M/s. Aum Housing,, Pune v. Income-tax Officer,,

ITA 1902/PUN/2013 | 2010-2011
Pronouncement Date: 30-04-2015 | Result: Allowed

Appeal Details

RSA Number 190224514 RSA 2013
Assessee PAN AAKFA4028N
Bench Pune
Appeal Number ITA 1902/PUN/2013
Duration Of Justice 1 year(s) 6 month(s) 6 day(s)
Appellant M/s. Aum Housing,, Pune
Respondent Income-tax Officer,,
Appeal Type Income Tax Appeal
Pronouncement Date 30-04-2015
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted A
Tribunal Order Date 30-04-2015
Assessment Year 2010-2011
Appeal Filed On 24-10-2013
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A PUNE BEFORE MS. SUSHMA CHOWLA JUDICIAL MEMBER AND SHRI R.K. PANDA ACCOUNTANT MEMBER ITA NO. 1902/PN/2013 (ASSESSMENT YEAR : 2010-11) M/S. AUM HOUSING MZSK & ASSOCIATES CHARTERED ACCOUNTANTS LEVEL 3 BUSINESS BAY PLOT NO.84 WELLESLEY ROAD NEAR RTO PUNE 411 001 .. APPELLANT PAN NO.AAKFA4028N VS. ITO WARD-2(2) PUNE .. RESPONDENT ASSESSEE BY : SHRI SARVESH KHANDELWAL REVENUE BY : SHRI CHANDIP SINGH DATE OF HEARING : 29-04-2015 DATE OF PRONOUNCEMENT : 30-04-2015 ORDER PER R.K.PANDA AM : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER DATED 17-05-2013 OF THE CIT(A) PUNE RELATING TO ASSESSMENT YEAR 2010-11. 2. FACTS OF THE CASE IN BRIEF ARE THAT THE ASSESS EE IS A PARTNERSHIP FIRM ENGAGED IN THE BUSINESS OF DEVELOP ERS AND BUILDERS. IT FILED ITS RETURN OF INCOME ON 08-10-2 010 DECLARING TOTAL INCOME OF RS.5 10 710/-. DURING THE COURSE O F ASSESSMENT PROCEEDINGS THE AO NOTED THAT THE ASSESSEE HAS CLA IMED DEDUCTION OF RS.45 73 245/- U/S.80IB(10) OF THE I.T . ACT. THE AO FURTHER NOTED THAT DURING THE YEAR THE FIRM HAD 3 PROJECTS IN 2 HAND I.E. LA VALLE CASA KASAR AMBOLI AND BANER P ROJECTS. THE AO FURTHER NOTED THAT IN THE PRECEDING ASSESSMENT Y EARS I.E. FOR A.Y. 2008-09 AND 2009-10 THE CLAIM OF DEDUCTION U/S .80IB(10) WAS REJECTED BY THE AO AS THE ASSESSEE FAILED TO OB TAIN THE COMPLETION CERTIFICATE WITHIN THE STIPULATED TIME L IMIT FROM THE LOCAL AUTHORITY AS REQUIRED BY THE PROVISIONS OF SE CTION 80IB(10) OF THE I.T. ACT. THE ORDERS HAVE BEEN UPHELD BY TH E CIT(A). THE AO THEREFORE FOLLOWING THE ORDERS FOR THE 2 PRECEDI NG ASSESSMENT YEARS DISALLOWED THE CLAIM OF DEDUCTION U/S.80IB(10 ) OF THE I.T. ACT. 3. IN APPEAL THE LD.CIT(A) FOLLOWING THE ORDER OF H IS PREDECESSOR FOR A.Y. 2009-10 UPHELD THE ACTION OF T HE AO. AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE