TaxTMI 
TaxTMI 
TaxTMI 
2021 (8) TMI 462
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....at as per clause (ii) of the Explanation U/s 80IB (10)(a), compliance of this condition has been made mandatory. 4. The Ld. CIT(A) has erred in law as well as on the facts of the case in ignoring the decision of Hon'ble High Court of Madhya Pradesh in the case of CIT Vs. Global Reality in ITA No. 35, 36 and 40 of 2012." 3. Brief facts of the case are that the assessee is engaged in the business of construction and sale of flats at Ghaziabad besides purchase of land for carrying out the said activities at other place also. The assessee has shown net profit of Rs. 4,79,25,436/-. 4. During the year, the assessee has claimed deduction u/ s 80IB(10) of the Act on the project eligible for the deduction namely "NEO". The said project was situated on Plot No. 11, Vaibhav Khand, Indirapuram, Ghaziabad, U. P. and it was a joint venture project with the Ghaziabad Development Authority (GDA). M/ s Shipra Estate Limited & GDA entered into an agreement in form of license deed dated 07.04.1998 for the development of a Plot No - 11 measuring 201576.25 sq. mtrs and the process was to be completed within a period of 8 years (5 years initial period & extended by another 3 Years). That in case of ....
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....d not from the date of completion mentioned in the completion certificate. The AO has recognized the letter issued on 21.12.2013 as completion certificate by the authority highlighting the fact that the project stands completed on 21.02.2011. The AO has not disputed that the process of registering the units with the Office of Sub Registrar in the name of ultimate buyers also started on 21.02.2011 itself. Registration of the units in the name of the ultimate customers is being registered by the GDA who is also the competent authority to issue the Completion Certificate in the case of the assessee. The GDA has clearly mentioned that the project was completed on 21.02.2011 vide the aforementioned letter therefore it establishes the fact that the project was in fact completed much before the cutoff date of 31.03.2012. It is also a fact that this letter dated 21.02.2013 is not a formal completion certificate issued by the GDA. This letter mentions the date of completion as 21.02.2011. 6. The date of this letter has been erroneously taken by AO as the completion date. Further in respect of the observations of the AO that assessee has not applied for completion certificate in time it is....
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....e customer dated 21.02.2011 by the GDA is placed at page no. 19 -50 of the paper book). 9. In view of above stated facts, it is well established that the project of the assessee was completed before the cutoff date as per the provisions by the Act i.e. 31.03. 2012. The AO has chosen to ignore all these facts and made the addition on the basis of interpretation of statute by holding that the date of completion is 21.12.2013 i.e. the date of letter of Joint Secretary, GDA ignoring the fact that this letter is not a completion certificate issued by the GDA. This letter itself mentions the date of completion as 21.02.2011. This date of letter has been erroneously taken by AO as ' the completion date. AO held that since this letter is dated 21.12.2013, the completion of the project is beyond the prescribed period u/ s 80-IB and not from the date mentioned in the letter i.e. 21.02.2011. 10. We also find that the same issue has been adjudicated earlier by the Co-ordinate Bench of ITAT in the case of the assessee in ITA No.740/ Del/2016 for the assessment year 2012- 13 vide order dated 22.01.2021. The relevant part of the order is as under: "05. For claiming deduction u/s 80 IB (1....
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....rom the end of the financial year in which the project was approved (i.e. 26/9/2006). The Assessing Officer noted that according to the provisions of Section 80IB(10) of the Act the project should have been completed within 5 years from the end of the financial year for which the housing project was approved by the local authority. He noted that the project for eligibility of deduction, the last date of completion would be 31st of March 2012. The AO noted that Ghaziabad Development Authority (GDA) through its Joint Secretary issued completion certificate on 21.02.2013. However, according to the assessee the application was submitted for completion certificate vide letter dated 29.09.2012. The assessee submitted that GDA has approved the date of project as on 21.02.2011. It further states that application after the completion of the project was submitted to the authority and the authorities constituted an inspection committee. As per the report and recommendation of the committee, the GDA approved the date of the completion of the project as 21.02.2011. The ld. Assessing Officer was of the view that the Act recognizes only the actual date of the completion certificate by the local....
