TMI Blog2012 (8) TMI 619X X X X Extracts X X X X X X X X Extracts X X X X ..... is granted to different housing projects. As project in question reflected by the sanction of PCMC dated 31.7.2004 is different than the project intended under PCMC approval dated 23.6.2003, the Explanation to section 80-IB(10) cannot be invoked so as to reckon the period of completion of construction as contained in clause (i) or (ii) clause (a) to section 80-IB(10) and the appellant is justified in asserting that it commenced development and construction of housing project on 31.7.2004 and not on 23.6.2003 and accordingly, the last date for completion of construction has to be calculated as per sub-clause (ii) of clause (a) to section 80-IB(10) in terms of which the assessee is required to complete the construction within four years from the end of the financial year in which the project was approved by PCMC, i.e. upto 31.3.2009 - in favour of assessee. - ITA No. 1216/PN/10 & 1057/PN/11 - - - Dated:- 26-6-2012 - SHRI SHAILENDRA KUMAR YADAV, AND SHRI G.S. PANNU, JJ. Appellant by: S/Shri Sunil Ganoo Chandrakant G Doshi Respondent by: Dr Santosh Kumar ORDER PER G.S. PANNU, A.M.: The captioned appeals by the assessee are directed against separate orders o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 10) of the Act, as applicable for the assessment year under consideration, is as under: 3 (10) The amount of deduction in the case of an undertaking developing and building housing projects approved before the 31st day of March, 2007 by a local authority shall be hundred per cent of the profits derived in the previous year relevant to any assessment year from such housing project if, -- (a) Such undertaking has commenced or commences development and construction of the housing project on or after the 1st day of October, 1998 and completes such construction,-- (i) In a case where a housing project has been approved by the local authority before the 1st day of April, 2004, on or before the 31st day of March, 2008; (ii) In a case where a housing project has been, or is approved by the local authority on or after the 1st day of April, 2004, within four years from the end of the financial year in which the housing project is approved by the local authority; Explanation For the purposes of this clause (i) In a case where the approval n respect of the housing project is obtained more than once, such housing project shall be deemed to have been approved on the date on w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng project of the assessee is approved by the local authority for the purposes of determining the required date of completion of construction prescribed- Whether the construction of the project is to be completed (i) on or before 31.3.2008 in terms of sub-clause (i) of clause (a) to section 80-IB(10) as canvassed by the Revenue, or (ii) by 31.3.2009 on application of subclause (ii) of clause (a) of section 80-IB(10) as canvassed by the assessee. In this background, we may now proceed to examine the relevant facts and the reasonings taken by the rival parties for their respective stands. 6. The assessee firm entered into a Deed of Assignment of development rights on 9.7.2004 with M/s Ganesh Constructions in terms of which, assessee acquired development rights in respect of property of land admeasuring 0.H 84 R out of survey No 61/2+3+5+6 lying and situate at village Pimple Saudagar, Tal. Haveli, Dist. Pune, a copy of such agreement is placed in the Paper Book at pages 30 to 48. Further, on the same day, i.e. on 9.7.2004, assessee also entered into a deed of assignment of development rights with Mr S. B Patil, whereby it acquired the development rights of the property of land 5 a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sanction was dated 23.6.2003 and therefore, the latter approval was the first approval which has to be considered to ascertain the required date of completion of construction. 8. In this context, the plea of the assessee is that the mere mention of the word Revised sanction in the approval granted on 31.7.2004 is misleading and in sum and substance it is the first approval and the assessee had commenced the construction of the project on 31.7.2004 only. The learned Counsel referred to the agreement with M/s Ganesh Constructions and pointed out that the said firm could not develop the said properties and, therefore, the development rights were assigned to the assessee vide agreement dated 9.7.2004. It was also pointed out that the PCMC sanction dated 23.6.2003 was obtained by M/s Ganesh Constructions, but as the said concern could not develop the properties, assessee acquired such rights. The assessee firm acquired such rights and also further acquired land of 20 R and amalgamated the two plots into a size of 104 R and thereafter, on such amalgamated plot, it sought PCMC approval for the instant housing project and such approval is dated 31.7.2004. It was, therefore, contended tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which we have extracted in the earlier part of this order, it emerges that the date of approval of the project is relevant to ascertain the permissible period of completion of construction or in other words, the prescribed condition of completion of construction of the project is to be reckoned from the date of approval by the local authority. In terms of sub-clauses (i) and (ii) of clause (a) to section 80-IB(10) of the Act, the ascertainment of date of completion of construction is liable to be determined with reference to the date of approval by the local authority. The Explanation below clause (a) section 80-IB(10) of the Act prescribes 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. Clause (ii) of the Explanation further clarifies that date of completion of construction of the housing project shall be taken to be the date on which the completion certificate in respect of such housing project is issued by the local authority. On the strength of clause (i) of the Explan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ey No. 61/2+3+4+5+6, whereas the former was with reference to survey No. 61/2+3+5+6 constituting 84 R of land alone. Secondly, the former sanction was as per the plan formulated by the earlier person, i.e. M/s Ganesh Constructions who had ultimately sold the development rights in such land of 84 R to the assessee. The following clauses of the Agreement dated 9.7.2004 with M/s Ganesh Constructions support the position canvassed by the assessee that the construction was not commenced, rather the project 10 reflected by the sanction dated 23.6.2003 could not be developed by the erstwhile holder, namely, M/s Ganesh Constructions: AND WHEREAS the party of the first part assignor got the building plan sanction from Pimpri Chinchwad Municipal Corporation under Commencement Certificate bearing No. dt. Obtained ULC order from the Competent Authority, Pune Urban Agglomeration, on 30.3.1999 in case No ULC/Desk-II/1999 and also obtained N.A order bearing No. PRH/NA/SR/158/III/2003 dt 24.7.2003; AND WHEREAS due to other business activities, the first part could not develop the said properties and as such intended to assign the development rights in pursuance of the terms and conditions o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... : Reliance placed by the Revenue on the Explanation to section 80IB(10)(a) which was introduced with effect from 1st April 2005 is also misplaced. What the said Explanation contemplates is that where the approval in respect of a housing project is granted more than once, then, that 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. For example, in respect of a housing project, the assessee may seek amendment of the building plan at several stages of the construction and the same maybe approved. In such a case, the explanation provides that for the purposes of section 80IB(10) the housing project shall be deemed to have been approved on the date on which the first approval was granted by the local authority. Thus, the Explanation to section 80IB(10)(a) refers to the approval granted to the same housing project more than once and the said Explanation would not apply where the approval is granted to different housing projects. In the present case, as noted earlier, construction of E building constitutes an independent housing project and, therefore, the date on which the ea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ri, Tal. Haveli, Dist. Pune. The stated objections of the Revenue, in our view, are not germane to support its stand qua the date of completion of construction envisaged in clause (a) section 80-IB(10) of the Act. 13. Apart therefrom, the Assessing Officer has also referred to statement of a partner of the assessee recorded during the course of a survey action under section 133A of the Act. As per the Assessing Officer, the partner was questioned to the effect that the assessee was not entitled to deduction under section 80-IB(10) of the Act because the first plan was approved on 23.6.2003 and the project has not been completed before 31.3.2008 as per sub-clause (i) section 80-IB(10) of the Act. The Assessing Officer pointed out that in the answer to such question, the partner was ready to pay tax on such amount 13 and, therefore, it is sought to be made out that the assessee admitted that its claim was untenable. In our considered opinion, the aforesaid situation cannot be a ground to decide the merits of the issue. In any case, the assessee had claimed the deduction under section 80-IB(10) of the Act in the return of income filed and being an issue involving a point of law, the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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