TMI Blog2016 (2) TMI 698X X X X Extracts X X X X X X X X Extracts X X X X ..... ousing Project at 1/1, R.R.L.Mitra Road, Kolkata 700085 was sanctioned by the Kolkata Municipal Corporation 09.12.1999, i.e., prior to 1-4-2005. In view of the aforesaid decision on the point, we do not find that any useful purpose will be served by examining this issue again by the AO, as admittedly the plan sanction in the case of the Assessee was prior to the statutory amendment. In the given facts and circumstances we are of the view that jurisdiction u/s 263 of the Act has not been properly exercised by C.I.T. as the condition precedent for exercise of such power viz., that the order of the AO was erroneous and prejudicial to the interest of revenue for failure on the part of the AO to make proper enquiries before completion of assessment. The jurisdiction u/s.263 of the Act could not have also been exercised for the reason that the AO did not enquire or examine as to whether commercial area in the project exceeded to statutory limits laid down in Sec.80IB(10)(d) of the Act. We, therefore, quash the order u/s 263 of the Act and allow the appeal of the assessee. - ITA No.807/Kol/2012 - - - Dated:- 15-1-2016 - Shri N.V.Vasudevan, JM Shri Waseem Ahmed, AM For The App ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2. On verification of the available records, it appeared that the plan for construction of the Housing Project at 1/1, R.R.L.Mitra Road, Kolkata 700085 was sanctioned by the Kolkata Municipal Corporation 09.12.1999 i. e. (F. Y 1999-2000) and validity of such plan was up to 08.12.2004 as per copy of the plan for Fire Fighting enclosed with the return for the Assmt.Year. 2004-05. As per 1. T Act, the plan sanctioned during the F.Y. 1999-2000, requires that the construction of the project should be completed within four years from the end of the Financial Year it which the plan. has been sanctioned i.e. on or before 31.03.2004 and completion order of the construction to be obtained from the plan sanctioning authority for the purpose of claiming deduction u/s 80IB(10). As per 1. T. Act, the date of completion certificate issued by the plan sanctioning authority is to be treated as the date of completion of project. The. date of completion of the project is 30.03.2005 as per copy completion certificate issued by the Kolkata Municipal Corporation, vide their letter No.B.62/III/04-05 dated 30.03.2005, which indicates that the project was completed beyond 4(four) financial years, debarring ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding purchasers. Afterwards, the remaining existing leases for better result executed a MOU between eight leases to construct the building and as per clauses of the MOU, the leases handed over the said plot of land in favor of Shree Krishna Developers (the assessee) for the purpose of construction of the building. Incidentally, it may be mentioned here that original 5 (five) nominee leases are also members of the A.O.P. Shree Krishna Developers and thus there was a restructuring of the A.O.P. already in existence. Lastly, on 17.07.2002, the status of the A.O.P. Shree Krishna Developers was restructured again and only original 5 (five) nominees were remained to enjoy the rights and entitlements of the said land. c) Hence in .your case,. the first condition required to be satisfied. for availing deduction u/s 80-IB(10), as above was not satisfied, since the present A. 0. P. with 5 (five) members is the re-constituted AOP, debarring you the claim of deduction u/s 80-IB(10) amounting to ₹ 1,62,09,343/-, which has wrongly been claimed by you. d)From the records of earlier years. it is also seen that the original members of the A.O.P. have contributed their portions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wing issues ought to have been considered by the AO before completion of the assessment u/s 143(3) of the Act. (i) The assessee AOP has under gone RECONSTRUCTION within the meaning of sec. 80IB(2) and hence ineligible for deduction u/s 80IB(10). (ii) The assessee AOP s business of development and construction had come existence well before 01-10-1998 and hence ineligible for deduction u/s 80IB(10). (iii) The assessee AOP has committed infringement of provisions of sec. 80IB(10)(c) of the I.T.Act, 1961 and hence ineligible for deduction u/s 80IB(10). (iv) The assessee AOP has committed infringement of provisions of sec.80IB(10)(d) of the I.T.Act, 1961 and hence ineligible for deduction u/s 80IB(10). According to the CIT, in the instant case, it was clear that after the assessee had filed his return, a notice under section 143(2) was issued to him for the purpose of carrying out a scrutiny in respect of the return of income filed by him. In the course of scrutiny no enquiry or investigation was made by the Assessing Officer on the above mentioned issues. According to the CIT failure to conduct necessary inquiry and investigation makes an order erroneous as the Assessi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A.C. is set aside with a direction to the AO to verify that the above issue and pass a fresh order as per provision of the Act Before passing the fresh assessment order, the AO shall grant the assessee a reasonable opportunity of being heard . 9. Aggrieved by the order of the C.I.T. the assessee has preferred the present appeal before the Tribunal. 10. At the time of hearing the learned counsel for the assessee brought to our notice that the issues that were sought to be raised by the CIT in exercise of his powers u/s.263 of the Act, were already considered and decided by CIT(A) in the regular appeal filed by the assessee against the order of AO dated 18.12.2009 passed u/s 143(3) of the Act. It was his submission that in view of clause (c) to Explanation 1 to section 263(1) of the Act, the C.I.T. does not have jurisdiction to consider the matter which has already been considered and decided in an appeal by CIT(A). It was further submitted by him that though factually the issues considered in the proceedings u/s 263 of the Act were already considered by the AO while completing the assessment u/s 143(3) of the Act and by the CIT(A) in the appeal against the order of AO, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed plan also. 13. The C.I.T. has not found this plea of the assessee to be false. Apart from the above we find that the existence of covered area in the housing project will not be applicable for housing projects, whose building plans had been sanctioned prior to the amendment to section 80IB(10)(d) of the Act. It has been so held by the Hon ble Bombay High Court in the Brahma Associates 333 ITR 289 (Bom). The Hon ble Bombay high Court held that on the date when the legislature introduced 100 per cent deduction under s. 80-IB(10), it was known that the local authorities could approve the projects as housing projects with commercial user to the extent permitted under the DC Rules framed by the respective local authorities. If the legislature intended to restrict the benefit of deduction only to the projects approved exclusively for residential purposes, it would have stated so. Legislature has provided deduction under s. 80-IB(1) to all housing projects approved by a local authority. Thus, it was evident that the legislature intended to allow deduction to all housing projects approved by a local authority with or without commercial user to the extent permitted under the DC Rules ..... X X X X Extracts X X X X X X X X Extracts X X X X
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