ASSESSE E IS IN APPEAL BEFORE US. 4. THE LD. COUNSEL FOR THE ASSESSEE AT THE OUTSET S UBMITTED THAT THE TRIBUNAL VIDE ITA NO.44/PN/2013 ORDER DATE D 06-02- 2015 FOR A.Y. 2009-10 HAS ALLOWED THE CLAIM OF DEDU CTION U/S.80IB(10) OF THE I.T. ACT. SINCE THE CLAIM OF DEDUCTION U/S.80IB(10) OF THE I.T. ACT WAS DENIED TO THE ASS ESSEE ON THE BASIS OF THE ORDER FOR A.Y. 2009-10 THEREFORE THI S BEING A COVERED MATTER IN FAVOUR OF THE ASSESSEE THE GROUN D OF APPEAL BE ALLOWED. 5. THE LD. DEPARTMENTAL REPRESENTATIVE ON THE OTHER HAND FAIRLY CONCEDED THAT THE ISSUE STANDS DECIDED IN FA VOUR OF THE ASSESSEE BY THE DECISION OF THE TRIBUNAL. 3 6. AFTER HEARING BOTH THE SIDES WE FIND THE TRIBUN AL VIDE ITA NO.44/PN/2013 ORDER DATED 06-02-2015 FOR A.Y. 2009- 10 IN ASSESSEES OWN CASE HAS DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE BY OBSERVING AS UNDER : 6. WE HAVE HEARD THE RIVAL SUBMISSIONS OF THE PARTIES A ND ALSO CONSIDERED THE PRECEDENT RELIED ON BY THE LD. A. R.. AS PER THE FACTS ON RECORD THE ASSESSEE UNDERTOOK THE HOUSING P ROJECT NAMELY LA VELLA CASA AT SURVEY NO.20/3/7+318 +3/12 AT BAVDHAN KHURD PUNE. IT APPEARS THAT AO HAS MADE REF ERENCE TO THE VALUATION OFFICER AND THE SAID REFERENCE IS MENTI ONED IN THE ORDERS OF THE AUTHORITIES BELOW. THERE ARE MAINLY TW O OBJECTIONS FOR NOT GRANTING THE DEDUCTION TO THE ASSESSEE I.E. (I ) THE ASSESSEE COULD NOT PRODUCE THE COMPLETION CERTIFICATE F ROM THE LOCAL AUTHORITIES AND (II) THE APPLICATION FILED BY THE ARCHITECT OF THE ASSESSEE WAS NOT IN THE PROPER FORMAT AND HENCE THE LD.CIT(A) RAISED THE DOUBT ABOUT THE COMPLETION CERT IFICATE ISSUED BY THE ARCHITECT. AS PER THE FACTS ON RECORD IT IS NOT IN DISPUTE THAT THE ASSESSEES HOUSING PROJECT WAS SANCTIONED VIDE C.C.ISSUED BY THE PMC DATE 22-12-2004. THE FIRST PLAN K OF THE ARGUMENT OF THE LD. AUTHORISED REPRESENTATIVE IS THAT SO FAR AS AMENDMENT BROUGHT ON THE STATUTE BOOK BY THE FINANCE ACT 2004 WHICH WAS OPERATIVE FROM 01-04-2005 IS HAVING NO RETROSPECTIVE EFFECT MORE PARTICULARLY THE HOUSING P ROJECTS WHICH ARE SANCTIONED PRIOR TO 01-04-2005. FOR THAT PROPOSITION HE RELIED ON THE DECISION OF THE HONBLE HIGH COURT OF GUJARAT IN THE CASE OF MANAN CORPORATION VS. ACIT (SUPRA) AND CI T VS. CHD DEVELOPERS (SUPRA) AND ALSO THE DECISION OF THE ITAT PUNE BENCH IN THE CASE OF SYSTEM ENTERPRISES VS. ITO-4(5) PU NE IN ITA NO.1123/PN/2012 