TMI Blog2012 (5) TMI 279X X X X Extracts X X X X X X X X Extracts X X X X ..... raised by the revenue in all these six appeals is as under:- "(i) On the facts and circumstances of the case, the Ld. CIT(A) erred in allowing the deduction u/s 80IB(10) of the Income-tax Act, 1961 by deeming that the completion certificate was issued by 31.03.2008. (ii), On the facts and circumstances of the case, the Ld. CIT(A) erred in coming to the above conclusion even where there is no scope in law to deem a date of completion." 3. We have heard the learned Departmental Representative. None for the assessee was present. Notice issued to the assessee has been served through the Department as is evident from the service 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 situ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 008, which is one of the statutory requirements for allowance of the deduction u/s 80IB(10) of the Act. Therefore, the AO concluded that the requirement of completion of construction before 31.03.2008 as per provisions of sec. 80IB(10)(a)(i) had not been met by the assessee not only in the AY 2006-07 and initiated proceedings u/s 147/148 of the Act for AY 2002-03 to 2005- 06. Later on the case of assessee for AY 2007-08 was also completed under scrutiny disallowing the deduction u/s 80IB(10) of the Act. The AO concluded the reassessment proceedings for AY 2002-03 to 2005-06, vide the impugned orders thereby denying the 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ficate is issued by such authority. It is further proposed to provide that built up area of the shops and other commercial establishments included in the housing project shall not exceed five per cent of the aggregate built up area of the housing project or 2000 sq. ft. whichever is less. With a view to encourage the redevelopment of slum dwellings, it is proposed to relax the condition of minimum plot size of one acre in the case of a housing project, carried out in accordance with a scheme framed by the Central Government or a State Government for a re-construction or redevelopment 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 prio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y. It is reported that- (a) The assessee submitted application for completion certificate w.r.t. its housing projects on 26.11.2007. (b) At the time of application, M/s Girija Colonizers had complied with all the formalities. (c) The Municipal Corporation has to carry out inspection of all the constructed units before issuing completion certificate. The applicant M/s Girija Colonizers had given possession of most of the units before submitting the application for completion certificate. As a result, it took time for inspection. 3. Regarding query 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 as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... laws; 2. unless the Commissioner has failed to fifteen days after the receipt of notice of completion to intimate his refusal to grant the said permission. 5.8 Here the appellant has completed the construction much prior to 31.03.2008 as evident from material available on the records and the AO's remand report dated 08.02.2011. The BMC, vide its letter dated 10.01.2011 addressed to the AO has admitted that the appellant, while filing applications on 26.11.2007, had fulfilled all requirements/formalities of the completion 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 a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... certificate and not the word 'OBTAINED' by the assessee. As the legislature had already anticipated such hardships of the assessee and that is why the word issued by the corporation has been used. In this case there is no refusal for issuance of the completion certificate by the Commissioner of Municipal Corporation till 31.03.2008 and BMC, vide its letter dated 10.01.2011 addressed to the AO has also admitted that the appellant, while filing applications on 26.11.2007, had fulfilled all requirements/guidelines/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. 373 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Tribunal's order in the above referred case is as under:- "7. We have considered the above view points of the parties in disputed. We find that it is a fact that the assessee through its architect had filed application with the AMC for issuance of occupancy certificate on 25.03.2008. Requisite fee was also paid by the assessee in this regard. AMC did not raise any objection to the said completion certificate of the Architect. The occupancy certificate dt. 10.10.2008 has been issued by the 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... einabove what would be the small objections. In brief those objections which do not affect the main project and are generally temporary constructions. 20. We thus while setting aside orders of the authorities below direct the AO to allow the claimed deduction u/s 80IB(10) of the I.T. Act, 1961 in the assessment years under consideration treating the required date of completion of construction of the housing project as the date when above discussed deeming provision period 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ivable that the type of defects which were pointed out by the CMDA could have been rectified in such a shore period. Be that as it may, the Hon'ble High Court also ratified the deviations and directed the CMDA to consider the explanation of the assessee. All these facts go to point that the project was indeed completed before the 31.03.2008. Thus, this ground also has no force to deny the assessee the impugned deduction." C. Extract from the decision of the Tribunal 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 als ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the said date is 25.03.2008 and the assessee filed requisite form before the local authorities intimating the completion of the project. The said certificate/intimation was accepted by the local authority without any amendments or objections. Local authority has not raised any queries on the quality construction of the building or the completion of the same as per the plans approved by such authority. In such circumstances, in our opinion, the delay in obtaining 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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