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.... AO to ascertain the correct date of completion by obtaining and examining the relevant details from the Development Authority and assessee. The report of the Assessing Officer states that committee of GDA was constituted on 25th October, 2012, inspected the site on 21.02.2013 and on the basis of the documents noting the fact that registration of sale of flat commenced on 21.02.2012, the GDA stated that the date of completion of the project is 21.02.2011. The Assessing Officer also submitted a copy of the report of the committee. It also gave the minutes of the committee of GDA. The assessee given an opportunity and submitted its rejoinder of 21.02.2015, which is as per para No. 5.1.4 of the order of the ld. CIT (Appeals). The ld. CIT (Appeals) also put before the assessee the decision of the Hon'ble Madhya Pradesh High Court in CIT Vs. Global Reality dated 21.08.2015 wherein it was held that issuance of completion certificate after cut-off date by local authority mentioned the completion of the date of project before cutoff date does not fulfill the required condition of Section 80IB (10) of the Act. The assessee submitted that the case of the assessee on facts is quite difficult.....
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....d that the issue is squarely covered in favour of the assessee by the decision of the co-ordinate bench in the case of Ram S. Sarda Vs. DCIT (2012) 13 ITR (T) 457. The ld. CIT (Appeals) held that if the assessee does not contest the liability of advance tax then assessee couldn't question the liability of interest under Section 234B of the Act. He, therefore, noted that when advance tax liability is not disputed, it becomes a case of exercise of discretion by the Assessing Officer in levying or not levying interest under Section 234B or 234C of the Act. 11. Thus, assessee aggrieved with the order of the ld. CIT (Appeals) has preferred this appeal before us. 12. The ld. AR on the issue of completion of the housing project for claiming deduction u/s 80 IB (10) of the act, submitted that appellant obtained the approval on 26.09.2006 for developing housing project in the name of Neo Project, Phase-I, as on 11056 sq. mtrs. of land situated at Plot No. 11, Indirapuram, Ghaziabad. The permissibility of 5 years for completion of the project ended on 31st of March 2012. He submitted that assessee submitted a request on 15.02.2011 to GDA for issuance of registration in the name of firs....
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....Appeals) for this assessment year has not allowed the claim of the assessee. However, he referred to the order of the ld. CIT (Appeals) dated 23.01.2018 for Assessment Year 2013-14 and order dated 10.05.2018 for Assessment Years 2014-15 and 2015-16 wherein the claim of the assessee was thoroughly discussed and the addition on account of disallowance of deduction under Section 80IB(10) of the Act was allowed. He, therefore, submitted that the claim of the assessee deserves to be allowed. 13. The ld. DR heavily relied upon the order of the ld. Assessing Officer and the CIT (Appeals). He also extensively relied on the decision of the Hon'ble Madhya Pradesh High Court in CIT vs. Global Reality and stated that the issue in the case of the assessee is squarely covered against the assessee. It was further stated that merely stating of the decision by the Hon'ble High Court does not obliterate the binding precedent of the order unless it is quashed. With respect to the order of the ld. CIT (Appeals) in subsequent years he submitted that the appeals for Assessment Years 2014-15 and 2015-16 have been dismissed by the co-ordinate bench on account of low tax effect and appeal for Assessment ....
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.... 2013, it issued a letter for payment of fees of Rs. 3,243,830/- and completion certificate stating that date of completion of the project is accepted as 21st of February 2011. The fee was also charged from the assessee from 1/4/2006 to 21st/2/2011. Further, it was also noted that the flat was registered in favour of the buyer on 21 February 2011, which was requested as per letter dated 15 February 2011 to Ghaziabad development authority to register a flat number SNC - 1104. Along with this letter, the assessee has also submitted, and it stated that the construction of above- mentioned flat is according to the approved map and therefore the above let may be registered in the name of the buyer. Further, the committee constituted by the Ghaziabad development authority also certified that the date of completion of the above project is 21 February 2011. Further, a letter was issued by Ghaziabad development authority on 13th of March 2015 to the assessee wherein also the date of completion is stated to be 21st/2/2011. Thus according to the sale deed even the buyer is accepted the possession of the above property in its completeness. Further, on page number 104 of the paper book the as....
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.... completion date is within the five years limitation. It is also interesting to note that for assessment year 2013 - 14 identically the deduction u/s 80 IB 10 was disallowed by the learned assessing officer however on appeal before the learned and CIT - A allowed the claim of the assessee wide order dated 23 January 2018. Further, similarly for assessment year 2014 - 15 also the learned CIT appeal allowed the claim of the assessee as per order dated 10 May 2018. However, both these orders are in challenge before the coordinate bench. However, the reasons given therein are required to be considered. An interesting fact has been recorded by the learned CIT - A for assessment year 2013 - 14 that during the financial year 2010 - 11 five of the units got registered in favour of the customers by the appellant company and another 291 units were transferred in financial year 2011 - 12 out of the total 346 units constructed by the assessee. Thus 86% of the total units were registered in the name of the ultimate customers before the end of the financial year 2011 - 12, which is also the cut-off date for getting the completion certificate. Therefore, it was held that that the project of the....