TMI Blog2014 (10) TMI 970X X X X Extracts X X X X X X X X Extracts X X X X ..... evathi Equipment Ltd. (2007 (6) TMI 154 - MADRAS HIGH COURT), we hold that the assessee is entitled to claim of deduction under section 80IB (10) of the Act in respect of the flat allotted to Mrs. Nalini Andar i.e. second residential unit allotted in the same project to two members of the said family. The amended clause (f) to section 80IB (10) of the Act are to be applied w.e.f. 19-08-2009 and cannot be used to deny the deduction under section 80IB (10)in respect of the residential unit allotted 14 prior to the coming into operation of amended provisions i.e. clause (f) inserted to section 80IB (10) of the Act. - Decided against revenue - ITA No. 2030/PN/2013 (Assessment Year: 2010-11) - - - Dated:- 27-10-2014 - SHRI G.S. PANNU AND MS. SUSHMA CHOWLA For the Appellant: Shri P.S. Naik For the Respondent: Shri Nikhil Pathak ORDER SUSHMA CHOWLA This appeal is filed by the Revenue against the order of CIT(A)-II, Pune dated 26-08-2013 relating to assessment year 2010-11 against the order passed under section 143(3) of the Income-tax Act. 2. The Revenue has raised the following grounds of appeal: 1. The Learned Commissioner of Income-tax (Appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... H-2, H-3, H-4 and G building. The project was approved by the Local authority i.e. PMC under which the project consisting of H-1, H-2, H-3 and G building and four flats of H-4 building were sanctioned. However, the construction of remaining flats in H-4 building was to be carried out by the assessee after the acquisition of Transferable Development Rights (TDR). The said project was sanctioned before 01-04-2004 and as per the Assessing Officer, the date of completion of the project was 31-03-2008. The assessee had received the completion certificate of H-1, H-2, H-3 and G building on 19-03-2008 and 06-03-2007 respectively. The assessee was unable to purchase any TDR for H-4 building and as such the said building could not be completed and part completion certificate was not issued by PMC. The Assessing Officer also noted that the completion certificate in case of H-4 building having four flats had not been received till the completion of the assessment since the assessee had not completed the housing project as building H-4 was still incomplete. The assessee was show-caused to explain as to why the deduction under section 80IB (10) should not be allowed. In reply it was pointed out ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spect of the deduction under section 80IB (10) of the Act observing as under: 14. After going through the rival submissions and material on record, we find that in the instant case assessee has obtained permission for construction of four buildings H-1, H-2, H-3, H-4 and G building. The said G building was to be given to the PMC to be allotted to the weaker section of the society. The housing project was approved by the local authority on 28.05.2003 wherein plan for construction of whole project including H-1, H-2, H-3 G building, and first floor of H-4 building was sanctioned. The assessee was planning to purchase further TDR for construction of remaining floors of H-4 building. As the project was sanctioned before 01.04.2004, the due date of completion of the project was 31.03.2008. It is undisputed that the assessee has received the completion certificate in respect of H-1, H-2, H-3 G building on 19.03.2008 and 06.03.2007. However, in respect of the building H-4, the assessee submitted that the TDR could not be purchased and, therefore, the building H-4 could not be completed and hence the completion certificate was not issued by the PMC for the H-4 building having four ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the deduction u/s.80IB(10). In such situation the assessee should not be denied claim of deduction u/s.80IB (10) in respect of completed buildings and claim of the assessee should not be completely denied. As mentioned above, this view is fortified by decision of Brigade Enterprises Pvt. Ltd . (supra). We also find that such liberal interpretation should be used in favour of assessee when he is incapacitated in completing whole project because assessee could not complete H-4 building for the reasons beyond his control as stated above. It is settled legal position that law always gives remedy and law does wrong to no one. We are aware that plain reading of section 80IB (10) of the Act suggests about only completion of construction and no adjective should be used alongwith word completion . This strict interpretation should be given in normal circumstances. However, in the case before us undisputedly assessee has completed the construction of buildings H-1, H-2, H-3 and G as stated above and assessee could not complete the construction of building H-4 for the reasons discussed above the assessee should not suffer for the same with regard to the completed portions of the project ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 80IB (10) was effected well before the purchase of flat by Mrs. Nalini Andar and Shri Gurudas Andar and as the assessee had violated the provision of section 80IB(10)(f) of the Act, the claim of deduction was rejected. 13. Before the CIT(A) the plea of the assessee was that clause (f) to section 80IB (10) was inserted by the Finance (No. 2) Act, 2009 w.e.f. 01-04-2010 i.e. assessment year 2010-11. The case of the assessee before the CIT(A) was that one flat no. 401 was sold to Gurudas Andar and his son in the financial year 2007-08 and the wife of Shri Gurudas Andar paid ₹ 5,00,000/- and booked another flat on 16-06-2009, for which the stamp duty was paid on 26-06-2009 and the agreement for sale was registered on 07-07-2009. In other words, there was an agreement to sale the flat in the month of June, 2009 i.e. before the introduction of the Finance (No.2) Act, 2009 which amended the relevant provisions. The assessee submitted that an amendment which was introduced in the Parliament on 06-07-2009 could not effect the transaction entered into, before that date. Further reliance was placed on the ratio laid down by the Hon'ble Supreme Court in the case of Krish ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lause (f) to section 80IB (10) of the Act. 17. The finance bill for amending the provisions of section 80IB (10) was introduced on 06-07-2009 and the Finance (No. 2) Act, 2009 passed on 19-08-2009 inserted clauses (e) and (f) to section 80IB (10) of the Act. The said provisions were inserted w.e.f. 01-04-2010. The relevant provisions of clause (f) to section 80IB (10) of the Act reads as under: Section 80IB(10): The amount of deduction in the case of an undertaking developing and building housing projects approved before the 31st day of March, 2009 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) (b) (c) (d) (e) (f) in a case where a residential unit in the housing project is wallotted to a person being an individual, no other residential unit in such housing project is allotted to any of the following persons, namely:- (i) the individual or the spouse or the minor children of such individual, (ii) the Hindu undivided family in which such individual is the karta, (iii) any person represent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he transaction was completed prior to insertion of clause (f) to section 80IB (10) of the Act by the Finance (No.2) Act, 2009, the same provisions cannot be applied in order to deny the deduction u/s. 80IB (10) of the Act. In the first instance the said Finance (No.2) Act, 2009 has been made effective from 01-04-2010 12 and even otherwise the said provisions can at best be made effective from the date of its introduction i.e. passing of the Finance (No. 2) Act, 2009 i.e. on 19-08-2009. 20. The amended provisions having been introduced on a later date cannot be applied to the transactions completed before the said provisions were introduced were amended as the assessee cannot be expected to do deeds which are impossible. The Hon'ble Supreme Court in the case of Krishnaswamy S. Pd. v. Union of India (supra) observed as under: 9. The other relevant maxim is, lex non cogit ad impossibiliathe law does not compel a man to do what he cannot possibly perform. The law itself and its administration is understood to disclaim as it does in its general aphorisms, all intention of compelling impossibilities, and the administration of law must adopt that general exception in the cons ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
