TaxTMI 
TaxTMI 
2017 (4) TMI 774
X X X X Extracts X X X X
X X X X Extracts X X X X
.... "(i) Whether Income Tax Appellate Tribunal was correct in law, under the facts and circumstances of the case in holding that the Assessee fulfilled the conditions laid down in section 80IB(1) of the Act without appreciating that at the time of commencement of the project the assessee had right, claim and interest in only 2657 Sq. Mtrs. of plot area of which is less than 1 Acre and thus it failed to fulfilled the stipulated condition for claiming the said deduction. (ii)Whether Income Tax Appellate Tribunal was correct in law, under the facts and circumstances of the case in holding that furnishing of the report in form No. 10CCB as per the requirement of Section 80IB (13) read with Section 80IA (7) is only directory and not mandatory and allowing the claim of the Assessee on the basis of report furnished in the course of assessment proceedings." 2. Connected Appeal No. 6 of 2012 has arisen from judgement and order dated 15.12.2011 passed by Tribunal in I.T.A. No. 72/LKW/2011 relating to A.Y. 2007-08. Revenue has preferred this appeal and it was admitted on the following substantial question of law: "Whether learned Income Tax Appellate Tribunal erred in....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nd information on record, and misinterpretation of the relevant provisions of law." 5. Fourth appeal No. 29 of 2014 relates to assessment year 2008-09 and assails judgement and order dated 11.4.2014 passed by Tribunal in C.O. No. 18/LKW/2013 filed by Assessee, together with I.T.A. No. 319/LKW/2013. It was admitted on followings question of law : "(i) Whether Section 80IB (10) as had been brought on the statute book by Finance (No.2) Act of 2004 w.e.f. 1.4.2005, in substitution of earlier provision, could be made applicable in the instant case where the project had been approved by the prescribed authority on 22.06.2003 i.e. prior to 1.4.2004. (ii) Whether on a true and correct interpretation of the provisions contained in the substituted Section 80IB (10) of the Act, the Tribunal was legally correct in holding that 'completion certificate' dated 21.10.2009 issued by LDA in response to the Assessee's application dated 14.3.2008 and dated 27.03.2008 did not meet the requirement of law so as to call for rejection of Assessee's claim for exemption thereunder. (iii) Whether looking to the overall scheme of the 'relief giving provision....
X X X X Extracts X X X X
X X X X Extracts X X X X
....AO') disallowed deduction claimed by Assessee under Section 80IB (10) on the following grounds: "1. Audit report as per Rule 18BBB in form no. 10CCB had not been filed along with the return. 2. Such report dated 02.09.2005, filed on 19.11.2007 did not conform to facts and the report had not been furnished along with the return, has lost relevance. 3. The project had been executed on three plots having number 27 A/1, 27A/2 and 27A/3 and there was no single plot having the minimum area of 1 acre or more." 12. Aggrieved by order of AO, Assessee preferred appeal before Commissioner of Income Tax (Appeals) [hereinafter referred to as "CIT (A)"]. Vide order dated 18.11.08 appeal was allowed and CIT (A) held that Assessee is eligible for deduction. Revenue carried the matter in appeal before Tribunal, who, vide order dated 8.4.2010, upheld the view taken by CIT (A) that Assessee is entitled for exemption as claimed under Section 80IB (10). Appeal of Revenue on this ground was rejected. 13. This has been challenged in Income Tax Appeal No. 73 of 2010, pointing out that first approval was granted by LDA to the building plan of housing project of Assessee....
X X X X Extracts X X X X
X X X X Extracts X X X X
....on 80IB (10) to the tune of Rs. 4348943/-. AO disallowed deduction and passed assessment order dated 25.11.08 computing total income at Rs. 6160410/-. CIT (A) dismissed appeal and confirmed assessment order vide order dated 30.11.2011. Assessee carried the matter to Tribunal. It has also dismissed Assessee's appeal upholding disallowance of deduction on the ground of non-availability of completion certificate. 17. Now coming to Assessee's appeals for A.Y. 2008-09, income of Rs. 1216014/- was disclosed in the return filed on 30.9.08 after claiming deduction under Section 80IB (10). The said deduction was disallowed by AO vide order dated 28.12.2010. The reason included the size, being less than one acre, and that the condition of obtaining completion certificate by 31st March, 2008 was not complied with. 18. Section 80IB (10) as it existed before 1.4.05 reads as under: "80IB (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 proj....
