TMI Blog2014 (12) TMI 929X X X X Extracts X X X X X X X X Extracts X X X X ..... cular point of time and the assessee is not expected to do or to fulfill the conditions which are not in existence at the relevant point of time or made compulsory after making some amendment in the Act from the future date - since the assessee was to complete the project on or before 31- 3-2009 and request was duly made with the Competent Authority on 5-11-2008 mentioning that the project has been completed and completion certificate may be issued and if the same is not issued by the Competent Authority the assessee should not be penalized for the same unless and until some contrary facts are brought on record evidencing that the assessee contravened the conditions contained in the approval granted by such Competent Authority - as per sub-section (10) of Sec. 80-IB, the housing project which were approved before 31st day of March, 2008, the benefit will be hundred per cent subject to fulfillment of certain conditions. However, this condition was substituted by the Finance (No.2) Act of 2009 with effect from 1-4-2009, which has been further explained by sub-clause (ii) to the Explanation regarding completion certificate. However, since the approval was granted to the assessee on 1- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation on computer accessories and peripherals amounting to ₹ 19,990/- ignoring the facts that only the computers and computer software are eligible for depreciation of 60% and the same cannot be extended to computer accessories and peripherals. 3. Briefly stated the facts giving rise to these appeals and Cos are that the assessee company is engaged in the business of hospitality and real estate. The assessee company filed its return of income and subsequently, the case was selected for scrutiny. During the course of assessment, the AO noted that the appellant company has claimed deduction u/s 80IB of the Income Tax Act, 1961 (for short the Act) amounting to ₹ 2,94,36,539/- in AY 2008-09 and ₹ 31,54,753 in AY 2009-10 in respect of its housing project at Sri Krishna Lok, Vrindavan, Mathura, UP. During the course of assessment, AO further noted that the project of the assessee viz. Sri Krishna Lok was having area of less than 1500 sq. Ft. The AO took a view that even if one residential unit violates prescribed condition, the entire project will not be eligible for deduction u/s 80IB. The AO also observed that the assessee had not furnished the audit report u/s 10 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Y 2007-08 has been upheld and approved by Jurisdictional High Court of Delhi through order dated 22.1.2014 (supra). Ld. Counsel supported the impugned orders and submitted that the AO adopted a hyper technical approach for rejecting the claim of the assessee for deduction u/s 80IB of the Act which was deleted by the CIT(A) on cogent and reasonable grounds. Ld. counsel vehemently contended that if CIT(A) is following orders of the Tribunal in assessee s own cases pertaining to the immediately previous years on the similar issue and facts, then the revenue cannot take a different or deviated stand without any substantial and strong reason. 7. On careful consideration of above rival submissions and vigilant perusal of the relevant material placed on record before us, at the outset, we note that the ITAT B Bench, Delhi deleted the additions made by the AO denying the claim of the assessee u/s 80IB of the Act for AY 2006-07 and 2007-08. We further note that the CIT(A) has granted relief on similar issue for AY 2008-09 and 2009-10 following the decision of the Tribunal dated 26.9.2012 (supra). From the copy of the order of the Hon ble High Court of Delhi dated 22.1.2014 (supra), we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... two reasons: Firstly, that the aforesaid project of the appellant company is having areas of more than 1500 sq.ft. and even if one residential unit of a project violates this condition the entire project would not be eligible for deduction u/s 80IB. Secondly, the appellant company failed to furnish completion certificates from the Competent Authority in respect of its aforesaid project. It is observed that the AO was guided in making the aforesaid disallowance from the previous assessment orders in the case of the appellant company for the AY. 06-07 and 07-08. 5.1 It is further observed that the disallowances made in respect of the aforesaid project of the appellant company u/s 80lB has been deleted by the Hon'ble ITAT B Bench Delhi in its consolidated order on 26.9.2012 in respect of AY. 06-07 the departmental appeal was rejected by the Hon'ble ITAT in ITA No. 2902/De1/10. The relevant extracts of the aforesaid order of the Hon'ble ITAT is reproduced below for reference: 3.2. We have considered the rival submissions and perused the material available on record. We have also perused the sanction plan and area of each unit like bed rooms, toilet, kitchen, drawi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lusion drawn in the impugned order, which is affirmed. 5.2 Similar issue was also adjudicated upon by the Hon ble ITAT in respect of AY 2007-08 in the appellant s case in ITA No. 4694/Del/10 dated 26.9.2012. For ready reference the relevant extracts of the order of the Hon ble ITAT is reproduced below:- 8.4. We have considered the rival submissions and perused the material available on record. The facts in brief are that the assessee declared taxable income of ₹ 5,97,15,620/- in its return filed on 31-10-2007. The case of the assessee was selected for scrutiny. The assessee claimed deduction of ₹ 5,19,92,472/- u/s 80-IB(10). The Assessing Officer asked the assessee to give justification for claiming such deduction. Ld. Assessing Officer denied the claim on two counts- firstly, the built up area of the unit is above prescribed limit of 1500 sq. ft. and secondly for earlier assessment order identical deduction was claimed by the assessee and the assessee violated the conditions stipulated u/s 80-IB(10) in Type A flats. Ultimately, the ld.Assessing Officer denied such deduction to the assessee. The assessee filed various documents before the Assessing Officer and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hange