ITO, Patiala v. M/s Ambey Developers Pvt. Ltd., Patiala

ITA 363/CHANDI/2016 | 2012-2013
Pronouncement Date: 21-10-2016 | Result: Dismissed

Appeal Details

RSA Number 36321514 RSA 2016
Assessee PAN AAFCA3286L
Bench Chandigarh
Appeal Number ITA 363/CHANDI/2016
Duration Of Justice 6 month(s) 8 day(s)
Appellant ITO, Patiala
Respondent M/s Ambey Developers Pvt. Ltd., Patiala
Appeal Type Income Tax Appeal
Pronouncement Date 21-10-2016
Appeal Filed By Department
Order Result Dismissed
Bench Allotted Not Allotted
Tribunal Order Date 21-10-2016
Assessment Year 2012-2013
Appeal Filed On 12-04-2016
Judgment Text
1 IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES CHANDIGARH BEFORE SHRI BHAVNESH SAINI JUDICIAL MEMBER AND MS. ANNAPURNA GUPTA ACCOUNTANT MEMBER ITA NO. 363/CHD/2016 ASSESSMENT YEAR: 2012-13 THE ITO VS. M/S AMBEY DEVELOPERS (P) LTD WARD-1 PATIALA PATIALA ` PAN NO.AAFCA3286L (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. S.K.MITTAL DEPARTMENT BY : SH. TEJ MOHAN SINGH DATE OF HEARING : 07.10.2016 DATE OF PRONOUNCEMENT : 21.10.2016 ORDER PER ANNAPURNA GUPTA A.M. THIS APPEAL HAS BEEN FILED BY THE REVENUE AGAINST T HE ORDER OF CIT(A) PATIALA DATED 29.9.2016. THE REVENUE HAS RA ISED THE FOLLOWING GROUNDS OF APPEAL :- 1. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 1 60 50 022/-- MADE BY THE AO ON ACCOUNT OF DISALLOWANCE OF DEDUCTION CLAIMED U/S 80IB OF THE INCOME TAX ACT 1961 WITHOUT APPRECIATING THAT THE HOUSING PROJECT APPROVED BY LOCAL AUTHORITY ON OR AFTER 01.04.2005 SHOULD HAVE 2 BEEN COMPLETED WITHIN FIVE YEARS FROM THE END OF YE AR IN WHICH THE HOUSING PROJECT IS APPROVED WHICH THE ASSESSEE FAILED TO SUBSTANTIATE WITH ANY DOCUMENTAR Y EVIDENCE AND IN THE ABSENCE OF WHICH CLAIM OF THE ASSESSEE REGARDING COMPLETION OF PROJECT IS NOT VERIFIABLE. 2. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) HAS FAILED TO APPRECIATE THAT EXPLANATION (II) BELOW SECTION 80IB(10) STATES THAT THE DATE OF ISSUE OF COMPLETION CERTIFICATE BY THE LOCA L AUTHORITY WILL BE TAKEN TO BE THE DATE OF COMPLETIO N OF CONSTRUCTION AND IN THIS CASE SINCE ADMITTEDLY THE COMPLETION CERTIFICATE WAS ISSUED AFTER 31.03.2011 IN RESPECT OF A PROJECT WHICH WAS FIRST APPROVED ON 06.10.2005 THE CONDITION OF COMPLETION OF CONSTRUCTION WITHIN 5 YEARS OF THE END OF THE FINAN CIAL YEAR IN WHICH THE PROJECT WAS FIRST APPROVED WAS NO T SATISFIED AND THE DEDUCTION U/S 801B(10) WAS NOT ALLOWABLE TO THE ASSESSEE. 3. IT IS PRAYED THAT THE ORDER OF LD. CIT(A) BE SET ASIDE AND THAT OF THE AO RESTORED. 