TaxTMI 
TaxTMI 
2016 (2) TMI 566
X X X X Extracts X X X X
X X X X Extracts X X X X
....sessee are accepted, the above mentioned grounds raised in the respective assessment years are dismissed as withdrawn. As far as other grounds raised in the appeals, they all relate to single issue i.e. disallowance of deduction claimed u/s. 80IB(10) of the Income Tax Act, 1961 (hereinafter referred to as "the Act"). 3. The facts of the case as emanating from the record are: The assessee is a partnership firm engaged in the business as promoter and developer of real estate. The assessee developed housing project under the name 'Laxmi Vihar' at Hadapsar, Pune comprising of 108 residential units. The commencement certificate in respect of the above said project was issued to the assessee by Pune Municipal Corporation (PMC) on 01-02-2002. The assessee allegedly completed the project prior to 31st March, 2008 and claimed deduction u/s. 80IB(10) of the Act. The assessee follows project completion method of accounting and accordingly offered profits for taxation on the completion of flats and their sale. The assessee offered the following income from sale of flats in the impugned assessment years. Assessment years Profits from sale of flats 2003-04 Rs.8,19,720/- 2004-05 Rs.48,45,....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tended that in the first instance the assessee was not required to obtain completion certificate from the PMC to claim deduction u/s. 80IB(10) and secondly, the assessee had completed the project well before 31-03-2008. Therefore, the assessee was eligible to claim deduction u/s. 80IB(10) of the Act. The ld. AR in order to support of his submissions placed reliance on the following decisions : i. Commissioner of Income Tax Vs. Sarkar Builders, 375 ITR 392 (SC); ii. M/s. Satish Bora & Associates Vs. Assistant Commissioner of Income Tax, ITA Nos. 713 & 714/PN/2010 decided on 07-01- 2011 (ITAT, Pune); iii. Income Tax Officer Vs. M/s. Paras Construction, ITA Nos. 584 to 588/PN/2013 for the assessment years 2003-04 to 2007-08 decided on 31-07-2015. 5. On the other hand Shri Dheeraj Kumar Jain representing the Department vehemently supported the findings of the Commissioner of Income Tax (Appeals) in rejecting the claim of assessee u/s. 80IB(10) of the Act. The ld. DR submitted that there is no dispute about the date of commencement of the project. Since, the project started before 1st April, 2004 the project should have been completed by 31-03-2008. Whereas, in the case of the as....
X X X X Extracts X X X X
X X X X Extracts X X X X
..... In the present set of appeals the only issue raised by the assessee is denial of deduction u/s. 80IB(10) for non-completion of project before the due date. Undisputedly, the commencement certificate was issued to the assessee in respect of project 'Laxmi Vihar' on 01-02-2002. As per the contention of the assessee the project was completed in all respects on 16-05-2005 and accordingly an application was made to the PMC for issuance of completion certificate. However, the PMC issued completion certificate in response to the said application of the assessee on 09-10-2009. 8. As per the provisions of section 80IB(10)(a) the project commenced before 01-04-2004 should be completed on or before 31-03-2008, to be eligible to claim deduction. In the instant case, the final completion certificate was issued by the PMC on 09-10-2009. The assessee has also placed on record a letter/communication from PMC dated 31-01-2011, in response to the application of the assessee under Right to Information Act. In the said letter the PMC has mentioned that an application was made on 16-05-2005 for occupation certificate of the building, no objection is found to the said matter. The relevant extract of ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....reby the condition for obtaining completion certificate was inserted. The Hon'ble Supreme Court of India in the case of Commissioner of Income Tax Vs. Sarkar Builders (supra) has held that the Department cannot deny the benefit of section 80IB(10) applying the principle of retroactivity, even when the provision has no retrospectivity. 10. We find that the issue in hands is covered by the decision of Coordinate Bench of the Tribunal in the case of Income Tax Officer Vs. M/s. Paras Construction (supra), wherein the Tribunal in similar circumstances after placing reliance on the decision rendered in the case of Runwal Developers Vs. ACIT in ITA No. 1339/PN/2010 decided on 30-12-2014 has held as under: "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 commenced 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) to the assessee on the ground that the completion certificate was given by the local authority after 31-03- 2008. T....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ity i.e. PMC on or before 31.03.2008. However, the case setup by the assessee is that the project of the assessee was approved 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 undertaking developing and building housing projects approved before the 31st day of March, 2005 by a local authority, shall be hundred per cent. of the profits derived in any 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 tile 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 situa....
X X X X Extracts X X X X
X X X X Extracts X X X X
....redevelopment of existing buildings in areas declared 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 area of one thousand square feet where such residential unit is situated within the cities of Delhi or Mumbai or within twenty-five kilometres from the municipal limits of these cities and one thousand and five hundred square feet at any other place; (d) the built-up area of the shops and other commercial establishments included in the housing project does not exceed three per cent. of the aggregate built-up area of the housing project of five thousand square feet, whichever is higher." 10. In the instant assessment year i.e. 2006-07, the Assessing Officer has sought to disallow the deduction claimed by the assessee on the ground that the completion certificate in terms of Explanation (ii) has not been obtained. A similar situation had arisen before the Hon'ble Delhi High Court in the case of CHD Developers Ltd. (supra). In the case before the Hon'ble Delhi High Court, the project of the assessee was approved on 16.03.2005 and the Assessing Officer proceeded ....