TMI Blog2013 (2) TMI 800X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee against the order of the CIT(A) on following grounds: 1. On the facts and in the circumstances of the case and in law, the honourable CIT (Appeal)-II Pune erred in confirming the disallowance of deduction under section 80IB(10) of ₹ 1,20,66,344/- made by the learned Income Tax Officer Ward 4(5), Pune without appreciating the facts of the case that the project approved by Pune Municipal Corporation-the then local authority was complete before 31st March 2008. The honourable CIT(A) failed to appreciate that the appellant was executing two separate projects. The appellant prays that the claim of deduction claimed under section 80IB(10) may please be granted. 2. Without prejudice to the first ground of appeal the appellant wishes to prefer the second ground of appeal as follows On the facts and in the circumstances of the case and in law, the honourable CIT (Appeal)-II Pune erred in not allowing the proportionate deduction in respect of residential units/flats for which completion certificate was granted by Grampanchayat Keshavnagar, Mundhwa Pune. The appellant prays that the proportionate deduction under section 80IB(10) in respect of residential units/flats fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has revised plan approval from the concern Collector, Pune on 25.01.2007 according to which three buildings F, G H and ten row houses B-1 to B-10 were added to the original plan. Beside this the amenity building was also proposed which also contained five shops on the ground floor. The Assessing Officer stated that on site visit it was noticed that out of the revised sanctioned plan approval dated 25.01.2007, construction work of buildings A, B, C, D, E, F, G, H were completed but no construction activity was started in buildings B-1 to B-10 and the amenity building. Further the construction of shops 1 to 8 proposed in the ground floor of building 'F' had also not started. Completion certificate from the local authority could not be produced because the area in question had been excluded from the PMC limits. It was contended on behalf of assessee that the Collector, Pune was not issuing the certificate during the relevant point of time. In this background, the Assessing Officer raised the following objections: a) When the project was started by the firm M/s. Harikrupa Shah Associates and the first building plan approval dated 31.03.2001 was also obtained by it, how t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om the local authority i.e. from the Collector, Pune, which is the competent local authority as per the Maharashtra Regional Town Planning Act, 1966 to sanction the plan, issue the permission for the commencement. 5. Matter was carried before the First Appellate Authority wherein various contentions were raised and the CIT(A) having considered the same, has rejected the claim of the assessee and upheld the order of the Assessing Officer. 6. Before us, the Ld. Authorised Representative submitted that the Assessing Officer erred in disallowing the claim u/s.80IB(10) of ₹ 1,20,66,344/-. He did not appreciate the facts of the case in proper prospective. He reiterated the submissions made before the authorities below and requested to allow the claim in question. Main thrust of the Ld. Authorised Representative was that assessee's lay out plan was approved on 29.03.2001 and first building plan for 5 buildings, i.e., A, B, C, D and E was approved on 31.03.2001. The Ld. Authorised Representative submitted that Keshav Nagar Village was included in the jurisdiction of PMC in 1997. However, it was excluded from PMC vide notification dated 17.11.2001. The construction activity ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ived 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 where a housing project has been approved by the local authority before the 1st day of April, 2004, on or before the 31st day of March, 2008; (ii) in a case where a housing project has been, or, is approved by the local authority on or after the 1st day of April, 2004, within four 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 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; ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 09.1997, which has been placed at page 9 and English translation of the same has been placed at page 10 of the Paper Book-I. f) The said village Mundhwa was excluded from Pune Municipal Corporation limit by Maharashtra Government Gazette No PMC 3020/1676/cr 258/2000/UD 22 dated 17.11.2001. A copy of the Maharashtra Govt. Gazette is appearing on pages 11 to 13 and English translation thereof is appearing on page 14 of the Paper Book-I, appearing at Sl.No.13 of the said Notification. The village Mundhwa after being excluded from PMC limits fall in the jurisdiction of the Collector, Pune, for administrative purpose including building activities etc. g) The assessee got the building plan approved from the Collector Pune on 25.01.2007 on the recommendation of Assistant Director of Town Planning Pune Branch, Pune, dated 14.11.2006. The building plan approved by Collector, Pune, also mentioned originally approved five Buildings A, B, C, D E and has been clearly mentioned in the approved plan as existing structure and new buildings namely F, G, H and 10 row houses and a building in Amenity Area were approved. A copy of the building plan approved by Collector Pune is appearing on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty to issue the completion certificate was the Collector Pune (Town Planning Department, Pune). Since the assessee neither applied nor obtained certificate from Collector Pune it was not eligible for deduction. 