TaxTMI 
TaxTMI 
TaxTMI 
2015 (9) TMI 495
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.... of the Act. This issue is also raised in ground nos. 2 and 3 in ITA Nos. 435/Ind/2010, 373, 374/Ind/2012 and 365/Ind/2013. Ground No. 1 in ITA Nos. 373 & 374/Ind/2012, 435/Ind/2010 and 365/Ind/2013 is general in nature. Hence, in all these six appeals there is a common ground relating to deduction u/s 80IB(10) of the Act but since in ITA Nos. 371 and 372/Ind/2012 the validity of reassessment proceedings has been challenged, therefore, we are deciding this issue first and thereafter we shall take the issue of deduction u/s 80IB(10) of the Act. 3. Brief facts of the case are that the assessee is a partnership firm engaged in the business of civil construction, developing building and housing projects. During the relevant period the assessee has developed various projects, viz. Mahendra Township Phase-I, Mahindra Township Phase-II, Mahendra City and Mahendra Greenwood. In the assessment year 2004-05 the assessee was allowed deduction u/s 80IB(10) of the Act while making the assessment u/s 143(3) of the Act. In the assessment year 2005-06 there was no scrutiny assessment and the return was processed u/s 143(1) of the Act. 4. The main contention of the learned counsel for the assesse....
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.... firm Joint Development Agreement 01.07.2002 07.06.2002 06.01.2006 14.02.2007 Approval 07.06.2002 07.06.2002 06.01.2006 14.02.2007 Income offered in A.Y. All Ays upto AY 2008-09 All Ays upto AY 2008-09 All AYs Only in A.Y.2009-10 8. For the issue that the permission is not given in the name of the assessee and ownership is also not belonging to the assessee, we hold that this issue has been settled by various judgments wherein even if the land was not in the name of the assessee and permission is not in the name of the assessee, then also the assessee was held to be eligible for deduction u/s 80IB(10) of the Act. Reliance is placed on the decision of the Hon'ble Gujarat High Court in the case of CIT vs. Radhe Developers; 341 ITR 402 (Guj.) wherein it was held - "The assessee had, in part performance of the agreement to sell the land in question, was given possession thereof and had also carried out the construction work for development of the housing project. Combined reading of s. 2(47)(v) and s. 53A of the Transfer of Property Act would lead to a situation where the land would be for the purpose of IT Act deemed to have been transferred to the assesse....
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....i) CIT vs. Mahalakshmi Housing; 41 Taxmann.com 146(Mad.) (ii) CIT vs. Nikhil Associates; 224 Taxman 219 (Guj) (iii) C.I. Builders Pvt. Ltd.; 20 ITJ 495 (Indore) (iv) CIT vs. Shajanand Associates; 44 taxman.com 458(Guj) (v) CIT vs. Moon Star Developers; 269 CTR 259 (Guj.) 10. This issue is considered by the Hon'ble Supreme Court in the case of CIT vs. Sarkar Builders dated 15.5.2015 wherein Hon'ble Supreme Court held as under :- "(g) From this provision, therefor, it is clear that the housing project contemplated under sub-section (10) of section 80IB includes commercial establishments or shops also. Now, by way of an amendment in the form of Clause (d), an attempt is made to restrict the size of the said shops and/or commercial establishments. Therefore, by necessary implication, the said provision has to be read prospectively and not retrospectively. As is clear from the amendment, this provision came into effect only from the day the provision was substituted. Therefore, it cannot be applied to those projects which were sanctioned and commenced prior to 01.04.2005 and completed by the stipulated date, though such stipulated date is after 01.04.2005. 21. These aspec....
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....ondition/restriction laid down in clause (d) of section 80IB(10) has to be revisited and/or looked at and complied with in the assessment eyar in which thye profits are offered to tax by the assessee. Whenthe assessee claims a deduction under section 80IB(10) the assessee is required to comply with such a condition only if it is on the statute book on the date of the approval of the housing project and it has nothing to do with the year in which the profits are brought to tax by the assessee. We have come to this conclusion only because we find that clause (d) of section 80IB(10) is inextricably linked to the date of the approval of the housing project and the subsequent development/ construction of the same and has nothing to do with the profits derived therefrom. We may hasten to add that if a particular condition si not inseparably linked to the date of approvfal of the housing project, different considerations would arise. However, we are not called upon to decide any such condition and hence we are not laying down any general proposition of law save and except that clause (d)of section 80IB(10) being a condition linked to the date of the approval of the housing project, would ....
