawal Builders vs. DCIT Asst. Years–2012-13,2013-14& 2015-16 - 8 – 1. The relevant extract of the said act is reproduced below and the copy of the extract is enclosed at page no. 34. 301. Completion certificate and permission to occupy or use-(1) Every person who- (i) Erects or re-erects any building; or (ii) Makes any material external alteration in or addition to any existing building; or (iii) Constructs or re-constructs any projecting portion of a building which the commissioner is empowered under section 305 require to be set back or is empowered to give permission to construct or reconstruct. Shall within one month of the completion of the work deliver to the commissioner at his office a notice in writing of such completion and shall give to the commissioner all necessary facilities for the inspection of such work. (2) Within sever; days after the receipt of the said notice the commissioner shall depute an officer commence the inspection of such work. (3) Within seven days from the date of commencement of such inspection the commissioner shall – a) Give permission for the occupation of the building erected or for the use of the part of the building re-erected; or b) Refuse such permission in case such erection, construction or re-construction is in contravention of any provision of this act or any rule or byelaw made there under or any other enactment for the time being in force. (4) No person shall occupy or permit to be occupied any such building or use or permit to be used any part affected by the re-erection of such building- a) Until the permission referred to in clause (a) of sub-section (3) has been granted in the manner prescribed by byelaws. b) Unless the commissioner has failed fifteen days after the receipt of notice of completion to intimate his refusal to grant the said permission. 2. It is specified in the above section every person who constructs any building shall within one month of completion of construction deliver to the commissioner a notice in writing of such completion and shall provide all the facilities to the commissioner for the inspection of the work completed. Within seven days of receipt of such notice, the commissioner shall depute an officer to commence the inspection of the said construction. Within seven days from the date of commencement of such inspection the commissioner shall-  give permission for the occupation of the building erected or for the use of the pan of the building: or IT(SS)A Nos.78to80/Ind/2020 Agrawal Builders vs. DCIT Asst. Years–2012-13,2013-14& 2015-16 - 9 –  refuse such permission in case such erection, construction is in contravention of any provisions of this act or any rule or any bylaw made there under or any other enactment for the time being in force. No person shall occupy or permit to be occupied any such building or use of permit to be used-  until the permission referred to in clause (a) of sub-section (3) has been, granted in, the manner prescribed by byelaws:  Unless the commissioner has failed for fifteen days after the receipt of notice of completion to intimate his refusal to grant the said permission. 3. The assessee, after completion of the project in all respect, applied for the completion certificate to the Bhopal Municipal Corporation vide letter dated 16.01.2008, 14.03.2012 & 22.03.2012. The copy of same is enclosed at page no. 3282- . The assessee approached several times and also written letter to the said authority for the issuance of the completion certificate tut he could not got the same. The assessee could not be held responsible for such thing which is beyond his control The assessee had completed the construction of the project on time and he had also applied for the completion certificate, but he could not get the completion certificate. Thus as per the provisions of section 301(4) of the Madhya Pradesh Nagar Palik Nigam Adhiniyam 1956, the assessee has not received any refusal from the commissioner of Bhopal Municipal Corporation till the March 31 st , 2012. The assessee had discharged his onus of intimating the commissioner regarding the completion of the construction. Hence as per the said provisions the project of the assessee is deemed to be completed and completion certificate is deemed to be received by March 31 st , 2008 & March 31 st 2012. 9. After pursuance, of several times till now the assessee had not received the completion certificate. The assessee once again reiterates that the issuance of the completion certificate is beyond the control of the assessee. The assessee had done all his efforts to get the same but he could not get the certificate on time. The assessee could not be punished for such act which is beyond his control 10. The assessee once again submit that he is complied all the requirements mentioned in the section 80 IB(10) of the IT Act, hence he is eligible for the said deduction for the relevant period. All the documents relating to the said deduction is already being submitted with our previous replies.” 7 The Ld. AO was not satisfied with the submission made by the assessee and completed the assessment with the impugned addition. 8. Before us the assessee has filed an application under Rule 29 of the Appellate Tribunal Rule for production of additional evidence. These are the IT(SS)A Nos.78to80/Ind/2020 Agrawal Builders vs. DCIT Asst. Years–2012-13,2013-14& 2015-16 - 10 – documents in support the claim of the assessee as made out therein. One of the documents as of dated 08.04.2021 filed by the assessee before Chief City Planning Officer, Bhopal dated 08.04.2021 and the other is issued by the Bhopal Municipal Corporation on 27.05.2021. These documents admittedly came into picture during the appellate proceeding pending before us and hence filed before us by way of an application under the appropriate rules. These documents may be treated as part and parcel of the records as the main prayer of the assessee. Considering the importance of the same for proper adjudication of the issue involved in the appeal as submitted by the Ld. A.R. which has not been controverted by the Ld. D.R. with all his fairness, we admit these two evidences filed by the appellant. 9. The fact relating to the issues are this that the appellant partnership firm developed projects namely “Sagar Royal Villas – PKT-1” and “Sagar Royal Villas – PKT-2”. The appellant claimed both the projects as eligible projects under Section 80IB(10) of the Act. The details of the projects are as follows: Name of the Projects Sagar Royal Villas –PKT-1 Sager Royal Villas-PKT-2 Location of the Projects Bawadia KalanHoshangabad Road Bhopal Bawadia Kalan, Hoshangabad Road Bhopal Area 5.15 Acres 5.92 Acres TNCP Approval No. TNCP/2006/1140 & TNCP/2006/1342 TNCP/2006/1140 & TNCP/2006/1342 Date of TNCP Approval 07/04/2006 & 22/04/2006 07/04/2006 & 22/04/2006 BMC Approval NC5314-392-62006, NC5314-1129-102006 & NC5211-172-52011 NC5314-144-42010 & NC5211-1682-112010 Date of BMC Approval 05/06/2006, 31/10,2006 & 28/04/2011 05/06/2006, 31/10/2006 & 28/04/2011 Number of units 72 Bungalows 103 Bungalows & 108 Flats Commencing year of projects 2006-07 2007-08 Completion year of 2011-12 2011-12 IT(SS)A Nos.78to80/Ind/2020 Agrawal Builders vs. DCIT Asst. Years–2012-13,2013-14& 2015-16 - 11 – projects Date of intimation of completion of competent authority 14/03/2012 14/03/2012 10. It appears from the orders passed by the authorities below that allegation has also been made against the assessee that the built up area of some of the house was found to be more than the eligible limit as prescribed under Section 80 IB (10) of the Act. That Ld. AO in assessment order at Para 14.8, 14.9 & 14.10 has given finding that the Assessee has not fulfilled all the conditions stated in clause (a) to (f) of section 80 IB (10) of the Act more particularly the