ORDER DATED 28-08-2014. IN RESP ECT OF THE OBSERVATION OF THE LD.CIT(A) THAT THE ARCHITECT CERTIFICATE IS NOT IN PROPER FORMAT HE SUBMITS THAT IT IS ONLY A PROC EDURAL AND APPLICATION OF THE ARCHITECT PROVES THAT WING-D HAVI NG THE 8 ROW HOUSES WAS COMPLETE. HE SUBMITS THAT THERE IS NO WHISPER IN THE LETTER FROM THE PMC THAT ANY WORK WAS PENDING IN RESP ECT OF THE WING-D. 6.1 IN THIS CASE FIRST ISSUE IS WHETHER THERE IS REQUIREM ENT TO PRODUCE THE COMPLETION CERTIFICATE FROM THE PMC AS P ER THE PROVISIONS OF SECTION 80IB(10) FOR DEMONSTRATING THAT T HE PROJECT WAS COMPLETED. IN THIS CASE BOTH THE AUTHORI TIES BELOW HAVE NOT DISPUTED THAT THE HOUSING PROJECT WAS APPROVE D BY THE LOCAL AUTHORITY I.E. PMC ON 22-12-2004. ADMITTED LY AT THE TIME OF APPROVAL OF THE PROJECT OF THE ASSESSEE AS PER THE LA W APPLICABLE THERE WAS NO REQUIREMENT TO PRODUCE COMP LETION CERTIFICATE FROM THE PMC. IN THIS CONTEXT WE MAY LIKE TO REFER TO THE OBSERVATIONS & FINDINGS IN THE DECISION OF THE ITA T IN THE CASE OF SYSTEM ENTERPRISES (SUPRA) WHICH READ AS UNDER : 10.2 THE OTHER GROUND ON WHICH THE ASSESSING OFFIC ER BASED HIS REJECTION OF DEDUCTION U/S.80IB(10) IS THAT THE ASS ESSEE HAS NOT BEEN ABLE TO OBTAIN THE REQUISITE COMPLETION CERTIF ICATE/OCCUPANCY CERTIFICATE WITHIN THE TIME LIMIT PRESCRIBED IN THE PROVISIONS OF 4 SECTION 80IB(10) FOR ALL THE FLATS/UNITS WHICH IN T HE INSTANT CASE IS 31-03-2008 AND THE ASSESSEE HAS OBTAINED THE CERTIF ICATE ONLY ON 31-10-2009 WHICH IS BEYOND THE STIPULATED DATE. WE FIND THE ASSESSING OFFICER AS WELL AS THE CIT(A) HAS GIVEN A CATEGORICAL FINDING THAT THE DATE OF COMMENCEMENT OF THE PROJEC T AS 16-07- 2002. IN OTHER WORDS THE HOUSING PROJECT WAS APP ROVED BEFORE 31-03-2004 AND THEREFORE ACCORDING TO BOTH OF THEM THE PROJECT SHOULD HAVE BEEN COMPLETED BEFORE 31-03-2008. 10.3 WE FIND THE HONBLE DELHI HIGH COURT IN THE CA SE OF CHD DEVELOPERS LTD. (SUPRA) HAS OBSERVED AS UNDER (SHO RT NOTES): SECTION 80-IB(10) OF THE INCOME-TAX ACT 1961 BEFO RE SUBSTITUTION BY THE FINANCE (NO. 2) ACT 2004 ALLOWED A HUNDRED PER CENT DEDUCTION OF THE PROFITS IN THE CASE OF AN UNDERTAK ING DEVELOPING AND BUILDING HOUSING PROJECTS APPROVED BEFORE MARCH 31 2005 BY A LOCAL AUTHORITY. BY THE FINANCE (NO. 2) ACT 2004 WITH EFFECT FROM APRIL 1 2005 THE CONDITIONS FOR GRANT OF DEDUCTIO N WERE THAT IN A CASE WHERE A HOUSING PROJECT IS APPROVED BY THE LOC