guidelines. These shares are issued to a number of companies and individuals and not only to RGSL. Valuation of these shares are done as per SEBI and Stock Exchange guidelines which were as per average market rats and approved by Board of Directors and General Meeting of CHD, statutory auditor and Bombay Stock exchange approval. There is no close or remote nexus between CHD and RGSL. There is no common relation among the directors or major share holders. Since CHD is listed company it has no control over market rate or guidelines of SEBI and Stock Exchange. It is immaterial for CHD what its shareholder does with their investments. As regard Assessing Officer s observation that the assessee has booked substantial sales with respect to non 80-IB project and has booked substantial sales with respect to 80-IB project, it was submitted that these are normal business transactions which CHD has undertaken during this year for earning profits in 80-IB project as well as non 80-IB projects. 8.7. If the aforesaid is analyzed, we find that the grievance of the revenue is that the sales made to M/s Rajasthan Global Securities Ltd. are not properly accounted for and undue profit has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m built-up area of one thousand square feet where such residential unit is situated within the cities of Delhi or Mumbai or within twenty-five kilometers from the municipal limits of these cities and one thousand and five hundred square feet atany other place. 8.9. If the aforesaid position of law existing at the time when the plan was sanctioned/ approval was granted to the assessee is analyzed , there was no condition like production of complete certificate. This is a settled legal proposition of law that the law existing at the particular point of time will be applicable unless and until it is specifically made retrospective by the legislature. The substitution so made, is therefore, applicable prospectively and not retrospectively. There is an uncontroverted fact that approval was granted to the assessee on 16-3-2005, consequently the assessee was expected to complete the project on or before 31-3-2009. Now the question arises whether the project was completed by the assessee within time. As is evident from the letter of the assessee dated 5-11-2008 addressed to the Vice Chairman Mathura Vrindavan Development Authority, on which the seal and signature of the concerned autho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was no practice of issuing the project completion certificate, therefore, it was held that it was not a condition precedent of filing the completion certificate for allowing deduction u/s 80-IB(10) of the Act. 8.12. In the case of CIT Vs. Tarnetar Corporation (Tax appeal no. 1241 of 2011), the Hon ble Gujarat High Court vide judgment dated 12-9-2012, observed that the confirmation issued by municipal authorities was filed on 15-2-2006 and was rejected on 1-7-2006. The assessee also paid penalty for regularization of the units. Since construction was completed well before 31st March 2008, the outer limit for such construction and the permission was not granted by they municipal authority, it was held that fulfilling of every condition is not mandatory and if there is a substantial compliance, the minor deviation thereof would not vitiate the very purpose of deduction. 8.13. The ITAT Delhi Bench G in the case of ACIT Vs. Surendra Developers etc. (ITA nos. 2743 to 2745 ITA nos. 3056 to 3058/Del/2010) vide order dated 1-8-2012, held that wherein the assessee applied for completion certificate before the lower authorities in time and such certificate was not issued by the loc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ince the assessee was to complete the project on or before 31- 3-2009 and request was duly made with the Competent Authority on 5-11-2008 mentioning that the project has been completed and completion certificate may be issued and if the same is not issued by the Competent Authority the assessee should not be penalized for the same unless and until some contrary facts are brought on record evidencing that the assessee contravened the conditions contained in the approval granted by such Competent Authority. As per sub-section (10) of Sec. 80-IB, the housing project which were approved before 31st day of March, 2008, the benefit will be hundred per cent subject to fulfillment of certain conditions. However, this condition was substituted by the Finance (No.2) Act of 2009 with effect from 1-4-2009, which has been further explained by sub-clause (ii) to the Explanation regarding completion certificate. However, since the approval was granted to the assessee on 1-4-2005, therefore, the assessee is not expected to fulfill the conditions which were not on the statute when such approval was granted to the assessee. Therefore, the appeal of the assessee deserves to be allowed. 9. Finally, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AO on this issue. 13. Ld. Counsel for the assessee supporting the impugned orders submitted that the issue is squarely covered in favour of the assessee by the order of the Hon ble Delhi High Court in the case of CIT vs BSES Rajdhani Power Ltd. dated 31.8.2010 in ITA No. 1266/2010 and he has drawn our attention towards operative para 6.3 and 6.4 of the impugned orders of the CIT(A). 14. On careful consideration of above rival submissions and perusal of the impugned order, we observe that the CIT(A) granted relief for the assessee with following conclusion:- 6.3 I have carefully considered the submissions of Id. AR and have gone through the assessment order. I find that the similar issue was involved in the case of CIT vs. BSES Rajdhani Powers Ltd. in ITA NO.1266/2010 wherein vide order dt.31.8.201 0, Hon'ble Delhi High Court has held as under:- We are in agreement with the view of the Tribunal that computer accessories and peripherals such as, printers, scanners and server etc. form an integral part of the computer system. In fact, the computer accessories and peripherals cannot be used without the computer. Consequently, as they are the part of the computer syste ..... X X X X Extracts X X X X X X X X Extracts X X X X
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