TaxTMI 
TaxTMI 
2010 (7) TMI 605
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....than 1,500 sq.ft., had subsequently modified his report and stated that the built-up area was 1521.74 sq. ft., (ii) the assessee which was recognizing revenue based on percentage completion method did not file the completion certificate from the local authority. 3. In its reply to the show-cause, it was submitted by the assessee that there was a report dt.05.10.07 from the DVO, in which the built-up area of each of the flat was shown as less than 1,500 sq. ft. and it was in its revised report dt.28.12.07 that the DVO had increased the built-up area. According to the assessee, the revised report of the DVO was not correct, especially since the report of a Registered Valuer prepared by it and given to the Assessing Officer, clearly stated the built-up area was less than 1,500 sq. ft. Vis-a-vis the issue regarding completion certificate, assessee relied on the letter dt.01.06.05 issued by Corporation of Chennai, which according to it, proved that the building was completed. 4. However, the CIT was not impressed. According to him, the revised report of the DVO dt.28.12.07 was not taken into consideration by the Assessing Officer while passing the assessmen....
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....ficer. Considerable stress was placed on the letter dt.31.12.07 of the Assessing Officer addressed to the DVO for strengthening his contention that there was proper application of the mind by the Assessing Officer in considering the original report dt.05.10.07 of the DVO as more appropriate, since it had excluded inaccessible projections from the built-up area. Coming to the issue regarding completion certificate, Ld. AR submitted that the assessee was following percentage completion method and not completed the contract method. According to him, the relevance of the completion certificate was for whole of the project and when assessee was returning income based on percentage completion method, it was not vital. Further continuing his arguments, Ld. AR submitted that there was no case for the Revenue that assessee had failed to produce a certificate after the completion of whole of the project. Reliance was also placed on the letter dt.01.06.05 from the Assistant Revenue Officer of the Corporation of Chennai addressed to the assessee wherein it was mentioned that they had found the residential building complex to have been completed, when they visited the premises. Reliance was als....
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.... interest of the Revenue' included an erroneous order, which resulted in a person not paying a tax lawfully payable, he relied on the decision of Hon'ble Apex Court in a case of Malabar Industrial Company Ltd. Vs. CIT 243 ITR 83. For his contention that when there was no enquiry caused to be done by the Assessing Officer, there was an error prejudicial to the interest of the Revenue, Ld. DR relied on the decisions of the Hon'ble jurisdictional High Court in the case of CIT Vs. Andhra Civil Construction Ltd., reported in 261 ITR 461 and CIT Vs. South India Shipping Corporation Ltd., reported in 233 ITR 546 . Referring to the assessment order, Ld. DR submitted that there was nothing in it regarding the admissibility of the claim of the assessee for deduction u/s.80-IB(10) of the Act and therefore, there was a patent non -application of mind as held by Co-ordinate Bench of this Tribunal's decision in a case of M/s.Covansys (India) Pvt. Ltd., Vs. ACIT (ITA No.1357/Mds/07 dt.14th May, 08) and M/s.South India Travels (P) Ltd., Vs. ACIT ( ITA No.624/Mds/08 dt. 13th Jan.,09). ... 7. We have heard the rival submissions and perused the orders. The question here is whether the CIT wa....
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.....10.2007 (TR.PAL'No. 461) It could be seen that no reasons/basis whatsoever given in the letter fa ,variations in the measurements. Therefore it is requested to clarify 1. Reasons for variations , 2. Whether flat area is inclusive of common area? If yes the extent a such common area included.- 3. What are the actual 'built up area' 'of those flats? 4. In this respect clarification should be given specifically on the basis of built up area as explained in section 80IB(14) which :is as under.:- "built up area' means the inner measurement of the residential unit at the floor level including the projections and balconies 48 increased by the thickness of the wall outdoes not include the common_areas shared with other residential units" Further the assessee had obtained Valuation Report from Registered Valuers Dr. A Krishnamurthy dt. 20.12.01 and Mr. Palanivelu Viswanathan, Architect dt. 24.12.01. The Xerox copies of these reports along with enclosures , are sent herewith for your kind perusals. In those reports built up area of the above fiats No. IA, 2A, 3 A of Block A had been shown less than 1500 Sq.ft as per physical measurement carried' on by ....
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....ercising his power u/s.263 of the Act, the record of proceedings would include records available to him at the time of examination, as held by Hon'ble Apex Court in the case of CIT Vs. Shree Manjunathesware Packing Products and Camphor Works (supra). But here there was nothing more with the CIT which would add to the report of the DVO dt.28.12.07 in which it was clearly mentioned that three of flats had built-up area exceeding 1,500 sq.ft. In Gee Vee Enterprises case (supra), Hon'ble Delhi High Court, held that cryptic order of the Assessing Officer passed without application of mind would render it erroneous and prejudicial. But in our opinion, this decision would have no applicability on the circumstances here, since the records show a clear application of mind by the Assessing Officer. As for the reliance placed on the decision of Mallabar Industrial Co., (supra), Hon'ble Apex Court was in-seisin of a case where there was total absence of material, to support the claim of the assessee that an amount received from the purchaser of a rubber estate, for delayed payment, represented compensation for loss of agricultural income. Such claim of the assessee was accepted by the Assessin....
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....lowing the percentage completion method, it is necessary to obtain such completion certificate for each year of his claim or is it sufficient that such certificate is obtained on the completion of the housing project as a whole. Stipulation for obtaining completion certificate should not be so interpreted to mean that an assessee can claim exemption u/s.80-IB(19) only in the year of completion of the whole of the housing project, even where the project stretches over a period number of years and assessee returns its income based on percentage completion method. It would only mean that assessee has to obtain such certificate on completion of the project, lest it would loose the deduction already granted u/s.80-IB(10) for the earlier year. As held by Hon'ble apex Court in the case of Bajaj Tempo Ltd Vs. CIT 196 ITR 188, a provision in the taxing statute granting incentives for promoting growth and development should be construed liberally. When such liberal interpretation is to be given, the restrictions placed in such provisions granting the incentives also has to be construed so as to advance the objective of the provision and not to frustrate it. Clause (a) of Sec.80-IB(10) specif....