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TMI Blog2012 (10) TMI 362X X X X Extracts X X X X X X X X Extracts X X X X ..... for deduction under section 80IB(10). Instruction No. 4 of 2009 dated 30.6.2009 of the Board, through which it has been clarified by the Board that deduction under section 80IB(10) can be claimed on year-to-year basis where the assessee is showing profit from partial completion of the project in every year. It was also further clarified that in case it is late found that the condition of completing the project within the specified time limit of four years, as stated in section 80IB(10) has not been satisfied, deduction granted to the assessee under section 80IB(10)in earlier years should be withdrawn - Thus the Revenue is at liberty to take action with respect to the earlier years as provided in the law - against assessee. - IT APPEAL NO. 283 (LKW) OF 2012 - - - Dated:- 22-8-2012 - SUNIL KUMAR YADAV AND SANJAY ARORA, JJ. P.K. Kapoor for the Appellant. Praveen Kumar and R.K. Ram for the Respondent. ORDER Sunil Kumar Yadav, Judicial Member - This appeal is preferred by the assessee against the order of the ld. CIT(A) on various grounds, which are illustrated as under:- 1. Because the CIT(A) has erred in law and on facts in upholding the denial ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pellate Authority for upholding the rejection of appellant's claim) are wholly irrelevant, not germane to the issue involved for decision before him. 8. Because the CIT(A) has further erred in holding that; (a) Lucknow Development Authority (LDA) ceased to be a local authority following amendment in section 10(20) of the Act and, therefore, approval of the housing project by it did not meet the requirement of law; (b) completion certificate having not been obtained, another vital requirement has not been fulfilled; and the same are wholly fallacious and based on misreading/misinterpretation of law. 9. Because the amendment in the definition of 'local authority' was merely meant to deny blanket exemption under section 10(20) of the Act and LDA being the prescribed authority for granting approval under UP Urban Planning and Development Act, 1973, the appellant had duly complied with the requirement of law, by obtaining approval from the said Authority and denial of claim for exemption under section 80IB(10) on that ground is wholly erroneous. 10. Because completion certificate as envisaged under the Act has also been obtained within ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .50 under section 80IB(10) of the Act as per report in prescribed Form No. 10CCB dated 4.8.2006. 4. During the course of assessment proceedings, the assessee was asked to explain as to whether the pre-requisite conditions for implementing the project of land area of more than one acre was satisfied besides other conditions for the completion of the project. In response thereto, it was stated that the project named as Fortuna Apartment Housing Project have been envisaged on a big chunk of land as per the understanding arrived at with Shri. Karuna Shankar Dubey, the owner thereof and as per the said understanding, the assessee itself has paid freehold charges of the landed property as had been agreed to be developed by the assessee into Fortuna Apartment Housing Project . The property had been duly acquired in phases after complying with the requisite formalities and on quantification of actual measurement at site, the area worked to 48,413 sq. ft. which is more than one acre. All these plots numbered as 27A/1, 27A/2 and 27A/3 in the municipal records, were contiguous and situated by the sides of each other, and housing project that had been implemented by the assessee was inte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d one multi storied building on 24.11.2001 This approval itself recognized the land into three plots out of which Builder's Agreement was made for one part, i.e. for 2657.009 sq mtrs only. Subsequently on 14.10.2003, the other part was offered for builder's agreement for the area of 1838.991 sq mtrs. The construction on the second part (i.e. 1838,991 sq mtrs) was originally to be made by the landowners themselves for which building plan was got approved by them only vide Permit No. 16628 vide sanction date 03.06.2003. As per the submissions of the assessee Company and the perusal of documents filed, it is revealed that profits of sharing ratio of both the parts are different as detailed below:- Plot no. Builders' profit ratio Land owners' profit ratio 27A/2 65% 35% 27A/3 62% 38% 4. The other builder's agreement for plot no 27A/3 was executed on 14.10.2003 as mentioned in the sale deed itself. From the above facts, it is amply clear that there were three plots ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etion certificate in respect of such housing project is issued by the local authority. Therefore, as per the above Explanation, the housing project was completed on 23.10.2009, which is certainly after 31.3.2008. Since the project was not completed before the specified date i.e. 31.3.2008, the assessee is not entitled for deduction under section 80IB(10) of the Act. The ld. CIT(A) has also observed that this completion certificate obtained from the local authority was not even filed in the course of appeal proceedings for assessment year 2005-06. The ld. CIT(A) accordingly did not rely upon the order of the Tribunal for assessment year 2005-06 in assessee's own case, in which it was claimed that project was completed before 31.3.2008. The relevant observations of the ld. CIT(A) in this regard are extracted hereunder:- 3.2.4. The Assessing Officer