assessee has not fulfilled clause (c) of Section 80 IB (10) of the Act. That the Ld. AO has given a finding that the built up area of the units were in excess of the maximum permissible limited under clause (c) of section 80 IB (10) of the Act. However, we find that the finding of the Ld. AO contained in Paragraph 14.8, 14.9 & 14.10 in regard to the violation of Clause (c) of Section 80 IB (10) of the Act has no relevance to the present appeal in the year under consideration in these appeals. In year under consideration the Assessee has only undertaken one housing project i.e. Sagar Royal Vilas (i) Sagar Royal Vilas PKT-1 and (ii) Sagar Royal Vilas PKT-2. The Finding of Ld. AO is not on housing project which is relevant for present Assessment year i.e. Sagar Royal Vilas. In facts physical verification was done on the project namely "Sagar Royal Homes" on 22.11.2008 and in that verification it has come to the knowledge that the assessee has not fulfilled clause (c) of Section 80 IB (10) of the Act and the during verification it was noted that built up area of some houses was found to be more than the eligible limit as prescribed in Section 80 IB (10) of the Act. It is found that Sagar Royal Homes project was completed in 2008 itself and it has no relevance to the present assessment year. In that view of the matter it is IT(SS)A Nos.78to80/Ind/2020 Agrawal Builders vs. DCIT Asst. Years–2012-13,2013-14& 2015-16 - 12 – contended by the appellant that both the lower authorities were not justified in denying the claim of deduction under Section 80 IB (10) of the Act on the ground that the Assessee had not complied with all the conditions mentioned in Section 80 IB (10) of the Act and the Assessee has not completed project before the Cut-off date. The lower authorities failed to look into evidences /documents placed on record which clearly proves that project was completed prior to the cut-off date. The project Sagar Royal Villas PKT-1 and PKT-2 were approved by the local authority on 07.04.2006 and 22.04.2006 and therefore, the assessee was required to complete the construction before 31.03.2012 upon completion of new project, the assessee on 14.03.2012 and 22.03.2012 filed applications before the competent authority being the Bhopal Municipal Corporation for issuance of completion certificate before the cut-off date. However, the completion certificate was issued by the Bhopal Municipal Corporation only on 17.07.2015 for projects Sagar Royal Villas PKT-1 and Sagar Royal Villas PKT-2. Since the assessee could not produce the completion certificate issued by the Municipal Authority either during the assessment proceeding or during the appellate proceeding relying upon the order passed by the Hon’ble Jabalpur High Court in the case of CIT vs. Global Reality in ITA Nos. 35, 36 and 40 of 2012 dated 21.08.2015 wherein issuance for certificate of housing project in time has been held to be the criteria for claiming deduction under Section 80IB(10) of the Act, the addition made by the Ld. AO amounting to Rs. 20,89,92,423/- for the year under consideration has been confirmed by the Ld. CIT(A). IT(SS)A Nos.78to80/Ind/2020 Agrawal Builders vs. DCIT Asst. Years–2012-13,2013-14& 2015-16 - 13 – 11. But, fact remains that the appeal preferred against the order passed by the Hon’ble Jabalpur High Court in the case of CIT vs. Global Reality (supra) has been admitted by the Hon’ble Supreme Court and the Apex Court on 08.07.2019 has been pleased to stay the order passed by the Hon’ble High Court dated 21.08.2015. A copy of the said order has been filed by the appellant before us by annexing the same to the Paper Book. 12. It was further contended by the Ld. Counsel appearing for the assessee that the issue is squarely covered in assessee’s own case for A.Y. 2008-09 in ITA No. 488/Ind/2014 by and under the order dated 18.08.2015 which has carefully been considered by us. We find that the Coordinate Bench while deciding the appeal in favour of the assessee relied on the provision of Section 301 of the Madhya Pradesh Municipal Corporation Act on the issuance of completion certificate by the concerned authority. Upon perusal of the said order passed by the Coordinate Bench we find that the following observation was made: “6. In M.P. Municipal Corporation Act, there is a provision in section 301 wherein the units can be occupied where the Commissioner of Municipal Corporation fails to issue completion certificate within 15 days from the date of receipt of the application. Section 301 of the said Act speaks about completion certificate and the relevant portion is reproduced hereunder :- “301. Completion certificate and permission to occupy or use – (1) Every person who – (i) Erects or re-erects any building; or (ii) Makes any material external alteration in or addition to any existing building : or (iii) Constructs or re-constructs any projecting portion of a building which the Commissioner is empowered is empowered under section 305 require to be set bask or is empowered to give permission to construct or re-construct. shall within one month of the completion of the work deliver to the Commissioner at his office a notice in writing of such completion and shall IT(SS)A Nos.78to80/Ind/2020 Agrawal Builders vs. DCIT Asst. Years–2012-13,2013-14& 2015-16 - 14 – give to the Commissioner all necessary facilities for the inspection of such work. (2) Within seven days after the receipt of the said notice the Commissioner shall depute an officer to commence the inspection of such work. (3) Within seven days from the date of commencement of such inspection the Commissioner shall – (a) give permission for the occupation of the building erected or for the use of the part of the building re-erected; or (b) refuse such permission in case such erection, construction or re- construction is in contravention of any provision of this Act or any rule or byelaw made thereunder or any other enactment for the time being in force. (4) No person shall occupy or permit to be occupied any such building or use or permit to be used any part affected by the re-erection of such building – (a) Until the permission referred to in clause (a) of sub-section (3) has been granted in the manner prescribed by byelaws; (b) Unless the Commissioner has failed for fifteen days after the receipt of notice of completion to intimate his refusal to grant the said permission.” 7. As per the above provisions, wherever a building is erected within one month of the completion of the work, the person was under obligation to deliver to the office of the Commissioner a notice in writing of such completion and submit all necessary facilities for inspection of such completed work. Thereafter within 7 days of the receipt of such notice from the person, the Commissioner shall depute an Officer to commence the inspection of such work. Within 7 days from the date of commencement of such inspection, the Commissioner shall give permission for occupation of the building erected or refuse such permission in case such erection is in contravention to any provision of the Act or any rule or any byelaws made under any other enactment for the time being in force. No person was allowed to occupy or permit to occupy such building until the permission has been granted in the manner prescribed by byelaws. However, there is a provision that unless the Commissioner has failed for 15 days after the receipt of the notice of completion, intimate his refusal to grant the said permission. The person shall not occupy the building. Thus, when the Commissioner has not acted upon for 15 days on the application of the assessee regarding completion of the project then the persons can occupy such building. In the assessee’s case the assessee has submitted the application well in time and the Commissioner has failed for more than 15 days after the receipt of the notice of completion to intimate the assessee regarding refusal to grant the permission. The assessee otherwise has also submitted various documents which establish that the project was physically complete as per the approved Building plan prior to the statutory period. 