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TMI Blog2012 (5) TMI 279X X X X Extracts X X X X X X X X Extracts X X X X ..... report submitted by the ACIT, Circle 27(1), New Delhi. We, therefore, proceed to dispose of these appeals after hearing the learned DR. 4. The facts relating to the issue raised in these appeals have been briefly stated by the learned CIT(A) in his order as under:- "2.1 The appellant, a partnership firm, is a builder and developer. During these six AYs, the assessee built residential units under the projects named as 'Surndera Enclave', 'Surendra Vihar Phase-I' and 'Surnedra Garden' in Bhopal, Madhya Pradesh. Project Surendra Enclave was situated at Village Bawadia Kalan, Bhopal. The project was developed on a land area of 1.40 acres after getting approval for the project from Bhopal Municipal Corporation (BMC) vides permission number 299 dated 04.09.1999. This project was claimed to have been started in the financial year (FY) 1999-2000 and completed in the FY 2002-03 as all units of the project were shown to have been sold in the A.Y. 2002-03 and 2003- 04. Project Surendra Vihar Phase-I was situated at Village Bagh Mugalia, Bhopal. The project was developed on a land area of 3.50 Acres after getting approval for the project from BMC vides permission number 580 da ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deduction u/s 80IB of the Act though the same was allowed in the original assessment u/s 143(3)/143(1) of the Act." 5. The issue involved is with regard to the question as to whether the AO was justified in disallowing the claim of deduction under sec. 80IB(10) of the Act for the reason that the completion certificate from the local authority has not been obtained within the time prescribed under sec.80-IB(10) of the Act. 6. The ld. DR has submitted that since the completion certificate has been issued by the Municipal Authority on 18.06.2010, 23.06.2010 and 24.06.2010 in respect of three housing projects respectively, the date of completion of construction of the housing project shall be taken to be the date on which the completion certificate is issued by the Municipal authority. He, therefore, submitted that completion of construction cannot be taken before 31.03.2008, by which date the assessee was required to obtain completion certificate from the authority to claim deduction u/s 80IB(10) of the Act. The learned DR before us has merely relied upon the AO's order and submitted that since the completion certificate issued by the local authority was beyond the pre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of existing buildings and notified by the Board in this behalf. It is also proposed to define the expression "built up area" to mean the inner measurements of residential unit at the floor level including the projections and balconies, as increase by the thickness of the walls but not including the common area shared with other residential units. 5.5 The amendment bringing the time limit for completion, here in the case of the appellant as 31.03.2008 cannot be said to have been brought with retrospective effect as it provides minimum 4 years time to complete the projects sanctioned prior to the amendment. Hence all the case laws relied upon by the AR are of no help as these are distinguishable on facts. Here, the undisputed facts are that the appellant fulfills all the terms and conditions required for the deduction u/s 80IB(10) for all three projects named as 'Surendra Enclave', 'Surendra Vihar Phase-I' and 'Surendra Garden' except the fact that the Municipal Corporation has not issued the completion certificates for these housing projects on or before 31.03.2008 though the applications for issuance of certificates have been received by BMC on 26.11.2007. The appel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y contained in para (ii) of your letter, the assessee has submitted reply on 11.01.2011. Copy of the same is enclosed which is self-explanatory. It has been submitted that the sister concern M/s Surendera Developers was incorporated on 01.04.2003. Hence, information with regard to AYs 2002-03 and 2003-04 is not applicable. In r/o AYs 2005-06 and 2007-08, the transactions of the assessee with its sister concern M/s Surendra Developers comprises of payments which are not in the nature of expenditure. Hence, the provisions of TDS are not applicable. Copies of the account extracts of M/s Surendra Developers in the books of the assessee for the relevant asst. years have been submitted which are also enclosed herewith. From the same, it is seen that there are no credits to the account of M/s Surendra Developers on account of any bills raised which would indicate expenditure on the part of the assessee. At the end of the year, the payments made by the assessee to, or on behalf of M/s Surendra Developers are shown as debit balance of M/s Surendra Developers towards the assessee. 4. Regarding query contained in para (iii) of your letter, viz. whether all the residential units are le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... certificates as notified by the Corporation. Thus, it can be inferred that these housing projects as such have been completed as per terms and conditions sanctioned by the Corporation as various parameters/guidelines specified by the Corporation are fulfilled and verified and certified by BMC who has sanctioned these projects. It is also an undisputed fact that states of all residential units of 'Surendra Enclave', 'Surendra Vihar Phase-I' and 'Surendra Garden' have been materialized on or before 31.03.2008 as no possession of any residential unit belonging to these projects was given by the appellant after 31.03.2008. The other evidences submitted by the appellant also establish this fact. These are as under: 1. As per possession certificates given by the buyers/customers, it is evident that all residential units in these projects were completed and sold much before than 31.03.2008. 2. The architect's certificates stating that the above mentioned housing projects of the assessee were completed in all respect on or before 31.03.2008. 