ITO, Ward-2, Ratnagiri v. M/s. Paras Construction, Ratnagiri

ITA 587/PUN/2013 | 2006-2007
Pronouncement Date: 31-07-2015 | Result: Dismissed

Appeal Details

RSA Number 58724514 RSA 2013
Assessee PAN AABFP7484K
Bench Pune
Appeal Number ITA 587/PUN/2013
Duration Of Justice 2 year(s) 4 month(s) 27 day(s)
Appellant ITO, Ward-2, Ratnagiri
Respondent M/s. Paras Construction, Ratnagiri
Appeal Type Income Tax Appeal
Pronouncement Date 31-07-2015
Appeal Filed By Department
Order Result Dismissed
Bench Allotted B
Tribunal Order Date 31-07-2015
Date Of Final Hearing 09-07-2015
Next Hearing Date 09-07-2015
Assessment Year 2006-2007
Appeal Filed On 04-03-2013
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH PUN E !'#$ BEFORE SHRI R.K. PANDA AM AND SHRI VIKAS AWASTHY JM / ITA NOS. 584 TO 588/PN/2013 #% & '& / ASSESSMENT YEARS : 2003-04 TO 2007-08 ()$ / CO NOS. 17 TO 21/PN/2014 #% & '& / ASSESSMENT YEARS : 2003-04 TO 2007-08 ASSESSEE BY : SHRI SUNIL GANOO/SHRI MAYURESH DOSHI REVENUE BY : SHRI B.C. MALAKAR * DATE OF HEARING :09-07-2015 / DATE OF PRONOUNCEMENT :31-07-2015 INCOME TAX OFFICER WARD 2 RATNAGIRI . / APPELLANT +% V/S. M/S. PARAS CONSTRUCTION K.C. JAIN NAGAR RATNAGIRI PAN : AABFP7484K . / RESPONDENT M/S. PARAS CONSTRUCTION K.C. JAIN NAGAR RATNAGIRI PAN : AABFP7484K . / APPELLANT +% V/S. INCOME TAX OFFICER WARD 2 RATNAGIRI . / RESPONDENT 2 ITA NOS. 584 TO 588/PN/2013 & CO NOS. 17 TO 21/PN/2 014 A.YS. 2003-04 TO 2007-08 * ORDER PER VIKAS AWASTHY JM : THESE SET OF FIVE APPEALS FOR THE ASSESSMENT YEARS 2003- 04 TO 2007-08 HAVE BEEN FILED BY THE REVENUE AGAINST THE ORDER OF COMM ISSIONER OF INCOME TAX (APPEALS) KOLHAPUR. THE COMMISSIONER OF INCOME TAX (APP EALS) VIDE COMMON ORDER DATED 13-12-2012 HAS DECIDED THESE APPE ALS OF THE ASSESSEE. THE ASSESSEE HAS ALSO FILED CROSS OBJECTIONS IN THE IMPUG NED ASSESSMENT YEARS. 2. THE BRIEF FACTS OF THE CASE AS EMANATING FROM RECORDS ARE : THE ASSESSEE IS A BUILDER AND DEVELOPER. THE ASSESSEE DEVELO PED A HOUSING PROJECT UNDER THE NAME PARAS NAGAR COMPRISING OF 20 6 UNITS. THE PROJECT WAS APPROVED BY THE LOCAL AUTHORITY ON 05-06-2000. SUB SEQUENTLY THE PLAN WAS MODIFIED AND 7 MORE UNITS WERE ADDED TO THE ORIGINAL PLAN. THE MODIFIED PLAN FOR 213 UNITS WAS APPROVED BY LOCAL AUTHORITY ON 23-11-2000. THE ASSESSEE CLAIMED DEDUCTION U/S. 80IB(10) OF THE SAID PR OJECT. IN THE ORIGINAL ASSESSMENT PROCEEDINGS THE CLAIM OF THE ASSESSEE U/S. 80IB(10) WAS ALLOWED. ON 03-06-2008 A SURVEY U/S. 133A WAS CONDUCT ED AT THE BUSINESS PREMISES OF THE ASSESSEE. DURING SURVEY APART FROM OTHE R SHORTCOMINGS IT WAS FOUND THAT: (I) THE COMPLETION CERTIFICATE OF THE PROJECT WAS NOT ISSUED BY THE LOCAL AUTHORITY ON OR BEFORE 31-03-2008; (II) THE COMPLETION CERTIFICATE DATED 31-03-2003 ISSUED BY LOC AL AUTHORITY WAS IN RESPECT OF PARTIAL COMPLETION OF THE PROJE CT I.E. WITH RESPECT TO 67 UNITS ONLY. 2.1 THE ASSESSING OFFICER OBSERVED THAT SINCE THE CONDITION WITH RESPECT TO OBTAINING OF COMPLETION