TaxTMI 
TaxTMI 
2016 (11) TMI 1720
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....loped by the assessee at Kothrud, Pune. The assessee was called upon to demonstrate that all the conditions laid down under section 80IB(10) of the I.T. Act were complied with before claiming the deduction. 3. It was submitted that the assessee company has entered into the following Development Agreements for development of Plot of Land at S.No. 54/5 and 54/6B, Kothrud, District Pune. The details of the development agreements entered into as submitted by the assessee are as follows: Sr. No. Name of the Land Owners Development Agreement and date of execution S. No. and Area of the Land 1 Sou. Yamunabai Babas Mokate and others Development agreement executed on 21/02/05 registered with Sub Registrar, Haveli - IV, at Serial No 1198/2005. S. No. 54/5/1(1) and 54/5/1, plot of land admeasuring about 3708.50 Sq Mtrs, 2 Smt. Hirabai Tukaram Borate and Others Development Agreement executed on 10/07/03 registered with Sub Registrar, Haveli-IV, at Serial No 5841/2003. S. No. 54/6, plot of land admeasuring about 1000 Sq Mtrs. 4. The assessee furnished a copy of above development agreements before the Assessing Officer. The assessee also submitted that the 1St Building plan was san....
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..... It was accordingly argued that since all the conditions laid down under sec. 80IB(10) are duly complied with, the assessee is eligible for the deduction claimed. 8. However, the Assessing Officer was not satisfied with the explanation given by the assessee. He observed that the approval in respect of the said housing project was granted by the local authority for the first time vide commencement certificate dated 03-04-2006 and therefore as per sub-clause (iii) of the clause (a) of Section 80IB (10) of the I.T. Act, 1961, the subject project should have been completed within five years from the end of the financial year in which the housing project was approved by the local authority, i.e. on or before 31-03-2012. Adverting to Explanation (ii) below clause (a) of the Section 80IB(10), the Assessing Officer also observed that the date of completion of construction of housing project has to be taken as the date on which completion certificate is issued by the local authority and as such the completion certificate ought to have been obtained on or before 31-03-2012. But admittedly, the final completion certificate in respect of the project was issued by the Pune Municipal Corporati....
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.... the assessee and obtaining the said certificate before 31-03-2012 was beyond the control of the assessee. It was argued that for claiming deduction u/s 80IB(10), the assessee is required to complete the housing project in accordance with the approved plans and intimate the same to the Local Authority by way of filing requisite forms together with the completion certificate given by the architect, who is an expert in the matter. It was submitted that the assessee cannot compel the Local Authority to issue completion certificate within particular time frame and the issue of completion of the project is squarely covered by the Pune Tribunal Judgment in the case of Hindustan Samuha Awas Limited vs. ITO ITA No. 945 to 950/PN/2010. It was further submitted that in the following cases, the different Benches of the Tribunal have decided the issue under consideration in favor of the assessee. 1. Sanghvi and Doshi Enterprise vs. ITO 141 TTJ 1 (Chennai), 2. ITO vs. Khyati Financial Services 6 Taxmann 56 (Mumbai) 3. Global Realty vs. ITO 134 ITD 407 (Indore) 4. Satish Bora and Associates vs. ACIT, ITA No. 713 and 714/PN/201 0 (Pune) 11. However, the Assessing Officer was not satisfie....
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.... of Rs.100/- value paper and that too notarized. In the absence of Rs.100/- stamp paper and notarization, agreement dated 04/01/2009 has no validity in the eyes of law and therefore, the c) If it is for delay of possession of flat, then the nomenclature "compensation" is misnomer as there is "Breach of contract" by the builder and if there is breach of contract, builder is liable to pay penalty under both consumer protection Act and Maharashtra Ownership flats Act which cannot be allowed as deduction under sec. 37 (1) of the I. T. Act. 5.2.1 Citing above reasons, compensation amount of Rs.19,56,185/- claimed by the appellant was disallowed by the Assessing Officer and added to the total income declared by the appellant company. 14. Before CIT(A) it was submitted that the deduction claimed of Rs. 1,47,49,415/- under section 80IB(10) of the I.T. Act, 1961 in respect of the said housing project was denied on the ground that the completion certificate for completion of the housing project was not obtained from the Local authority on or before the due date viz. 31-03- 2012 as specified in the Explanation (ii) below clause (a) of the section 80IB(10) of the I.T. Act 1961. The assess....
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....l completion certificate on 21-07-2012 with reference to the application dated 27-03-2012 and the delay in obtaining the completion certificate before 31-03-2012 is certainly not attributable to the assessee and it is beyond the control of the assessee. It was further submitted that for claiming deduction u/s 80IB(10), the assessee is required to complete the housing project in accordance with the approved plans and intimate the same to the Local Authority by way of filing requisite forms together with the completion certificate given by the architect, who is the expert in the matter and the assessee cannot compel the Local Authority to issue completion certificate within particular time frame. It was argued that the issue of completion of the project is squarely covered by the Pune Bench of the Tribunal in the case of Hindustan Samuha Awas Limited (supra). It was argued that condition of obtaining completion certificate of project is not mandatory and what is important to be established is substantial compliance. In support of this, the assessee referred to the decision of Hon'ble Gujarat High Court in the case of CIT vs. Tarnetar Corporation reported in 26 Taxmann.com 180, wherei....