2. THE FACTS OF THE CASE ARE THAT THE APPELLANT IS A COMPANY AND DURING THE YEAR UNDER CONSIDERATION IT EARNED INCOME FROM DEVELOPING AND BUILDING HOUSING PROJECTS APPROVED BY THE PRESCRIBE D LEGAL AUTHORITY. IT CLAIMED DEDUCTION OF ITS PROJECTS U/S 80IB(10) OF T HE INCOME TAX ACT 1961. THE ASSESSING OFFICER DURING THE COURSE OF AS SESSMENT PROCEEDINGS NOTED THAT THE ASSESSEE HAD NOT CLAIME D THE COMPLETION 3 CERTIFICATE OF THE PROJECT BEFORE 31.3.2010 WHICH W AS NECESSARY FOR THE PURPOSE OF CLAIMING DEDUCTION U/S 80IB(10) THERE FORE DENIED DEDUCTION OF THE SAME. DURING THE COURSE OF APPELLA TE PROCEEDINGS THE ASSESSEE FILED DETAILED WRITTEN SUBMISSIONS REPRODU CED AT PARA 6.1 OF THE ORDER OF THE CIT(A) STATING THAT SINCE THE ASSESSEE HAD APPLIED FOR THE COMPLETION CERTIFICATE WELL BEFORE THE PRESCRIBED TIME IT SHOULD NOT HAVE BEEN DENIED DEDUCTION MERELY FOR THE REASON TH AT THE COMPLETION CERTIFICATE WAS ISSUED BY THE PRESCRIBED AUTHORITY BEYOND THE STIPULATED DATE. THE ASSESSEE FURTHER STATED THAT DURING THE C OURSE OF ISSUANCE OF COMPLETION CERTIFICATE NO OBJECTIONS WERE BROUGHT TO THE NOTICE OF THE ASSESSEE AND FURTHER STATED THAT THE COMPLETION CE RTIFICATE ISSUED ON THE REQUEST OF THE ASSESSEE RELATED BACK TO THE DATE O N WHICH APPLICATION WAS MADE. THE ASSESSEE RELIED UPON THE DECISION OF THE ITAT CHENNAI BENCH IN THE CASE OF M/S SANGHVI AND DOSHI ENTERPRI SE REPORTED IN ITA NO. 259/MDS/2010 IN THIS REGARD. THE ASSESSEE FURTH ER STATED THAT THOUGH THE APPLICATION WAS FILED IN TIME THE COMPLETION C ERTIFICATE WAS RECEIVED LATE FOR NO FAULT OF THE ASSESSEE AND THE ISSUANCE OF COMPLETION CERTIFICATE WAS BEYOND THE CONTROL OF THE ASSESSEE THEREFORE IT COULD NOT BE SAID THAT IN SUCH CASE THE CERTIFICATE ALONE WOU LD DETERMINE THE DATE OF COMPLETION OF THE PROJECT. THE ASSESSEE RELIED U PON THE DECISION OF THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF CIT AURAN GABAD VS. M/S HINDUSTAN SAMUHA AWAS LTD. REPORTED IN (2015) 62 TA XMAN. COM 175 AND CIT VS. RADOMIR DZELATOVIC (1994) 206 ITR 320 ( BOM.)IN THIS REGARD. THE ASSESSEE FURTHER FILED SUPPLEMENTARY E VIDENCE TO PROVE THAT COMPLETION OF THE PROJECT HAD TAKEN PLACE WELL BEFO RE THE STIPULATED TIME IN THE FORM OF ALLOTMENT LETTERS ISSUED TO FL AT OWNERS REGISTRATION 4 DEED EXECUTED IN FAVOUR OF THE FLAT OWNERS NO OBJE CTION CERTIFICATE FROM THE FIRE SAFETY OFFICER NO OBJECTION CERTIFICATE F ROM THE PUNJAB STATE ELECTRICITY BOARD PATIALA AND PERMANENT ELECTRICIT Y CONNECTION GIVEN TO FLAT OWNERS ALL BEFORE THE STIPULATED DATE I.E. 31. 3.2010. THUS THE ASSESSEE STATED THAT FOR ALL PROPOSES THE PROJECT H AD BEEN COMPLETED BEFORE THE STIPULATED DATE I.E. 31.3.2010 AND MEREL Y BECAUSE THE COMPLETION CERTIFICATE WAS ISSUED BY PRESCRIBED AUT HORITY THEREAFTER THE ASSESSEE COULD NOT BE DENIED DEDUCTION U/S 80IB(1 0) OF THE ACT. THE ASSESSEE PLACED RELIANCE ON A NUMBER OF JUDICIAL DE CISIONS IN THIS REGARD. THE SUBMISSIONS OF THE ASSESSEE WERE SENT TO THE AS SESSING OFFICER FOR HER COMMENTS WHO APPRECIATED ALL THE SUBMISSIONS MA DE BY THE ASSESSEE BUT STATED THAT SINCE THE LAW IS VERY CLEAR ABOUT D ATE OF COMPLETION BEING THE DATE OF ISSUANCE OF CERTIFICATE THE CLAIM OF TH E ASSESSEE COULD NOT BE ACCEPTED. 