CERTIFICATE AS LAID DOWN U/S. 80IB (10) WAS NOT FULFILLED THEREFORE THE ASSESSEE IS NOT ELIGIBLE TO CLAIM DEDUCTIO N U/S. 3 ITA NOS. 584 TO 588/PN/2013 & CO NOS. 17 TO 21/PN/2 014 A.YS. 2003-04 TO 2007-08 80IB(10) OF THE ACT. CONSEQUENTLY REASSESSMENT PROCEE DINGS WERE INITIATED AND NOTICES U/S. 148 WERE ISSUED TO THE ASSESSEE. IN A SSESSMENT ORDERS PASSED U/S. 143(3) R.W.S. 147 OF THE ACT FOR THE IMPUGNED ASSESSMENT YEARS THE ASSESSING OFFICER DISALLOWED THE CLAIM OF DEDUCTION U/S. 8 0IB(10) IN RESPECT OF PROJECT PARAS NAGAR. AGGRIEVED BY THE ASSESSMENT ORDERS PASSED IN ALL THE IM PUGNED ASSESSMENT YEARS THE ASSESSEE FILED APPEALS BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS) CHALLENGING THE REASSESSMENT PROCE EDINGS AS WELL AS DISALLOWANCE OF DEDUCTION U/S. 80IB(10) OF THE ACT. THE COM MISSIONER OF INCOME TAX (APPEALS) AFTER ANALYZING THE FACTS OF THE CAS E UPHELD THE JURISDICTION ASSUMED BY THE ASSESSING OFFICER U/S. 148 OF TH E ACT. HOWEVER ON MERITS THE COMMISSIONER OF INCOME TAX (APPEALS) HELD THA T THE ASSESSEE IS ELIGIBLE TO CLAIM DEDUCTION U/S. 80IB(10) OF THE ACT. AGAINST THE FINDINGS OF COMMISSIONER OF INCOME TAX (APPEALS) T HE REVENUE HAS FILED APPEALS FOR ASSESSMENT YEAR 2003-04 T O ASSESSMENT YEAR 2007-08 AND THE ASSESSEE HAS FILED CROSS OBJECTIONS FOR THE CORRESPONDING ASSESSMENT YEARS. 3. SHRI B.C. MALAKAR REPRESENTING THE DEPARTMENT SUBMITT ED THAT THE ASSESSEE HAS NOT COMPLIED WITH THE CONDITIONS AS SET OUT IN SECTION 80IB(10) TO BE ELIGIBLE FOR CLAIMING DEDUCTION. DURING SURVEY CONDUCTE D U/S. 133A IT TRANSPIRED THAT THE ASSESSEE HAS NOT OBTAINED COMPLETIO N CERTIFICATE FROM THE COMPETENT AUTHORITY BEFORE DUE DATE I.E. 31-03-2008. THE PROJECT WAS INITIALLY APPROVED FOR 206 UNITS ON 05-06-2000. SUBSEQUEN TLY MODIFIED PLAN WAS APPROVED FOR 213 UNITS ON 23-11-2000. SINCE TH E PROJECT WAS APPROVED PRIOR TO 01-04-2004 THE ASSESSEE WAS REQUIRE D TO OBTAIN COMPLETION CERTIFICATE ON OR BEFORE 31-03-2008. INITIALLY TH E ASSESSEE RECEIVED COMPLETION CERTIFICATE IN RESPECT OF 67 UNITS ON 31 -03-2003. 4 ITA NOS. 584 TO 588/PN/2013 & CO NOS. 17 TO 21/PN/2 014 A.YS. 2003-04 TO 2007-08 THEREAFTER THE ASSESSEE APPLIED FOR COMPLETION CERTIFICATE O N 02-01-2007 ON THE BASIS OF CERTIFICATE ISSUED BY THE ARCHITECT ON 31-12- 2006. THE COMPLETION CERTIFICATE WAS NOT ISSUED BY THE LOCAL AUTHORIT Y TO THE ASSESSEE AS THERE WAS NO PROPER DRAINAGE SYSTEM AND THE CONST RUCTION OF SEPTIC TANK WHICH IS ESSENTIAL FOR RESIDENTIAL UNITS WERE NOT COMPLETED. THE GRAMVIKAS ADHIKARI GRAMPANCHAYAT KHEDSHI IN HIS STATEMENT RECORDED U/S. 131 CATEGORICALLY STATED THAT DRAINAGE SYSTEM OF PROJECT WA S NOT PROPER WITH CONSTRUCTION OF SEPTIC TANK ETC. WAS NOT COMPLETED. THE COMPLETION CERTIFICATE WAS ISSUED ON 04-06-2008 AFTER THE DISCREPANC IES AS MENTIONED ABOVE WERE REMOVED. THE LD. DR FURTHER CONTENDED THAT EVEN NOW THE PROJECT IS NOT COMPLETE. AS AGAINST APPROVED 213 UNITS ONLY 204 UNITS HAVE BEEN CONSTRUCTED. THE LD. DR FURTHER SUBMITTED THAT IN T HE APPEALS FOR THE ASSESSMENT YEARS 2005-06 2006-07 AND 2007-08 THERE IS GROUND RELATING TO COMMERCIAL AREA IN THE PROJECT. THE SAME IS NOT PRES SED. THE LD. DR PRAYED FOR SETTING ASIDE THE IMPUGNED ORDER AND RESTORING THE FINDING S OF THE ASSESSING OFFICER. 