TMI Blog2021 (8) TMI 462X X X X Extracts X X X X X X X X Extracts X X X X ..... AO as the completion date. Further in respect of the observations of the AO that assessee has not applied for completion certificate in time it is seen from the documents available on record that the assessee has applied for the project completion certificate with the authority vide its letter dated 30.11.2011 after duly completing the work on 21.02.2011. The apartments would be registered only when the project completion certificate is obtained by the assessee. Since, the prescribed authority has accepted the project completion on 21.02.2011 therefore first registry of the project was done by the authority in favor of ultimate buyer' s on 21.02.2011. During the Financial Year 2010 - 11, 5 of the units got registered in favor of the customers of the NEO project by the assessee company and another 291 units in Financial Year 2011-12 out of total units of 346 i.e. the majority of the units i.e. around 86% of the total units got registered in the names of ultimate customers before the end of financial year 2011-12 which is also the cutoff date for getting the project completion certificate. As well established that the project of the assessee was completed before the cutoff ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sides purchase of land for carrying out the said activities at other place also. The assessee has shown net profit of ₹ 4,79,25,436/-. 4. During the year, the assessee has claimed deduction u/ s 80IB(10) of the Act on the project eligible for the deduction namely NEO . The said project was situated on Plot No. 11, Vaibhav Khand, Indirapuram, Ghaziabad, U. P. and it was a joint venture project with the Ghaziabad Development Authority (GDA). M/ s Shipra Estate Limited GDA entered into an agreement in form of license deed dated 07.04.1998 for the development of a Plot No - 11 measuring 201576.25 sq. mtrs and the process was to be completed within a period of 8 years (5 years initial period extended by another 3 Years). That in case of default the assessee was liable for penal action. As per agreement the assessee was to develop the whole area but due to some compelling reasons and adverse market position the assessee could not begin the development process on a piece of land measuring 11056 sq. mtrs. The development of the remaining piece of land measuring 11056 sq. mtr was started in F.Y. 2006-07 and the project was named as NEO Project and the map of the NEO project wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e name of the ultimate customers is being registered by the GDA who is also the competent authority to issue the Completion Certificate in the case of the assessee. The GDA has clearly mentioned that the project was completed on 21.02.2011 vide the aforementioned letter therefore it establishes the fact that the project was in fact completed much before the cutoff date of 31.03.2012. It is also a fact that this letter dated 21.02.2013 is not a formal completion certificate issued by the GDA. This letter mentions the date of completion as 21.02.2011. 6. The date of this letter has been erroneously taken by AO as the completion date. Further in respect of the observations of the AO that assessee has not applied for completion certificate in time it is seen from the documents available on record that the assessee has applied for the project completion certificate with the authority vide its letter dated 30.11.2011 after duly completing the work on 21.02.2011. (Copy of letter place at page no. 18 of the paper book) and the same was also filed before the AO during the assessment proceedings. 7. As per the Uttar Pradesh Apartment (promotion of construction, ownership and maintenanc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3 i.e. the date of letter of Joint Secretary, GDA ignoring the fact that this letter is not a completion certificate issued by the GDA. This letter itself mentions the date of completion as 21.02.2011. This date of letter has been erroneously taken by AO as ' the completion date. AO held that since this letter is dated 21.12.2013, the completion of the project is beyond the prescribed period u/ s 80-IB and not from the date mentioned in the letter i.e. 21.02.2011. 10. We also find that the same issue has been adjudicated earlier by the Co-ordinate Bench of ITAT in the case of the assessee in ITA No.740/ Del/2016 for the assessment year 2012- 13 vide order dated 22.01.2021. The relevant part of the order is as under: 05. For claiming deduction u/s 80 IB (10), assessee has submitted Form No 10 CCB being an audit report required u/s 80 IB of the act for the impugned assessment year. According to para number 23 of the above report it was stated that the project of the assessee has been granted approval on 26th of September 2006 and with respect to the date of completion of the housing project, it was submitted that the request for issuing complication certificate has alr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... date of completion would be 31st of March 2012. The AO noted that Ghaziabad Development Authority (GDA) through its Joint Secretary issued completion certificate on 21.02.2013. However, according to the assessee the application was submitted for completion certificate vide letter dated 29.09.2012. The assessee submitted that GDA has approved the date of project as on 21.02.2011. It further states that application after the completion of the project was submitted to the authority and the authorities constituted an inspection committee. As per the report and recommendation of the committee, the GDA approved the date of the completion of the project as 21.02.2011. The ld. Assessing Officer was of the view that the Act recognizes only the actual date of the completion certificate by the local authorities. He, therefore, rejected the explanation of the assessee that the first registration of the flat was made on 21.02.2011 and Ghaziabad Development Authority has accepted the date of completion as at 21.02.2011 as per the letter dated 21.02.2013. The Assessing Officer was of the view that the language of the Act was very clear and the date of completion of construction of the housing pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 