3. THE LD. CIT(A) AFTER CONSIDERING THE SUBMISSIONS MADE BY THE ASSESSEE AS ALSO THE COMMENTS OF THE ASSESSING OFFI CER ALLOWED THE ASSESSEES APPEAL RELYING UPON THE ORDERS PASSED IN THE ASSESSEES CASE IN THE PRECEDING YEARS I.E 2009-10 AND 2010-11 WHEREIN THE DISALLOWANCE MADE BY THE ASSESSING OFFICER IN IDENTICAL FACTS AN D CIRCUMSTANCES WAS DELETED. AGGRIEVED BY THE SAME THE REVENUE FILED THE PRESENT APPEAL BEFORE US. 4. DURING THE COURSE OF HEARING BEFORE US LD. COUN SEL FOR THE ASSESSEE BROUGHT TO THE NOTICE OF THE BENCH THAT ID ENTICAL ISSUE IN THE CASE OF THE ASSESSEE ITSELF HAD BEEN DECIDED BY TH E TRIBUNAL IN THE 5 PRECEDING ASSESSMENT YEARS I.E. ASSESSMENT YEARS 20 09-10 AND 2010-11 IN FAVOUR OF THE ASSESSEE IN ITA NOS . 668 & 852/CHD/2014 DATED 14.3.2016. THE LD. DR ON THE OTHER HAND RELIED UPO N THE ORDER OF THE ASSESSING OFFICER. 5. WE HAVE HEARD THE CONTENTIONS OF BOTH THE PARTIE S AND PERUSED THE DOCUMENTS PLACED BEFORE US AS ALSO THE ORDER OF THE LOWER AUTHORITIES. THE ONLY ISSUE ARISING IN THE PRESENT APPEAL IS WHE THER FOR THE PURPOSES OF CLAIMING DEDUCTION U/S 80IB (10) THE DATE OF CO MPLETION OF PROJECT COULD BE TAKEN AS THE DATE OF ISSUANCE OF COMPLETIO N CERTIFICATE BY THE PRESCRIBED AUTHORITY OR THE DATE OF APPLICATION FOR ISSUANCE OF THE REQUIRED CERTIFICATE. THIS ISSUE WE FIND HAD ARISE N IN THE CASE OF THE ASSESSEE IN THE PRECEDING ASSESSMENT YEARS I.E. ASS ESSMENT YEARS 2009-10 AND 2010-11 WHEEIN DISALLOWANCE U/S 80IB (10) HAD BEEN MADE FOR THE REASON THAT THOUGH THE ASSESSEE HAD APPLIED FOR COM PLETION CERTIFICATE BEFORE THE PRESCRIBED TIME THE CERTIFICATE WAS ISS UED TO IT AFTER THE SAME. THE LD. CIT(A) IN BOTH THE ASSESSMENT YEARS HAD DEL ETED THE DISALLOWANCE MADE. THE TRIBUNAL IN ITS ORDER DATED 14.3.2016 IN ITA NOS. 688 AND 852/CHD/2014 HAS UPHELD THE ORDERS OF THE LD. CIT(A) BY STATING THAT SINCE THE ASSESSEE HAD SUBSTANTIALLY C OMPLIED WITH THE CONDITION OF COMPLETION OF PROJECT DATE OF COMPLET ION OF PROJECT SHOULD BE TAKEN FROM THE DATE OF APPLICATION FOR THE ISSUA NCE OF COMPLETION CERTIFICATE TO THE PRESCRIBED AUTHORITY BY THE ASSE SSEE. THE TRIBUNAL RELIED UPON THE JUDGEMENT OF THE GUJARAT HIGH COUR T IN THE CASE OF CIT VS. TARNETAR CORPORATION REPORTED IN [2014] 362 IT R 174(GUJ.). THE RELEVANT FINDIGNS OF THE ORDER OF ITAT AT PARA 8& 9 IS AS UNDER:- 6 8. WE HAVE HEARD THE LEARNED REPRESENTATIVES OF BO TH THE PARTIES PERUSED THE FINDINGS OF THE AUTHORITIE S BELOW AND CONSIDERED THE