4. AU CONTRAIRE SHRI SUNIL GANOO AND SHRI MAYURESH DOSHI APPEARING ON BEHALF OF THE ASSESSEE SUBMITTED THAT THE ASSESSEE H AS COMPLIED WITH ALL THE CONDITIONS AS SET OUT IN SECTION 80IB(10) CLAIMING DED UCTION. ORIGINALLY THE PROJECT WAS APPROVED FOR 206 UNITS. SUBSEQUENTLY THE PLAN WAS MODIFIED AND NUMBER OF UNITS WERE INCREASED FROM 206 TO 21 3 UNITS. THE ASSESSEE APPLIED FOR PROJECT COMPLETION CERTIFICATE 02-01-2 007. THE OBJECTION WAS RAISED ONLY ON THE GROUND THAT SOAKPITS CONNECTED WITH SEPTIC TANKS WERE NOT COMPLETED. THERE WAS NO OBJECTION WITH REGARD TO THE COMPLETION OF DWELLING UNITS. THE DEFECT POINTED OUT BY THE LOCAL AUTHORITY WAS ONLY MENIAL IN NATURE AND THUS CANNOT BE SAID THAT THE PROJECT WAS NOT COMPLETED. FINALLY OUT OF 213 APPROVED UNITS 204 UNITS C OULD BE COMPLETED AS SPACE OF 5 UNITS WAS UTILIZED FOR CONSTRUCTIO N OF SEPTIC TANKS 5 ITA NOS. 584 TO 588/PN/2013 & CO NOS. 17 TO 21/PN/2 014 A.YS. 2003-04 TO 2007-08 AND 4 UNITS WERE LEFT OUT FOR PROPOSED D P ROAD. THE LD. AR CONTENDED THAT IF 9 UNITS ARE NOT CONSTRUCTED IT WILL NOT RENDER THE ENT IRE PROJECT INELIGIBLE FOR DEDUCTION U/S. 80IB(10). THE LD. AR FURTHER SUBMITTED T HAT SINCE THE PROJECT WAS APPROVED MUCH PRIOR TO 01-04-2004 THE CO NDITION OF OBTAINING COMPLETION CERTIFICATE WAS NOT IN THE SECTION AT THAT TIME. THE REQUIREMENT TO OBTAIN COMPLETION CERTIFICATE WAS INTRODUCED BY THE FINA NCE ACT 2004 W.E.F. 01-04-2005. THEREFORE THE CONDITION OF OBTAINING COMPLE TION CERTIFICATE IS NOT APPLICABLE ON THE ASSESSEE. IN SUPPORT OF HIS SUBMISSIONS THE LD. AR PLACED RELIANCE ON THE DECISION OF CO-ORDINATE BENCH OF TRIBUNAL IN THE CASE OF RUNWAL DEVELOPERS VS. ACIT IN ITA NO. 1339/ PN/2010 FOR THE ASSESSMENT YEAR 2006-07 DECIDED ON 30-12-2014 THE DE CISION OF HON'BLE MADRAS HIGH COURT IN THE CASE OF CIT VS. JAIN HOUSING & CONSTRUCTIONS LTD. REPORTED AS 30 TAXMANN.COM 131 (MADRAS) AND THE JU DGMENT OF HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS. CHD DEVELOPERS LT D. REPORTED AS 362 ITR 177 (DEL). AS FAR AS CROSS OBJECTIONS FILED ON BEHALF OF THE ASSESSEE ARE CONCERNED THE LD. AR STATED AT THE BAR THAT THE SAME ARE NOT PRESS ED. 5. WE HAVE HEARD THE SUBMISSIONS MADE BY THE REPRESENT ATIVES OF BOTH THE SIDES AND HAVE PERUSED THE ORDERS OF THE AUTHORITIE S BELOW. WE HAVE ALSO CONSIDERED THE DECISIONS ON WHICH THE LD. AR HAS PLACE D RELIANCE. THE UNDISPUTED FACTS IN THE CASE ARE THAT THE ASSESSEE IS A DEVELOPER OF A PROJECT PARAS NAGAR. INITIALLY THE PROJECT WAS APPROVED FOR 206 UNITS ON 05-06-2000. LATER THE PLAN WAS MODIFIED AND 213 UNITS W ERE APPROVED BY THE LOCAL AUTHORITY ON 23-11-2000. ACCORDING TO THE PRO VISIONS OF SECTION 80IB(10) ANY PROJECT