TaxTMI 
TaxTMI 
2014 (9) TMI 1145
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....mpletion certificate vide letter dated 3 1/03/2008, but not obtained due to the reason beyond the control of assessee, deduction u/s 801B(10) cannot be denied. d) Obtaining a completion certificate is a technical formality and that cannot be a ground for denying deduction u/s 801B(10). e) Beneficial provision should be interpreted liberally. 4. The Ld. CIT(A) failed to considered that project has no commercial area. 5. The Ld. CIT(A) failed to considered that revised development permission was issued for other part of land belong to other person. 6. The Ld. CIT(A) erred in confirming charging interest under section 234B and 234C. 7. The Ld. CIT(A) in confirming invocation of provision u/s 271(1)(c) 8. The assessee crave leave to add further grounds or to amend or alter the existing grounds of appeal on or before the date of hearing". 2. The assessee is a firm engaged in the business of builder and developer in the Vasai-Virar region of Thane Dist. Shri Purushottam A. Kawali the original owner of the land was awarded with commencement certificate from CIDCO as per letter No.CIDCO/VVSR/BP-1087/W/2500 dated 5/3/2004 wit....
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....e issued under section 133(6) has stated that it did not issue completion certificate to the assessee and as per letter received from Vasai-Virar Municipal Corporation permission of revised development plan was issued vide letter dated 23/3/2010. Thus AO observed that assessee did not complete the building within the mandatory time line i.e. 31/3/2008. iii. According to details filed before AO the assessee had been incurring expenditure beyond 31/3/2008 in the shape of fixing of kitchen doors, sliding windows, electric meter purchase, loft tank purchase, plumbing pipes, electric wiring cables etc. which is indicative of the fact that project of the assessee was not complete. 2.2 Further the AO rejected the contention of the assessee that completion certificate issued by Gram Panchayat Bolinj, Virar should be considered to be fulfillment of the condition of completion of project. The AO rejected such contention on the basis that the certificate issued by Gram Panchayat will not serve the purpose of the assessee and only CIDCO could issue such certificate, therefore, the certificate issued by Gram Panchayat cannot be taken as fulfillment of the condition of completion of ....
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....on of putting them into effect did not arise at that time. The old provisions never required the completion certificate and hence, the assessee is not required to obtain the same. Hence, in view of the above, we request your honour to grant a sympathetic consideration towards the assessee and allow the claim of deduction under section 80 IB(10) of the IT Act, 1961." 2.5 After considering the aforementioned submissions of the assessee Ld. CIT(A) has come to the conclusion that prima facie the project was not approved by Local Authority i.e. CIDCO as housing project but as residential building in shop line as there was no provision for commercial area in housing project prior to 01/04/2004. The completion certificate was not issued by Local Authority/Competent authority i.e. CIDCO till the date of the assessment order. The project of the assessee could not be considered to be complete in view of the facts mentioned by the AO in the assessment order. The permission to construct the structure was given by the Local Authority i.e. CIDCO and the completion certificate was issued by another Local Authority i.e. Gram Panchayat Bolinj, Virar. Though Gram Panchayat may be a Compe....
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.... completion certificate from another Local Authority. The permission to construct the structure was given by the Local Authority i.e. CIDCO and the completion certificate was issued by another Local Authority i.e. Gram Panchayat, Bolinj, Virar. The appellant submitted that Gram Panchayat also was a competent authority to issue the completion certificate to claim the benefit of deduction u/s.8OlB(10) of the Income Tax Act. However, I am of the opinion that Gram Panchayat may be a competent authority to issue such a certificate but in the instant case, the permission to construct the building was not accorded by the Gram Panchayat, Bolinj, Virar. The appellant had applied for completion certificate from CIDCO only and could not obtain from the said competent authority. In the circumstances getting a certificate from another Local Authority cannot hold any validity. It may be a Local Authority as defined by the Income Tax Act but the question remains in the instant case whether it is a competent authority to issue the certificate of completion to 'the appellant. The question of 'competence' has not been proved by the appellant either, before the Assessing Officer or before the appella....
