M/s. D.K. Construction,, Bhopal v. The A.C.I.T., Bhopal

ITA 243/IND/2010 | 2006-2007
Pronouncement Date: 06-12-2010 | Result: Allowed

Appeal Details

RSA Number 24322714 RSA 2010
Assessee PAN AAAFD7121P
Bench Indore
Appeal Number ITA 243/IND/2010
Duration Of Justice 7 month(s) 13 day(s)
Appellant M/s. D.K. Construction,, Bhopal
Respondent The A.C.I.T., Bhopal
Appeal Type Income Tax Appeal
Pronouncement Date 06-12-2010
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted DB
Tribunal Order Date 06-12-2010
Date Of Final Hearing 02-12-2010
Next Hearing Date 02-12-2010
Assessment Year 2006-2007
Appeal Filed On 23-04-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH : INDORE BEFORE SHRI JOGINDER SINGH JUDICIAL MEMBER AND SHRI R.C.SHARMA ACCOUNTANT MEMBER PAN NO. : AAAFD7121P I.T.A.NO.243/IND/2010 A.Y. : 2006-07 M/S.D.K.CONSTRUCTION INCOME-TAX OFFICER 21/E-2 DEEN DAYAL PARISAR VS 1(1) BHOPAL BHOPAL. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI M.K.SHARMA C. A. RESPONDENT BY : SHRI P.K.MITRA SR. DR O R D E R PER R. C. SHARMA A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A) DATED 11.1.2010 FOR THE ASSESSMENT YEAR 2 006-07 IN THE MATTER OF ORDER PASSED U/S 143(3) OF THE INCOME -TAX ACT 1961. 2. VARIOUS GROUNDS HAVE BEEN TAKEN BUT THE CRUX OF THE ASSESSEE REVOLVES AROUND DECLINE OF CLAIM OF DEDUCT ION U/S 80- IB IN RESPECT OF ITS PROJECT D.K. HONEY HOMES. -: 2: - 2 3. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORDS PERUSED. 4. FACTS IN BRIEF ARE THAT THE ASSESSEE IS A FIRM ENG AGED IN THE BUSINESS OF CIVIL CONSTRUCTION BUILDING AND DEVELOPING OF HOUSING PROJECT. IN THE RETURN OF INCOME IT HAS CLAIMED DEDUCTION OF RS. 36 63 342/- U/S 80IB(10). THE AO O BSERVED THAT THE ASSESSEE HAS NOT COMPLIED WITH PRE-REQUISI TE CONDITIONS FOR ALLOWING CLAIM U/S 80IB IN SO FAR AS ITS D.K. HONEY HOMES PROJECT WAS NOT COMPLETED PRIOR TO 31.3 .2008. THE AO ALSO CALLED FOR INFORMATION U/S 133(6) FROM LOCAL AUTHORITIES. IT WAS INFORMED BY LOCAL AUTHORITIES T HAT COMPLETION CERTIFICATE WAS NOT PROVIDED TO THE ASSE SSEE. THE SAID LETTER OF LOCAL AUTHORITY WAS MADE PART OF ASS ESSMENT ORDER BY THE ASSESSING OFFICER AND MARKED AS ANNEXU RE A. BY THE IMPUGNED ORDER THE LD. CIT(A) CONFIRMED THE DI SALLOWANCE OF CLAIM U/S 80IB OF THE ACT AND THE ASSESSEE IS IN FURTHER APPEAL BEFORE US. 5. SHRI M.K.SHARMA C. A. APPEARED ON BEHALF OF THE ASSESSEE AND SUBMITTED THAT THE ASSESSEE HAS COMPLE TED ITS PROJECT BEFORE 31.3.2008 AND VIDE ITS LETTER DATED 21.3.2008 IT -: 3: - 3 HAS ALREADY INFORMED TO LOCAL AUTHORITY REGARDING C OMPLETION OF THE PROJECT. HE FURTHER SUBMITTED THAT AFTER GIV ING THIS LETTER THE ASSESSEE WAS ASKING AGAIN AND AGAIN TO THE LOCA L AUTHORITIES FOR ISSUE OF NECESSARY CERTIFICATE. HE ALSO INVITED OUR ATTENTION TO THE LETTER OF MUNICIPAL AUTHORITIE S DATED 15.12.2008 INDICATING THAT PROJECT OF M/S. D.K.HONE Y HOMES WAS COMPLETED AND SAME WAS TRANSFERRED TO MUNICIPAL CORPORATION KOLHAR. AS PER LD. AUTHORIZED REPRESENT ATIVE