APPROVED BY LOCAL AUTHORITY BEFORE 0 1-04-2004 SHOULD HAVE BEEN COMPLETED ON OR BEFORE 31-03-2008. INITIALLY C OMPLETION CERTIFICATE WITH RESPECT TO 67 UNITS WERE OBTAINED ON 31- 03-2003. THE ASSESSEE APPLIED FOR COMPLETION CERTIFICATE TO GRAMPANCHYAT/LOCAL A UTHORITY 6 ITA NOS. 584 TO 588/PN/2013 & CO NOS. 17 TO 21/PN/2 014 A.YS. 2003-04 TO 2007-08 ON 02-01-2007. THE COMPLETION CERTIFICATE WAS GRANTED TO THE ASSESSEE BY LOCAL AUTHORITY ON 04-06-2008. HOWEVER OCCUPANCY CERTIFIC ATE WAS ISSUED ON 31-12-2006 WITH RESPECT TO 204 UNITS. ADMITTEDLY TH E ASSESSEE COULD NOT COMPLETE 9 UNITS AS AREA OF 4 UNITS WAS LEFT FOR THE P ROPOSED 9 MTR. D P ROAD AND THE AREA OF 5 UNITS WAS UTILIZED FOR CONSTRUCTIO N OF SEPTIC TANK. DISCREPANCY WITH REGARD TO THE CONSTRUCTION OF SEPTIC TA NK/SOAKPIT WAS POINTED OUT BY THE LOCAL AUTHORITIES AFTER THE REMOVAL OF SHORTCOMINGS THE LOCAL AUTHORITY ISSUED COMPLETION CERTIFICATE ON 04-06-2008. THE ASSESSEE CLAIMED DEDUCTION U/S. 80IB(10) IN THE IMPUGNED ASSESSMENT YEARS. IT IS NOT DISPUTED THAT THE ASSESSEE HAS COMPLIED WITH OTHER CONDITIONS AS SET OUT IN CLAUSE (B) TO (F) OF SUB-SECTION (10). THE ASSESSING OFF ICER DISALLOWED THE DEDUCTION ON THE GROUND THAT SINCE COMPLETION CERTIFIC ATE WAS OBTAINED AFTER 31-03-2008 THEREFORE THE PROJECT WAS COMPLETED A FTER 31-03-2008. IN FIRST APPEAL THE COMMISSIONER OF INCOME TAX (APPEALS) OBSER VED THAT IN THE YEAR 2007 THE GRAMPANCHYAT HAD ISSUED NO OBJECTION CE RTIFICATE TO THE ASSESSEE FOR GETTING INDIVIDUAL ELECTRICITY CONNECTION IN ALL TH E RESIDENTIAL UNITS. THE SOAK PIT AND DRAINAGE SYSTEM CONNECTED THER ETO BECOMES RELEVANT AND OPERATIONAL ONLY WHEN THE SEPTIC TANK STA RTS OVERFLOWING. THE SEPTIC TANK WAS ALREADY IN EXISTENCE. THE DISCREPANCY IN CONSTRUCTION AS POINTED OUT BY LOCAL AUTHORITY IS OF VENIAL NATURE AND IT WO ULD NOT RENDER THE PROJECT IN ELIGIBLE FOR DEDUCTION U/S. 80IB(10) OF THE ACT. TH E COMMISSIONER OF INCOME TAX (APPEALS) HELD THAT THE ASSESSEE IS ELIGIBLE T O CLAIM DEDUCTION U/S. 80IB(10). 6. WE FIND THAT THE ISSUE RAISED IN THE PRESENT APPEAL IS SIMILAR TO THE DISPUTE DECIDED BY THE CO-ORDINATE BENCH IN THE CASE OF RUNWAL DEVELOPERS VS. ACIT (SUPRA). IN THE SAID CASE THE PROJECT HAD COM MENCED W.E.F. 12-12- 2003 AND ACCORDINGLY IT WAS REQUIRED TO BE COMPLETED ON OR BEFORE 31-03- 2008. THE ASSESSING OFFICER DISALLOWED THE CLAIM OF DEDUCTION U/S. 80IB(10) 7 ITA NOS. 584 TO 588/PN/2013 & CO NOS. 17 TO 21/PN/2 014 A.YS. 2003-04 TO 2007-08 TO THE ASSESSEE ON THE GROUND THAT THE COMPLETION CER TIFICATE WAS GIVEN BY THE LOCAL AUTHORITY AFTER 31-03-2008. THE TRIBUNAL HELD TH AT THE ASSESSEE MADE APPLICATION TO THE CONCERNED AUTHORITY FOR ISSUANCE OF COMPLETION CERTIFICATE BEFORE 31-03-2008. THE ASSESSEE HAD TAKEN A LL THE NECESSARY STEPS REQUIRED TO BE DONE BEFORE SEEKING THE COMPLETION CERTIFICATE. NON- ISSUANCE OF COMPLETION CERTIFICATE BY THE COMPETENT AUTHOR ITY BEFORE 31-03-2008 WAS FOR REASONS BEYOND THE CONTROL OF THE