TaxTMI 
TaxTMI 
2018 (12) TMI 401
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.... & Law 2. That the Learned Commissioner of Income Tax (A) has wrongly upheld the disallowance of deduction u/s 80IB(10) amounting to Rsl,51,10,390 /-. 3. Considering the fact that there was a common order for three years and only the appeals of two years had been argued since the appeal for 2010-11 assessment year which was part of the consolidated order was still pending before the ITAT. The case was re-fixed requiring the parties to address the issue. The ld. AR in response to the clarification pointed out that since there were other issues in the appeal on which some clarity was sought from the assessee, these had not been argued. However, in the meantime, before the appeal could come up for re-hearing, on clarification, it was submitted that the Co-ordinate Bench had concluded the hearing on 27.08.2018 in 2010-11 assessment year in ITA 636/CHD/2017. In the said background, the ld. AR relied upon the arguments advanced before the AO and the CIT(A) and the arguments advanced before the ITAT that even if the first approval date is considered as 14.10.2015, even then on the basis of third party evidences, the statutory requirements stood fulfilled. The ld. CIT-DR relied....
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....ating that the first approval was very much operative. The arguments of the assessee that the assessee was ignorant about which authority was to be approached for grant of approval, was discarded on the reasoning that an assessee who "embarks on a multi-crore project is supposed to be well versed and well advised on law and facts. Unlike poor and ignorant ordinary litigants, it cannot take shelter of the excuse of ignorance of law". The disallowance of deduction u/s 80IB(10) made by the AO was affirmed in appeal by the CIT(A). 5. In 2012-13 i.e. in ITA 637/CHD/2017, the reasoning adopted in dismissing the appeal in 2009-10 was followed by the CIT(A). 6. The ld. AR though reiterating the facts and position of law has canvassed before the AO and the CIT(A) referring to facts available on record submitted that even if on the insistence of the Department, the approval dated 14.10.2005 is adhered to, even then the assessee on the basis of the material available on record is entitled to claim 100% deduction of eligible profits u/s 80-IB(10) on the basis of the following facts and evidences which are not in dispute and infact some of which constitutes third party evidences. The foll....
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....n on 14.10.2005 and the completion certificate had been applied for on 9.3.2009. (emphasis supplied) 7. The copies of these documents, it was submitted, were available on the Paper Book. It was submitted that it is not in the hands of the assessee to have a completion certificate signed and delivered on a specific date The application having been made well within time alongwith the facts on record demonstrate that the assessee had substantially completed the construction. Thus, the Completion Certificates made available dated 01.06.2012 and 17.10.2012 were in the background where the construction stood completed and infact even the possession stood handed over to the owners well within time. It was his submission that out of the 782 flats constructed, possession of 624 flats stood given by 31.03.2011 and in 602 flats, electricity connection had also been given. It was submitted that these are third party evidences. Similarly, fire fighting system stood installed on 12.12.2008 and copy of the letter issued on 27.01.2009 by the concerned Fire Station, Dera Bassi certified the fact that admittedly personnel of the Fire Department had visited and checked the fire safe....
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....ument and has instead argued that even when the first approval date of 14.10.2005 is adhered to even then the Project stood completed within the statutory limits and most of the evidence is third party evidence on record and the factual position is supported by para 5.10 in 2009-10 has been noted by the AO. A perusal of which, it was submitted, would show that in effect over 60% of the cost of Project stood incurred upto 2007 i.e. well before 31.03.2009. For ready reference, relevant extract relied upon is reproduced hereunder : "5.10 In the case under consideration assessee has also started construction activity according to the sanction granted on 14/10/2005. Therefore it is very clear that assessee considered the first approval as valid and legal approval and planned whole construction activities accordingly. As per assessee's own submission assessee has also made more than 50% of expenditure (Rs. 40,90,44,343/-out of Rs. 63,94,69,498/-) on this project well before getting second approval on 24/10/2007. As 50% work for project on which 80-IB deduction is claimed completed before the assessee got second approval on 24/10/2005 and as per assessee's submission firs....
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....uted that the certificate of completion was applied on 29.3.2010 which was issued to the assessee on 31.12.2011. The assessee in such circumstances could not be denied the benefit of Section 80IB(10)(a) of the Act. The CIT(A) and the Tribunal had rightly adjudicated the issue in favour of the assesseerespondent. Learned counsel for the appellant revenue has not been able to show any illegality or perversity in the findings recorded by the CIT(A) as well as the Tribunal, warranting interference by this Court." 11. Reverting to the facts of the case, we note that admittedly the Completion Certificate available with the assessee is dated 01.06.2012 and 17.10.2012 which is beyond the stipulated period in terms of the approval of the Project dated 01.04.2005 which, in terms of Section 80IB(10) requires that the Project be completed within five years from the end of the financial year in which it was approved. We find that the factum of Project completion within time on the basis of application moved before GAMADA on 18.05.2009 is no longer res-integra as the Co-ordinate Bench in ITA 636/CHD/2017 pertaining to 2010-11 assessment year which is part of the consolidated order wherein two....
