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Amrutlal Hassanand Pamnani Versus The Income Tax Officer, Ward - 1 (2) , Solapur

2016 (5) TMI 870 - ITAT PUNE

Claim of deduction under section 80IB(10) - non receipt of completion certificate - Held that:- No reason in the disallowance made by the authorities below in denying deduction under section 80IB(10) of the Act. The assessee before us has furnished evidence to the effect that the individual flat owners have occupied the respective flats, against which municipal taxes have been levied by the State authorities and even electricity connections have been made to the flats, against which the charges .....

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EDIA, AM For The Appellant : Shri Nikhil Pathak For The Respondent : Shri Hitendra Ninawe ORDER PER SUSHMA CHOWLA, JM: This bunch of three appeals filed by the assessee are against consolidated order of CIT(A)-III, Pune, dated 28.07.2011 relating to assessment years 2005-06 to 2007-08 against respective orders passed under section 143(3) / 143(3) r.w.s. 147 of the Income-tax Act, 1961 (in short the Act ). 2. This bunch of three appeals filed by the assessee relating to similar issue were heard t .....

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t. 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 ₹ 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 fo .....

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not completed before 31.03.2008 is not justified. 3] The appellant craves leave to add, alter, amend or delete any of the above grounds of appeal. 4. The grounds of appeal No.1 and 1.1 raised in all the appeals against reopening of assessment are not pressed and hence, the same are dismissed as not pressed. 5. The issue in ground of appeal No.2 raised in all the appeals is against the claim of deduction under section 80IB(10) of the Act. 6. Briefly, in the facts of the case, the assessee was eng .....

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. In this case, spot survey under section 133A of the Act was conducted on 28.05.2008 for the purpose of verification of claim of deduction under section 80IB(10) of the Act in order to check whether the project was completed by 31.03.2008 and completion certificate was issued by the local authority and obtained by the assessee. During the course of survey, the assessee was asked to furnish the copy of completion certificate of the project. However, the assessee could not furnish the same statin .....

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ssment under section 147 of the Act and in response to notice under section 148 of the Act, the assessee furnished a letter stating that the original return of income filed by it should be treated as reply to notice under section 148 of the Act. The reasons for reopening of the assessment were supplied to the assessee in this regard and after considering the submissions of assessee, the Assessing Officer vide paras 6 and 7 observed as under:- 6. The assessee s submission has duly been considered .....

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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 fail .....

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ation (ii) the date of completion of construction of the housing project shall be taken to be the date on which the completion certificate in respect of such housing project is issued by the local authority. Considering the fact that completion certificate in this case is not issued by the Solapur Municipal Corporation on or before 31-03-2008 there is violation of condition for eligibility for deduction u/s 80IB(10). Considering these provisions of Income Tax Act assessee s explanations are not .....

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r held the assessee was not eligible for claiming deduction under section 80IB(10) of the Act and the said deduction was not allowed to the assessee. 8. The CIT(A) upheld the order of Assessing Officer in denying the deduction claimed under section 80IB(10) of the Act for non-receipt of completion certificate by 31.03.2008 with regard to assessment years 2005-06 to 2007-08. However, with regard to assessment year 2004-05, it was observed by the CIT(A) that the said provisions of receipt of compl .....

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h, 2008 and persons had occupied the flats and also received notices for payment of municipal 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 certifi .....

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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 Departmental Representative for the Revenue in turn, relied on the orders of authorities below. 11. We have heard the rival contentions and perused the record. The issue arising before us is in respect of claim of dedu .....

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ssee claims to have fulfilled the conditions of development of the said project and handing over of the respective units to the individual flat owners, who in turn, had occupied the said flats before 31.03.2008. The assessee further claims to have applied for the issue of completion certificate vide letter dated 17.03.2008. However, no such completion certificate was issued to the assessee by 31.03.2008. In the absence of completion certificate, both the authorities below held the assessee not t .....

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rated upon by the Pune Bench of Tribunal in Runwal Developers Vs. ACIT (supra). The facts as referred to by the Tribunal in paras 4 and 5 were as under:- 4. The project of the assessee commenced on 12.12.2003. The Assessing Officer was of the view that the project of the assessee did not comply with the conditions prescribed in clause (a) to section 80-IB(10) of the Act read with Explanation (ii) thereof. As per the Assessing Officer, the construction of the project was to be completed by 31.03. .....

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amounting to ₹ 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. .....

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buyers of the flats were indeed using the flats and the same could have been possible only after completion of the project. The Ld. Representative submitted that the aforesaid assertions of the assessee have not been disputed but the claim of deduction u/s 80-IB(10) of the Act had been rejected merely because the PMC did not issue the occupancy certificate on or before 31.03.2008. In this context, reference has also been made to the judgement of the Hon ble Delhi High Court in the case of CIT vs .....

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the said facts, held as under:- 7. We have carefully considered the rival submissions. The crux of the controversy in the present appeal relates to the provisions of sub-clause (i) of clause (a) to section 80-IB(10) of the Act read with Explanation (ii) thereof. As per the Revenue, having regard to sub-clause (i) of clause (a) to section 80- IB(10) of the Act, the construction of the housing project was to be completed on or before 31.03.2008. Sub-clause (i) of clause (a) to section 80-IB(10) o .....

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n admitted position that the housing project of the assessee known as Runwal Daffodils commenced with effect from 12.12.2003 and therefore construction of such a housing project was required to be completed on or before 31.03.2008 as stipulated in sub-clause (i) of clause (a) 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 ass .....

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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 has minimum area of one acre; and (c .....

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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 commenced or commences development and construction of the housing project on or after the 1st day of October, 1998 and completes such construction - (i) in a case .....

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local authority on or after the 1st day of April, 2005, within five years from the end of the financial year in which the housing project is approved by the local authority. Explanation- For the purposes of this clause,- (i) in a case where the approval in respect of the housing project is obtained more than once, such housing project shall be deemed to have been approved on the date on which the building plan of such housing project is first approved by the local authority; (ii) the date of com .....

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ting 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 commerc .....

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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 .....

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e case of CHD Developers Ltd. (supra). In this background, we therefore find no reasons to uphold the objection of the lower authorities in order to disallowance claimed u/s 80-IB(10) of the Act. 11. Factually speaking, assessee has consistently canvassed before the lower authorities as well as before us that the construction of the project was complete in all respects by 31.03.2008. In-fact, before the CIT(A) assessee also pointed out that it had made an application to the PMC for issuance of c .....

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ssing Officer has also noted that assessee furnished the copy of electricity bills and possession documents in respect of the flat owners, which formed a part of written submissions. Assessee had asserted before the Assessing Officer that the PMC was levying municipal taxes in respect of each of the flat in the project and such levies were in the name of the respective owners. The MSEB receipts and possession documents were also furnished to the Assessing Officer. Before the CIT(A) assessee also .....

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or 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 constructi .....

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