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TMI Blog2016 (5) TMI 870X X X X Extracts X X X X X X X X Extracts X X X X ..... lowing ground of appeal:- 1] The learned CIT(A) erred in holding that the reasst. u/s 147 was valid in law. He failed to appreciate that the appellant had complied with all the conditions of section 80IB(10) and thus, there was no warrant for reopening the asst. 1.1] The appellant submits that the reasst. is null and void. 2] The learned CIT(A) erred in not allowing the deduction u/s 80IB(10) of Rs. 3,51,663/- on the ground that the appellant had not completed the project by 31.03.2008. 2.1] The learned CIT(A) failed to appreciate that - a. The appellant had applied for completion certificate before 31.03.2008 to Solapur Municipal Corporation but the certificate was not given before that date. b. The appellant had produced all other evidences like electrical bills, water bills, municipal tax bills, etc. to indicate that the project was completed in time. c. During the survey operation, the dept. did not find any evidence that the project was not completed before 31.03.2008. d. And hence, the denial of deduction u/s 80IB(10) on the ground that the project was not completed before 31.03.2008 is not justified. 3] The appellant craves leave to add, alter, amend or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed. During course of survey it was seen that there was no construction activity going on. Photographs and video recording was taken during course of survey and same are placed on records. Further, in response to question 14 and 15 of the statement recorded during survey assessee produced MSEB bills and Municipal tax paid receipts, paid by the occupants before 31-3-2008, in support of the claim that owners were actually residing and project was completed before 31- 03-2008. 6.1 Regarding completion certificate it is submitted by the assessee that assessee has filed application as per provisions of BPMC Act, 1949 to SMC on 17.03.2008 but the Commissioner of Solapur Municipal Corporation has neither communicated his refusal / objection nor issued the certificate of completion. It is the claim of assessee that as per BPMC Act, 1949, on an application by the builder, the Commissioner shall grant certificate of completion along with permission to occupy premises. In case, the Commissioner fails to issue such certificate within 21 days from the date of application, it shall be presumed that, the Completion Certificate along with permission to occupy is deemed to have been granted. It is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cipal taxes and even electricity bills and since the said units were occupied by the respective owners of the flats, hence completed and the assessee was entitled to the claim of deduction under section 80IB(10) of the Act. In this regard, the learned Authorized Representative for the assessee pointed out that where all the formalities have been completed by the assessee, merely because the completion certificate had not been issued, the deduction claimed under section 80IB(10) of the Act could not be denied to the assessee. In this regard, reliance was placed on the decision of Pune Bench of Tribunal in Runwal Developers Vs. ACIT in ITA No.1339/PN/201 0, relating to assessment year 2006-07, order dated 30.12.2014. Further, the learned Authorized Representative for the assessee pointed out that even if the assessee had not applied for the said completion certificate, since the project was sanctioned prior to the amendment in section 80IB(10)(ii)(a) of the Act, there was no requirement of completion certificate and in this regard, reliance was placed on the ratio laid down by the Hon'ble Delhi High Court in CIT Vs. CHD Developers Ltd. (2014) 362 ITR 177 (Del). 10. The learned Depar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e date of completion. In the present case, according to the Assessing Officer, assessee did not obtain the completion certificate from the local authority i.e. Pune Municipal Corporation (PMC) on or before 31.03.2008. Therefore, the Assessing Officer disallowed assessee's claim for deduction u/s 80-IB(10) of the Act amounting to Rs. 1,20,25,699/-. The aforesaid action of the Assessing Officer has also been affirmed by the CIT(A), against which assessee is in appeal before us. 5. Before us, the Ld. Representative for the assessee vehemently pointed out by referring to the submissions made before the Assessing Officer, which are reproduced in the assessment order, that assessee had duly applied for obtaining of occupancy certificate from PMC but the same was not issued by PMC for their internal reasons. Factually, it is pointed out that the project of the assessee consisted of 56 flats and 7 row houses and the construction of all of them was completed and in-fact possession was handed-over to the respective buyers. The Ld. Representative also pointed out that the PMC was levying municipal taxes in respect of each of the residential unit and the same was being done in the name of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to section 80-IB(10) of the Act. It is also not denied by the assessee that the relevant completion certificate has not been issued by the local authority i.e. PMC on or before 31.03.2008. However, the case setup by the assessee is that the project of the assessee was approved and it commenced on 12.12.2003, which pertains to a period prior to 01.04.2005 i.e. the date on which the amendment which insisted on production of completion certificate was brought into force. In order to appreciate the aforesaid plea of the assessee, we may refer to the provisions of section 80-IB(10) of the Act as it stood prior to the amendment brought by the Finance (No.2) Act of 2004, w.e.f. 01.04.2005 :- "(10) The amount of profits in case of an undertaking developing and building housing projects approved before the 31st day of March, 2005 by a local authority, shall be hundred per cent. of the profits derived in 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 ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll apply to a housing project carried out in accordance with a scheme framed by the Central Government or a State Government for reconstruction or redevelopment of existing buildings in areas declared to be slum areas under any law for the time being in force and such scheme is notified by the Board in this behalf; (c) the residential unit has a maximum 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; (d) the built-up area of the shops and other commercial establishments included in the housing project does not exceed three per cent. of the aggregate built-up area of the housing project of five thousand square feet, whichever is higher." 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. (su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s were also furnished to the Assessing Officer. Before the CIT(A) assessee also pointed out that while making application for issuance of completion certificate to PMC, assessee had taken all the necessary steps required to be done before seeking the completion certificate, namely, obtaining of NOCs from various Departments like, Fire Department, Garden Department, Encroachment Department, Construction and Development Control Department, etc.. On this basis, it was sought to be contended that the non-issuance of the completion certificate by the PMC before 31.03.2008 was for reasons beyond the control of the assessee. 12. We find that all the aforesaid factual assertions made by the assessee have not been controverted either by the Assessing Officer or by the CIT(A). In the absence of any material to controvert the assertions of the assessee that the construction was completed before the stipulated dated i.e. 31.03.2008, we find no reasons to belie the same. Therefore, on facts, the position consistently canvassed by the assessee to the effect that the construction of the project was complete before the stipulated date of 31.03.2008 has to prevail. We hold so. 14. The Tribunal ..... X X X X Extracts X X X X X X X X Extracts X X X X
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