10. It is the claim of the assessee before us that there was no procedure of issuing completion certificate by the Collector. Therefore he made inquiries under Right to Information Act. During the course of appellate proceedings, the assessee produced the certificate from the Collector, Pune, before the CIT(A) that no completion certificate was granted by the office of the Collector to any project approved before 31.12.2007. A copy of the reply issued by the Collector, Pune and its English translation is appearing on pages 26 27 of the Paper Book-I, inter alia, mentioned as under: TRANSLATION OF LETTER FROM OFFICE OF COLLECTOR PUNE REGARDING COMPLETION CERTIFICATE ISSUED UPTO 31sT DECEMBER 2007 From Office of the Collector Pune Revenue Department Date: 14/01/2010 To Mr. Haribhau Lohkare 19, United Apartment Camp, East Street Pune 411 001 SUBJECT: INFORMATION UNDER RIGHT TO INFORMATION ACT IN RESPECT OF COMPLETION CERTIFICATE GRANTED WITHIN THE LIMITS VILLAGE MUNDHWA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... approved by local authority and the assessee should obtain the completion certificate from the local authority. We find that Hon'ble Gujarat High Court in the case of CIT vs. Radhe Developers 204 Taxmann 543 (Guj.) has held that the assessee is entitled to deduction u/s.80IB(10) even if the title of the land is not passed on to the assessee or the land is not owned by the assessee or development permissions may have been obtained in the name of original owner. Similar view has been taken by Ahmedabad Bench in the case of Amaltas Associates vs. ITO 142 TTJ 849 (Ahd) and KZK Developers vs. CIT 130 TTJ 157 (Cuttack). In view of this, we find that the Assessing Officer was not justified in observing that the assessee is not eligible for deduction since commencement certificate and completion certificate are not in the name of the assessee. 13. The next objection of the Assessing Officer is that the project is not complete on 31.03.2008. The Assessing Officer observed that on visit to the project site during assessment proceedings in December, 2008, the construction of buildings B-1 to B-10 and amenity building and shop was not started which proved that the project is not complet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eeding 1000 square feet ('E' building in the present case) would constitute a 'housing project' under Section 80IB(10) of the Act. 14. In this background we find that the authorities below failed to appreciate that lay out can have number of housing projects and the fact that the building plan approved on 25.01.2007 by the Collector, Pune, was independent and was not the extension of the building plan approved on 31.03.2001 by PMC with regards to five earlier buildings. We find that ITAT Pune Bench in the case of Rahul Construction Co. Vs. ITO in ITA.No.1250/PN/2009 and 707/PN/2010 held observed that there is a difference between the layout plan and building plan. It was held that approval of housing project and approval of building plan are two different concepts. Thus it was held that whatever portion of the housing project is otherwise found to be eligible, has to be considered as a housing project for the purposes of deduction u/s.80IB(10). The next objection of the Assessing Officer is that the assessee could not produce the completion certificate from the local authority i.e., Collector, Pune, the competent authority who has sanctioned the revised lay out ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 10(20) of the Act as under: Explanation - For the purposes of this clause, expression local authority means (i) Panchayat as referred to in clause (d) of Article 243 of the Constitution or (ii) Municipality as referred to in clause (e) of the Article 243P of the constitution or (iii)Municipal Committee or District Board, legally entitled to or entrusted by the Government with the control and management of Municipal or local fund (iv) Cantonment Board as defined in section 3 of the Cantonment Board Act 1924 15. In view of above we hold that assessee should not suffer for any administrative change with regard to applicability of building bye laws in particular area. The problem arose with regard to completion certificate by PMC by virtue of the fact that area of the land in question was excluded from PMC limits at relevant point of time as discussed above. In such peculiar conditions, the benefit bestowed on assessee should not be denied for no fault of the assessee. Such liberal interpretation should be used in favour of assessee when he is incapacitated in complying certain provisions for the reasons beyond his control. In case before us, problem arose due to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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