TMI Blog2020 (9) TMI 293X X X X Extracts X X X X X X X X Extracts X X X X ..... ation Act and Karnataka Municipalities Act do not contain any provision to obtain completion certificate and therefore, it was not necessary for the assessee to obtain any completion certificate in the absence of any provisions in the aforesaid Acts. From the findings recorded by the Commissioner of Income Tax (Appeals) as well as the Tribunal, it is evident that the project undertaken by the assessee was approved by the local authority and therefore, it had complied with the conditions mentioned in Section 80IB(10)(a) of the Act. - Decided in favour of assessee. - I.T.A. NO.13/2013 - - - Dated:- 2-9-2020 - HON BLE MR. JUSTICE ALOK ARADHE AND HON BLE MR. JUSTICE H.T. NARENDRA PRASAD APPELLANTS (BY SRI.K.V. ARAVIND, ADV.,) RESPONDENT (BY SRI. A. SHANKAR SR. ADV. A/W SRI. M. LAVA, ADV.) JUDGMENT ALOK ARADHE J., This appeal under Section 260A of the Income Tax Act, 1961 (hereinafter referred to as the Act for short) has been preferred by the revenue. The subject matter of the appeal pertains to the Assessment year 2007-08. The appeal was admitted by a bench of this Court vide order dated 23.01.2013 on the following substantial questions of law: ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bmitted, which was duly approved by Bruhat Bengaluru Mahanagara Palike (BBMP). It was further found that subsequently the authorities of BBMP instructed the building for issuance of occupancy certificate and found that there is a deviation in the construction with reference to modified building plan, which was in the permissible limits as per revised master plan and therefore, compounding fee was levied, which was paid by the assessee and permission was granted to occupy the building for residential purposes. It was also held that Section 80IB(10) being beneficial provision should be liberally construed and there was no justification in reducing the deduction claimed by the assessee. It was held that the project was approved by the local authority as a housing project and therefore, in view of Central Board of Direct Taxes (CBDT) Circular dated 04.05.2010, the assessee is entitled to benefit of exemption under Section 80IB(10) of the Act. The revenue filed an appeal before the Income Tax Appellate Tribunal (hereinafter referred to as the Tribunal , for short). The Tribunal by an order dated 31.08.2012 dismissed the appeal preferred by the revenue. In the aforesaid factual backgrou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion to consider the issue of completion certificate. It is further submitted that the form of completion certificate has to be filled in by the architect. It is also pointed out that no substantial questions of law have been framed with regard to completion certificate and therefore, the issue with regard to completion of certificate does not arise for consideration in this appeal. It is also argued that law contemplates modification of the building plan and the assessee had got the building plan modified and had subsequently paid the compounding fee and had also obtained the permission to occupy the building for residential purposes. It is also pointed out that occupancy certificate was issued by BBMP on 25.04.2009. Learned Senior counsel for the assessee has submitted that there is no requirement of obtaining completion certificate under the Bangalore Development Authority (BDA) Act, Karnataka Municipal Corporation Act and under Karnataka Municipalities Act. Therefore, the revenue cannot insist on production of completion certificate as the revenue cannot insist on assessee to do something, which is impossible in law. In support of aforesaid submission, reliance has been placed o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oved 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; Thus, it is evident that Section 80IB(10)(a) of the Act not only mentions a particular date before housing project has to be approved by the local authority but even a date by which housing project has to be completed. These dates have a specific purpose with a view to give time to the developers to arrange their affairs in such a manner that the housing project is started and finished within the dates stipulated in Section 80IB(10)(a) of the Act. The basic object of Section 80IB(10) is to encourage developers of housing project for weaker section of the society and in order to qualify for deduction under the provision the conditions mentioned therein have to be fulfilled. 7. At this stage, we may advert to the well settled legal principles with regard to interpretation of taxing statutes. It is trite law that subject is not to be taxed without clear words for the purpose and also that every Act of Parliament must be read according to natura ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hether the assessee has complied with the requirement contained in Section 80IB(10)(a) of the Act. In substance, the housing project is required to be approved by the local authority. The Assessing Officer has held that the construction of the project has been carried out in violation of the sanction plan. Therefore, the project built and completed by the assessee does not have an approval of the local authority. The Commissioner of Income Tax (Appeals) has in para 3.2 and 3.3 has held as follows: 3.2 A plan was sanctioned for construction of residential apartments consisting of stilt plus ground floor and 3 upper floors at survey No.1 others, Katha No.54 in Kodichikkanahalli Village, Begur Hobli, Bangalore South Taluk vide LP No.274/05-06 dated 01.08.2005. Subsequently, a modified building drawing was submitted an the same was approved by the BBMP. 3.3 subsequently, the authorities of the BBMP inspected the building for issue of occupancy certificate and it was observed that there was a deviation in construction with reference to the modified building plan, which is well within the permissible limit of regularization as per the revised Master Plan 2015 with levy of comp ..... X X X X Extracts X X X X X X X X Extracts X X X X
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