8. Similarly in respect of semi-finished, finished units where the revenue has treated the assessee as a contractor rather than a developer, we hold that even after registry, the purchasers were not given possession of the house till it is completed. As regards IT(SS)A Nos.78to80/Ind/2020 Agrawal Builders vs. DCIT Asst. Years–2012-13,2013-14& 2015-16 - 15 – the reliance of the revenue in the case of Sky Builders (supra), we find that in that case only the plots were sold to the purchasers and not the constructed area. Various documents submitted before us including sanction from the Municipal Corporation and the completion certificate and other documents establish that the registries of the structure were made only to facilitate the housing loan to the purchasers. The initial agreement clearly provided that after receiving the sale consideration, the registration for structure/ semi-finished/ finished flats/ bungalows may be done whenever the purchaser desires. Even after execution of the registration of sale deed of structure/semi-finished/finished flats/bungalows, the possession shall remain with the seller till full payment is made. All these facts suggest that the assessee was a developer and it has never worked as a contractor on behalf of the purchasers. We also get support from the decision of the ITAT in the case of Paras Housing (supra) and Vardhman Builders & Developers (supra). Our this view is also supported by the decision of the Hon'ble Gujarat High Court in the case of CIT vs. Radhe Developers (supra) wherein the Hon'ble High Court has held as under :- “ The assessee had, in part performance of the agreement to sell the land in question, was given possession thereof and had also carried out the construction work for development of the housing project. Combined reading of s. 2(47)(v) and s. 53A of the Transfer of Property Act would lead to a situation where the land would be for the purpose of IT Act deemed to have been transferred to the assessee. In that view of the mater, for the purpose of income derived from such property, the assessee would be the owner of the land for the purpose of the said Act. It is equally true that such title would pass only upon execution of a duly registered sale deed. However, for the limited purpose of these proceedings, one is not concerned with the question of passing of the title of the property but only examining whether for the purpose of benefit under s. 80IB(10), the assessee could be considered as the owner of the land in question. For the limited purpose of deduction u/s 80IB(10), the assessee had satisfied the condition of ownership also, even if it was necessary. The Tribunal committed no error in holding that the assesses were entitled to the benefit u/s 80IB(10) even where the title of the lands had not passed on to the assessee and in some case, the development permissions may also have been obtained in the name of the original land owners. It is not even the case of the Revenue that other conditions of s. 80IB were not fulfilled.” The decisions in the cases of Radhe Developers and Paras Housing Pvt. Ltd. (supra) were of a later date than the decision of ITAT in the case of Sky Developers (supra). 9. In view of the above peculiar factual matrix, we allow the appeal of the assessee.” 13. Furthermore, whether the assessee on the identical facts and circumstances of the case is a contractor or developer has also been decided by the Coordinate Bench holding the assessee a developer and never worked as a IT(SS)A Nos.78to80/Ind/2020 Agrawal Builders vs. DCIT Asst. Years–2012-13,2013-14& 2015-16 - 16 – contractor on behalf of the purchaser as reflecting in Paragraph 8 therein. Moreso, upon being satisfied that the assessee has fulfilled the condition of ownership of the land, benefit under Section 80IB(10) has been extended to the assessee. 14. Apart from that it has been placed on record that an appeal was preferred by the Revenue before the Hon’ble Jurisdictional High Court against the said order dated 18.08.2015 and the same stood allowed on 29.01.2016 whereupon a review application being RP-393-2016 was preferred before the Jurisdictional High Court by the assessee on the ground that the said appeal preferred by the Revenue which stood allowed on 29.01.2016 was heard and disposed of without notice the respondent therein. In that view of the matter, on 18.11.2016 the review petition was allowed and disposed of by restoring the matter to the original file. Copy of each of the relevant orders as annexed to the Paper Book filed have been already considered by us. 15. Now for proper adjudication of the matter the following list of evidence is required to be considered. On 14.03.2012 & 22.03.2012 application for completion certificate for project of Aggrawal Builders in the name of “Sagar Royal Villas for PKT-1 and PKT-2” was made by the assessee as appearing at Pages 147 & 148 of the Paper Book filed. Certificate was issued by the Architect on 28.03.2012 certifying that the construction and the building developing work of Sagar Royal Villas PKT-1 & PKT-2 was completed in all respect as per approval given by Municipal Corporation, Bhopal (Madhya Pradesh) as appearing at Pages 150 & 151 of the Paper Book. On 17.07.2015 the completion certificate was issued by Nagar Nigam, Bhopal in respect of the construction of the property mentioned hereinabove. Apart from that the detail IT(SS)A Nos.78to80/Ind/2020 Agrawal Builders vs. DCIT Asst. Years–2012-13,2013-14& 2015-16 - 17 – of all the purchases of the property in question appearing at Pages 220 to 250 of the Paper Book alongwith the status of property tax paid by the purchasers obtained from the Bhopal Municipal Corporation, ledger accounts with sale deed for the property in question has been duly considered by us. Moreso, we have perused the letter dated 08.04.2021 written by the assessee before the Chief City Planning Officer, Bhopal Municipal Corporation, Bhopal appearing at Page 7 of the application annexing additional evidence. By the said application dated 08.04.2021 the assessee categorically stated the fact that the completion certificate issued to the assessee by the Municipal Corporation, Bhopal on 17.07.2015 for the project namely Sagar Royal Villas PKT-1 & Sagar Royal Villas PKT-2 does not acknowledge the date of application 14.03.2012 & 22.03.2012 filed by the assessee for issuance of completion certificate for these two projects as aforesaid. Since the other statutory departments are not accepting the fact of making such application by the assessee on 14.03.2012 & 22.03.2012 for issuance of completion certificate for these two projects, the assessee categorically requested the Municipal Corporation for issuance of “Certificate” containing the factum of making application of completion certificate on 14.03.2012 & 22.03.2012 by the appellant on the basis of which ultimately the Bhopal Municipal Corporation has issued completion certificate on 17.07.2015. We find acknowledgement of the above fact of making application for completion certificate by the assessee on 14.03.2012 & 22.03.2012 upon which the completion certificate was issued by the said statutory authority on 17.05.2017 in the said letter issued by the Bhopal Municipal Corporation as appearing at Page 8 of the application under Rule 29 made by the appellant. Thus, it is evident upon analyzing and examining all the documents filed by the assessee as stated hereinabove that the IT(SS)A Nos.78to80/Ind/2020 Agrawal Builders vs. DCIT