TaxTMI 
TaxTMI 
2013 (9) TMI 528
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.... engaged in the business of construction of residential complexes. For the assessment year in dispute the assessee had filed its return on 01/11/2005 declaring total income of Rs. 3,85,000/- after claiming deduction u/s 80IB(10) of an amount of Rs. 86,84,567/-. Initially the assessment was completed u/s 143(3) of the Act accepting assessee's claim of deduction u/s 80IB(10) vide assessment order dated 28/12/2007. A search and seizure operation u/s 132 of the Act was conducted in the business premises of the assessee on 17/03/2009. Consequent upon the search operation, a notice was issued u/s 153A of the Act on 03/12/2009 calling for a return of income. In response to the notice u/s 153A of the Act, the assessee submitted its return on 01/02/2010 by admitting total income of Rs. 3,85,000/- after claiming deduction u/s 80IB(10) of the Act, as was done in the original return filed by it. In course of the assessment proceedings, which ensued in response to notice u/s 153A of the Act, the Assessing Officer noticed that the assessee has claimed deduction u/s 80IB(10) of the Act in respect of construction of a housing project in the name and style of "Manasa Sarover Heights - II". In a not....
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....ion by introducing new eligibility criteria. As per the amended provision, one of the condition is the date of completion of the housing project shall be the date on which the completion certificate is issued by the local authority. The CIT(A) was of the opinion that the purpose of introducing the condition of production of completion certificate issued by local authority is to ensure that every housing project has been constructed with all permissions and followed the bye-laws and allowed setbacks as prescribed in the sanction order issued by the competent authority. Therefore, mere filing of house tax assessment of individual flat owners does not prove that the housing project was constructed with all permissions and without any violation. The CIT(A) observed that it is the responsibility of the municipal authority to ensure the housing projects which come up in the towns and cities are as per norms for better living conditions and not to encroach on the public property and to ensure that a design and construction in tune with the notifications issued by the competent authority from time to time. The CIT(A) came to a conclusion that special deductions as contemplated in the Incom....
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....lfilled all the preconditions as required for claiming deduction u/s 80IB(10). The project is on a land measuring more than 3 acres, the assessee is the owner of the land and the individual residential unit are less than 1500 sft. that besides housing project was approved in the June, 2004 by the competent authority and the project was completed within the prescribed period is evident from the fact that municipal tax assessments in case of individual flat owners have been completed. This proves the fact that the project was complete during the relevant financial year and within the prescribed time. In support of such contentions, the learned AR drew our attention to page 94 to 103 of the paper book. The learned AR submitted that the turnover of each of the project disclosed in the return of income would also support the fact that the project has been completed. The learned AR submitted that section 80IB(10) is a beneficial provision of tax incentive and should be interpreted liberally so as to confer the benefit keeping in view the intention of the legislature and object behind the introduction of the provision. In this context, the learned AR relied upon the CBDT Circular No. 5/20....
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....such undertaking has commenced or commences development and construction of the housing project after the 1st day of October, 1998 and completes such construction within 4 years from the date of approval of the housing project as approved by the local authority. The explanation to the above said clause makes it mandatory that the date of completion of the housing project shall be the date on which the completion certificate in respect of such housing project is issued by the local authority. The learned Departmental Representative submitted that an Explanation once enacted as part of existing provision becomes part and parcel of such provision from the date of the provision itself. The learned Departmental Representative submitted that the true import and scope of an explanation is to remove obscurity or vagueness and to provide additional support to the dominant object and to fill in gaps. The object of the explanation is to interpret the true purpose and intent of the enactment. The learned Departmental Representative in this context relied upon the following decisions: 1. Bengal Immunity Co. Ltd. v. State of Bihar [1955] 6 STC 446 (SC). &nb....
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....: "10) The amount of deduction in the case of an undertaking developing and building housing projects approved before the 31st day of March, [2008] by a local authority shall be hundred per cent of the profits derived in the previous year relevant to any 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 construction,- (i) in a case where a housing project has been approved by the local authority before the 1st day of April, 2004, on or before the 31st day of March, 2008; (ii) in a case where a housing project has been, or, is approved by the local authority on or after the 1st day of April, 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 approved by the local authority;  ....
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.... is higher];] (e) not more than one residential unit in the housing project is allotted to any person not being an individual; and (f) in a case where a residential unit in the housing project is allotted to a person being an individual, no other residential unit in such housing project is allotted to any of the following persons, namely:- (i) the individual or the spouse or the minor children of such individual, (ii) the Hindu undivided family in which such individual is the karta, (iii) any person representing such individual, the spouse or the minor children of such individual or the Hindu undivided family in which such individual is the karta.] [Explanation.-For the removal of doubts, it is hereby declared that nothing contained in this sub-section shall apply to any undertaking which executes the housing project ....
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....completion certificate issued by the local authority cannot be overlooked or brushed aside for conferring a benefit upon the assessee only for the sake of liberal interpretation. The requirement of completion certificate assumes importance for removing the possibility of deviation from the sanctioned plan and to see to it that the project has been constructed in accordance with the sanctioned approval. It is settled principle of law that when the language of a provision is clear and unambiguous then there is little scope to interpret it in a different manner. The Hon'ble Supreme court in case of IPCA Laboratories Ltd. (supra) has held that even though a liberal interpretation has to be given, the interpretation has to be as per wording of the section. If the wordings of section are clear, then benefits, which are not available under section, cannot be conferred by ignoring or misinterpreting words in the section. The Hon'ble Supreme Court in case of Petron Engg. Construction (P.) Ltd. (supra) held that liberal interpretation of an incentive provision can be resorted to only when it is possible without impairing the legislative requirement and the spirit of the provision. Where the ....