A SSESSEE. ONCE THE ASSESSEE HAS OBTAINED NO OBJECTION CERTIFICATE FROM THE C ONCERNED DEPARTMENTS THE OBTAINING OF COMPLETION CERTIFICATE IS MEREL Y A FORMALITY. THE DELAY IN ISSUANCE OF COMPLETION CERTIFICATE BY THE COMPE TENT AUTHORITY CANNOT BE ATTRIBUTED TO THE ASSESSEE. THE TRIBUNAL FUR THER RELIED ON THE DECISION OF HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS. C HD DEVELOPERS LTD. (SUPRA) AND HELD THAT SINCE THE PROJECT WAS APPROV ED PRIOR TO 2005 THE CONDITION OF OBTAINING COMPLETION CERTIFICATE INSERTED BY FINAN CE ACT 2004 WILL NOT BE APPLICABLE. THE RELEVANT EXTRACT OF THE ORDER O F TRIBUNAL IS AS UNDER: 7. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS. THE CRUX OF THE CONTROVERSY IN THE PRESENT APPEAL RELATES TO THE PR OVISIONS OF SUB-CLAUSE (I) OF CLAUSE (A) TO SECTION 80-IB(10) OF THE ACT READ WIT H EXPLANATION (II) THEREOF. AS PER THE REVENUE HAVING REGARD TO SUB-CLAUSE (I) OF CLAUSE (A) TO SECTION 80- IB(10) OF THE ACT THE CONSTRUCTION OF THE HOUSING PROJECT WAS TO BE COMPLETED ON OR BEFORE 31.03.2008. SUB-CLAUSE (I) OF CLAUSE (A) TO SECTION 80-IB(10) OF THE ACT PRESCRIBES THAT WHERE A HOUSING PROJECT IS APPR OVED ON OR BEFORE 01.04.2004 THEN THE DEVELOPMENT AND CONSTRUCTION OF SUCH HOUSING PROJECT SHALL BE COMPLETED ON OR BEFORE 31.03.2008. EXPLAN ATION (II) BELOW CLAUSE (A) OF SECTION 80-IB(10) OF THE ACT PROVIDES THAT THE D ATE 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 P ROJECT IS ISSUED BY THE LOCAL AUTHORITY. 8. IN THE PRESENT CASE IT IS AN ADMITTED POSITION THAT THE HOUSING PROJECT OF THE ASSESSEE KNOWN AS RUNWAL DAFFODILS COMMENCED WITH EFFECT FROM 12.12.2003 AND THEREFORE CONSTRUCTION OF SUCH A HOU SING PROJECT WAS REQUIRED TO BE COMPLETED ON OR BEFORE 31.03.2008 AS STIPULAT ED IN SUB-CLAUSE (I) OF CLAUSE (A) TO SECTION 80-IB(10) OF THE ACT. IT IS ALSO NOT DENIED BY THE ASSESSEE 8 ITA NOS. 584 TO 588/PN/2013 & CO NOS. 17 TO 21/PN/2 014 A.YS. 2003-04 TO 2007-08 THAT THE RELEVANT COMPLETION CERTIFICATE HAS NOT BE EN ISSUED BY THE LOCAL AUTHORITY I.E. PMC ON OR BEFORE 31.03.2008. HOWEVE R THE CASE SETUP BY THE ASSESSEE IS THAT THE PROJECT OF THE ASSESSEE WAS AP PROVED AND IT COMMENCED ON 12.12.2003 WHICH PERTAINS TO A PERIOD PRIOR TO 01.04.2005 I.E. THE DATE ON WHICH THE AMENDMENT WHICH INSISTED ON PRODUCTION OF COMPLETION CERTIFICATE WAS BROUGHT INTO FORCE. IN ORDER TO APPRECIATE THE AFORESAID PLEA OF THE ASSESSEE WE MAY REFER TO THE PROVISIONS OF SECTION 80-IB(10) OF THE ACT AS IT STOOD PRIOR TO THE AMENDMENT BROUGHT BY THE FINANCE (NO.2) ACT OF 2004 W.E.F. 01.04.2005 :- (10) THE AMOUNT OF PROFITS IN CASE OF AN UNDERTAKI NG DEVELOPING AND BUILDING HOUSING PROJECTS APPROVED B EFORE THE 31ST DAY OF MARCH 2005 BY A LOCAL AUTHORITY SHALL BE HUNDR ED PER CENT. OF THE PROFITS DERIVED IN ANY PREVIOUS YEAR RELEVANT TO AN Y ASSESSMENT YEAR FROM SUCH HOUSING PROJECT IF - (A) SUCH UNDERTAKING HAS COMMENCED OR COMMENCES DEVELOP MENT AND CONSTRUCTION OF THE HOUSING PROJECT ON OR AFTER TIL E 1ST DAY OF OCTOBER 1998; (B) THE PROJECT IS ON THE SIZE OF A PLOT OF LAND WHICH HAS MINIMUM AREA OF ONE ACRE; AND (C) THE RESIDENTIAL UNIT HAS A MINIMUM BUILT-UP AREA OF ONE THOUSAND SQUARE FEET WHERE SUCH RESIDENTIAL UNIT IS SITUATED WITHIN THE CITIES OF DELHI OR MUMBAI OR WITHIN TWENTY-FIVE KILOMETRES FR OM THE MUNICIPAL LIMITS OF THESE CITIES AND ONE THOUSAND AND FIVE HUN DRED SQUARE FEET AT ANY OTHER PLACE. 