AL AUTHORITY BETWEEN APRIL 1 2004 AND MARCH 31 2005 THE PROJE CT SHOULD BE COMPLETED WITHIN FOUR YEARS FROM THE END OF THE FIN ANCIAL YEAR IN WHICH IT IS APPROVED BY THE LOCAL AUTHORITY. CLAUSE (II) OF THE EXPLANATION PROVIDED THAT THE DATE OF COMPLETION OF CONSTRUCTION OF THE HOUSING PROJECT SHALL BE TAKEN TO BE THE DAT E ON WHICH THE COMPLETION CERTIFICATE IN RESPECT OF SUCH HOUSING P ROJECT IS ISSUED BY THE LOCAL AUTHORITY. THE ASSESSEE A REAL ESTATE DEVELOPER OBTAINED APPROVAL FOR A HOUSING PROJECT ON MARCH 16 2005 FROM THE DEVELOPMENT AUTHORITY. IT COMPLETED THE PROJECT IN 2008 AND BY LETTER DATED NOVEMBER 5 2008 APPLIED TO THE COM PETENT AUTHORITY FOR THE ISSUE OF THE COMPLETION CERTIFICA TE. FOR THE ASSESSMENT YEAR 2007-08 ITS CLAIM TO DEDUCTION UND ER SECTION 80- IB(10) OF THE INCOME-TAX ACT 1961 WAS DENIED INTER ALIA ON THE GROUND THAT THE ASSESSEE HAD VIOLATED THE CONDITION S STIPULATED UNDER SECTION 80-IB(10) INASMUCH AS IT HAD NOT OBTA INED THE COMPLETION CERTIFICATE FOR THE PROJECT FROM THE COM PETENT AUTHORITY WITHIN FOUR YEARS AS STIPULATED IN EXPLAN ATION (II) THERETO. THE COMMISSIONER (APPEALS) UPHELD THE ASSE SSMENT ORDER. THE TRIBUNAL HELD THAT THE ASSESSEE WAS EXPECTED TO COMPLETE THE PROJECT IN ACCORDANCE WITH THE APPROVED PLAN AT A P ARTICULAR POINT OF TIME AND THE ASSESSEE WAS NOT EXPECTED TO DO OR TO FULFIL THE CONDITIONS WHICH WERE NOT IN EXISTENCE AT THE RELEVA NT POINT OF TIME OR MADE COMPULSORY BY AMENDMENT IN THE ACT FRO M THE FUTURE DATE. SINCE THE ASSESSEE WAS TO COMPLETE THE PROJECT ON OR BEFORE MARCH 31 2009 AND A REQUEST WAS DULY MADE WITH THE COMPETENT AUTHORITY ON NOVEMBER 5 2008 MENTIONING THAT THE PROJECT HAD BEEN COMPLETED AND THE COMPLETION CERTI FICATE MAY BE ISSUED AND IF THE CERTIFICATE WAS NOT ISSUED BY THE COMPETENT AUTHORITY THE ASSESSEE SHOULD NOT BE PENALISED THER EFORE UNLESS AND UNTIL SOME CONTRARY FACTS WERE BROUGHT ON RECOR D EVIDENCING THAT THE ASSESSEE CONTRAVENED THE CONDITIONS CONTAI NED IN THE APPROVAL GRANTED BY SUCH COMPETENT AUTHORITY. HOWEV ER SINCE THE APPROVAL WAS GRANTED TO THE ASSESSEE ON APRIL 1 200 5 THE ASSESSEE WAS NOT EXPECTED TO FULFIL THE CONDITIONS WHICH WER E NOT ON THE STATUTE WHEN SUCH APPROVAL WAS GRANTED TO THE ASSES SEE. THE TRIBUNAL ACCEPTED THE ASSESSEE'S CLAIM TO DEDUCTION UNDER SECTION 80-IB(10). ON APPEAL: HELD DISMISSING THE APPEAL THAT THE APPROVAL FOR THE PROJECT