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....plan and submitted alongwith application for issuance of completion certificate. 9) Completion Certificate by a Registered Architect or Engineer in Form-C certifying that the project was supervised and completed by it on 15-09-08 in accordance with Punjab Regional and Town Planning and Development Act,1995. 10) Letter written by the assessee to the Additional Chief Administrator, GMADA dated 18.5.2009 requesting to complete the external development work relating to the impugned project and thereafter to issue completion certificate at the earliest so as to avoid any litigation against the assessee by the allottees of the project who were demanding completion of External Development work and the issuance of completion certificate. 11) A letter issued by GMADA in response to information demanded by Shri Yogeshwar Vashisht under RTI Act, 2005 stating that the licence for the impugned project was given on 14.10.2005 and the completion certificate had been applied for on 9.3.2009. Copies of all the above documents were placed before us at paper book page no.76-91. The Ld. counsel for assessee stated that the aforesaid documents clearly showed that the....
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....deduction is that the assessee has not fulfilled the condition specified in the section of having completed the housing projects within five years from the end of the financial year in which approval for the same was obtained by the local authority. The facts which are not disputed are that the project in relation to which the dispute has arisen is Penta VIP Towers Project, the approval for commencing which was given by PUDA on 14.10.2005 and the completion certificate was given on 1.6.2012 and 17.10.2012. Undeniably, the five period for the completion of the project, as stipulated under the Act, ended on 31.3.2011. The contention of the assessee is that it had competed the project within stipulated time and evidences to this effect had also been filed in the form of completion certificate of the flat owners of majority of flats, certificate of electricity connection, certificate of fire safety in the project, the formation of residents welfare association in the project, all issued prior to 31.3.2011 and application for completion certificate filed much before the end of five years period. The contention of the assessee was that merely because the completion certificate had not be....
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.... a result of any fault of the assessee. It is thus clearly evident from the above that for all purposes the project of the assessee was completed in 2009 ,which was well before the end of the stipulated period of five years i.e. 31.3.2011. Merely because a certificate was issued later by the competent authority and that too for no fault of the assessee who had applied for the same well within stipulated time. The assessee cannot be denied deduction u/s 80IB(10) of the Act. The Hon'ble Jurisdictional High Court in the case of Pr.CIT Vs. Ambey Developer Pvt. Ltd. in ITA No.263 of 2016 (P&M) while dealing with an identical issue held that the term "shall" used in section 80IB(10)(a) of the Act for obtaining completion certificate from the local authority need not be read as a mandatory condition. The Hon'ble High Court has said that the meaning of the term "shall" would depend upon intent of the Legislature and not the language in which the provision is clothed. The Hon'ble High Court held that the purport of the said requirement of obtaining completion certificate was to safeguard interest of the Revenue wherever the construction had not been completed within sti....
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....nsel for the appellant revenue has not been able to show any illegality or perversity in the findings recorded by the CIT(A) as well as the Tribunal, warranting interference by this Court." 10. In view of the above since the Hon'ble Jurisdictional High Court in the case of Ambey Developer Pvt. Ltd. (supra)above has categorically held that the assessee having demonstrated completion of the project and having applied for completion certificate well within stipulated date, it shall be entitled to claim deduction u/s 80IB(10) of the Act and as per the facts in the present case the assessee had demonstrated completion of the project in the year 2009 and had also shown to have applied for completion certificate in 2009 itself while it was required to obtain the certificate by 31.3.2011, it can be safely said that the assessee had applied with the conditions of having obtained completion certificate within five years from the date of approval of the project and hence was entitled to claim deduction of profits u/s 80IB(10) of the Act. Ground No.2 raised by the assessee is, therefore, allowed. 11.2 Accordingly, since on facts, there is no dispute, we find that in the peculia....
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....considered, argued and decided in the following manner : 09. Ground No. 6 agitates against the disallowance of travelling expensed claimed by the assessee amounting to Rs. 20,23,712/-. During the assessment proceedings, the assessee was given show cause notice dated 20.02.2015 and asked to submit reply in that regard, which is reproduced as under:- "You have made an expenditure of Rs. 20,25,712/- during the year under consideration under the head travelling expenses. You have not Submitted any proof like bills and vouchers in this regard also you have stated that to keep the management updated on designing and structure and latest technology being used In real estate business the director have to visit abroad. Use of latest technology helps not only reduced cost but environment friendly also. As such all the travelling expenses were wholly and exclusively for business purposes of the assessee. Further you are again asked to give the following details in this regard :- (i) Any invitation to see design and structure of any particular building at particular place from any authority, (ii) Any proof of learning and attending any conference seminar, me....