9. SUBSEQUENTLY FINANCE (NO.2) ACT OF 2004 WHICH WAS BROUGHT INTO FORCE W.E.F. 01.04.2005 AMENDED THE PROVISIONS OF SECTIO N 80-IB(10) OF THE ACT; AND POST-AMENDMENT SECTION 80-IB(10) OF THE ACT RE AD AS UNDER :- (10) THE AMOUNT OF DEDUCTION IN THE CASE OF AN UND ERTAKING DEVELOPING AND BUILDING HOUSING PROJECTS APPROVED B EFORE THE 31ST DAY OF MARCH 2008 BY A LOCAL AUTHORITY SHALL BE HUNDRE D PER CENT. OF THE PROFITS DERIVED IN THE PREVIOUS YEAR RELEVANT TO AN Y ASSESSMENT YEAR FROM SUCH HOUSING PROJECT IF - (A) SUCH UNDERTAKING HAS COMMENCED OR COMMENCES DEVELOPMENT AND CONSTRUCTION OF THE HOUSING PROJECT ON OR AFTER THE 1ST DAY OF OCTOBER 1998 AND COMPLETES SUCH CON STRUCTION - (I) IN A CASE WHERE A HOUSING PROJECT HAS BEEN APPR OVED BY THE LOCAL AUTHORITY BEFORE THE 1ST DAY OF APRIL 2004 ON OR BEFORE THE 31ST DAY OF MARCH 2008; 9 ITA NOS. 584 TO 588/PN/2013 & CO NOS. 17 TO 21/PN/2 014 A.YS. 2003-04 TO 2007-08 (II) IN A CASE WHERE A HOUSING PROJECT HAS BEEN OR IS APPROVED BY THE LOCAL AUTHORITY ON OR AFTER THE 1ST DAY OF A PRIL 2004 BUT NOT LATER THAN THE 31ST DAY OF MARCH 2005 WITHIN FOUR YEARS FROM THE END OF THE FINANCIAL YEAR IN WHICH THE HOUSING PROJECT IS APPR OVED BY THE LOCAL AUTHORITY. (III) IN A CASE WHERE A HOUSING PROJECT HAS BEEN AP PROVED BY THE LOCAL AUTHORITY ON OR AFTER THE 1ST DAY OF APRIL 2 005 WITHIN FIVE YEARS FROM THE END OF THE FINANCIAL YEAR IN WHICH THE HOU SING PROJECT IS APPROVED BY THE LOCAL AUTHORITY. EXPLANATION- FOR THE PURPOSES OF THIS CLAUSE - (I) IN A CASE WHERE THE APPROVAL IN RESPECT OF THE HOUSING PROJECT IS OBTAINED MORE THAN ONCE SUCH HOUSING PROJECT SH ALL BE DEEMED TO HAVE BEEN APPROVED ON THE DATE ON WHICH THE BUILDIN G PLAN OF SUCH HOUSING PROJECT IS FIRST APPROVED BY THE LOCAL AUTH ORITY; (II) THE DATE OF COMPLETION OF CONSTRUCTION OF THE HOUSING PROJECT SHALL BE TAKEN TO BE THE DATE ON WHICH THE COMPLETI ON CERTIFICATE IN RESPECT OF SUCH HOUSING PROJECT IS ISSUED BY THE LO CAL AUTHORITY; (B) THE PROJECT IS ON THE SIZE OF A PLOT OF LAND WH ICH HAS A MINIMUM AREA OF ONE ACRE: PROVIDED THAT NOTHING CONTAINED IN CLAUSE (A) OR CL AUSE (B) SHALL APPLY TO A HOUSING PROJECT CARRIED OUT IN ACCORDANCE WITH A SCHEME FRAMED BY THE CENTRAL GOVERNMENT OR A STATE GOVERNMENT FOR RE CONSTRUCTION OR REDEVELOPMENT OF EXISTING BUILDINGS IN AREAS DECLAR ED TO BE SLUM AREAS UNDER ANY LAW FOR THE TIME BEING IN FORCE AND SUCH SCHEME IS NOTIFIED BY THE BOARD IN THIS BEHALF; (C) THE RESIDENTIAL UNIT HAS A MAXIMUM BUILT-UP ARE A OF ONE THOUSAND SQUARE FEET