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TaxTMI 
TaxTMI 
TaxTMI 
2015 (1) TMI 1376
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....irement of obtaining completion certificate and Gram Panchayat was the competent authority at the relevant time to issue completion certificate. It was also pleaded that assessee applied for completion certificate vide letter dated 31/03/2008 but was not granted such certificate which was beyond the control of the assessee. Plea was also raised that section 80IB(10) of the Act is a beneficial provision, consequently, it should be interpreted liberally. Reliance was placed upon the Delhi Bench of the Tribunal in the case of CHD Developers Ltd. which was approved by Hon'ble Delhi High Court in (2014) 43 taxman.com 249 (Del.). Reliance was also placed upon the decisions in ITO vs SAI Krupa Developers (ITA NO.3661/Mum/2011), CIT vs Jain Housing & construction Ltd. (2013) 30 taxman.com 131 (Mad.), and Manan Corporation vs ACIT (ITA No.1053 of 2011 order dated 03/09/2012) from Hon'ble Gujarat High Court. It was also explained that identically for A.Y. 2009-10 in the case of assessee itself, the Mumbai Bench of the Tribunal vide order dated 22/09/2014 (ITA No.6728/Mum/2013) allowed the appeal of the assessee. 2.1. On the other hand, the ld. DR, Shri Neil Philip, though defended the concl....
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....sp; 29.03.2008 Bolinj Grampanchayat issued completion certificate 177 31.03.2008 Firm applied to CIDCO for granting occupation certificate 176 2.1 During the year under consideration the assessee claimed deduction under section 80IB(10) of the Income Tax Act, 1961 (the Act), which has been disallowed by the AO. The reasons given by AO for disallowance of the claim are as under: i. The assessee could not produce completion certificate obtained from CIDCO within a period of four years i.e. before 31/3/2008. ii. Vasai - Virar Municipal Corporation in response to query raised by AO vide notice 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 purchas....
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....ct before 31.03.2008 and has also obtained the completion certificate from the Gram Panchayat, Bolinj. ii. That Gram Panchayat , Bolinj is a competent local authority authorized to issue a completion certificate as per the Income Tax Act as well as the Constitution of India. iii. That the requirement of a completion certificate is a technical formality for which the deduction should not be disallowed. iv) That the assessee is not required to obtain the completion certificate because the project was approved prior to 01.04.2005 when the amended provision did not even exist and the question 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 i....
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.... the same was enclosed by the Assessing Officer for reference. As per the above stated letter, the Assessing Officer had come to the conclusion that the project was not completed till the mandatory time line i.e. 31.3.2008 and denied the deduction u/s.8OlB(10) of the Income Tax Act. 5.2. From the foregoing paras, it is observed that there are certain irregularities/delays in getting the completion certificate from CIDCO by the appellant. It is very much obvious that the appellant approached another Local Authority to cut short the regular proceedings and obtained the 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 Gra....
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....ation was received by the AO vide letter dated 23/3/2010 did not belong to assessee as the said plan was not revised in respect of project developed by the assessee but was in respect of project developed by other developer. Therefore, Ld. AR pleaded that the said revised plan has nothing to do with the project of the assessee. 3.2 So far as it relates to contention regarding completion certificate it was submitted by Ld. AR that project of the assessee was approved by CIDCO as per letter dted 5/3/2004 ( The copy of the said letter was not enclosed in the paper 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 Provisio....
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....rupa Developers, decision dated 14/3/2012 in ITA No.3661/Mum/2011, copy placed on record. The aforementioned proposition was upheld as per following observations: "Regarding the next objection of the AO, that the project was not completed before 31.3.2008, the contention of the representative is that as the project of the appellant was approved before 31.3.2005, there was no requirement of obtaining the completion certificate. 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 & Construct....
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....d. The said residential building has to be constructed on a shopping complex comprising of approx. 10,566 sq/ft/ built up area wherein the limited development right to construct shopping complex was assigned to a different concern viz Lakshadeep Investment & Finance P.Ltd hereinafter called as LIFPL, being a sister concern of the appellant through 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 and LIFPL were fixed at Rs. 11.56 crore & 2 crore respectively in lieu of development rights received by them. 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 siste....
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.... 31/03/2008 and these evidences have also been described in para 3.4 of this order. In our opinion it will not be relevant to go into much detail for this issue as it is clear from the decisions of Hon'ble Delhi High Court in the case of CIT vs. CHD Developers and Hon'ble Madras High Court in the case 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 a....
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....on 80 IB(10). Ground No.1 to 5 are allowed in the manner aforesaid." 2.3. If the observation made in the assessment order/impugned order, conclusion drawn in the order of the Tribunal ( in the case of assessee itself), we note that the facts are identical because for Assessment Year 2009-10, the project was approved on 05/03/2004 i.e. before insertions of conditions of completion with effect from 01/04/2005. The assessee is a firm engaged in the business of builder and developer in Vasai-Virar region of Thane district. The claimed deduction u/s 80IB(10) of the Act was denied to the assessee on the reasons as contained in the assessment order, broadly, the assessee could not produce completion certificate from CIDCO within the stipulated period. On appeal, the ld. Commissioner of Income tax (Appeals) also affirmed the stand of the Assessing Officer. It is not worthy that as per explanation to section 10(20) of the Act Gram Panchayat also falls under local authority for which reference can be drawn from the decision in the case of Krishan Harubhau Lohokare vs ITO (ITA No.937/PN/2010), wherein, it was held that for the purposes of issuance of completion certificate u/s 80IB(10) of th....