WHATEVER ASSESSEE CAN DO FOR GETTING THE CERTIFICAT E IS TO INFORM THE COMPETENT AUTHORITIES REGARDING COMPLETION OF I TS PROJECT AND MERELY BECAUSE THIS CERTIFICATE WAS NOT ISSUED IMMEDIATELY BY THE LOCAL AUTHORITIES OVER WHICH THE ASSESSEE WAS NOT HAVING ANY CONTROL THE SAME CANNOT BE MADE THE BASIS FOR DENIAL OF CLAIM U/S 80IB. AS PER LD. AUTH ORIZED REPRESENTATIVE INTENTION BEHIND ANY DEDUCTION U/S 80IB IS TO PROMOTE INVESTMENT IN A PARTICULAR SECTOR WHICH IS LESS PROFITABLE AND THE ASSESSEE HAS ALREADY DONE WHATEV ER IT CAN DO. HOWEVER IT HAS NO CONTROL OVER THE LOCAL AUTHO RITIES FOR GETTING CERTIFICATES ISSUED. DURING THE COURSE OF H EARING HE WAS PARTICULARLY ASKED TO AGAIN OBTAIN A CERTIFICAT E OF LOCAL -: 4: - 4 AUTHORITY WITH SPECIFIC MENTION OF COMPLETION OF PR OJECT BEFORE 31.3.2008 WHICH IS A BASIC CONDITION FOR ALLOWING CLAIM U/S 80IB(10). THE ASSESSEE AGAIN PRODUCED THE CERTIFICA TE WHICH WAS AGAIN DULY VERIFIED FROM THE LOCAL AUTHORITIES TO THE EFFECT THAT A LETTER DATED 21.3.2008 BY THE ASSESSEE INTIM ATING TO LOCAL AUTHORITY FOR COMPLETION OF ITS PROJECT AT KH ASRA NOS. 74 75 78 79 91 94 102 104 419 420 421 WAS REC EIVED BY THE MUNICIPAL CORPORATION ON 29.3.2008. ON THE BASI S OF THIS CERTIFICATION THE LD. AUTHORIZED REPRESENTATIVE FU RTHER CONTENDED THAT THE ASSESSEE HAS DONE WHATEVER HE HA S EXPECTED TO DO AND THAT LETTER REGARDING COMPLETION OF PROJECT WAS DULY ENTERED IN MUNICIPAL RECORD ON 29.3.2008 ON THE BASIS OF WHICH THE ASSESSEE SHOULD BE ALLOWED CLAIM OF DEDUCTION U/S 80IB. 6. ON THE OTHER HAND THE LD. SR. DR DREW OUR ATTENTI ON TO THE LETTER ISSUED BY THE LOCAL AUTHORITIES DATED 11 TH NOVEMBER 2008 CLEARLY INDICATING THAT NO COMPLETI ON CERTIFICATE HAS BEEN ISSUED TO THE ASSESSEE. THIS I NFORMATION WAS DIRECTLY CALLED BY THE ASSESSING OFFICER FROM M UNICIPAL CORPORATION BHOPAL. AS PER LD. SR. DR THE PRIMARY CONDITION -: 5: - 5 FOR ALLOWING CLAIM OF DEDUCTION U/S 80-IB IS THAT T HE PROJECT SHOULD BE APPROVED PRIOR TO 1.4.2004 AND SHOULD HAV E BEEN COMPLETED BEFORE 31.3.2008. THE FIRST CONDITION REG ARDING APPROVAL WAS NOT DISPUTED BUT THE SECOND CONDITION WHICH IS ALSO EQUALLY IMPORTANT FOR ALLOWING ASSESSEES CLAI M IS REGARDING COMPLETION OF THE PROJECT WHICH HAS NOT BEEN FULFILLED. HE ACCORDINGLY JUSTIFIED THE ORDER OF THE LD. CIT(A) FOR CONFIRMING THE DISALLOWANCE OF CLAIM OF DEDUCTION U /S 80-IB. 7. WE HAVE CONSIDERED THE RIVAL CONTENTIONS CAREFULL Y GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AN D RELEVANT MATERIAL PLACED ON RECORD TOWARDS WHICH OUR ATTENTI ON WAS INVITED DURING THE COURSE OF HEARING BY THE LD. AUT HORIZED REPRESENTATIVE AND THE LD. SENIOR D.R. PROVISIONS O F SECTION 80IB ALLOWS CLAIM FOR DEDUCTION IN RESPECT OF HOUSI NG PROJECT WHICH HAS BEEN APPROVED PRIOR TO 1.4.2004 AND ALSO COMPLETED BEFORE 31.3.2008. DURING THE COURSE OF ASSESSMENT W ITH REGARD TO ASSESSEES CLAIM OF DEDUCTION U/S 80IB IN RESPECT OF ITS D.K.HONEY HOMES PROJECT THE AO HAS ASKED THE A SSESSEE TO FURNISH THE