M/s D.K.Construction, Bhopal v. The Assistant Commissioner of Income Tax 1(1), Bhopal

ITA 522/IND/2010 | misc
Pronouncement Date: 30-11-2011 | Result: Allowed

Appeal Details

RSA Number 52222714 RSA 2010
Assessee PAN AAAFD7121P
Bench Indore
Appeal Number ITA 522/IND/2010
Duration Of Justice 1 year(s) 3 month(s) 27 day(s)
Appellant M/s D.K.Construction, Bhopal
Respondent The Assistant Commissioner of Income Tax 1(1), Bhopal
Appeal Type Income Tax Appeal
Pronouncement Date 30-11-2011
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted DB
Tribunal Order Date 30-11-2011
Assessment Year misc
Appeal Filed On 02-08-2010
Judgment Text
1 IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH INDORE BEFORE SHRI JOGINDER SINGH JUDICIAL MEMBER AND SHRI R.C. SHARMA ACCOUNTANT MEMBER ITA NOS.521 & 522/IND/2010 A.YS. 2005-06 & 2007-08 M/S. D.K. CONSTRUCTION BHOPAL PAN AAAFD 7121 P ... APPELLANT VS ACIT-1(1) BHOPAL ... RESPONDENT DATE OF HEARING 30.11.2011 DATE OF PRONOUNCEMENT 30.11.2011 APPELLANT BY : SHRI M.K. SHARMA CA RESPONDENT BY: SHRI ARUN DEWAN SR. DR O R D E R PER JOGINDER SINGH THESE APPEALS ARE BY THE ASSESSEE FOR THE ASSESSME NT YEARS 2005-06 & 2007-08 CHALLENGING THE COMMON ORDE R OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-I BHO PAL DATED 17.3.2010. 2 2. DURING HEARING THE LEARNED COUNSEL FOR THE ASSE SSEE CONTENDED THAT THE IMPUGNED ISSUE IS COVERED BY THE DECISION OF THE TRIBUNAL DATED 6.12.2010 IN THE CASE OF ASS ESSEE ITSELF (ITA NO.243/IND/2010) FOR ASSESSMENT YEAR 2006-07. THIS FACTUAL MATRIX WAS NOT CONTROVERTED BY THE REVENUE. 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PER USED THE MATERIAL AVAILABLE ON FILE. IN VIEW OF THE ABOV E WE ARE REPRODUCING HEREUNDER THE RELEVANT PORTION OF THE O RDER DATED 6.12.2010 (SUPRA):- THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A) DATED 11.1.2010 FOR THE ASSESSMENT YEAR 2006-07 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 DEDUCTION U/S 80-IB IN RESPECT OF ITS PROJECT D.K. HONEY HOMES. 3. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORDS PERUSED. 4. FACTS IN BRIEF ARE THAT THE ASSESSEE IS A FIRM ENGAGED 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 OBSERVED THAT THE ASSESSEE HAS NOT COMPLIED WITH PRE- REQUISITE CONDITIONS FOR ALLOWING CLAIM U/S 80IB IN SO FAR AS ITS D.K. HONEY HOMES 3 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 THAT COMPLETION CERTIFICATE WAS NOT PROVIDED TO THE ASSESSEE. THE SAID LETTER OF LOCAL AUTHORITY WAS MADE PART OF ASSESSMENT ORDER BY THE ASSESSING OFFICER AND MARKED AS ANNEXURE A. BY THE IMPUGNED ORDER THE LD. CIT(A) CONFIRMED THE DISALLOWANCE 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 COMPLETED ITS PROJECT BEFORE 31.3.2008 AND VIDE ITS LETTER DATED 21.3.2008 IT HAS ALREADY INFORMED TO LOCAL AUTHORITY REGARDING COMPLETION OF THE PROJECT. HE FURTHER SUBMITTED THAT AFTER GIVING THIS LETTER THE ASSESSEE WAS ASKING AGAIN AND AGAIN TO THE LOCAL AUTHORITIES FOR ISSUE OF NECESSARY CERTIFICATE. HE ALSO INVITED OUR ATTENTION TO THE LETTER OF MUNICIPAL AUTHORITIES DATED 15.12.2008 INDICATING THAT PROJECT OF M/S. D.K.HONEY HOMES WAS COMPLETED AND SAME WAS