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....r book. However, it was submitted during the course of hearing and copy was also given to Ld. DR) It was submitted by Ld. AR that the condition regarding completion of project is not applicable on the project which are approved before 31/3/2005. Ld. AR has submitted a chart showing the essential conditions before 01/04/2005 and after 01/04/2005 and the said chart read as under: SN Head Before 1.4.05 After 1.4.05 Remarks 1. Cut of Date Projects approved before 31.3.2005 Projects approved before 31.03.2007 Deduction period increased 2. Commencement After 1.10.1998 After 1.10.1998 Same 3. Completion No Provision i) Projects approved before 1.4.2004 on or before 31.03.2008 ii. Projects approved after 1.4.2004 within 4 years from the end of the financial year in which approval received These provisions added 4. Area Minimum 1 acre Plot size. Minimum 1 acre Plot size Same. 5. Maximum built up area 1000 sq.ft. or 1500 sq.ft. as applicable according to cities 1000 sq.ft. or 1500 sq.ft. as applicable according to cities Same 6. Built up area No definition B....
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.... The assessee has fulfilled all the conditions. In the circumstances, I accept the plea of the representative that deduction u/s. 80 IB(10) cannot be denied merely because the appellant did not obtain the completion certificate on or before 31.3.2008. In view of above, I find that there is no justification for denying deduction u/s. 80IB(10)." 10. Aggrieved by the stand so taken by the CIT(A), the revenue is in appeal before us. ii. Having heard the learned Departmental Representative and going to the facts of the case and detailed reasoning given by the CIT(A), we are not inclined to disturb the well reasoned order of the CIT(A), wherein, he has allowed the claim for deduction u/s. 80 IB(10)) to the assessee firm." (3) CIT vs. Jain Housing & Construction Ltd. ( 2013) 30 Taxaman.com 131 (Mad) - In this case it was held by Hon'ble Madras High Court that it is difficult to accept the case of Revenue that that the claim for deduction has to be rejected on the ground that assessee did not furnish the completion certificate as there was no such requirement under section 80 IB(10), as it stood during the relevant assessment year 2004-05. 3.4 Ld. AR further subm....
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....hrough a separate development agreement dt 25.4.2003 entered between LIFPL & M/s Hickson & Dadajee Put .Ltd (owner of the property) In other words the development right of the property was divided between the assessee for constructing residential flats and shopping complex at ground floor to LIFPL. The considerations to be paid by the appellant Housing project of the assessee is different and distinct from the project for building commercial area by another entity. Housing project does not include construction of commercial establishment carried but by another entity in that area. Therefore claim of the assessee for deduction u/s 801B(10) for the housing project cannot be denied because the commercial project was carried out by a sister concern. and LIFPL were fixed at Rs. 11.56 crore & 2 crore respectively in lieu of development rights received by them. 3.6 He has also relied upon the decision of Hon'ble Bombay High Court in the case of CIT vs. Vandana Properties, 353 ITR 36 (Bom) and reference was made to the following observations: "The expression "housing projects" is neither defined under Section 2 of Act nor under section 801B(10) ....
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....ase of CIT vs. Jain Housing Construction (supra) that such condition of submission of completion certificate was not applicable to the projects which have been approved by the Public Authority before 31/3/2005. In the present case the project was approved for commencement vide letter of CIDCO dated 05/03/2004. Thus, the project was approved for commencement before 31/3/2005 and old law will apply when it was not a condition precedent to submit completion certificate. In view of these decisions and also the decisions of Co-ordinate Benches relied upon by Ld. AR which have been discussed in the above part of this order we hold that deduction u/s. 80 IB (10) cannot be denied to the assessee for want of completion certificate from CIDCO. 5.1 The other objection by the AO is regarding commercial element which according to the submissions of the assessee is not applicable to the case of the assessee as there is no commercial element in the project constructed by the assessee and commercial element, if any, for development was in another project which is not the subject matter of this appeal. 5.2 It may also be mentioned here that though AO has given a passing remark for disallowing....