Asst. Years–2012-13,2013-14& 2015-16 - 18 – assessee duly made application for completion certificate in respect of the project name “Sagar Royal Villas PKT-1” & “Sagar Royal Villas PKT-2” before the required date i.e. 31.03.2012. However, neither the Commissioner has deputed any officer to inspect such work nor had he refused the said grant of permission. We do not find any lacuna in moving that application by the assessee seeking for completion certificate from the Municipal Authorities which was made well within time and the delay in issuing such completion certificate has been admittedly done by the concerned authority. The assessee duly applied for completion certificate followed by the architects certificate certifying completion of the project once the construction has been completed; moreso, application for completion certificate has been duly made by the assessee with supporting documents. We observe that delay in granting such certificate by the statutory body cannot be detrimental to the interest of the assessee in claiming the benefit under Section 80IB(10) of the Act, particularly when the mandatory provision of issuance of completion certificate by the statutory authority within the due date prescribed under the law has been violated by the said authority itself. 16. In this regard we have considered the judgment passed by the Hon’ble Punjab & Haryana High Court in the case of PCIT vs. Ambey Developer Pvt. Ltd., reported in (2018) 99 taxmann.com 415 (Punjab & Haryana). The relevant observation is as follows: “8. Adverting to the interpretation and meaning to be assigned to Explanation (ii) to section 80-IB(10(a) of the Act, essentially it has to be seen whether the term "shall" used therein is to be treated as mandatory or it is in the nature of a directory requirement. In our opinion, though the word used in Explanation (it) to section 80- IB(10)(a) of the Act is "shall", but it would not necessarily mean that in every case, it shall be taken to be mandatory requirement instead would depend upon the intent of the Legislature and not the language in which the provision is clothed. The meaning IT(SS)A Nos.78to80/Ind/2020 Agrawal Builders vs. DCIT Asst. Years–2012-13,2013-14& 2015-16 - 19 – and the intent of the Legislature would be gathered not on the basis of the phraseology of the provision but taking into consideration its nature, its design and the consequences which would follow from interpreting it in a particular way alone. The purport of the said Explanation (ii) to section 80-IB(10)(a) of the Act is to safeguard the interests of the Revenue wherever the construction has not been completed within the stipulated period. Thus, it cannot mean that the requirement is mandatory in nature and would disentitle an assessee to the benefit of section 80-IB(10)(a) of the Act even in respect of those cases where the assessee had completed the construction within the stipulated period and had made an application to the local authority within the prescribed time. The issuance of the requisite certificate was within the domain of the competent authority over which the assessee had no control. From the findings recorded by the Commissioner of Income-tax (Appeals) as affirmed by the Tribunal, it was clear that the construction had been completed before the stipulated date, i.e., March 31, 2010. It was also not disputed that the certificate of completion was applied on March 29, 2010 which was issued to the assessee on December 31, 2011. The assessee in such circumstances could not be denied the benefit of section 80-IB(10)(a) of the Act. The Commissioner of Income-tax (Appeals) and the Tribunal had rightly adjudicated the issue in favour of the assessee-respondent. Learned counsel for the appellant-Revenue has not been able to show any illegality or perversity in the ' findings recorded by the Commissioner of Income-tax (Appeals) as well as the Tribunal, warranting interference by this Court.” 17. We have considered the judgment passed by the Hon’ble Bombay High Court in the case CIT vs. Hindustan Samuh was Ltd., reported in (2015) 377 ITR as has been relied upon by the assessee wherein the identical issue has been cropped up and decided in favour of the assessee. The relevant observation of the judgment is as follows: “8. The learned council for the appellant asserted that though Subsection (10) is a provision relating to exemption, since the explanation does not introduce any uncertainty, it must be read and interpreted literally. 9. On the other hand, learned council for the respondents contended that even assuming that there is no doubt arising from the interpretation of Section 80-IB and the explanation referred to above, there is scope for holding that the interpretation had inducted an element, which goes against the spirit and purpose of the Section. He also placed reliance on a judgment of Gujarat High Court in the case of CIT v. Tarnetar Corpn. [2014] 362 ITR 174/[2012] 210 Taxman 206 (Mag.)/26 taxmann.com 180 on the point. We have perused the judgment of Gujarat High Court and found that the situation before the Gujarat High Court was similar. The High Court was examining the correctness of the findings recorded by the Income Tax Appellate Tribunal. The High Court mainly placed reliance on the crucial fact that the application seeking Completion Certificate was submitted to the Municipal IT(SS)A Nos.78to80/Ind/2020 Agrawal Builders vs. DCIT Asst. Years–2012-13,2013-14& 2015-16 - 20 – Corporation prior to 31.03.2008 and therefore, they confirmed the finding of the Court that the requirement of Section was not mandatory in nature. 10. We have no difficulty to accept this contention. We also hold that the explanation is quite clear and does not introduce any uncertainty. In other words, date of completion of a project has to be the date of issuance of Completion Certificate by the Municipal authority. 11. The question we raise here is whether the explanation introduced an element of harshness to such an extent that it rendered the main provision nugatory? In our view, the explanation is introduced recently to put an end to a controversy, which might arise before the Assessing Officer about the date of completion. The intention of the legislature in providing explanation to fix the date of completion of a project is quite helpful when this provision is utilized in practice. In our view the explanation has introduced an unnecessarily strictness in the provision which is in the nature of exemption and not in the nature of charging. Sub-section (10) mentions that a housing project should 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 through a certificate issued by an architect who is appointed for supervising the construction work. He is a professional who would declare that the project is complete. Unfortunately, Sub-section (10) and the explanation do not give any importance to the issuance of such Completion Certificate by the concerned architect. It gives importance only to the certificate of Municipal authority. It is common knowledge that an application for Completion Certificate submitted to the Municipal Authorities is accompanied by a Completion Certificate issued by the concerned architect. No doubt, the Municipal authorities then cause inspection of the site and verify 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 seeking 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 completion of the project? The answer is in negative. 12. In the facts of this case, admittedly, the Architect of the project had given a certificate prior to 31.03.2008. The respondent submitted application to the Municipal authority along with such certificate well in time on 25.03.2008. It seems that the Municipal authorities directed the respondent to deposit certain amount for issuance of Completion Certificate on 27.03.2008 and the amount was accordingly deposited on 31.03.2008. Thereafter, the certificate was issued in October, 2008. This delay cannot be attributed to the respondent assessee. 