TMI Blog2016 (6) TMI 548X X X X Extracts X X X X X X X X Extracts X X X X ..... etc. are to be produced before the AO in the coruse of assessment proceedings; which has been done in this case. Before us, except for raising the grounds (supra), the learned D.R. for Revenue has not been able to bring on record any material evidence to contradict the findings of facts rendered by the learned CIT(A) that the assessee has fulfilled the conditions laid down for being allowed deduction under section 80IB(10) of the Act. In this factual matrix of the case, as discussed above, we uphold the order of the learned CIT(A) in holding that the assessee is entitled to be allowed deduction under section 80IB(10) of the Act in this year. - Decided in favour of assessee - ITA Nos. 1030, 2879 to 2882, 3497 & 3498/Mum/2013 - - - Dated:- 29-4-2016 - Shri Jason P. Boaz, Accountant Member and Shri Sandeep Gosain, Judicial Member For The Assessee : Shri G.M. Doss For The Revenue : Shri Bhumika V. Vora ORDER Per Jason P. Boaz, A.M. These appeals by Revenue are directed against the orders of the CIT(A)- 39, Mumbai dated 30.11.2012 for A.Y. 2002-03; dated 18.01.2013 for A.Y. 2004-05 and 2005-06; dated 31.01.2013 for A.Y. 2006-07; dated 30.01.2013 for A.Y. 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hose case a search and seizure action was carried out under section 132 of the Act on 22.09.2005 at their business and residential premises. Pursuant thereto, the assessment for A.Y. 2002-03 was completed under section 143(3) r.w.s. 153A of the Act vide order dated 30.03.2007. Subsequently, the CIT, Central II, Mumbai invoking the provisions of section 263 of the Act held the order of assessment passed by the Assessing Officer (AO) to be erroneous and prejudicial to the interest of the Revenue and set aside the order of assessment. The AO then passed order under section 143(3) r.w.s. 153! 263 of the Act disallowing the assessee s claim for deduction under section 80IB(10) of the Act. Subsequently, the Coordinate Bench of this Tribunal vide its order in ITA Nos. 3514 to 3520/Mum/2009 dated 24.08.2011 quashed the order passed by the learned CIT under section 263 of the Act for assessment years 200-01 to 2006-07. 2.4.2 We find that the learned CIT(A), considering the facts of the case for the year under consideration and following aforesaid decision of the Coordinate Bench of this Tribunal dated 24.08.2011 in the assessee s own case for assessment years 2000-01 to 2006-07, allowe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ointed out by the Ld. Counsel of the assessee the work could not start because of hindrances and the same started only after 17/10/1998, which becomes clear from the letter of the architect addressed to the TMC which is available at page 111 of the paper book. It was further pointed out that an enquiry was made by A.O himself though the Inspector and the Inspector has categorically stated that actual construction started on 17/10/1998. The relevant para of the Inspector's report dated 02/03/2007 reads as under:- In. this project the assessee had constructed seven buildings. The area of land utilized for this project is 2.93 acres and the built-up area of flats constructed on each of the these building are ranging from 456 to 664 per sq.ft. The date of commencement and date of completion of this project was 17/10/1998 and 13/10/2001, 13/12/2001 06/02/2002 respectively. The documentary proof of municipal approved plan, architect, certificate, and completion certificate etc, are obtained and placed on record. 8.5 Thus it is observed that on the basis of enquiry by the A.O it had been ascertained that actual construction had commenced only after 17.10.1998. Thus, al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n law, the CIT(A) has erred in allowing the claim of the assessee u/s. 80IB(10) without appreciating that one of the projects viz. Vijay Garden contained row houses exceeding 2000 sq.ft. in area which violated the condition precedent for allowing deduction u/s. 801B(10). 3. On the facts and in the circumstances of the case and in law, the CIT(A) has erred in allowing the claim of the assessee u/s. 80IB(10) despite noting that the assessee had filed only consolidated audit report and not separate audit report in respect of each project as mandatory under Rule 18BBB. 4. The Appellant craves to leave to add, to amend and / or to alter any of the grounds of appeal, if need be. 5. The appellant, therefore, prays that on the grounds stated above, the order of the CIT(A)-39, Mumbai may be set aside and that of the Assessing Officer restored. 