MATERIAL AVAILABLE ON RECO RD. THOUGH THERE ARE A NUMBER OF JUDGMENTS IN FAVOUR OF THE ASSESSEE IN THE SAID CIRCUMSTANCES WE WOULD LI KE TO REFER TO THE JUDGMENT OF GUJARAT HIGH COURT IN T HE CASE OF CIT VS. TARNETAR CORPORATION REPORTED IN (2014) 362 ITR 174 (GUJ) WHERE THE HON'BLE HIGH CO URT OBSERVES AS UNDER : IN THE PRESENT CASE THEREFORE THE FACT THAT THE ASSESSEE HAD COMPLETED THE CONSTRUCTION WE BEFORE 31 ST MARCH 2008 IS NOT IN DOUBT. IT IS OF COURSE TRUE THAT FORMALLY BU PERMISSION WAS NOT GRANTED BY THE MUNICIPAL AUTHORITY BY SUCH DATE. IT IS EQUALLY TRUE THAT EXPLANATION TO CLAUSE (A) TO S ECTION 80IB(10) LINKS THE COMPLETION OF THE CONSTRUCTION TO THE BU PERMISSION BEING GRANTED BY THE LOCAL AUTHORITY. HOWEVER NOT EVERY CONDITION OF THE STATUTE CAN BE SEEN AS MANDATORY. IF SUBSTANTIAL COMPLIANCE THEREOF IS ESTA BLISHED ON RECORD IN A GIVEN CASE THE COURT MAY TAKE THE VI EW THAT MINOR DEVIATION THEREOF WOULD NOT VITIATE THE VERY PURPOSE FOR WHICH DEDUCTION WAS BEING MADE AVAILABLE. IN THE PRESENT CASE THE FACTS ARE PECULIAR. THE ASS ESSEE HAD NOT ONLY COMPLETED THE CONSTRUCTION TWO YEARS BEFORE THE FINAL DATE AND HAD APPLIED FOR BU PERMISSION. SUCH BU PER MISSION WAS NOT REJECTED ON THE GROUND THAT CONSTRUCTION WAS NOT COMPLETED BUT THE SOME OTHER TECHNICAL GROUND. IN THAT VIEW OF THE MATTER GRANTING BENEFIT OF DEDUCTION CANNOT BE H ELD TO BE ILLEGAL. 9. THE FACTS OF THE PRESENT CASE ARE ON A STRONG FOOTING IN THE SENSE THAT THE APPROVAL HAS NOT BEE N REFUSED TO IT AND IN FACT HAS BEEN GRANTED TO IT O N A LATER DATE THAT TOO WITHOUT RAISING ANY OBJECTION. SINCE THE FACTS ARE SAME RESPECTFULLY FOLLOWING THE ORDER OF THE 7 HON'BLE HIGH COURT WE CONFIM THE ORDER OF THE LD. CIT(APPEALS). 6. THE FACTS IN THE PRESENT CASE WE FIND ARE IDENTI CAL TO THAT IN THE CASE OF ASSESSEE FOR ASSESSMENT YEARS 2009-10 2010 -11 WHEREIN IT IS NOT DISPUTED THAT THE PROJECT WAS COMPLETED FOR ALL PUR POSE BEFORE 31.3.2010 AND EVEN APPLICATION FOR COMPLETION CERTIFICATE WAS FILED BEFORE THE SAME DATE. NO DISTINGUISHING FACTS HAVE BEEN BROUGHT TO OUR NOTICE BY THE LD. DR. THE DECISION OF THE TRIBUNAL THEREFORE IN THAT CASE SQUARELY APPLIES IN THE PRESENT CASE ALSO FOLLOWING WHICH WE CONFIR M THE ORDER OF LD. CIT(A) HOLDING THAT THE DATE OF APPLICATION FOR OBT AINING COMPLETION CERTIFICATE BE TREATED AS THE DATE OF COMPLETION OF THE PROJECT AND THE SAME BEING BEFORE THE STIPULATED DUE DATE I.E. 31.3 .2010 THE ASSESSEE BE GRANTED DEDUCTION U/S 80IB(10) OF THE ACT. 7. IN THE RESULT THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (BHAVNESH SAINI) (ANNAPURNA GUPTA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED :21 ST OCTOBER 2016 RKK COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR 8