13. In view of this, we are inclined to hold that the project, for which exemption is sought, was completed prior to 31.03.2008 and therefore, we are inclined to record our answer in affirmative to the substantial question of law referred to above. Both the appeals are accordingly dismissed.” IT(SS)A Nos.78to80/Ind/2020 Agrawal Builders vs. DCIT Asst. Years–2012-13,2013-14& 2015-16 - 21 – 18. On the identical facts and circumstances of the case we find that the Hon’ble Bombay High Court relying upon the judgment passed in the matter of CIT vs. Hidustan Samuh Awas Ltd. (supra) passed orders in favour of the assessee in the case of PCIT vs. M/s. Dharti Enterprises in Income Tax Appeal No. 1096 of 2016. The observation made therein is as follows: “8 We find that this issue is now no longer res Integra as it stands concluded against the Revenue and in favour of the Respondent by the decision of this Court in CIT v/s. Hindustan Samuha was Ltd., 377 ITR 150 . in the above case, it has been held that whether the project is completed within the time framed provided under Section 80IB(10) of the Act, and an application for issuance of completion certificate is filed within time, then delay on account of the competent authority in issuing completion certificate would not deprive the Assessee, the benefit of Section 80IB(10) of the Act. To the same effect the decision of the Gujarat High Court in CIT v/s. Tarnetar Corporation 362 ITR 174. In the present case on facts, it is found that not only the project was completed within time but an application for granting of certificate was also made well within the time. Thus, the Respondent should not suffer on account of the delay at the hands of the Competent Authority issuing the certificate.” 19. We find that the Hon’ble Gujarat High Court has observed that delay on account of the competent authority in issuing the completion certificate would not deprive the assessee, the benefit of Section 80IB(10) of the Act. Relevant to mention that the judgment in the case of CIT vs. Tarnetar Corporation, reported in (2012) 26 taxmann.com 180 (Guj.) is also relied upon by the assessee. The relevant observation made therein is as follows: “6. In the present case, therefore, the fact that the assessee had completed the construction well before 31st March, 3008 is not in doubt. It is, of course, true that formally BU permission was not granted by the Municipal Authority try such date. It is equally true that explanation to clause (a) to section 80-IB(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 compliance thereof is established on record, in a given case, the court may take the view that minor deviation thereof would not vitiate the very purpose for which deduction was being made available. IT(SS)A Nos.78to80/Ind/2020 Agrawal Builders vs. DCIT Asst. Years–2012-13,2013-14& 2015-16 - 22 – 20. Coming back to the fact of the matter, we note that perusal of the records mainly sale deed, possession certificate, the electricity Certificate, the electricity meter connection and the ledger of property tax established that all the residents had occupied their units and pay property tax and obtained permanent electricity connection from Madhya Pradesh Electricity Board in due time which further satisfies beyond doubt that the assessee completed the project prior to 31.03.2021 as per the plan sanctioned. Further, there is no deviation in the project which has been certified by the completion Certificate issued by the Municipal Corporation on 17.07.2015. We have already discussed the different judgments passed by the different judicial forums as relied upon by the parties which further indicates the issue in favour of the appellant. Thus, considering the entire aspects of the matter when the relevant project is otherwise eligible, respectfully relying upon the ratio laid down by the different Benches and Hon’ble High Courts, we find that the claim of the assessee under Section 80IB(10) of the Act deserves to be allowed. The addition made, therefore, is deleted. 21. In the result, all three appeals filed by the assessee on this identical ground are allowed. 22. The addition of Rs.5,40,00,000/- on account of undisclosed income under Section 69 of the Act for A.Y. 2012-13 is also under challenged before us. 23. The brief facts leading to the issue is this that during the course of locker operation of Locker No. 2/29 of State Bank of India, Area Colony, Bhopal in the name of Shri Siddharth Agrawal and Smt. Archana Agrawal on 08.11.2022 incriminating documents being loose papers were found wherefrom mentioning IT(SS)A Nos.78to80/Ind/2020 Agrawal Builders vs. DCIT Asst. Years–2012-13,2013-14& 2015-16 - 23 – of total amount of Rs. 10,25,00,000/- in regard to expenditure of payment of material, labour of Sagar Royal Villa and cash kept at the site of Royal Villa totaling Rs.5,40,00,000/- was found. The appellant during search surrendered this income in the hands of the appellant firm and paid tax accordingly. According to Ld. AO, the nature of such undisclosed income cannot be said to have been derived out of the business of developing housing projects and added the entire amount under Section 69 of the Act which was, in turn, confirmed by the First Appellate Authority. Hence, the instant appeal before us. 24. We have heard the respective parties, and we have also perused the relevant materials available on record. 25. It appears from the record that during the assessment proceeding itself the assessee submitted the additional income offered during the search operation which is also reflecting in the books of accounts duly audited and supported by the requisite audit report under Section 80IB in Form No. 10CCB and is, therefore, eligible for deduction under Section 80IB(10) of the Act. It further appears from the records that the assessee has disclosed income in credit side of P&L Account. Amount of Rs. 2,50,00,000/- and Rs. 2,90,00,000/- has been offered in the P&L Under PKT-1 & PKT-2 respectively as undisclosed income. 26. On the contrary, the said income cannot be said to have been derived out of the developing housing project so as to satisfy the deduction under Section 80IB(10) and thus, taxable as of the view of the Ld. AO. According to him the undisclosed income has not a regular income from housing project and therefore, the assessee is not eligible for such claim. IT(SS)A Nos.78to80/Ind/2020 Agrawal Builders vs. DCIT Asst. Years–2012-13,2013-14& 2015-16 - 24 – 27. It appears from the records that the additional income was shown in books of account and same being part and parcel of business income and the appellant claimed to have been eligible for deduction under Section 80IB(10) of the Act. That the assessee during assessment proceedings has submitted offering of Rs. 5,40,00,000/- as additional / undisclosed income during search and bifurcation of such income was as follows: 1) Payment of material at SRV (Sagar Royal Villas) site 2,00,00,000/- 2) Payment of labour of for SRV (Sagar Royal Villas) site 2,50,00,000/- 3) Cash at SRV 90,00,000/- 28. It appears that the Ld. AO has failed to look into the return of income filed by the Assessee and its books of account wherefrom it is evident that the assessee during search assessee has “disclosed additional income” and same is credited as profit in profit and loss account. That the Ld. AO’s finding that such additional income in form of unexplained expenditure is not reflecting in books of account is found not accepted as the Assessee has duly shown in books of account “undisclosed income” and thus the expenditure of such income will