TRANSFERRED TO MUNICIPAL CORPORATION KOLHAR. AS PER LD. AUTHORIZED REPRESENTATIVE WHATEVER ASSESSEE CAN DO FOR GETTING THE CERTIFICATE IS TO INFORM THE COMPETENT AUTHORITIES REGARDING COMPLETION OF ITS 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. AUTHORIZED REPRESENTATIVE INTENTION BEHIND ANY DEDUCTION U/S 80IB IS TO PROMOTE INVESTMENT IN A PARTICULAR SECTOR WHICH IS LESS PROFITABLE AND THE ASSESSEE 4 HAS ALREADY DONE WHATEVER IT CAN DO. HOWEVER IT HAS NO CONTROL OVER THE LOCAL AUTHORITIES FOR GETTING CERTIFICATES ISSUED. DURING THE COURSE OF HEARING HE WAS PARTICULARLY ASKED TO AGAIN OBTAIN A CERTIFICATE OF LOCAL AUTHORITY WITH SPECIFIC MENTION OF COMPLETION OF PROJECT BEFORE 31.3.2008 WHICH IS A BASIC CONDITION FOR ALLOWING CLAIM U/S 80IB(10). THE ASSESSEE AGAIN PRODUCED THE CERTIFICATE WHICH WAS AGAIN DULY VERIFIED FROM THE LOCAL AUTHORITIES TO THE EFFECT THAT A LETTER DATED 21.3.2008 BY THE ASSESSEE INTIMATING TO LOCAL AUTHORITY FOR COMPLETION OF ITS PROJECT AT KHASRA NOS. 74 75 78 79 91 94 102 104 419 420 421 WAS RECEIVED BY THE MUNICIPAL CORPORATION ON 29.3.2008. ON THE BASIS OF THIS CERTIFICATION THE LD. AUTHORIZED REPRESENTATIVE FURTHER CONTENDED THAT THE ASSESSEE HAS DONE WHATEVER HE HAS 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 ATTENTION TO THE LETTER ISSUED BY THE LOCAL AUTHORITIES DATED 11 TH NOVEMBER 2008 CLEARLY INDICATING THAT NO COMPLETION CERTIFICATE HAS BEEN ISSUED TO THE ASSESSEE. THIS INFORMATION WAS DIRECTLY CALLED BY THE ASSESSING OFFICER FROM MUNICIPAL CORPORATION BHOPAL. AS PER LD. SR. DR THE PRIMARY CONDITION FOR ALLOWING CLAIM OF DEDUCTION U/S 80-IB IS THAT THE PROJECT SHOULD BE APPROVED PRIOR TO 1.4.2004 AND SHOULD HAVE BEEN COMPLETED BEFORE 31.3.2008. THE FIRST CONDITION REGARDING APPROVAL WAS NOT DISPUTED BUT THE SECOND CONDITION WHICH IS ALSO EQUALLY IMPORTANT FOR ALLOWING ASSESSEES CLAIM IS REGARDING 5 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 CAREFULLY GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AND RELEVANT MATERIAL PLACED ON RECORD TOWARDS WHICH OUR ATTENTION WAS INVITED DURING THE COURSE OF HEARING BY THE LD. AUTHORIZED REPRESENTATIVE AND THE LD. SENIOR D.R. PROVISIONS OF SECTION 80IB ALLOWS CLAIM FOR DEDUCTION IN RESPECT OF HOUSING PROJECT WHICH HAS BEEN APPROVED PRIOR TO 1.4.2004 AND ALSO COMPLETED BEFORE 31.3.2008. DURING THE COURSE OF ASSESSMENT WITH REGARD TO ASSESSEES CLAIM OF DEDUCTION U/S 80IB IN RESPECT OF ITS D.K.HONEY HOMES PROJECT THE AO HAS ASKED THE ASSESSEE TO FURNISH THE CERTIFICATE OF COMPLETION OF THIS PROJECT M/S. D.K. HONEY HOMES. THE AO ALSO DIRECTLY CALLED INFORMATION 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 CERTIFICATE HAS BEEN ISSUED BY THIS OFFICE. ACCORDINGLY THE ASSESSEES CLAIM FOR DEDUCTION U/S 80-IB WAS DECLINED. SECTION 80IB CLEARLY DEFINES THE DATE OF COMPLETION AS DATE OF COMPLETION OF CONSTRUCTION OF THE HOUSING PROJECT SHALL BE TAKEN TO BE THE DATE ON WHICH THE COMPLETION CERTIFICATE IN RESPECT OF SUCH HOUSING PROJECT IS ISSUED BY THE LOCAL AUTHORITIES IT MEANS LOCAL AUTHORITIES IS COMPETENT TO CERTIFY THE DATE OF COMPLETION OF HOUSING PROJECT. THE DATE OF ISSUE OF SUCH LETTER BY