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....ed." 11. With reference to the condition of completion certificate from the Municipal Corporation, Bhopal, it was submitted before us that the provisions of section 80IB(10) of the Act are incentives for the benefit of persons of lower and middle income group. The IT Act does not specifically mandates or lays down any enforceable compliance from the Municipal Corporation for issue of completion certificate. In this situation, the provisions of M.P. Municipal Corporation act, 1956 and M.P. Bhumi Vikas Niyam, 1984 are to be understood in the situation in which the tax payer is placed. M.P. Municipal Corporation Act, 1956, section 301 provides for completion certificate and permission to occupy or use the premises erected or reerected. As per these provisions, no building shall be occupied for residential or commercial purposes before the completion certificate is obtained from the Municipal Corporation, as desired under this section. However, there is a provision that when the Commissioner has failed for 15 days after the receipt of the notice of completion to intimate his refusal to grant permission then the person can occupy such building. In such a situation, M.P. Municipal Corpo....
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....ld that no statute should be interpreted in such a manner as to render any provision completely meaningless or redundant. He further submitted that the assessee should not suffer or should not be penalized for no fault. The assessee completed the project in all respects and applied for completion certificate and if the completion certificate is not issued by the competent authority then the assessee should not be penalized for his no fault. He relied on the following decisions :- (i) CIT Vs. Tarnetar Corporation (2012) 26 Taxman.com (ii) ACIT vs. Surendra Developers in ITA No.2743 to 2745/Del/2010 (iii) Hindustan Samuha Awaas Ltd. vs. ITO; ITA No. 945 to 950/PN/2010 (iv) ACIT vs. Girija Colonisers; 2417 to 2422/Del/2011 (v) M/s Vishnu Builders vs. ACIT; ITA Nos.178, 179 & 180Vizag/2011 12. On this issue we have heard both the sides in detail. These projects were sanctioned prior to the amended provisions of the Act. Municipal Corporation Act, 1956 provides that when the Commissioner fails to issue completion certificate within 15 days after the receipt of the notice of completion, the person is permitted to occupy the building. The assessee has given notice of completion and ....
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....not every condition of the statute can be seen as mandatory. If substantial completion thereof is established on record, in a given case, the court may take a view that minor deviation thereof would not vitiate the very purpose for which the deduction was being made available. In the present case, the facts are peculiar. The assessee has not only completed the construction two years before the final date and applied for BU permission. Such BU permission was not rejected on the ground that construction was not completed, but on some other technical ground. In that view of matter, granting relief of deduction cannot be held to be illegal. In ACIT vs. Surendra Developers in ITA Nos. 2743 to 2745/Del/2010 it was held as under :- "The ld. CIT(A), it is seen, has granted relief to the appellant on the basis of the fact that though the appellant had applied for completion certificate before the local authority6 in time, the said certificate was not issued in time by the local authority. Such issuance of completion certificate has been held and in our opinion, correctly so, to be beyond the control of the assessee." In the case of Hindustan Samudha Awas Ltd. vs. ITO in ITA Nos. 945 to ....
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....n respect of three projects were materialized on or before 31.03.2008. The Municipal authority has not pointed out any defect and irregularity in the appellant's application dated 26.11.2007 submitted for issuance of completion certificate of all the said projects. Therefore, in the light of facts found by the ld. CIT(A) and reasons given by him and respectfully following the aforesaid decision of ITAT, Pune Bench "B" in the case Hindustan Samuha Awas Limited (supra), we do not find any reason to take a view other than the view taken by the ld. CIT(A) in the present case. We, therefore, uphold the order of ld. CIT(A) and dismiss all these appeals filed by the revenue." Visakhapatnam Bench of the ITAT in the case of M/s Vishnu Builders vs. ACIT (ITA Nos. 178, 179 & 180/Vizag/2011) order dated 27th July, 2011 observed that completion certificate was not filed before the Assessing Officer and the proof of municipal tax assessment of various flat owners establishing that the housing project was completed before September, 2008 was filed. Since there was no practice of issuing the project completion certificate, therefore, it was held that it was not a condition precedent of filing....