WAS GIVEN BY THE DEVELOPMENT AUTHORITY ON MARCH 16 200 5. CLEARLY THE APPROVAL RELATED TO THE PERIOD PRIOR TO 2005 I .E. BEFORE THE 5 AMENDMENT WHICH INSISTED ON ISSUANCE OF THE COMPLE TION CERTIFICATE BY THE END OF THE FOUR-YEAR PERIOD WAS BROUGHT INTO FORCE. THE APPLICATION OF SUCH STRINGENT CONDITIONS WHICH ARE LEFT TO AN INDEPENDENT BODY SUCH AS THE LOCAL AUTHORITY WHO IS TO ISSUE THE COMPLETION CERTIFICATE WOULD HAVE LED TO NOT O NLY HARDSHIP BUT ABSURDITY. AS A CONSEQUENCE THE TRIBUNAL WAS NOT THEREFORE IN ERROR OF LAW WHILE HOLDING IN FAVOUR OF THE ASSESSE E. 10.4 WE FIND THE HONBLE KARNATAKA HIGH COURT IN TH E CASE OF M/S.ITTINA PROPERTIES PVT. LTD. (SUPRA) WHILE DECID ING AN IDENTICAL ISSUE HAS OBSERVED AS UNDER (PARA 4/PAGE 6 OF THE ORDER): 4. INSOFAR AS QUESTION NOS. 3 AND 4 ARE CONCERNED IT RELATES TO THE ASSESSEE COMPLYING WITH THE REQUIREMENTS PROVID ED UNDER SUB- SEC.(1) OF SEC.80 IB BEFORE IT COULD CLAIM THE BENE FIT PROVIDED UNDER SEC. 80 IB. THE SAID PROVISION CAME ON THE ST ATUTE BOOK BY FINANCE ACT 2004 WITH EFFECT FROM 1/4/2005. THE PL AN WHICH IS SANCTIONED IN THIS CASE IS OF 16/3/2004 I.E. PRIOR TO THE SAID PROVISION COMING INTO FORCE. THIS COURT IN MORE THA N ONE CASE HAS HELD THAT THE SAID PROVISION IS PROSPECTIVE IN NATU RE AND IT HAS NO APPLICATION TO HOUSE PRODUCTS WHICH WAS APPROVED BY THE LOCAL AUTHORITY PRIOR TO 1/4/2005. IN THAT VIEW OF THE MA TTER THE BENEFIT UNDER SEC. 80 IB CANNOT BE DENIED TO THE ASSESSEE O N THE GROUND THAT HE DOES NOT COMPLY WITH THE TERMS OF SEC.80 IB (10). 5. IT IS SUBMITTED ON BEHALF OF THE ASSESSEE THAT T HEY HAVE COMPLIED WITH THE SAID STATUTORY REQUIREMENT ALSO. AS THE SAID PROVISION HAS NO APPLICATION TO THE FACTS OF THE CA SE THE QUESTION OF GOING TO THE QUESTION WHETHER THOSE STATUTORY RE QUIREMENTS HAVE BEEN COMPLIED WITH OR NOT WOULD NOT ARISE AND THE TRIBUNAL RIGHTLY EXTENDED THE SAID BENEFIT. IN THAT VIEW OF THE MATTER WE DO NOT SEE ANY MERIT IN THE APPEALS AND THE SAID QUEST IONS OF LAW ARE ANSWERED IN THE SENSE THAT THE SAID PROVISION HAS N O APPLICATION TO THE FACTS OF THIS CASE. 10.5 SINCE THE DATE OF THE COMMENCEMENT OF THE PROJ ECT IN THE INSTANT CASE IS ADMITTEDLY 16-07-2002 AS HELD BY TH E ASSESSING OFFICER AS WELL AS THE CIT(A) THEREFORE RESPECTFU LLY FOLLOWING THE DECISIONS CITED (SUPRA) IT HAS TO BE HELD THAT AMEN DMENT W.E.F. 01- 04-2005 REQUIRING CERTIFICATE OF