always reflect in balance sheet as “stock in trade”. Thus, once the addition / undisclosed income has already shown in books of account as profit / income then application of such income cannot be brought to tax again under Section 69C of the Act. 29. On this issue, we have considered the judgment relied upon by the Ld. AO passed by the Hon’ble Gujarat High Court in the matter of CIT vs. Megha IT(SS)A Nos.78to80/Ind/2020 Agrawal Builders vs. DCIT Asst. Years–2012-13,2013-14& 2015-16 - 25 – Industries, reported in (2013) 29 taxmann.com 404/214 Taxman 400 (Guj.). While dealing with the issue the Hon’ble Court was pleased to observe as follows: “In course of assessment, the Assessing Officer opined that the assessee had failed to explain genuineness of deposits received from ten different parties and on that basis Rs 1.90 lakh was added to its taxable income. On appeal, the assessee raised a plea that addition confirmed, if any, in trading results had to be allowed to be set off against unaccounted income introduced in grab of cash deposit. The Commissioner (Appeals) accepted assessee’s plea and accordingly, a part of addition was deleted. Tribunal upheld order of the commissioner (Appeals). Held that, on facts, there was no error in reasoning adopted by the commissioner (Appeals) and confirmed by Tribunal.” 30. We are further enlightened by the judgment passed by the Hon’ble Gujarat High Court in the case of CIT vs. Hindustan Marbles Ltd., reported in (2010) 327 ITR 312 (Guj.). In this respect, our attention has also been drawn by the Ld. AR on the judgment passed by the Hon’ble Pune Bench in ITA Nos. 18, 19 & 20/PN/2013 & ITA Nos. 60 & 61/PN/2013 (Naresh T. Wadhwani vs. DCIT). On the identical situation, the Ld. Bench has been pleased to allow the deduction under Section 80IB(10) of the Act even in relation to the income surrendered during the course of survey on account of undisclosed receipts to the Housing Project. The observation made therein is as follows: “35. In the above background, the m2o1ot question is whether such additional income declared in the course of search is eligible for the benefits of section 80IB(10) of the Act, especially when the relevant project is otherwise eligible for the benefits of section 80IB(10) of the Act. 36. In this context, it was a common point between the parties that an identical controversy has been considered by the Pune Bench of the Tribunal in the case of M/s Malpani Estates vs. ACIT vide ITA Nos.2296 to 2298/PN/2012 vide order dated 30.01.2014. The relevant discussion in the order of the Tribunal dated IT(SS)A Nos.78to80/Ind/2020 Agrawal Builders vs. DCIT Asst. Years–2012-13,2013-14& 2015-16 - 26 – 30.01.2014 (supra) is reproduced hereinafter to facilitate appreciation of reasoning that prevailed with the Tribunal to allow the claim of assessee therein :- 10. In the present case, it is not in dispute that the assessee has derived income from undertaking a housing project, 'The Crest' at Pimple Saudagar, Pune, which is eligible for section 80IB(10) benefits. In the return of income originally filed u/s 139(1) of the Act, assessee had claimed deduction u/s 80IB(10) of the Act in relation to the profits derived from the said housing project and the same stands allowed even in the impugned assessment which has been made u/s 153A(1)(b) of the Act as a consequence of a search action u/s 132(1) of the Act. 11. In the course of search, in a statement deposed u/s 132(4) of the Act, assessee declared certain additional income pertaining to the housing project in question. The additional income declared was on account of on- money received from the customers to whom flats were sold in the said project. At the time of hearing, learned counsel referred to the copy of statement recorded u/s 132(4) of the Act of Shri Rajesh Malpani, a partner of the assessee firm and also copies of some of the seized papers, which indicated receipt of on-money, and the same have placed in the Paper Book at pages 35 to 52. A perusal of the seized material shows that a complete detail of that on-money received is enumerated, viz. name of the customers, amount and the respective flat sold in the project. Even in the deposition made u/s 132(4) of the Act, the partner of the assessee firm made a yearwise detail of additional income declared on account of on- money received on sale of flats in the project. Accordingly, the impugned sum has been declared as unaccounted income from the housing project in question. In the return of A.Ys. 2008-09 to 2010-11 income filed in response of notice issued u/s 153A(1)(a) of the Act, assessee has declared such additional income as income from housing project, 'The Crest' at Pimple Saudagar, Pune. The declaration made in the return of income has not been disputed by the Assessing Officer. The only dispute raised by the Assessing Officer is with regard to nature of such income, which according to the Assessing Officer "does not fall under of the any heads of income as described u/s 14 of the I.T. Act". In coming to such conclusion, he has disagreed with the stand of the assessee that such additional income was a 'business income' of the assessee relating to the housing project. 'The Crest' at Pimple Saudagar, Pune. However, as per the CIT(A), the income in question is assessable under the head 'income from other sources'. Ostensibly, the CIT(A) has not agreed with the inference of the Assessing Officer that the impugned income does not fall under any heads of income u/s 14 of the Act because according to her such income is liable to be assessed under the head 'income from other sources. Thus, as of now, before us the inference of the Assessing Officer does not survive any longer since the order of the Assessing Officer has merged in the order of the IT(SS)A Nos.78to80/Ind/2020 Agrawal Builders vs. DCIT Asst. Years–2012-13,2013-14& 2015-16 - 27 – CIT(A) and in any case the Revenue is not in appeal on this aspect. Be that as it may, factually speaking, it cannot be denied that the additional income in question relates to the housing project, 'The Crest' at Pimple Saudagar, Pune undertaken by the assessee. The material seized in the course of search; the deposition made by the assessee's partner during search u/s 132(4) of the Act; and, also the return of income filed in response to notice issued u/s 153A(1)(a) of the Act after the search, clearly show that the source of impugned additional income is the housing project, 'The Crest' at Pimple Saudagar, Pune. The aforesaid material on record depicts that the impugned income is nothing but unaccounted money received by the assessee from customers on account of sale of flats of its housing project, 'The Crest' at Pimple Saudagar, Pune. Clearly, the source of the additional income is the sale of flats in the housing project, 'The Crest'. Therefore, once the source of income is established the assessability thereof has to follow. The nature of income, thus on facts, has to A.Ys. 2008-09 to 2010-11 be treated as 'business income' albeit, the same was not accounted for in the account books. In this manner, we are unable to accept the stand of the Assessing Officer or of the CIT(A) that the said income is not liable to be taxed as 'business income'. 