9911796707
TMI Blog2012 (8) TMI 619X X X X Extracts X X X X X X X X Extracts X X X X ..... on to the assessment year 2006-07. In this background, we take up for discussion the dispute in relation to the facts emerging from record with respect to the assessment year 2006-07. 3. The appellant is a partnership firm engaged in the business of promoters, developers and builders. During the year under consideration, assessee firm undertook construction of a housing project at Pimple Saudagar, Pimpri, Tal. Haveli, Dist. Pune, and the project consisted of several buildings as detailed in para 3 of the assessment order. The assessee effected sales out of the said project at Rs 1,62,53,965/- and computed profits eligible for deduction under section 80-IB(10) of the Act during the year at Rs 25,24,677/-. After claiming deduction of Rs 25,24,677/- as per section 80IB(10) of the Act, the return of income was filed at an income of Rs 60,000/- representing rental income under the head 'other sources'. In the course of assessment proceedings, the assessee was not found eligible for the claim of deduction under section 80-IB(10) of the Act and accordingly, the deduction claimed at Rs 25,24,677/- was denied and the total income assessed at Rs 25,84,680/-. The Commissioner of Income-tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty, i.e. Pimpri Chinchwad Municipal Corporation, Pimpri (in short "the PCMC") on 31.7.2004 and therefore, the period allowed for completion shall be governed by subclause( ii) of clause (a) of section 80-IB(10) of the Act. Thus, as per the assessee, it is entitled to complete the construction of the project as per subclause (ii) of clause (a) of section 80-IB(10) within four years from the end of the financial year in which the project was approved by PCMC, i.e. upto 31.3.2009. On the contrary, the claim of the Assessing Officer is to the effect that having regard to the prescription of clause (i) of the Explanation below clause (a) of Section 80IB(10) of the Act reproduced above, the date of approval of the housing project for the purposes of clause (a) has to be with 4 reference to the date on which the building plan of such a project is first approved by the local authority. According to the Revenue, in the instant case, the approval granted by PCMC on 31.7.2004 is a Revised sanction, whereas the original sanction was dated 23.6.2003 and therefore, having regard to clause (i) of the Explanation below section 80-IB(10)(a), the period allowed for completion of construction in this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to 105 of the Paper Book wherein is placed copies of the certificate of completion of construction dated 31.3.2011 issued by PCMC wherein the date of completion/occupancy certificate has been stated to be 20.3.2009. On the strength of the aforesaid, the case made out by the assessee is that since the date of approval by the PCMC is 31.7.2004, assessee was permitted to complete the construction by 31.3.2009 as per sub-clause (ii) of clause (a) of section 80-IB(10) of the Act, and therefore, the Assessing Officer was not correct in requiring the assessee to complete the construction of the project by 31.3.2008 by wrongly invoking sub-clause (i) of clause (a) of section 80-IB(10) of the Act. 7. The Revenue has supported its plea by pointing out that the approval granted by PCMC on 31.7.2004 was not the first approval, inasmuch as the PCMC itself has stated that it was a Revised sanction of the earlier sanction No. DP/P's Saudagar/15/2003 dated 23.6.2003, a copy of which has also been placed in the Paper Book at page 72. Our attention was also been drawn to pages 63 to 71 of the Paper Book wherein the corresponding certificate to commence construction was also issued by PCMC on 23.6.2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wrong in asserting that an altogether new project was sanctioned by PCMC on 31.7.2004. As per the learned Departmental Representative, both the sanctioned plans bear the same number, namely, "BP/P'Saudagar/15/2003", and the plan approved on 31.7.2004 clearly contains a mark 'revision to' the plan dated 23.6.2003. Therefore, according to the learned Departmental Representative, PCMC has treated the second plan to be merely a revised version of the first plan and that the Assessing Officer had duly noted in the assessment order that the development charges levied by PCMC in respect of the first plan was Rs 2,01,150/- whereas in respect of the revised plan the charges levied were only to the tune of Rs 11,819/-. This shows that the latter plan was not a new plan but only a revision of the earlier plan. It is further pointed out that even in the agreement entered into by the assessee with the buyers of flats/row houses, the mention has been made of the sanction by PCMC dated 23.6.2003. On this basis, it is contended that the housing project continued to be the same one which was approved by PCMC initially on 23.6.2003, notwithstanding the fact that the builder who ultimately executed t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... examine the project which has been approved by PCMC on 31.7.2004 and for that matter, we refer to page 77 of 9 the Paper Book wherein is placed the certificate of commencement of construction dated 31.7.2004. As per the said certificate, the sanction is granted for construction on survey No. 61/2+3+4+5+6 of Pimple Saudagar, Pimpri Chinchwad Municipal Corporation/City Survey No 772 as per Maharashtra State Regional and City planning code year 1966 section 44 and provisions of Mumbai Municipal Corporation code 1949 section 253 and 254. The corresponding sanction on the building lay-out plan of even date also contains reference to the building lay-out at S.No 61/2+3+4+5+6, C.T.S No 772 & 773, Pimple Saudagar, Tal. Haveli, Pune. Now, we may contrast this with the certificate to commence construction dated 23.6.2003 placed at pages 63 to 72 of the Paper Book. Clearly, in terms of the said certificate permission for construction is on survey No.61/2+3+5+6 of Pimple Saudagar, Pimpri Chinchwad Municipal Corporation/City Survey No 772 as per Maharashtra State Regional and city Planning code year 1966 section 44 and provisions of Mumbai Municipal Corporation code 1949 section 253 and 254. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on record to say that the seller M/s Ganesh Constructions had commenced the development and construction of the housing project as sanctioned by PCMC on 23.6.2003. In fact, it is quite clear that the land of 84 R with M/s Ganesh Constructions was acquired by the assessee in the month of July, 2004 and till the date of such purchase, there was no construction activity stated to have been commenced by the erstwhile person. As a matter of fact, the assessee firm acquired further land of 20 R on the same date and revised the building lay-out, which were originally prepared by the erstwhile holder of rights and the plan so revised (inclusive of the additional land of 20R) got sanctioned by the PCMC on 31.7.2004 only. It is only after that date, the assessee thus commenced the development and construction of the housing project in question. Quite clearly, the project in question is quite distinct and separate from the project reflected by the PCMC sanction dated 23.6.2003, in view of the above features, which we have noted, the Assessing Officer, in our view, has been unduly influenced by the remark 'revised sanction' contained in 11 PCMC approval dated 31.7.2004. In fact, the Explanati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In this view of the matter, in our view, 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) of the Act in terms of which the assessee is required to complete the construction by 31.3.2009. 12 12. Before parting, we may refer to the issue of development charges levied by PCMC in this case, on the basis of which it is sought to be canvassed that the latter sanction dated 31.7.2004 has been considered by PCMC merely a revision of earlier one, because the development charges paid on a latter date is only Rs 11,819/- as against payment of Rs 2,01,150/- in respect of the first plan. Secondly, it is also canvassed that in the agreement entered into by the appellant with the buyers, it contains reference to the PCMC sanction of 23.6.2003 also. On these aspects, the learned Counsel for the assessee submitted that the same are governed by the requirements of the local laws and are not relevant for the present purpose. In our considered opinion, both these aspects a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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