COMPLETION OF PROJ ECT WITHIN 4 YEARS OF APPROVAL IS NOT APPLICABLE TO THE PROJECTS APPROVED PRIOR TO THAT DATE AND THEREFORE THE ASSESSEE IS ENTITLED TO DEDUCTION U/S.80IB(10) OF THE I.T .ACT. 6.2 SO FAR AS THE FIRST OBJECTION IS CONCERNED THE SAM E IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISIO N OF THE ITAT PUNE BENCH IN THE CASE OF SYSTEM ENTERPRISES (SUP RA). THE NEXT OBJECTION IS REGARDING THE FORMAT OF THE APPLIC ATION MADE BY THE ARCHITECT OF THE ASSESSEE. IN OUR OPINION THAT IT IS THE ONLY PROCEDURAL ASPECT AND THE SAID OBJECTION SHOULD NOT CO ME FOR THE HELP OF THE REVENUE. THERE IS NO DISPUTE IN THIS CASE ON THE FACT THAT THE ARCHITECT OF THE ASSESSEE SHRI MANGESH BHANDARK AR HAS MADE AN APPLICATION FOR OCCUPANCY CERTIFICATE TO TH E PMC ON 08- 12-2008. AS PER THE ADMITTED POSITION OF LAW THE ASSE SSEE WAS REQUIRED TO COMPLETE THE HOUSING PROJECT ON OR BEFOR E 31-03- 2009. THE PMC DID NOT ISSUE THE COMPLETION CERTIFICA TE FOR THE REASON THAT THE ASSESSEE HAS NOT HANDED OVER THE AMENITY SPACE. IN OUR OPINION THE FORMAT IN WHICH THE ARCHITECT O F THE ASSESSEE HAS FILED THE APPLICATION FOR GETTING THE OCCUPANCY CERTIFICATE MAY BE THE PROCEDURAL DEFAULT AND THAT WILL NOT DEP RIVE THE 6 ASSESSEE FROM ITS LEGITIMATE CLAIM U/S.80IB(10). MOREOVE R THE PMC HAS NOT POINTED OUT THAT THE APPLICATION IS NOT I N PRESCRIBED FORMAT. WE ACCORDINGLY ALLOW THE GROUNDS TAKEN BY T HE ASSESSEE AND DIRECT THE AO TO ALLOW THE DEDUCTION. 7. SINCE THE CLAIM OF DEDUCTION U/S.80IB(10) WAS DE NIED TO THE ASSESSEE ON THE BASIS OF THE ORDER FOR A.Y. 200 9-10 AND SINCE THE TRIBUNAL HAS ALLOWED THE CLAIM OF DEDUCTION U/S .80IB(10) IN A.Y. 2009-10 THEREFORE FOLLOWING THE DECISION OF THE COORDINATE BENCH OF THE TRIBUNAL IN ASSESSEES OWN CASE AND IN ABSENCE OF ANY CONTRARY MATERIAL BROUGHT TO OUR NOT ICE WE SET ASIDE THE ORDER OF THE CIT(A) AND DIRECT THE AO TO ALLOW THE DEDUCTION CLAIMED BY THE ASSESSEE U/S.80IB(10) OF T HE ACT. 8. IN THE RESULT THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. PRONOUNCED IN THE OPEN COURT ON 30-04-2015. SD/- SD/- (SUSHMA CHOWLA) (R.K. PA NDA) JUDICIAL MEMBER ACCOUNTANT MEMBER PUNE DATED: 30 TH APRIL 2015 SATISH COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE 2. DEPARTMENT 3. THE CIT(A)-II PUNE 4. THE CIT-II PUNE 5. THE D.R A PUNE BENCH 6. GUARD FILE BY ORDER // TRUE COPY // ASSISTANT REGISTRAR ITAT PUNE BENCHES PUNE