X X X X Extracts X X X X
X X X X Extracts X X X X
....of construction of the housing project shall be taken to be the date on which the completion certificate in respect of such housing project is issued by the local authority; (b) the project is on the size of a plot of land which has a minimum area of one acre: Provided that nothing contained in clause (a) or clause (b) shall apply to a housing project carried out in accordance with a scheme framed by the Central Government or a State Government for reconstruction or redevelopment of existing buildings in areas declared to be slum areas under any law for the time being in force and such scheme is modified 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 kilometers 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 percent of the aggregate built-up area of the housing project of five thousand square feet, whichev....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the plot admeasuring 2657 sq. mts. Subsequently, revised plan was approved by LDA on 22.6.03 to the total aggregate land i.e. 4550.07 sq. mts. 26. One of the essential conditions to attract deduction under Section 80IB (10) is that the housing project approved by local authority must be on the size of a plot of land which has a minimum area of one acre. The word 'plot' itself has not been clarified or explained anywhere that it may include contiguous plots, more than one, so as to satisfy requirement of minimum area of one acre. 27. CIT (A) called for a remand report from AO during course of appellate proceedings, as to whether housing project had actually been developed on an integrated plot of land admeasuring 4550.07 sq. mt. or otherwise. Remand report submitted by AO has been reproduced by CIT (A) in its order dated 18.11.08. This report and other material has been discussed in para 8.2 to 8.11 of order dated 18.11.2008. This is part of record in I.T.A. No. 73 of 2010. 28. Basic facts are not disputed in this regard. In fact, they are relied in written arguments submitted by Assessee. 29. Plot No. 27-A/1, Jopling Road, Lucknow, area 52.44 sq. mts. was purcha....
X X X X Extracts X X X X
X X X X Extracts X X X X
....med to be applicable to those plots which became available to Assessee much subsequently. 37. Revised plan was approved by LDA on 22.6.2003. On this date also Assessee had in possession only two plots i.e. 27-A/2 ( are 2657 sq. mtrs.) and 27-A/1 (area 52.44. sq. mtrs). Third plot i.e. plot no. 27-A/3 (area 1840.63 sq. mtrs.) came to be possessed by Assessee on 14.10.2003 i.e. much after second approval granted by LDA on 22.6.2003. Therefore, second approval cannot be said to include area of land which was not even available with Assessee in any capacity. 38. Sub-section (10) of Section 80IB was broadly amended by Finance Act of 2004 w.e.f. 1.4.2005. With regard to clause (d) of sub-section (10), in Commissioner of Income Tax-19, Mumbai Vs. Sarkar Builders (2015) 375 ITR 392(SC), Court has already held that it is prospective and shall not apply to the projects which were approved before 1.4.2005. Same is the position in respect of clause (c) of Section 80IB (10). However, with respect to clause (a) and its explanation, we find that it was not a new condition with regard to completion of project and only it was reintroduced after a short gap by Finance Act of 2004. On this aspe....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Assessee cannot be made to suffer if it filed audit report in form 10CCB in the course of assessment proceedings and not alongwith return. 45. Question No. 1 in ITA No. 29 of 2014 has to be answered partly in favour of Assessee and partly in favour of Revenue. 46. Clause (d) of Section 80IB (10) came to be inserted for the first time, is prospective and shall not apply to housing projects approved before 1.4.2004 but the same effect is not applicable to other parts of Section 80IB (10) and in particular clause (a) with which Assessee in the present appeals is concerned. The aforesaid clause has to be observed by Assessee even if its project stands approved before 1.4.2004 and in this regard a detailed judgement has already been given on 7.4.2015 in ITA No. 9 of 2014 and other connected appeals (Commissioner of Income Tax v. M/s Arif Industries Ltd.). and for the reasons stated therein in respect of Section 80IB(10)(a), as amended w.e.f. 1.4.2005, we answer that it will apply to the projects approved before 1.4.2004 also and it is only clause (d), came to be inserted w.e.f. l.4.2005, which is prospective. 47. Questions no. 2, 3 and 4 in ITA No. 29 of 2014 and questions no. ....