WHERE SUCH RESIDENTIAL UNIT IS SITUATED WITHIN THE CITIES OF DELHI OR MUMBAI OR WITHIN TWENTY-FIVE KIL OMETRES FROM THE MUNICIPAL LIMITS OF THESE CITIES AND ONE THOUSAND A ND FIVE HUNDRED SQUARE FEET AT ANY OTHER PLACE; (D) THE BUILT-UP AREA OF THE SHOPS AND OTHER COMMER CIAL ESTABLISHMENTS INCLUDED IN THE HOUSING PROJECT DOES NOT EXCEED THREE PER CENT. OF THE AGGREGATE BUILT-UP AREA OF THE HOU SING PROJECT OF FIVE THOUSAND SQUARE FEET WHICHEVER IS HIGHER. 10. IN THE INSTANT ASSESSMENT YEAR I.E. 2006-07 TH E ASSESSING OFFICER HAS SOUGHT TO DISALLOW THE DEDUCTION CLAIMED BY THE ASS ESSEE ON THE GROUND THAT THE COMPLETION CERTIFICATE IN TERMS OF EXPLANATION (II) HAS NOT BEEN OBTAINED. A SIMILAR SITUATION HAD ARISEN BEFORE THE HONBLE DEL HI HIGH COURT IN THE CASE OF 10 ITA NOS. 584 TO 588/PN/2013 & CO NOS. 17 TO 21/PN/2 014 A.YS. 2003-04 TO 2007-08 CHD DEVELOPERS LTD. (SUPRA). IN THE CASE BEFORE TH E HONBLE DELHI HIGH COURT THE PROJECT OF THE ASSESSEE WAS APPROVED ON 16.03.2 005 AND THE ASSESSING OFFICER PROCEEDED TO DISALLOW THE DEDUCTION CLAIMED FOR ASSESSMENT YEAR 2007-08 ON THE GROUND THAT THE COMPLETION CERTIFICA TE IN TERMS OF EXPLANATION (II) WAS NOT GRANTED WITHIN THE STIPULATED PERIOD I .E. ON OR BEFORE 31.03.2009. NOTABLY IN THE CASE BEFORE THE HONBLE DELHI HIGH COURT THE TIME-LIMIT FOR COMPLETION OF CONSTRUCTION OF THE HOUSING PROJECT W AS GOVERNED BY SUB-CLAUSE (II) OF CLAUSE (A) TO SECTION 80-IB(10) OF THE ACT. THE HONBLE DELHI HIGH COURT NOTED THAT SINCE THE PROJECT OF THE ASSESSEE WAS AP PROVED PRIOR TO 2005 I.E. BEFORE THE AMENDMENT WHICH INSISTED ON ISSUANCE OF COMPLETION CERTIFICATE BY THE END OF FOUR YEARS WAS BROUGHT INTO FORCE THE C LAIM OF DEDUCTION COULD NOT BE DENIED FOR THE SAID REASON. THE CASE OF THE ASS ESSEE BEFORE US IS FULLY COVERED BY THE RATIO OF THE JUDGEMENT OF THE HONBL E DELHI HIGH COURT IN THE CASE OF CHD DEVELOPERS LTD. (SUPRA). IN THIS BACKG ROUND WE THEREFORE FIND NO REASONS TO UPHOLD THE OBJECTION OF THE LOWER AUTHOR ITIES IN ORDER TO DISALLOWANCE CLAIMED U/S 80-IB(10) OF THE ACT. 7. THE HON'BLE MADRAS HIGH COURT IN THE CASE OF CIT VS. JAIN HOUSING & CONSTRUCTIONS LTD. (SUPRA) HAD HELD THAT CONDITION TO FURN ISH COMPLETION CERTIFICATE FOR GRANT OF DEDUCTION U/S. 80IB(10) WAS INTRODUC ED BY FINANCE NO. (2) ACT 2004 W.E.F. 01-04-2005 AND PRIOR TO IT THERE WA S NO SUCH REQUIREMENT. THE CLAIM OF ASSESSEE CANNOT BE REJECTED FO R ASSESSMENT YEAR 2004-05 ON THE GROUND THAT THE ASSESSEE HAD NOT FURN ISHED THE COMPLETION CERTIFICATE. 8. IN THE PRESENT CASE IT IS AN UNDISPUTED FACT THAT T HE ASSESSEE HAD OBTAINED NO OBJECTION CERTIFICATE FROM THE LOCAL AUTHORITY IN THE YEAR 2007 AND HAS THEREAFTER APPLIED FOR OBTAINING COMPLETION CERTIFICAT E TO THE LOCAL AUTHORITY ON 02-01-2007. THE ASSESSEE HAD ALREADY OBT AINED COMPLETION CERTIFICATE IN RESPECT OF 67 UNITS IN THE YEAR 31-03-2003 ITSELF. THERE IS NOTHING ON RECORD TO SHOW THAT THE RESIDENTIAL DWELLING UN ITS WERE NOT COMPLETED OR