required the assessee to furnish the completion certificate, but it was not furnished till the date of the assessment as the project was not complete by the date of assessment. It is claimed before the ITAT in the appeal for the A.Y. 2005-06 that the project was completed by 31.03.2008. However, no completion certificate has been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g project as a works contract awarded as per the agreement with Shri Karuna Shankar Dubey and his heirs, it is not eligible for the claim of deduction under section 80IB(10). Thus, apart from the reasons mentioned by the Assessing Officer, the facts as enunciated above show that the assessee is not entitled to the claim of deduction under section 80IB(10) of the Income-tax Act, 1961 and the deduction has rightly been denied by the Assessing Officer. Thus the grounds of appeal 1 to 4 are hereby rejected. 3.1.4 There is further additional fact that the so-called completion certificate claimed to have been issued by LDA on 23.10.2009 is actually a verification of the Praman Patra in respect of the Group housing constructed on Plot no. 15, Lajpat Rai Marg, Jopling Road, Lucknow made by Shri Karuna Shankar Dubey but the applicant was not alive on the date of application and the application has been illegibly signed in the name of Shri Karuna Shankar Dubey by some so-called employee whose name does not even figure therein and the application for obtaining the completion certificate was not made by the legal heirs, making the so-called certificate itself questionable. Moreover ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the impugned assessment year, the completion certificate was first time filed before the ld. CIT(A) and the ld. CIT(A) has categorically observed from the application for completion certificate and the completion certificate that the completion certificate was issued by the LDA on 23.10.2009, which is much after the specified date for completion of project for claiming the deduction under section 80IB(10) of the Act i.e. 31.3.2008. During the course of hearing, the ld. counsel for the assessee has admitted that Shri Karuna Shankar Dubey, owner of the land was expired long back and the application for completion certificate was filed in the name of a dead person without disclosing the factum of death of Shri Karuna Shankar Dubey to the LDA. Consequently, the completion certificate was also issued to a dead person by the LDA on 23.10.2009. Since the completion certificate was issued in the name of a dead person, it has no evidentiary value in the eyes of law. Therefore, it cannot be relied upon for the purpose of completion of the project. 8. The ld. D.R. further invited our attention to the receipt dated 14.3.2008 for map, with the submission that approval of design of the pl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of 2009 dated 30.6.2009 issued by the Board, in which it has been stated that in case it is late found that the condition of completing the project within the specified time limit of four years as stated in section 80IB(10) of the Act has not been satisfied, deduction granted to the assessee under section 80IB(10) of the Act in earlier years should be withdrawn. Therefore, a direction should be issued by the Tribunal to withdraw the deduction already granted under section 80IB(10) of the Act in earlier years. 10. In rebuttal, the ld. counsel for the assessee has submitted that controversy raised in this appeal has already been adjudicated by the Tribunal in its earlier order and following the rule of consistency, the Tribunal is bound to follow its earlier order passed in earlier assessment years in the assessee's own case. The ld. counsel for the assessee, Shri. P. K. Kapoor further invited our attention to the Board's Instruction No. 4 of 2009 dated 30.6.2009 through which the Board has clarified that deduction under section 80IB(10) of the Act would be available on year-to-year basis wherein profit is shown on partial completion. Therefore, the deduction claimed unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... idential housing project. During the course of hearing no dispute was raised by the ld. D.R. with regard to the findings of the Tribunal in earlier assessment years on these two aspects. Therefore, there is no controversy in this regard. 14. The main dispute was raised with regard to the date of completion of the housing project, though this issue was also raised in earlier years and the Tribunal has given a specific finding that the housing project was completed before 31.3.2008, but the ld. CIT (DR) has emphatically argued that this finding of the Tribunal in this regard is contrary to the facts available on record. During assessment year 2005-06, the impugned completion certificate as available at page 26 of the compilation of the assessee, was neither placed before the lower authorities nor before the Tribunal during the course of hearing of the appeal though the appeal was heard on 8.4.2010 and the said completion certificate was issued by the LDA to the assessee on 23.10.2009. The Tribunal has given a finding on the basis of its own assumption of facts that the project was completed before 31.3.2008 during assessment year 2005-06. In the assessment year 2007-08, the Tribun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deemed to be the date of approval. In the instant case, by considering the Explanation (i) inserted in section 80IB(10) it can safely be held that the assessee got the approval of the local authority before 1st day of April 2004 even if the first approval obtained i.e. the approval dated 24/11/2001 is to be