4.2 From a perusal of the grounds raised (supra), it is seen that the issue raised therein is with regard to the learned CIT(A) allowing the assessee s claim for deduction under section 80IB(10) of the Act in the impugned orders for assessment years 2004-05 and 2005-06, by following the decision of the Coordinate Bench of thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .2011 in the assessee s own case for assessment year 2000-01 to 2006-07, at paras 5.1 to 5.5 of the impugned orders for assessment year 2004-05 and 2005-06 have allowed the assessee s claim for deduction under section 80IB(1) of the Act, subject to verification, by holding as under: - 5.1 It is stated by the Assessing Officer that after considering the details submitted during the course of assessment proceedings and during the course of revision proceeding under s. 263, the claim of deduction under s. 80IB is being disallowed. 5.2 It is pointed out by the appellant that - The Assessing Officer after physical verification has allowed deduction u/s 80IB(10) in. the assessment order date 30.03.2007 passed under s.143(3) r.w. 153A. Subsequently the Commissioner invoked the provisions of section 263 and set aside the assessment order dated 30.3.2007 mainly for the purpose of withdrawing the deduction allowed by the Assessing Officer in the order dated 303.2007. The Hon'ble ITAT quashed the order passed by the CIT under s. 263. The Assessing Officer has in the impugned order disallowed the deduction under s. 80IB(10) mainly on the ground that his predecessor has dis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... building has been completed which is evident from audit report u/s 80IB(10) as well as from the completion certificate issued by the architect. It may be noted that the ld. A.O. during the course of assessment proceedings deputed two Inspectors at the sites of the housing projects constructed and developed by the appellant in order to verify the claim of the appellant u/s 80IB(10). The Inspectors accordingly submitted their report vide letter dated 2.3.2007. The relevant para of the Inspectors report is reproduced as under : In this project the assessee had constructed seven buildings. The area of land utilized for this project is 2.93 acres and the built-up area of flats constructed on each of these building are ranging from 456 to 664 per sq. feet. The date of commencement and date of completion of this project was 17.10.1998 and 13.10.2001; 13.12.2001 6.02.2002 respectively. The documentary proof of municipal approved plan, architect certificate, commencement certificate and completion certificate, etc. are obtained and placed on record. Therefore, it is submitted that the ld. A.O. in the order u s 143(3) r.w.s.153A has correctly legitimately allowed the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... report in form No.10CCB. Though the appellant would argue that in this case a consolidated audit report is already filed and hence the claim cannot be denied, it cannot be ignored that for the impugned year separate audit report in Form 10CCB is essential. Therefore the claim is subject to filing of separate reports for each undertaking or undertaking for which deduction under s. 80IB is claimed by the appellant. The appellant is directed to file the same before the Assessing Officer and subject to filing and due verification, the claim stands allowed. 4.4.3 On an appreciation of the facts of the case for the two assessment years 2004-05 and 2005-06 on the issue of the assessee claim for deduction under section 80IB(10) of the Act for assessment years 2004-05 and 2005-06 we find that no material has been brought on record by Revenue to controvert the factual findings of the learned CIT(A) (supra) and therefore find no requirement to interfere with or deviate therefrom. In the factual matrix of the case as discussed above and following the decision of the Coordinate Bench of this Tribunal in its order in ITA Nos. 5315 to 5320/Mum/2009 dated 24.08.2011 in the assessee s own c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or Revenue was heard in support of the grounds raised and submitted that the learned CIT(A) ought not to have followed the aforesaid order of the Coordinate Bench of this Tribunal (supra) since the Department had not accepted the order and had preferred appeal against the same before the Hon'ble High Court. 6.3 Per contra, the learned A.R. for the assessee submitted that the learned CIT(A) has considered the assessee s claim for deduction under section 80IB(10) of the Act and allowed the same considering the facts of the case for the relevant year under consideration and by following the decision of the Coordinate Bench of this Tribunal in ITA Nos. 3514 to 3520/Mum/2009 dated 24.08.2011 for assessment years 2000-01 to 2006-07. It is prayed that in view of the above, Revenue s appeal for A.Y. 2006-07 is liable to be dismissed. 