NOT FIT FOR OCCUPATION AT THE TIME WHEN THE ASSESSEE MADE APPLICATION FOR ISSUANCE OF COMPLETION CERTIFICATE. IT HAS ALS O NOT BEEN REFUTED BY THE REVENUE THAT IN THE YEAR 2007 THE GRAMPANCHYA T HAD ISSUED 11 ITA NOS. 584 TO 588/PN/2013 & CO NOS. 17 TO 21/PN/2 014 A.YS. 2003-04 TO 2007-08 NO OBJECTION CERTIFICATE TO THE ASSESSEE FOR GETTING INDIVID UAL ELECTRICITY CONNECTION IN ALL THE RESIDENTIAL UNITS. THUS WE ARE OF TH E CONSIDERED OPINION THAT THE UNITS WERE COMPLETED IN ALL RESPECT AND R EADY FOR OCCUPATION. AS FAR AS THE DEFICIENCY POINTED OUT BY THE LD. DR WITH REGAR D TO THE DRAINAGE AND SEPTIC TANK IS CONCERNED WE CONCUR WITH THE FINDIN GS OF THE COMMISSIONER OF INCOME TAX (APPEALS) THAT CONSTRUCTION OF S OAKPIT WHICH IS REQUIRED TO DRAIN EXCESS WATER FROM THE SEPTIC TANK OF V ENIAL NATURE. THE SEPTIC TANK HAS SUBSTANTIAL CAPACITY TO HOLD THE DRAINAGE WATER AND IT IS ONLY IN THE CASE OF OVERFLOW THAT THE WATER FLOWS FROM SEP TIC TANK TO THE SOAKPIT. THIS DISCREPANCY POINTED OUT BY THE LOCAL AUTHOR ITY WAS ALSO REMOVED BY THE ASSESSEE. 9. AS FAR AS THE OBJECTION OF THE REVENUE THAT AGAINST 213 UNITS APPROVED THE ASSESSEE HAS CONSTRUCTED ONLY 204 UNITS WE DO NOT FIND ANY MERIT IN THE SAME. FOUR UNITS WERE NOT CONSTRUCTED AS SPACE WAS LE FT FOR 9 MTR. PROPOSED D P ROAD AND 5 UNITS WERE LEFT OUT TO MAKE SP ACE FOR CONSTRUCTION OF SEPTIC TANK. THE NON-CONSTRUCTION OF 9 UNITS IN OUR CO NSIDERED VIEW WILL NOT RENDER 204 COMPLETED UNITS IN-ELIGIBLE FOR THE CLAIM OF DE DUCTION U/S. 80IB(10) OF THE ACT. 10. IN VIEW OF THE FACTS OF THE CASE AND THE DECISIONS DIS CUSSED ABOVE WE HOLD THAT NON OBTAINING OF COMPLETION CERTIFICATE IN RESPECT OF PROJECT APPROVED PRIOR TO 01-04-2005 WILL NOT RENDER THE ASSESS EE INELIGIBLE FOR CLAIMING DEDUCTION U/S. 80IB(10) IN THE IMPUGNED ASSESSMENT YEARS. IN APPEALS FOR ASSESSMENT YEARS 2005-06 TO 2007-08 THE R EVENUE HAS RAISED GROUND WITH REGARD TO COMMERCIAL UNITS IN THE PROJECT. SINCE THE SAME HAS NOT BEEN PRESSED BY THE LD. DR. THE SAME ARE DISMISSED AS NOT PRESSE D. 12 ITA NOS. 584 TO 588/PN/2013 & CO NOS. 17 TO 21/PN/2 014 A.YS. 2003-04 TO 2007-08 11. THE ASSESSEE HAS FILED CROSS OBJECTIONS IN ALL THE IMPU GNED ASSESSMENT YEARS. THE LD. AR OF THE ASSESSEE HAS MADE STATEMENT AT THE BAR NOT TO PRESS THE GROUNDS RAISED IN THE CROSS OBJE CTIONS. ACCORDINGLY ALL THE CROSS OBJECTIONS FOR THE ASSESSMENT YEARS 2003- 04 TO 2007-08 ARE DISMISSED AS NOT PRESSED. 12. IN THE RESULT ALL THE FIVE APPEALS AS WELL AS CROSS OBJ ECTIONS ARE DISMISSED. ORDER PRONOUNCED ON FRIDAY THE 31 ST DAY OF JULY 2015 AT PUNE. SD/- SD/- ( . . / R.K. PANDA) ( ! ' / VIKAS AWASTHY) ACCOUNTANT MEMBER JUDICIAL MEMBER / PUNE; $% /DATED : 31 ST JULY 2015 RK/PS -(#./ 0 '. / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. & ) ( / THE CIT(A) KOLHAPUR 4. & /THE CIT-I/II KOLHAPUR 5. !)* + + - - 01 / DR ITAT B BENCH PUNE 6. * 2 3 / GUARD FILE. // ! + //TRUE COPY// % / BY ORDER #%1 2* PRIVATE SECRETARY ' /ITAT PUNE