considered. Therefore, we are of the opinion that the assessee got the approval of the local authority before the cut off date as mentioned in sub clause (i) to clause (a) to sub-section (10) of section 80IB of the Act. The another condition which is required to be fulfilled is provided in clause (b) of sub section 10 to section 80IB which relates to the area of land on which the project is constructed. The provisions contained therein specify the area which shall be minimum one acre. In the instant case, the assessee constructed the complete housing project known as Fortuna Apartment Housing Project on the total area of 4550.07 sq. mtr. The assessee was in possession of the said area and the mode of acquisition of land was as under: Date Instrument Area Purchased 15/04/2002 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2007-08, the Tribunal has simply followed its earlier order for assessment year 2005-06 in assessee's own case in the absence of completion certificate and has again given a finding that the project was completed before 31.3.2008. The relevant portion of the order of the tribunal is extracted hereunder:- 7.4 The learned CIT(A) has also drawn a parallel and proceeded to hold that this was a project undertaken by the assessee as project of works contract. Such a finding reached by learned CIT(A) is without any cogent reasons and the same is divorced from the approved scheme which was undertaken by the appellant in assessment year 2004-2005 by making his own investment and income declared on partial completion method from assessment year 2004-2005 till the year under consideration. The Assessing Officer himself has allowed the claim u/s 80-IB(10) of the Act in assessment year 2004-2005 in the summary assessment. Thereafter, the Appellate Tribunal in assessment year 2005-2006 found that the appellant had satisfied all the conditions as are laid u/s 80-IB(10) of the Act for claiming deduction under that section and thereafter by a detailed reasoning contained in the said order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be date on which the completion certificate in respect of such housing project is issued by the local authority i.e. LDA. The ld. CIT(A) has also given a finding that the completion certificate was sought the assessee in the name of Shri Karuna Shanker Dubey, who was expired long back and the certificate was also issued in his name. Therefore, the certificate has no evidential value and cannot be relied upon for the purpose of determining the date of completion of the housing project. In the light of these facts, the issue with regard to the date of completion of the housing project requires a fresh adjudication by the Tribunal without being influenced by the earlier orders of the Tribunal, as those orders can be called to be an order per incuriam. 17. We have also examined various judgments referred to by the assessee on the point of rule of consistency and we find that in all those judgments it has been repeatedly held that the principle of res judicata are not applicable in the Income-tax proceedings and every assessment year is independent assessment year, but the rule of consistency should be followed, if a particular view is taken by the Tribunal in a particular year wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in which the housing project is approved by the local authority.] Explanation.-For the purposes of this clause,- (i) in a case where the approval in respect of the housing project is obtained more than once, such housing project shall be deemed to have been approved on the date on which the building plan of such housing project is first approved 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; 19. For claiming deduction under section 80IB(10) of the Act, the assessee is required to fulfill basic requisite conditions that the housing project should have been approved before 1st April 2004 and should have been completed before 31.3.2008. If any of the condition is not fulfilled, the assessee would not be entitled for deduction under section 80IB(10) of the Act. With respect to the approval of the housing project, there is no dispute and admittedly it was granted before 1st April, 2004 by the local authority, but with regard to the date of completion of the project, as per provisions of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the date of completion of construction of housing project shall be taken to be date on which completion certificate in respect of such housing project is issued by the local authority. Therefore, there is no iota of doubt in the interpretation of Explanation below section 80IB(10) of the Act and according to the said Explanation, the date of completion of the project in the instant case shall be taken to be the date of issuance of completion certificate by the local authority i.e. 23.10.2009. Since the housing project was completed after 31.3.2008, the assessee has not fulfilled the second requisite condition for claiming deduction under section 80IB(10) of the Act and therefore the assessee is not entitled for deduction under section 80IB(10) of the Act. 22. We have also examined the other judgments referred to by the assessee on the point of interpretation of beneficial provisions and we are of the view that the judgments would be of no assistance to the assessee, as the provisions are quite unambiguous and there cannot be second interpretation. 23. We have also considered the request of the ld. CIT (DR) that once it is held that the assessee is not entitled for deduc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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