12. Now, coming to the point as to whether such 'business income' qualifies to be eligible for deduction u/s 80IB(10) of the Act in the course of an assessment made u/s 153A(1)(b) of the Act. On this aspect, the learned Departmental Representative submitted that the assessment in cases of search action or requisition are made u/s 153A or 153C of the Act in order to assess undeclared incomes and such provisions are for the benefit of the Revenue and therefore a claim u/s 80IB(10) of the Act cannot be considered in such proceedings, especially when such a claim was not made in the return of income originally filed under section 139 of the Act. In this regard, the learned Departmental Representative has referred to the judgment of the Hon'ble Supreme Court in the case of CIT vs. Sun Engineering Works Pvt. Ltd., 198 ITR 297 (SC) to point out that even in the cases of re-assessment u/s 147/148 of the Act fresh claims cannot be raised by the assessee. Secondly, it is pointed out by the learned Departmental Representative that even if the claim was to be considered then it was not allowable because the requisite condition that the return of income has to be accompanied by the prescribed audit report has not been complied with by the assessee. On the basis of aforesaid reasons, the claim of the assessee has been opposed. 13. Sections 153A to 153C of the Act contain provisions relating to assessments to be made in cases where search is initiated u/s 132 or a requisition is made u/s 132A of the Act after 31st May, 2003. Clause (b) of sub-section (1) of section 153A postulates assessment or re-assessment of total income of six assessment years preceding the assessment year IT(SS)A Nos.78to80/Ind/2020 Agrawal Builders vs. DCIT Asst. Years–2012-13,2013-14& 2015-16 - 28 – relevant to the previous year in which such search is conduced or requisition is made. A.Ys. 2008-09 to 2010-11 Shorn of other details, it would suffice for us to notice clause (i) of the Explanation below section 153A(2) of the Act, which reads as under :- "Explanation. - For the removal of doubts, it is hereby declared that, - (i) save as otherwise provided in this section, section 153B and section 153C, all other provisions of this Act shall apply to the assessment made under this section." 14. In terms of the above referred clause (i) of the Explanation, it is evident that all the provisions of the Act shall apply to an assessment made u/s 153A of the Act save as otherwise provided in the said section, or in section 153B or section 153C of the Act. In the background of the expression "all other provisions of this Act shall apply" contained in Explanation (i) below section 153A of the Act, and in the context of the controversy before us, the moot point to be examined is as to whether or not deductions enumerated in Chapter VIA of the Act are to be considered in making an assessment made u/s 153A(1)(b) of the Act. Section 153A(1)(b) of the Act requires the Assessing Officer to assess or reassess the 'total income' of the assessment years specified therein. Ostensibly, section 80A(1) of the Act prescribes that in computing the 'total income' of an assessee, there shall be allowed from his 'total income' the deductions specified in Chapter VIA of the Act. The moot point is as to whether the aforestated position prevails in an assessment made u/s 153A(1)(b) or not? In our considered opinion, having regard to the expression "all other provisions of this Act shall apply to the assessment made under this section" in Explanation (i) of section 153A of the Act, it clearly implies that in assessing or reassessing the 'total income' for the assessment years specified in section 153A(1)(b) of the Act, the import of section 80A(1) of the Act comes into play, and there shall be allowed the deductions specified in Chapter VIA of the Act, of course subject to fulfillment of the respective conditions. Therefore, we are unable to subscribe to the stand of the CIT(A) to the effect that the benefits of Chapter VIA of the Act, which inter-alia include section 80IB(10) of the Act, are not applicable to an assessment made under sections 153A to 153C of the Act. In our considered opinion, the phraseology A.Ys. 2008-09 to 2010-11 of section 153A r.w. Explanation (i) as noted above, does not support the premise arrived at by the CIT(A) and accordingly, the same is rejected. Therefore, assessee's claim for deduction u/s 80IB(10) of the Act even with regard to the enhanced income was well within the scope IT(SS)A Nos.78to80/Ind/2020 Agrawal Builders vs. DCIT Asst. Years–2012-13,2013-14& 2015-16 - 29 – and ambit of an assessment u/s 153A(1)(b) of the Act and the Assessing Officer was obligated to consider the same as per law. 15. The other argument of the Ld. CIT-DR to the effect that the return of income was not accompanied by the prescribed audit report on the enhanced claim of deduction is too hyper-technical, and superficial. Pertinently, the Assessing Officer has not altogether denied the claim of deduction and in any case, the claim was initially made in the return originally filed, which was duly accompanied by the prescribed audit report. 16. The argument set-up by the learned Departmental Representative on the basis of the judgment of the Hon'ble Supreme Court in the case of Sun Engineering Works Pvt. Ltd. (supra), in our view, is also untenable having regard to the facts of the present case. No doubt the Hon'ble Supreme Court has observed that reopening of an assessment u/s 147/148 is for the benefit of the Revenue. In the case before the Hon'ble Supreme Court, assessee wanted to set-off loss against the escaped income which was taxed in the re- assessment proceedings and the claim of such set-off was not made in the return of income originally filed. According to the Hon'ble Supreme Court, the claim was not entertainable because the said claim not connected with the assessment of escaped income. In-fact, the judgment of the Hon'ble Supreme Court in the case of Sun Engineering Works Pvt. Ltd. (supra) is not an authority to say that assessee cannot raise a claim pertaining to an issue which is connected to the assessment of escaped income. In-fact, if a claim which is connected to the escaped income is set- up before the Assessing Officer in the course of re-assessment proceedings, the same is liable to be considered and the judgment of the Hon'ble Supreme Court in the case of Sun A.Ys. 2008-09 to 2010-11 Engineering Works Pvt. Ltd. (supra) only precludes such new claims by the assessee which are unconnected with the assessment of escaped income. In the present case, we are dealing with an assessment u/s 153A of the Act and the scope of such an assessment has already been examined by us in the context of the relevant specific provisions, which do not leave any scope for ambiguity. The judgment of the Hon'ble Supreme Court in the case of Sun Engineering Works Pvt. Ltd. (supra) has been rendered on a different footing and is strictly not applicable to the present proceedings. So, however, even if one were to import the reasoning raised by the learned Departmental Representative based on the judgment of the Hon'ble Supreme Court, to the present case, yet we do not find that it would debar the assessee from claiming deduction u/s 80IB(10) of the Act on the impugned additional income declared in the return filed in response to notice u/s 153A(1)(a) of the Act. In the present case, the claim of deduction u/s 80IB(10) of the Act was made in the return of income originally filed and in the return filed in pursuance to the notice u/s 153A(1)(a) of the Act, IT(SS)A Nos.78to80/Ind/2020 Agrawal Builders vs. DCIT Asst. Years–2012-13,2013-14& 2015-16 - 30 – the claim u/s 80IB(10) of the Act is only enhanced and therefore, it is not a fresh claim. Therefore, in our view, the judgment of the Hon'ble Supreme Court in the case of Sun Engineering Works Pvt. Ltd. (supra) does not help the Revenue in the present case. 17. In-fact, the Hon'ble Bombay High Court in the case of Sheth Developers (P) Ltd. (supra) was considering the claim of deduction u/s 80IB(10) of the Act in relation to the undisclosed income declared consequent to the search action. In the case before the Hon'ble High Court, it was factually emerging that undisclosed income was earned by the assessee in the course of carrying on his business activity of a 'builder' and the same was accepted by the Department, but the claim of the deduction u/s 80IB(10) was denied in relation to such income. However, the claim was upheld by the Hon'ble Bombay High Court. In the present case, factually, there is no material to negate the assertion of the assessee, which are borne out of the material on record, that the additional income in question has been received in A.Ys. 2008-09 to 2010-11 the course of carrying on its business activity of developing the housing project, 'The Crest' at Pimple Saudagar, Pune, which is eligible for section 80IB(10) benefits. Therefore, in terms of the parity of reasoning laid down by the Hon'ble Bombay High Court in the case of Sheth Developers (P) Ltd. (supra), the claim of the assessee is justified. 