THE LOCAL AUTHORITIES IS NOT SO CRUCIAL BUT IT SHOULD HAVE CLEARLY MENTIONED THE DATE OF COMPLETION OF PROJECT. WHEN THE PROJECT 6 IS COMPLETED ON 31.3.2008 AND THE ASSESSEE HAS INFORMED REGARDING SUCH COMPLETION THE LOCAL AUTHORITIES MAY TAKE ITS OWN TIME FOR ISSUE OF CERTIFICATE WHICH MAY BE EVEN AFTER 6-7 MONTHS BUT THE LETTER SO ISSUED BY THE LOCAL AUTHORITIES SHOULD CLEARLY MENTION THE DATE OF COMPLETION OF SUCH PROJECT. MERELY BECAUSE SUCH CERTIFICATE IS ISSUED AFTER GAP OF 8-9 MONTHS OR EVEN ONE YEAR WILL NOT ADVERSELY AFFECT THE ASSESSEE IF IT HAS MENTIONED CLEARLY THE DATE OF COMPLETION OF PROJECT PRIOR TO 31.3.2008. ONCE THE LETTER FOR COMPLETION OF PROJECT 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 OF 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 MENTIONED IN THE LETTER CERTIFYING COMPLETION OF PROJECT IS IMPORTANT. WE THEREFORE DO NOT FIND ANY MERIT IN THE OBSERVATION OF THE LOWER AUTHORITIES TO THE EFFECT THAT THE DATE OF COMPLETION SHALL BE TAKEN THE DATE ON WHICH CERTIFICATE IS PHYSICALLY ISSUED BY THE LOCAL AUTHORITIES. 8. IN VIEW OF THE ABOVE DISCUSSION WE RESTORE THE MATTER BACK TO THE FILE OF AO AND ASSESSEE IS AT LIBERTY TO PROCURE THE REQUIRED LETTER/CERTIFICATE FROM THE LOCAL AUTHORITY CLEARLY MENTIONING THEREIN THE DATE OF COMPLETION OF THE PROJECT. THE AO IS TO DECIDE THE ISSUE AFRESH AS PER LAW AFTER CONSIDERING THE LETTER OF COMPLETION IF ANY 7 FURNISHED BY THE ASSESSEE. WE DIRECT ACCORDINGLY. 9. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. THIS ORDER HAS BEEN PRONOUNCED IN THE OPEN COURT ON 6 TH DECEMBER 2010. 4. IN THE AFORESAID ORDER FOR THE ASSESSMENT YEAR 2006- 07 THE MATTER WAS RESTORED TO THE FILE OF TH E LEARNED ASSESSING OFFICER WITH THE DIRECTION THAT THE ASSESSEE SHALL BE AT LIBERTY TO PROCURE THE COMPLET ION CERTIFICATE FROM THE LOCAL AUTHORITY MENTIONING THEREIN THE DA TE OF COMPLETION OF THE PROJECT AND FURTHER IT WAS DIRECT ED THAT IF SUCH CERTIFICATE IS FILED BY THE ASSESSEE THE ASSESSING OFFICER SHALL DECIDE THE ISSUE AS PER LAW AFTER CONSIDERING SUC H CERTIFICATE. THE ASSESSEE FILED THE CERTIFICATE DAT ED 24 TH DECEMBER 2010 CLEARLY MENTIONING THAT THE ASSESSEE COMPLETED THE PROJECT IN MARCH 2008. THIS FACTUAL MATRIX WAS NOT CONTROVERTED BY THE REVENUE. THE ASSESSING OFFICER REJECTED THE CLAIM OF THE ASSESSEE U/S 80IB(10) FOR THE REASON THAT SUCH COMPLETION CERTIFICATE WAS NOT FILED BEFO RE THE ASSESSING OFFICER MENTIONING THAT SUCH CERTIFICATE WAS ISSUED 8 BEFORE 31.3.2008 BUT FACT REMAINS THAT THE REQUIRED CERTIFICATE MENTIONING THE DATE OF COMPLETION ISSUED BY THE CO MPETENT AUTHORITY HAS BEEN FILED BY THE ASSESSEE THEREFOR E NO PURPOSE WOULD BE SERVED IN REMANDING THE ISSUE BACK TO THE FILE OF THE ASSESSING OFFICER THEREFORE BY FOLLOW ING THE AFORESAID ORDER OF THE TRIBUNAL DATED 6.12.2010 (SU PRA) BOTH THESE APPEALS OF THE ASSESSEE ARE ALLOWED. ORDER WAS PRONOUNCED IN THE OPEN COURT IN THE PRES ENCE OF LD. REPRESENTATIVES OF BOTH SIDES AT THE CONCLUS ION OF THE HEARING. SD SD (R.C.SHARMA) (JOGINDER SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 30.11.2011 COPY TO: APPELLANT RESPONDENT CIT CIT(A) DR GU ARD FILE !VYAS!