6.4.1 We have heard the rival contentions and perused and carefully considered the material on record; including the judicial pronouncement cited. The facts of the matter are that the AO completed the order of assessment for A.Y. 2006-07 under section 143(3) r.w.s. 153A of the Act vide orders dated 30.03.2007 allowing the assessee s claim for deducti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nct entity. 6.2 In respect of the above stated objections, the appellant submissions are as summarized below: i) With regard to non-receipt of completion occupancy certificate for Bldg. No, 16 (Vjaya Nagari Annex II), the objection is entirely frivolous as is evident from copy of the Audit Report placed on record. Further during the course of assessment proceedings, the Assessing Officer had deputed two inspectors at the site of the housing project in order to verify the claim of the appellant under s. 80IB(10). The relevant paragraph of the Inspectors report is reproduced as under: II(ii) Vijay Nagri Annexure Phase-Il - In this project the assessee had constructed five buildings. The area of land utilized for this project is 3.16 acres and the built-up area of flats constructed on each of these building are ranging from 539 to 792 per sq. feet. The date of commencement and date of completion of this project was 31.03.2001 and March 2004 respectively. The documentary proof of municipal approved plan, architect certificate, commencement certificate and completion certificate, etc. are obtained and placed on record. ii) With regard to the project Vijay Garden ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deduction under s. 80IB(10) claimed by the appellant. However, the Hon'ble ITAT vide order dt.24.8.2011 quashed the order passed by the CIT(C)-II, Mumbai, under s. 263. The Hon.ble ITAT in para 13 of its order has held as under: 13. The first objection raised by the Commissioner is that the actual work in two projects viz. Vijay Nagari Annex-I (Building Nos. 1 to 3) and Vijay Nagari Annex-I (building No.10 to 12) commenced as per the annexures to 10CCB reports on 17.10.1998, whereas as per the Commencement Certificate issued by the TMC work commenced on 04.10.1997 and therefore, commencement should be reckoned as 04.10.1997. As per sec. 80IB(10) the first condition for claiming deduction is that the project must have commenced on or before 1st date of October, 1998. However, as pointed out by the Ld. Counsel of the assessee the work could not start because of hindrances and the same started only after 17.10.1997, which becomes clear from the letter of the architect addressed to the TMC which is available at page 111 of the paper book. It was further pointed out that an enquiry was made by A.O. himself through the Inspector and the Inspector has categorically state ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The primary condition with regard to the order of the A.O. being prejudicial to the interest of the Revenue is not satisfied in this case, therefore, Hon'ble court has held that the order of CIT u/s 263 was bad in law. Accordingly, it was held that where the CIT has stated in his order that A.O. has not examined certain items, assuming this to be so, the order will only be erroneous, but it cannot be said to be prejudicial to the interest of the revenue till the CIT deals with the explanation given by the assessee with regard to the items alleged by him in the course of proceedings u/s 263. Meaning thereby the CIT should have appreciated the reply filed by the assessee and merely by stating that A.O. has not examined certain points, he cannot exercise his revisionary jurisdiction u/s 263, in so far as such order can be branded as erroneous but cannot be said to be prejudicial to the interest of the Revenue. In any case, once A.O. had made the enquiry and he was satisfied that actual construction had commercial only after 17.10.1998 and allowed the deduction that would mean that A.O. has adopted one of the possible views in law. If this course of action is adopted, then ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... On the basis of the above submissions it is prayed that deduction under s. 80IB(10) be allowed. 6.3 I have considered the matter. As per the facts on record, in the return of income filed, the appellant had claimed deduction under s. 80IB(l0) of the Act. The Assessing Officer had allowed the claim while completing the assessment under s 143(3) r.w.s. 153A after scrutiny of the claim made. Subsequently, the Commissioner invoked the provisions of section 263 and set aside the assessment order dt. 30.3.2007 mainly for the purpose of withdrawing the deduction allowed by the Assessing Officer. The Hon'ble ITAT quashed the order passed by the CIT under s 263. The Assessing Officer, in the impugned order has disallowed the deduction under s. 80IB(10) reckoning that the deduction has been disallowed in the order passed under s. 143(3) r.w.s. 263/153A. It has to be held that since the order passed by the CIT under s.263 has been quashed by the Hon'ble Tribunal, the consequential order passed by the Assessing Officer under S. 143(3) r.w.s. 263/153A no longer survives. Therefore, it follows that the deduction earlier allowed by the Assessing Officer in the order dated 30. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... venue s appeal for A.Y. 2006-07 is dismissed. 8. Revenue s appeal in ITA No. 2882/Mum/2013 for A.Y. 2007-08 8.1 In this appeal, Revenue has raised the following grounds: - 1. On the facts and in the circumstances of the case and in law, the CIT(A) has erred in holding that the assessee has fulfilled the conditions laid down u/s 80IB(10) without appreciating the fact that the assessee failed to obtain Completion Certificate issued by the Local Authority in respect of all the projects on which it has claimed deduction u/s. 801B(10) of the IT Act, 1961. 2. On the facts and in the circumstances of the case and in law, the CIT(A) has erred in allowing the claim of the assessee u/s. 80IB(10) without appreciating that one of the projects viz. Vijay Garden contained row houses exceeding 2000 sq.ft. in area which violated the condition precedent for allowing deduction u/s. 801B(10). 3. On the facts and in the circumstances of the case and in law, the CIT(A) has erred in allowing the claim of the assessee u/s. 80IB(10) despite noting that the assessee had filed only consolidated audit report and not separate audit report in respect of each project as mandatory und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e captioned year, the appellant had claimed deduction under s. 80IB(10) as under: Project Date of commencement Date of Completion Size of plot (Approx.) Deduction u/s 80IB V Nagari Annex-II (14-18) 30.3.2001 March 2003 3.16 Acres 17,09,493 V Nagari Annex- II (26-27) 04.08.2003 25.08.2006 1.18 Acres 64,11,469 V Nagari Annex- II (31-32) 04.08.2003 07.11.2007 1.64 Acres 38,54,278 V Nagari Annex-II (10-13) 11.07.2002 04.04.2006 1.72 Acres 2,25,30,384 Vijay Vatika 11.08.2003 27.10.2007 1.78 Acres 1,14,46,927 Vijay Vilas (1-6) 14.12.2004 14.04.2007 2.78 acres ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ow cause notice issued by CIT u/s 263, order passed by CIT u/s 263, consequential order passed by the A.O. u/s 143(3) R.W.S. 263/153a. It is submitted that the building has been completed which is evident from audit report u/s 80IB(10) as well as from the completion certificate issued by the architect which is placed at pages nos. 11-13 of the paperbook. It may be noted that the A.O. during the course of assessment proceedings had deputed two Inspectors at the sites of the housing projects constructed and developed by the appellant in order to verify the claim of the appellant u/s 80IB(10). The inspectors accordingly submitted their report vide letter dated 2.3.2007. The relevant para of the Inspectors report is reproduced as under : (ii) Vijay Nagri Annexure Phase-II :In this project the assessee had constructed five buildings. The area of land utilized for this project is 3.16 acres and the built-up area of flats constructed on each of these building are ranging from 539 to 792 sq. feet. The date of commencement and date of completion of this project was 31.03.2001 and March 2004 respectively. The documentary proof of municipal approved plan, architect certificate, commenc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no documents (including TDS / TCS Certificate, reports of Audit) should be attached alongwith returns filed in the electronic mode. 7.5 The objection as raised by the A.O and the submissions of the appellant have been considered. It is observed that during the course of assessment proceedings, the A.O. had deputed two Inspectors for on-site verification, who had clearly stated that project Vijay Nagari Phase II commenced on 31.3.2011 and was completed in March 2003; that with regard to Vijay Garden, the deduction had been claimed in respect of Building Nos. 10 to 13, and not in respect of Row houses being Building nos. 1-9, The copy of the Inspector's Report is available at page nos. 85-86 of the paper book filed. As regards Project Vijay Nagari Annex-II, that only occupancy certificate has been received and not completion certificate, the appellant has brought to my notice that occupancy certificate is issued by the Municipal Authority only after receipt of completion certificate from the Architect. In other words, without the completion certificate from the Architect, the Occupancy Certificate would not be issued. It is a fact that the Occupancy Certificates have been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hout appreciating the fact that the assessee failed to obtain Completion Certificate issued by the Local Authority in respect of all the projects on which it has claimed deduction u/s. 801B(10) of the IT Act, 1961. 