CERTIFICATE OF COMPLETION OF THIS PR OJECT M/S. D.K. HONEY HOMES. THE AO ALSO DIRECTLY CALLED INFOR MATION -: 6: - 6 FROM LOCAL AUTHORITIES BY ISSUING SUMMONS U/S 133(6 ) AND A LETTER WAS ISSUED BY THE COMPETENT AUTHORITY DATED 11 TH NOVEMBER 2008 CONFIRMING THAT NO COMPLETION CERTI FICATE HAS BEEN ISSUED BY THIS OFFICE. ACCORDINGLY THE ASSESS EES CLAIM FOR DEDUCTION U/S 80-IB WAS DECLINED. SECTION 80IB CLEA RLY DEFINES THE DATE OF COMPLETION AS DATE OF COMPLETION OF CO NSTRUCTION OF THE HOUSING PROJECT SHALL BE TAKEN TO BE THE DAT E ON WHICH THE COMPLETION CERTIFICATE IN RESPECT OF SUCH HOUSI NG PROJECT IS ISSUED BY THE LOCAL AUTHORITIES IT MEANS LOCAL AU THORITIES IS COMPETENT TO CERTIFY THE DATE OF COMPLETION OF HOUS ING PROJECT. THE DATE OF ISSUE OF SUCH LETTER BY THE LOCAL AUTHO RITIES IS NOT SO CRUCIAL BUT IT SHOULD HAVE CLEARLY MENTIONED THE DATE OF COMPLETION OF PROJECT. WHEN THE PROJECT IS COMPLET ED ON 31.3.2008 AND THE ASSESSEE HAS INFORMED REGARDING S UCH COMPLETION THE LOCAL AUTHORITIES MAY TAKE ITS OWN TIME FOR ISSUE OF CERTIFICATE WHICH MAY BE EVEN AFTER 6-7 M ONTHS BUT THE LETTER SO ISSUED BY THE LOCAL AUTHORITIES SHOUL D CLEARLY MENTION THE DATE OF COMPLETION OF SUCH PROJECT. MER ELY BECAUSE SUCH CERTIFICATE IS ISSUED AFTER GAP OF 8-9 MONTHS OR EVEN ONE YEAR WILL NOT ADVERSELY AFFECT THE ASSESS EE IF IT HAS -: 7: - 7 MENTIONED CLEARLY THE DATE OF COMPLETION OF PROJECT PRIOR TO 31.3.2008. ONCE THE LETTER FOR COMPLETION OF PROJEC T IS GIVEN BY THE ASSESSEE TO THE LOCAL AUTHORITY IT IS THE DUTY OF THE LOCAL AUTHORITY TO VERIFY PHYSICALLY THE PROJECTS STATED TO BE COMPLETED FROM ITS OWN PARAMETERS. THIS PROCESS MAY TAKE TIME AND THEREFORE THE DATE OF ISSUE OF LETTER IS NOT SO CRUCIAL TO DETERMINE THE ASSESSEES ELIGIBILITY FOR CLAIM O F DEDUCTION AS PER EXPLANATION (II) OF SECTION 80IB(10)(A) OF THE INCOME-TAX ACT 1961. WHAT IS CRUCIAL IS DATE MENTIONED IN THE LETTER SO ISSUED CERTIFYING COMPLETION OF THE PROJECT. THUS THE DATE OF ISSUE OF LETTER IS NOT IMPORTANT BUT THE DATE MENT IONED IN THE LETTER CERTIFYING COMPLETION OF PROJECT IS IMPORTAN T. WE THEREFORE DO NOT FIND ANY MERIT IN THE OBSERVATION OF THE LOWER AUTHORITIES TO THE EFFECT THAT THE DATE OF COMPLETI ON SHALL BE TAKEN THE DATE ON WHICH CERTIFICATE IS PHYSICALLY I SSUED BY THE LOCAL AUTHORITIES. 8. IN VIEW OF THE ABOVE DISCUSSION WE RESTORE THE MAT TER BACK TO THE FILE OF AO AND ASSESSEE IS AT LIBERTY T O PROCURE THE REQUIRED LETTER/CERTIFICATE FROM THE LOCAL AUTHORIT Y CLEARLY MENTIONING THEREIN THE DATE OF COMPLETION OF THE PR OJECT. THE -: 8: - 8 AO IS TO DECIDE THE ISSUE AFRESH AS PER LAW AFTER C ONSIDERING THE LETTER OF COMPLETION IF ANY FURNISHED BY THE AS SESSEE. WE DIRECT ACCORDINGLY. 9. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALLOWE D FOR STATISTICAL PURPOSES. THIS ORDER HAS BEEN PRONOUNCED IN THE OPEN COURT ON 6 TH DECEMBER 2010. SD/- SD/- (JOGINDER SINGH) ( R.C.SHARMA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 6 TH DECEMBER 2010. CPU* 3