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TMI Blog2010 (7) TMI 605X X X X Extracts X X X X X X X X Extracts X X X X ..... im of assessee for deduction u/s.80-IB(10) of the Act and he had taken a possible view on such claim and allowed the deduction - As held by the Hon'ble Apex Court in the case of CIT Vs. Mox India Ltd. 295 ITR 282 when two views are possible and Assessing Officer had taken one view with which the CIT does not agree it cannot be considered an erroneous order, prejudicial to the interest of the Revenue - Decided in the favour of the assessee - ITA No. 497/Mds/2010 - - - Dated:- 9-7-2010 - ORDER Per ABRAHAM P GEORGE, AM This is an appeal of the assessee in which it challenges the jurisdiction of the CIT for invoking the Section 263 of the Income Tax Act (in short 'the Act' ) on assessment made u/s. 143(3) of the Act for the assessment year 2005-06. 2. Short facts are that assessee engaged in the business of construction and promotion of flats had filed its return of income for the impugned assessment year claiming deduction of Rs. 1,05,30,269/- u/s.80 IB(10) of the Act. The Assessing Officer while completing the assessment, accepted the claim of the assessee. Later on 01.03.10, the CIT issued a show-cause notice u/s.263 of the Act citing two reasons for considering the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... before us assailing the order of the CIT, Ld. AR submits that claim of the assessee for deduction u/s.80 IB(10) of the Act was accepted by the Assessing Officer in his assessment order dt.31.12.07 only after considering the DVO's revised valuation report dt.28.12.07. According to him, the issue was limited to three flats numbered as 1A 2A and 3A of Block No. A of its residential project 'Eden', Ld. Counsel submitted that assessee had in response to the revised report of the DVO, submitted a report of Registered Valuer. Ld. Counsel invited the attention of the Bench to the definition of the 'built-up area' given in clause-(a) of Sub-Section(14) of Section 80-IB. According to him, the built-up area meant the inner measurement only which included the projections and balconies as increased by the thickness of the walls but excluding the common areas shared with other residential units. According to Ld. Counsel, the projections and balconies, which were accessible from the flats alone was to be considered and not those projections which formed part of the architectural works carried out to accommodate Sewage water and rain Water pipe lines. Further submission of the Counsel was that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on'ble Apex Court in the case of CIT Vs. Shree Manjunathesware Packing Products and Camphor Works reported in 231 ITR 53. Ld. DR submitted that for invoking powers u/s.263, CIT could consider all the records, which were available with him, when he took up such proceedings. Therefore, according to him, the CIT acted well within his powers while considering the letter dt.05.02.08 of the valuation officer, for concluding that assessee was not eligible for deduction u/s.80-IA(10) of the Act. Coming to the aspect of completion certificate, Ld. DR submitted that it was an essential element since the language used in the statute in Explanation(ii) to clause(a) of Sec.80-IB(10) was 'shall , with regard to the completion certificate, for reckoning the date of completion of construction of the housing project. According to him, assessee had not produced such completion certificate from the local authority and it was without examining these two vital aspects that the Assessing Officer accepted the claim of the assessee for deduction u/s.80-IB(10) of the Act. In his opinion, order of the Assessing Officer was passed without application of mind and was stereo typed and he had accepted the retur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 07 Letter in 2 F.No.DVO/Mds/Misc/2001-08 dt. 28.12.07 Letter in Kindly refer to the ,above.- On perusal of the letter dt. 28.12.07 .as referred above it is found that you have shown the following measurement in respect of flat 1A, 2A, 3 A of Block~ A. The relevant portion of the letter is reproduced as under: - As desired in the above reference, the above property was checked by linear measurements as per the guideline and details of BUA are as given below:- STATEMENT SHOVVING, THE BU1LTUP AREA Jat area Car parking area Remarks in In Sqm In Sft Sqm In Sqft 11 A 1A 141.36 1821.14 11.69 126.84 covered pal'king 2. A 3A 141.36 1621.74 17.64 189.89 coveredparldng 3. A SA 141.36 IB21J4 11.78 126.4$ coveredparking In this respect it is further seen that vide letter dt. 05.10.01 referred \ above, the measurement of those flats had been shown as 134.64 Sq.mt. The Relevant portion 'of the letter is also reproduced hereunder: - As desired in the above reference, BUA of the above property was checked by linea measurements as per the standard guide in in vogue. The BUA of the flat NO,3Ais found to be, 134.64 Sq.mt (one hundred and thirty four point sixty fou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wherein the flats in question were mentioned to have built-up area of 134.64 Sq. mt., which was definitely less than 1500 Sq. ft. on conversion, (ii) The DVO's letter dt.28.12.07 had revised such area to 141.36 Sq. mt. which exceeded 1500 sq. ft. on conversion or to be exact 1521.74 Sq.ft. Assessing Officer also clearly mentions that the report of the DVO dt.05.10.07 was received in tapal on 09.10.07. (iii) Assessing Officer had acknowledged that valuation report of a Registered Valuer was filed by the assessee wherein the built-up area of the three flats were shown less than 1500 sq. ft. 8. No doubt, the assessment order is crisp. But in the face of the above, can we say that the Assessing Officer had not applied his mind? The answer is a definite 'No'. He had the original report of the DVO dt.05.10.07, as well as his revised report dt. 28.12.07. Despite these and after considering reports of the Registered Valuer, he decided that the assessee was eligible for deduction u/s.80-IB(10) of the Act. The order of the Assessing Officer in such as scenario cannot be considered as one passed without application of mind or as a stereo typed one or accepting the claim of the assessee as m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tions Pvt Ltd., reported in 190 ITR 404 held that the expression 'record' used in Sec.263 would include the whole of the record of evidence on which the original assessment order was based and even the valuation report received subsequent to the completion of the assessment. But in our opinion this decision cited by Ld. DR also would not help the case of the Revenue since the DVO report dt.28.12.07 clearly mentioned therein that three of the flats to exceed built-up area of 1,500 sq.ft. and only after considering such report and the earlier report dt.05.10.07 of the same DVO that the Assessing Officer had decided to give the assessee deduction u/s.80-IB(10) of the Act. 9. Now coming to the second issue, which is regarding completion certificate, there can be no qualm regarding the definition of date of completion of construction as given in Explanation (ii) to clause-(a) to Sec.80-IB(10). Date of completion of construction would mean date on which completion certificate in respect of the housing project was issued by the local authority. It cannot also be disputed that the every housing project to be eligible for claiming deduction u/s.80-IB(a) of the Act, shall necessarily obtai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that a completion certificate should be there in every year of the project span. The certifications are for ensuring that the project span does not exceed the prescribed period and nothing more. Of course if such period exceeded the prescribed limit, Revenue would be well within its rights to withdraw the claims already allowed, following the procedure prescribed under the Act. Thus, if the Assessing Officer did not insist on the completion certificate in the impugned year, he was not acting in contravention of the statute, but was only following it in the right meaning. In any case nobody can say that the view taken by the Assessing Officer was not a possible one. This view has also been taken by CBDT in its Instruction No.4/2009 dt.30.06.09, paras 2 to 4 of which are reproduced hereunder: 2. Clarifications have been sought by various CCsIT on the issue whether the deduction u/s.80-IB(10) would be available on a year-to-year basis where an assessee is showing profit on partial completion or if it would be available only in the year of completion of the project u/s..80-IB(10). 3. The above issue has been considered by the Board and it is clarified as under: a) The deduction ..... X X X X Extracts X X X X X X X X Extracts X X X X
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