3. The property taxes of all units are being paid by the respective buyers/residents from the date of registration of the sale ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es/formalities of the completion certificates as issued/notified by the Corporation, therefore, it is here by held that these three housing projects of the appellant are deemed to have been completed and completion certificates are deemed to have been issued by 31.03.2008, keeping in view (i) the submission of the AR, (ii) absence of any contrary material brought on the records by the AO and (iii) provisions of sec. 301(4) of the Madhya Pradesh Nagar Palika Nigam Adhiniyam. This inference also gets buttressed by the fact that, the Corporation had issued the completion certificates of these three projects on 18.06.2010, 23.06.2010 and 24.06.2010 in respect of Permission No. 3737/27.03.2001, 299/04.09.1999 and 580/02.11.1999 respectively. 5.10 Here, there is no dispute regarding the appellant complying with the eligibility conditions required for claiming deduction u/s 80IB(10 and the only contention of the AO for rejecting the claim of appellant for all these six AYs is that there is no completion certificates in respect of above mentioned three housing projects issued by the Corporation. Taking into account the fact that the AO has not disputed the eligibility of the appell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AMC only on the basis of the said application dt. 25.03.2008. It is also an undisputed fact that issuance of occupancy certificate is the prerogative of the local authority i.e. AMC and in this regard, the assessee has no control and it is beyond the power of the assessee to make the AMC issue the said Completion/Occupancy certificate before 31.03.2008. What was under the power and control of the assessee was only to move the AMC for completion certificate fulfilling all the requirements with the AMC for issuance of occupancy certificate, which the assessee has done in the present case. Thus, the delay in issuing the occupancy certificate cannot be attributed on the part of the assessee to deny the claimed deduction u/s 80IB(10) of the Act on the basis that the project was not completed by 31.03.2008, especially when there is no objection raised by the AMC regarding deviation in the construction of the project approved by the AMC. 8. We have gone through the orders cited by the assessee's representative and find relevant paragraphs are required to be extracted for completion of the order. They are as follows: A. Extract from the decision of the Tribunal in the case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d of 21 days expired i.e. 20.11.20." B. Extract the decision of the Tribunal in the case of Sanghvi and Doshi Enterprise vide ITA No. 259 to 263/Mds/2010 "24. Next objection of the AO is that the project had to be completed on or before 31.03.2008 and since the assessee did not furnish the completion certificate, the assessee is not eligible for deduction. The objection is to the effect that the completion certificate from CMDA is dated 13.06.2008, i.e. three months after the due date for completing the project. In this connection, it has to be noted that the completion certificate is to be issued by the local authority. The question is, whether CMDA can be considered to be a local authority or not. This issue had come up before the Chennai Bench of the Tribunal in the case of Jain Housing and Constructions Ltd. in ITA No. 1369/Mds/2009 dated 05.02.2010. In that case, assessee was denied deduction in the absence of completion certificate by the CDMA but completion certificate issued by the Corporation of Chennai was placed on record. The Tribunal in paragraph 3.5 of its order stated that the project lay out plan may be required to be approved by the CMDA but as far ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ribunal in the case of M/s D.K. Construction vide ITA 243/Ind/2010 "7. We have considered the rival contentions, carefully gone through the orders of the authorities below and relevant material placed on record towards which our attention was invited during the course of hearing by the ld. AR and the ld. Sr. DR Provisions of Section 80IB allows claim for deduction in respect of housing project, which has been approved prior to 01.04.2004 and also completed before 31.03.2008. During the course of assessment with regard to assessee's claim of deduction u/s 80IB in respect of its D.K. Honey Homes Project, the AO has asked the assessee to furnish the certificate of completion of this project M/s D.K. Honey Homes. The AO also directly called information from the local authorities by issuing summons u/s 133(6) and a letter was issued by the competent authority dated 11th November, 2008, confirming that no completion certificate has been issued by this office. Accordingly, the assessee's claim for deduction u/s 80-IB was declined. Section 80IB clearly defines the date of completion as "Date of completion of construction of the Housing Project shall be taken to be the date on which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... taining the completion certificate on 10.10.2008 is certainly not attributable to the assessee and obtaining the said certificate before 31.03.2008 is beyond the control of the assessee. Assessee's job includes the completion of the building in accordance with the approved plans and intimation of the same to the local authority by way of filing the requisite forms together with the Completion certificate given by the Architect, the specialist in the matter and the assessee has done his job scrupulously in this case. However, the local authority has neither objected to the said application of the assessee and the Architect by raising any objections nor accepted by issue of said completion certificate till 10.10.2008. Therefore, the delay in grant of the said certificate is certainly not attributable to the assessee. Therefore, in our opinion, the assessee is not defaulter on this account and thus, the AO has erred in denying the deduction u/s 80IA(10) of the Act. Accordingly, the order of the CIT(A) has to be reversed. Thus, the grounds raised in the appeal are allowed." 9. In the present case, the assessee vide application dated 26.11.2007 has requested the Municipal Corpor ..... X X X X Extracts X X X X X X X X Extracts X X X X
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