2. On the facts and in the circumstances of the case and in law, the CIT(A) has erred in allowing the claim of the assessee u/s. 80IB(10) without appreciating that one of the projects viz. Vijay Garden contained row houses exceeding 2000 sq.ft. in area which violated the condition precedent for allowing deduction u/s. 801B(10). 3. On the facts and in the circumstances of the case and in law, the CIT(A) has erred in allowing the claim of the assessee u/s. 80IB(10) despite noting that the assessee had filed only consolidated audit report and not separate audit report in respect of each project as mandatory under Rule 18BBB. 4. The Appellant craves to leave to add, to amend and / or to alter any of the grounds of appeal, if need be. 5. The appellant, therefore, prays that on the grounds stated above, the order of the CIT(A)-39, Mumbai may be set aside and that of the Assessing Officer restored. 10.2 From a perusal of the grounds raised (supra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Architect. In this regard, I have examined the copies of the occupancy certificate placed on record by the appellant. From pages 47 to 40 contain the copies of the completion certificates given by the Architect to enable the Municipal authorities to issue the Occupancy Certificate. Thus it is found that there is merit in the contention that without completion certificate from the Architect, the Occupancy Certificate cannot he obtained. Also, it is clear from the order of the AO himself that no claim was made for deduction in respect of row houses being building numbers 1-9 of Vijay Garden. It is clear from the chart as prepared by the A.O., in paragraph 3.2 of the assessment order that in respect of Vijay Garden, the claim is with respect to Building Nos. 10-13; there is no claim in respect of Row House, being Building Nos. 1-9 of Vijay Garden. As regards the non-furnishing of Audit Report along with the return, when the return of income has been e-filed, the original documents/annexures relating to the computation of income are to be produced during the course of assessment proceedings. In the instant case, the separate Audit Reports in Form 10CCB, project wise, were produced duri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r being allowed deduction under section 80IB(10) of the Act. In this factual matrix of the case, as discussed above, we uphold the order of the learned CIT(A) in holding that the assessee is entitled to be allowed deduction under section 80IB(10) of the Act in this year. Consequently, Revenue s grounds at S.Nos. 1 to 5 of this appeal being bereft of merit are dismissed. 11. In the result, Revenue s appeal for A.Y. 2008-09 is dismissed. 12. Revenue s appeal in ITA No. 3498/Mum/2013 for A.Y. 20090-10 12.1 In this appeal Revenue has raised the following grounds: - 1. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in holding that the assessee has fulfilled the conditions laid down u/s. 80IB(10) without appreciating the fact that the assessee failed to obtain a Completion Certificate issued by the Local Authority in order to claim deduction u/s. 80IB(10) of the I.T. Act, 1961. 2. The Appellant craves to leave to add, to amend and/or alter any of the grounds of appeal, if need be. 3. The appellant, therefore prays that on grounds stated above, the order of the CIT(A)-39, Mumbai may be set aside and that of the Assessing Off ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... perusal of the said documents it is observed that the occupancy certificate for the various projects have been issued by the Municipal Corporation and the same are addressed to M/s Archetype Consultants (I) Pvt. Ltd., who in turn have submitted the completion certificates, which is referred to in the said certificate of occupancy. Hence the claim cannot be denied for the reason that completion certificates haves not been obtained for the reason that it is after receipt of the completion certificate of the Architect that the occupancy certificate is issued by the Municipal Authorities. Hence held that for the said reason the claim cannot be denied and that the appellant is entitled to the claim. In these circumstances it is held that appellant is entitled to the deduction claimed under s. 80IB(10). It is accordingly held so. 12.4.2 On an appreciation of the facts of the case on the issue of the assessee s claim for deduction under section 80IB(10) of the Act, it is seen that the assessee s eligibility for being allowed the deduction under section 80IB(10) of the Act has been upheld by the decision of the Coordinate Bench of this Tribunal in the assessee s own case in ITA Nos. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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