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....ered to be in compliance with the statutory provision. 14. The decision of the Hon'ble Gujarat High Court in case of CIT v. Tarnetar Corpn relied upon by the assessee is not applicable to the facts of the present case as in that case there was no doubt with regard to completion of the project whereas in the appeal before us the assessee has failed to prove conclusively that the housing project was complete in all respects for entitling it to claim deduction u/s 80IB(10). The other decisions relied upon by the assessee in this context are also found to be factually distinguishable. In case of Mahaveer Calyx (supra) the Income-tax Appellate Tribunal Bangalore Bench has not at all considered the applicability of explanation to clause (a) of 80IB(10). In fact in case of Brahma Associates (supra) has held that the conditions laid down in the amended provision of section 80IB(10) would apply prospectively from the AY 2005-06. In our view, the decisions relied upon by the assessee are of not much help to it if considered in the light of the principles laid down by the Hon'ble Supreme Court as discussed herein before. So far as the assessee's contention to the effect that the entire issue....
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....annual value of the property as quantified at Rs. 2,10,39,214/- in the assessment order u/s 143(3) should be added back to the total income while completing the assessment u/s 153A also. The assessee challenged the addition made on account of ALV of the house property before the CIT(A). 18. The CIT(A) while disposing of the assessee's appeal on this issue held that since the addition was made in the original assessment completed u/s 143(3), the Assessing Officer is not correct in making fresh addition in the proceedings u/s 153A of the Act. 19. After hearing the submissions of the parties on this issue, we fully agree with the conclusion of the CIT(A). The same addition having already been made in the original assessment completed u/s 143(3) it cannot be added once again in the assessment completed u/s 153A of the Act. So far as legality/validity of the addition made in the assessment order passed u/s 143(3) is concerned, since the same is not in dispute before us, we cannot adjudicate on the issue. Since the CIT(A) has categorically held that the addition of Rs. 2,10,39,214/- cannot be made in the assessment completed u/s 153A of the Act, the ground raised by the assessee is mis....
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....mpletion certificate from the local authority. The CIT(A) further observed that the assessee has fulfilled all the conditions of section 80IB(10) as it existed in the statute book at the relevant time which are, i) the development and construction of the project was started after 1st October, 1998, ii) the project is on plot of land of more than 1 acre, and iii) the residential units are having built up area of less than 1,500 sq.ft. The CIT(A) further observed that the provision contained u/s 80IB(10) nowhere prescribed that for availing deduction u/s 80IB(10) the undertaking must be the owner of the land. So far as the allegation of the Assessing Officer that the assessee has not furnished the auditor's report, the CIT(A) observed that in the original scrutiny assessment the issue was verified and the claim of deduction was allowed by the Assessing Officer. On the basis of the aforesaid findings, the CIT(A) allowed the claim of deduction u/s 80IB(10). 24. The learned Departmental Representative supporting the grounds raised before us submitted that as the assessee did not submit the audit report in form 10CCB before the Assessing Officer the disallowance made by the Assessing Of....
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....er has not accepted the Assessing Officer's allegation with regard to non furnishing of information and evidence towards fulfillment of the conditions u/s 80IB(10) by observing that the issue has been verified in the original scrutiny assessment proceedings. IN our opinion, that cannot be a ground for not furnishing the required information and evidence as called for by the Assessing Officer during the proceeding u/s 153A of the Act. In the aforesaid view of the matter, we deem it fit and proper to remit the matter back to the file of the Assessing Officer who shall consider the claim of deduction u/s 80IB(10) afresh after affording a reasonable opportunity of being heard to the assessee. It is open for the assessee to produce all the information and evidence in support of its claim of deduction u/s 80IB(10). The Assessing Officer shall consider all the information and evidences that may be produced by the assessee and decide the issue keeping in view the observations made by us hereinabove. The grounds raised by the department are allowed for statistical purposes. ITA No. 380/Hyd/12 for AY 2004-05 - appeal by the revenue 27. Ground Nos. 1 & 2 wherein the Department has challenge....
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.... the assessment order that the Assessing Officer has determined the income from house property by following the market rate method as per the assessment order passed u/s 143(3) read with section 147 dated 24/03/2006 for the assessment year 2003-04. It is a fact on record that the said assessment order passed for the assessment year 2003-04 along with assessment orders passed on similar lines for the assessment year 2002-03 and 2005-06 were subject matter of appeal before the Income-tax Appellate Tribunal, Hyderabad Bench in ITA Nos. 1182 and 1183/Hyd/2008 and 1713/Hyd/08. The Tribunal in its order dated 23rd October, 2009 directed the Assessing Officer to recompute the income from house property by following the return on investment method, applying the rate of 7% on the assessee's investment in the property as enhanced by applying the cost inflation index applied for the respective years to arrive at the ALV for the relevant assessment year. The facts being identical, since the CIT(A) has followed the direction of the Income-tax Appellate Tribunal while directing the Assessing Officer to recompute the income from house property, we do not find any reason to interfere with the same....