21.02.2012, the GDA stated that the date of completion of the project is 21.02.2011. The Assessing Officer also submitted a copy of the report of the committee. It also gave the minutes of the committee of GDA. The assessee given an opportunity and submitted its rejoinder of 21.02.2015, which is as per para No. 5.1.4 of the order of the ld. CIT (Appeals). The ld. CIT (Appeals) also put before the assessee the decision of the Hon ble Madhya Pradesh High Court in CIT Vs. Global Reality dated 21.08.2015 wherein it was held that issuance of completion certificate after cut-off date by local authority mentioned the completion of the date of project before cutoff date does not fulfill the required condition of Section 80IB (10) of the Act. The assessee submitted that the case of the assessee on facts is quite difficult. Assessee also submitted a letter of the installer of lift stating that the lifts were installed on 3.12.2011. The ld. CIT (Appeals) held that it is clear that inspection of the site had not taken place before the cut-off date on or before 31.03.2012. He further noted that the committee itself was constituted on 25th October, 2012 i.e. after the cut-off date and the ins ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . He, therefore, noted that when advance tax liability is not disputed, it becomes a case of exercise of discretion by the Assessing Officer in levying or not levying interest under Section 234B or 234C of the Act. 11. Thus, assessee aggrieved with the order of the ld. CIT (Appeals) has preferred this appeal before us. 12. The ld. AR on the issue of completion of the housing project for claiming deduction u/s 80 IB (10) of the act, submitted that appellant obtained the approval on 26.09.2006 for developing housing project in the name of Neo Project, Phase I, as on 11056 sq. mtrs. of land situated at Plot No. 11, Indirapuram, Ghaziabad. The permissibility of 5 years for completion of the project ended on 31st of March 2012. He submitted that assessee submitted a request on 15.02.2011 to GDA for issuance of registration in the name of first buyer of the flats. Accordingly, on 21.12.2011 the first flat was sold at same registration. The Electricity Board on 24.10.2011 approved the installation of lift in various towers. Thus, on 21.10.2011 the process of handing over of the possession to respective buyers submitted. He further stated that Electricity Board on 28.11.2011 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... count of disallowance of deduction under Section 80IB(10) of the Act was allowed. He, therefore, submitted that the claim of the assessee deserves to be allowed. 13. The ld. DR heavily relied upon the order of the ld. Assessing Officer and the CIT (Appeals). He also extensively relied on the decision of the Hon ble Madhya Pradesh High Court in CIT vs. Global Reality and stated that the issue in the case of the assessee is squarely covered against the assessee. It was further stated that merely stating of the decision by the Hon ble High Court does not obliterate the binding precedent of the order unless it is quashed. With respect to the order of the ld. CIT (Appeals) in subsequent years he submitted that the appeals for Assessment Years 2014-15 and 2015-16 have been dismissed by the co-ordinate bench on account of low tax effect and appeal for Assessment Year 2013-14 is pending before the co-ordinate bench. Thus, moreover the orders of CIT (Appeals) as they have been challenged before the higher forum cannot be an on-going force for appeal at higher forum. In view of this he submitted that the order of the lower authorities so far as disallowance of deduction under Section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... yer on 21 February 2011, which was requested as per letter dated 15 February 2011 to Ghaziabad development authority to register a flat number SNC 1104. Along with this letter, the assessee has also submitted, and it stated that the construction of above- mentioned flat is according to the approved map and therefore the above let may be registered in the name of the buyer. Further, the committee constituted by the Ghaziabad development authority also certified that the date of completion of the above project is 21 February 2011. Further, a letter was issued by Ghaziabad development authority on 13th of March 2015 to the assessee wherein also the date of completion is stated to be 21st/2/2011. Thus according to the sale deed even the buyer is accepted the possession of the above property in its completeness. Further, on page number 104 of the paper book the assessee has submitted the list of late buyer whose position has been given to them before 31st of March 2012. Assessee has given a list of 102 such buyers who have been allotted flats, possession is granted and the sale deed is registered. When the learned assessing officer asked the Ghaziabad development authority to sta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2018. Further, similarly for assessment year 2014 15 also the learned CIT appeal allowed the claim of the assessee as per order dated 10 May 2018. However, both these orders are in challenge before the coordinate bench. However, the reasons given therein are required to be considered. An interesting fact has been recorded by the learned CIT A for assessment year 2013 14 that during the financial year 2010 11 five of the units got registered in favour of the customers by the appellant company and another 291 units were transferred in financial year 2011 12 out of the total 346 units constructed by the assessee. Thus 86% of the total units were registered in the name of the ultimate customers before the end of the financial year 2011 12, which is also the cut-off date for getting the completion certificate. Therefore, it was held that that the project of the assessee was completed much before the cut-off date as per the provisions of the act i.e. 31st of March 2012. The learned CIT A noted that that the honourable M P High Court has taken a view in favour of the strict interpretation of the statute as relied upon by the learned assessing officer. He also noted that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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