18. In-fact, once it is factually explicit that the additional income in question is derived from the housing project, 'The Crest' at Pimple Saudagar, Pune, which is eligible for section 80IB(10) benefits, such an income merely goes to enhance the 'business income' derived from the eligible housing project and shall be entitled for section 80IB(10) benefits, even as per the ratio of the judgment of the Hon'ble Bombay High Court in the case of Gem Plus Jewellery India Ltd. (supra). 19. In the result, on the basis of the aforesaid legal position and the material and evidence on record, assessee is eligible for deduction u/s 80IB(10) of the Act in relation to impugned additional income offered in a statement u/s 132(4) of the Act in the course of search and subsequently declared in the return filed in response to notice u/s 153A(1)(a) of the Act. In the result, appeal of the assessee for assessment year 2008-09 is allowed.” 37. In view of the legal position explained in the above precedent and the material and evidence on record, assessee is eligible for deduction u/s 80IB(10) of the Act even in relation to 2im5pugned additional income offered in a statement deposed u/s 132(4) of the Act during the course of search and subsequently declared in the return of income filed in response to notice u/s 153A(1)(a) of the Act. Thus, IT(SS)A Nos.78to80/Ind/2020 Agrawal Builders vs. DCIT Asst. Years–2012-13,2013-14& 2015-16 - 31 – assessee’s claim for deduction u/s 80IB(10) of the Act in relation to the impugned additional income of Rs.60,00,000/- is liable to be upheld. 38. Before parting, we may refer to the decision of the Chandigarh Bench of the Tribunal in the case of Liberty Plywood (P.) Ltd. (supra) relied upon by the learned CIT-DR, for the proposition that income surrendered during the course of a survey action was to be assessed separately as ‘deemed income’. On the basis of the said proposition, the Chandigarh Bench of the Tribunal denied the claim of the assessee to set-off business losses against such surrendered income, in the context of sections 70 and 71 of the Act. By drawing an analogy from the said precedent, it is canvassed by the Revenue that the impugned additional income is not eligible for the benefits of section 80IB(10) of the Act. 39. We have carefully perused the fact-situation in the case before the Chandigarh Bench of the Tribunal and find that the ratio of the said decision has to be understood with reference to peculiar facts of the case. In the case before the Chandigarh Bench of the Tribunal, the undisclosed income surrendered by the assessee in the course of search was in the shape of unaccounted cash, investments etc. and the material seized did not show the sources of acquisition of the undisclosed income reflected by such unaccounted cash, etc.. So however, in the present case, it is factually clear that the impugned additional income is nothing but monies received by the assessee from customers against sale of flats in its housing project, Sai Nisarg Park - Mayureshwar, which was not recorded in the regular account books. Clearly, in the case before us, source of additional income is the execution of the housing project and once the 2s6ource of income is established, the assessability has to follow. The said fact-position is quite different and distinct from what was before the Chandigarh Bench of the Tribunal and therefore the proposition laid down by the Chandigarh Bench of the Tribunal is not applicable to the present fact-situation. Hence, reliance placed by the learned CIT-DR on the said decision does not help the case of the Revenue. 40. In the result, we set-aside the order of the CIT(A) and direct the Assessing Officer to allow the deduction u/s 80IB(10) of the Act even in relation to the income surrendered during the course of survey on account of the undisclosed receipts from the housing project, Sai Nisarg Park - Mayureshwar amounting to Rs.60,00,000/-. Thus, on this Ground assessee succeeds.” 31. Considering the entire aspects of the matter, we find that when the additional income has already been offered and shown in the books of account and further brought to tax then its application needs to be allowed which has been negated by the authorities below on a wrong conception deserves to be IT(SS)A Nos.78to80/Ind/2020 Agrawal Builders vs. DCIT Asst. Years–2012-13,2013-14& 2015-16 - 32 – deleted. In that view of the matter, the additional income offered during the search is found to be eligible for deduction under Section 80IB(10) of the Act and the impugned addition of Rs. 5,40,00,000/- as unexplained expenditure under Section 69C of the Act is, thus, deleted. This ground of appeal is preferred by the assessee is, therefore, allowed. 32. In the combined result, all three appeals filed by the assessee are allowed. This Order pronounced in Open Court on 09/09/2022 Sd/- Sd/- (BHAGIRATH MAL BIYANI) (MADHUMITA ROY) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad; Dated 09/09/2022 TANMAY, Sr. PS TRUE COPY आदेश कᳱ ᮧितिलिप अᮕेिषत/Copy of the Order forwarded to : 1. अपीलाथᱮ / The Appellant 2. ᮧ᭜यथᱮ / The Respondent. 3. संबंिधत आयकर आयुᲦ / Concerned CIT 4. आयकर आयुᲦ(अपील) / The CIT(A)- 5. िवभागीय ᮧितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Indore 6. गाडᭅ फाईल / Guard file. आदेशानुसार/ BY ORDER, (Dy./Asstt.Registrar) ITAT, Indore Order pronounced on 09/09/2022 by placing the result on the Notice Board as per Rule 34(4) of the Income Tax (Appellate Tribunal) Rule, 1963. IT(SS)A Nos.78to80/Ind/2020 Agrawal Builders vs. DCIT Asst. Years–2012-13,2013-14& 2015-16 - 33 – IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE Ms. MADHUMITA ROY, JUDICIAL MEMBER & SHRI BHAGIRATH MAL BIYANI, ACCOUNTANT MEMBER I.T(SS).A. Nos.78 to 80/Ind/2020 (Assessment Years: 2012-13,2013-14&2015-16) M/s. Agrawal Builders, “The Sagare”, E-2/4, Arera Colony, Bhopal (M.P.) Vs. DCIT-Central & DCIT- Central-II, Bhopal, Madhya Pradesh-462011 PAN No.AAEFA8222A (Appellant) .. (Respondent) CORRIGENDUM PER Ms. MADHUMITA ROY - JM: There is a typographical error found in the order passed by us dated 09.09.2022 which needs to be rectified and to be read as follows: 2. In the seventh line from the top of page No.22 instead of 31.03.2021 the same should be read as 31.03.2012. In the third line of Para 23 from the page No.22 instead of 08.11.2022 the same should be read as 08.11.2011. 3. This corrigendum is being issued to rectify the above mistake. This Order pronounced in Open Court on 15/09/2022 Sd/- Sd/- (BHAGIRATH MAL BIYANI) (MADHUMITA ROY) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad; Dated 15/09/2022 SKSinha, Sr.PS TRUE COPY आदेश कᳱ ᮧितिलिप अᮕेिषत/Copy of the Order forwarded to : 1. अपीलाथᱮ / The Appellant IT(SS)A Nos.78to80/Ind/2020 Agrawal Builders vs. DCIT Asst. Years–2012-13,2013-14& 2015-16 - 34 – 2. ᮧ᭜यथᱮ / The Respondent. 3. संबंिधत आयकर आयुᲦ / Concerned CIT 4. आयकर आयुᲦ(अपील) / The CIT(A)- 5. िवभागीय ᮧितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Indore 6. गाडᭅ फाईल / Guard file. आदेशानुसार/ BY ORDER, (Dy./Asstt.Registrar) ITAT, Indore