TMI Blog2020 (12) TMI 576X X X X Extracts X X X X X X X X Extracts X X X X ..... corded by the authorities under the Act is based on surmises and conjectures and has to be termed as perverse. First substantial question of law is answered in favour of the assessee and against the revenue. Treating the fee paid towards the regularization of additional construction as against the sanctioned plan as penalty - HELD THAT:- The second substantial question of law is answered against the assessee and in favour of the revenue in view of the judgment of M/S. PRESTIGE ESTATES PROJECTS LTD. [ 2020 (11) TMI 952 - KARNATAKA HIGH COURT] for the present. However, the same shall be subject to decision of special leave petition which is pending before the Supreme Court. - I.T.A. NO. 528 OF 2015 - - - Dated:- 8-12-2020 - HON BLE ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... company registered under the Companies Act. The assessee is a builder engaged in the business of construction and sale of residential and commercial buildings. The assessee filed its original return of income on 15.10.2010 and submitted a revised return on 31.03.2012 in which an income of ₹ 6,27,87,633/- for Assessment Year 2010 11 was declared. The case of the assessee was selected for scrutiny and a notice dated 25.08.2011 under Section 143(2) of the Act was issued. The assessee, in response to the aforesaid notice, submitted all the details. The Assessing Authority, by an order dated 26.02.2013, inter alia held that the assessee had rented out a part of the building to M/s. Brigade Foundation and even though no rental income has be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er referred to as 'the BBMP' for short) and prior to issuance of occupancy certificate, it was not permissible to occupy the building in view of the bye law No.5.7 of building bye laws of the BBMP. It is also pointed out that from paragraph 11 of the order passed by the Assessing Officer, it is evident that the Assessing Officer himself has found that the assessee has denied that he has realized any rent for the period in question. It is urged that the notional income cannot be assessed on a building under construction as the same comes into existence legally only on issuance of occupancy certificate. Therefore, the finding recorded by the authorities under the Act are perverse. 6. It is also submitted that the second substanti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ave perused the record. Clause 5.7 of the building bye laws of the BBMP provide that no person shall occupy or allow any other person to occupy any new building or part of a new building for any purpose whatsoever until occupancy certificate to such buildings or part thereof has been granted by an officer authorized to give such a certificate. In other words, a building legally comes into existence only on issuance of an occupancy certificate. From perusal of paragraphs 29 and 30 of the order passed by the Assessing Authority conjointly, it is evident that the assessee has declared the rental income in the subsequent Assessment Year and has not admitted any rental income for the Assessment Year in question. The Commissioner of Income Tax (A ..... X X X X Extracts X X X X X X X X Extracts X X X X
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