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....final approval for revision of the plan was received by CC No. 4664/06 dated 29-03- 2007. Thus, the aforesaid housing project was originally approved vide PMC's commencement certificate No. CC/0019/06 dated 03-04-2006. 19. He referred to the provisions of section 80IB(10) and noted that from a plain reading of the section, it is clear that in a case where the approval in respect of the housing project is obtained more than once, such housing project shall be deemed to have been approved on the date on which the building plan of such housing project is first approved by the local authority. As already mentioned, the assessee received its first approval for its housing project on 03-04-2006 and all subsequent approvals taken were for amendments to its initial plan. Therefore, as per Explanation (i) to sec. 80IB(10)(a), the deemed date of approval of the housing project would be 03-04-2006. As the project is approved by the local authority on or after the 1st day of April, 2005, the construction of the project has to be completed within five years from the end of the financial year in which the housing project is approved by the local authority i.e. on or before 31-03-2012 in the....
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....with the said observations of the ITAT in view of the express language of clause (ii) of Explanation to sec. 80IB(10) as discussed earlier, the certificate so issued on 21-07-2012 relates back to the date of application i.e. 27-03-2012 provided no objections/queries were raised by the PMC during intervening period on the quality of construction of the building or the completion of the same as per the plans approved by PMC. According to him, from the material placed on record, it is not clear whether certificate was issued by the PMC on 21-07-2012 without raising any queries or seeking clarifications on the completion of the project in accordance with the project plan approved by the PMC. Therefore, he held that this is a fit case for issue of directions to the Assessing Officer for necessary verification in the matter. He accordingly directed the Assessing Officer to verify whether occupancy certificate dated 21-07-2012 was issued by the Local Authority without raising any queries or objections on the quality of construction of the building or seeking clarifications on the completion of the same as per the project plan approved by the PMC. On due verification and enquiries with the....
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.... 19,56,185/- also. In support of this plea, the appellant relied on the following legal precedents wherein it is reported to have been held that the plain consequence of disallowance or addition that has been made by the AO is an increase in the business profit of the business/unit eligible for deduction. 1) CIT vs. Gem Plus Jewellery India Ltd 330 ITR 175 (Bombay) 2) S B Builders & Developers vs. ITO 136 TTJ (Mumbai) 420 5.4.4 The additional ground raised by the appellant is carefully examined with reference to the material placed on record and the relevant legal position. The additional ground raised by the appellant is a legal ground arising from the facts available on record and the same does not require further investigation of facts or calling for additional evidence. Therefore, the same is admitted in view of the decision of the Hon'ble Supreme Court in the case of NTPC Ltd. (229 ITR 383) and adjudicated herein after. In the present case, the plain consequence of the disallowance of the compensation to buyers of fiats in the project and the add back, that had been made by the Assessing Officer, was an increase in the business profits of the appellant. In this conte....
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....uring 27th March 2012 (the date of application for occupancy certificate) and 21st July 2012 (the date on which Pune Municipal Corporation issued the occupancy certificate) and decide the eligibility of the appellant for claiming deduction 80IB(10) of the I. T. Act. On the facts and in the circumstances of the cases and in law the appeal order passed by the honourable CIT(A) -I, Pune is void ab initio and is bad in law as the honourable CIT(A) has exceeded his authority beyond the powers prescribed in section 251 (1)(a) of the I. T. Act. The honourable CIT(A) set aside the assessment order and refer the case back to assessing officer to make the fresh assessment. The Finance Act 2001 with effect from 01/06/2001 has deleted the powers of the CIT (A) to set aside the assessment and refer back the case to the assessing officer in accordance with the direction given by the CIT (A). The appellant hereby prays that the order of the CIT (A) may please be quashed as illegal and bad in law. 2. On the facts and in the circumstances of the cases and in law the honourable CIT (A)-I, Pune ought to have allowed the deduction of Rs. 1,47,49,415/- claimed under section 80IB(10) of the Income T....
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....the issue himself instead of setting aside the issue. Accordingly, the Tribunal directed the CIT(A) to decide the issue himself. 26. Referring to the decision of Delhi Bench of the Tribunal in the case of ACIT Vs. Ramkishan reported in 29 CCH 935 he submitted that the Tribunal in the said decision has held that under the provisions of section 251(1)(a) the CIT(A) can confirm, reduce, enhance or annul the assessment. However, he cannot restore the issue to be determined by the Assessing Officer. 27. Referring to the decision of Delhi Bench of the Tribunal in the case of DCIT Vs. Hotel Quees Road Pvt. Ltd. reported in 42 CCH 139 he submitted that the Tribunal in the said decision has held that under the provisions of section 251(1)(a) the CIT(A) has power only to confirm, reduce, enhance or annul the assessment and specifically does not have power to set aside as per Finance Act, 2001. Accordingly, the order of the CIT(A) was set aside and the matter was restored to the file of the Assessing Officer with the same directions. He accordingly submitted that since in the instant case the CIT(A) instead of deciding the issue himself has restored the matter to the file of the Assessing O....
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....the argument of the learned counsel for the assessees that the learned CIT(A) has no power to set aside the issue to the file of the AO for reconsideration w.e.f. 1st June, 2001, which is deleted by the Finance Act, 2001. 9. The learned CIT(A) should have decided this issue himself instead of setting aside the issue. This is a irregularity, which can be cured by us otherwise it will lead to miscarriage of justice. Hence, we direct, the learned CIT(A) to decide this issue himself instead of setting aside to the AO. This issue is accordingly set aside to the file of the CIT(A) for deciding afresh after affording an opportunity to the assessee." 32. We find the Delhi Bench of the Tribunal in the case of Ramkishan (Supra) from para 8 onwards has observed as under : "8. We have carefully considered the rival submissions in the light of material placed before us. Section 251(1)(a) regulates the powers of the CIT(A) where the appeal is against an order of assessment. His power under that provision is to confirm, reduce, enhance or annul the assessment. For the sake of convenience, the said provision is reproduced hereunder : 251(1) In disposing of an appeal, the Commissioner (Appea....