TMI Blog2015 (8) TMI 266X X X X Extracts X X X X X X X X Extracts X X X X ..... ic tank is concerned we concur with the findings of the Commissioner of Income Tax (Appeals) that construction of soakpit which is required to drain excess water from the septic tank of venial nature. The septic tank has substantial capacity to hold the drainage water and it is only in the case of overflow that the water flows from septic tank to the soakpit. This discrepancy pointed out by the local authority was also removed by the assessee. As far as the objection of the Revenue that against 213 units approved the assessee has constructed only 204 units, we do not find any merit in the same. Four units were not constructed as space was left for 9 mtr. Proposed D P Road and 5 units were left out to make space for construction of septic tank. The non-construction of 9 units, in our considered view will not render 204 completed units in-eligible for the claim of deduction u/s. 80IB(10) of the Act. Thus non obtaining of completion certificate in respect of project approved prior to 01-04-2005 will not render the assessee ineligible for claiming deduction u/s. 80IB(10) in the impugned assessment years. In appeals for assessment years 2005-06 to 2007-08, the Revenue has raised g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Aggrieved by the assessment orders passed in all the impugned assessment years, the assessee filed appeals before the Commissioner of Income Tax (Appeals) challenging the reassessment proceedings, as well as, disallowance of deduction u/s. 80IB(10) of the Act. The Commissioner of Income Tax (Appeals) after analyzing the facts of the case upheld the jurisdiction assumed by the Assessing Officer u/s. 148 of the Act. However, on merits the Commissioner of Income Tax (Appeals) held that the assessee is eligible to claim deduction u/s. 80IB(10) of the Act. Against the findings of Commissioner of Income Tax (Appeals), the Revenue has filed appeals for assessment year 2003-04 to assessment year 2007-08 and the assessee has filed Cross Objections for the corresponding assessment years. 3. Shri B.C. Malakar representing the Department submitted that the assessee has not complied with the conditions as set out in section 80IB(10) to be eligible for claiming deduction. During survey conducted u/s. 133A it transpired that the assessee has not obtained completion certificate from the competent authority before due date i.e. 31-03-2008. The project was initially approved for 206 units on 0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , it will not render the entire project ineligible for deduction u/s. 80IB(10). The ld. AR further submitted that since the project was approved much prior to 01-04-2004, the condition of obtaining completion certificate was not in the section at that time. The requirement to obtain completion certificate was introduced by the Finance Act, 2004 w.e.f. 01-04-2005. Therefore, the condition of obtaining completion certificate is not applicable on the assessee. In support of his submissions the ld. AR placed reliance on the decision of Co-ordinate Bench of Tribunal in the case of Runwal Developers Vs. ACIT in ITA No. 1339/PN/2010 for the assessment year 2006-07 decided on 30-12-2014, the decision of Hon'ble Madras High Court in the case of CIT Vs. Jain Housing Constructions Ltd. reported as 30 taxmann.com 131 (Madras) and the judgment of Hon'ble Delhi High Court in the case of CIT Vs. CHD Developers Ltd. reported as 362 ITR 177 (Del). As far as Cross Objections filed on behalf of the assessee are concerned, the ld. AR stated at the Bar that the same are not pressed. 5. We have heard the submissions made by the representatives of both the sides and have perused the order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eal is similar to the dispute decided by the Co-ordinate Bench in the case of Runwal Developers Vs. ACIT (supra). In the said case the project had commenced w.e.f. 12-12- 2003 and accordingly it was required to be completed on or before 31-03- 2008. The Assessing Officer disallowed the claim of deduction u/s. 80IB(10) to the assessee on the ground that the completion certificate was given by the local authority after 31-03-2008. The Tribunal held that the assessee made application to the concerned authority for issuance of completion certificate before 31-03-2008. The assessee had taken all the necessary steps required to be done before seeking the completion certificate. Nonissuance of completion certificate by the competent authority before 31-03-2008 was for reasons beyond the control of the assessee. Once, the assessee has obtained no objection certificate from the concerned Departments, the obtaining of completion certificate is merely a formality. The delay in issuance of completion certificate by the competent authority cannot be attributed to the assessee. The Tribunal further relied on the decision of Hon'ble Delhi High Court in the case of CIT Vs. CHD Developers Ltd. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any 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 tile 1st day of October, 1998; (b) the project is on the size of a plot of land which has minimum area of one acre; and (c) the residential unit has a minimum 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 kilometres from the municipal limits of these cities and one thousand and five hundred square feet at any other place. 9. Subsequently, Finance (No.2) Act of 2004, which was brought into force w.e.f. 01.04.2005, amended the provisions of section 80-IB(10) of the Act; and, post-amendment section 80-IB(10) of the Act read as under :- (10) The amount of deduction in the case of an undertaking developing and building housing projects approved before the 31st day of March, 2008 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 co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 10. In the instant assessment year i.e. 2006-07, the Assessing Officer has sought to disallow the deduction claimed by the assessee on the ground that the completion certificate in terms of Explanation (ii) has not been obtained. A similar situation had arisen before the Hon ble Delhi High Court in the case of CHD Developers Ltd. (supra). In the case before the Hon ble Delhi High Court, the project of the assessee was approved on 16.03.2005 and the Assessing Officer proceeded to disallow the deduction claimed for assessment year 2007-08 on the ground that the completion certificate in terms of Explanation (ii) was not granted within the stipulated period i.e. on or before 31.03.2009. Notably, in the case before the Hon ble Delhi High Court, the time-limit for completion of construction of the housing project was governed by sub-clause (ii) of clause (a) to section 80-IB(10) of the Act. The Hon ble Delhi High Court noted that since the project of the assessee was approved prior to 2005 i.e. before the amendment which insisted on issuance of completion certificate by the end of four years was brought into force, the claim of deduction could not be denied for the said reason. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ft for 9 mtr. Proposed D P Road and 5 units were left out to make space for construction of septic tank. The non-construction of 9 units, in our considered view will not render 204 completed units in-eligible for the claim of deduction u/s. 80IB(10) of the Act. 10. In view of the facts of the case and the decisions discussed above we hold that non obtaining of completion certificate in respect of project approved prior to 01-04-2005 will not render the assessee ineligible for claiming deduction u/s. 80IB(10) in the impugned assessment years. In appeals for assessment years 2005-06 to 2007-08, the Revenue has raised ground with regard to commercial units in the project. Since, the same has not been pressed by the ld. DR. The same are dismissed as not pressed. 11. The assessee has filed Cross Objections in all the impugned assessment years. The ld. AR of the assessee has made statement at the Bar, not to press the grounds raised in the Cross Objections. Accordingly, all the Cross Objections for the assessment years 2003-04 to 2007-08 are dismissed as not pressed. 12. In the result, all the five appeals as well as Cross Objections are dismissed. Order pronounced on Friday, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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