9911796707
TMI Blog2012 (11) TMI 50X X X X Extracts X X X X X X X X Extracts X X X X ..... counsel for the assessee has preferred written submissions, which are placed on record, by submitting that these submissions may be considered. 3. We have considered the rival submissions and perused the material available on the record. The facts, in brief, are that the assessee firm claimed to have engaged in the business of civil construction developing building and housing projects, showed construction receipts of Rs. 1,68,25,023/- and claimed deduction u/s 80IB(10) of the Act for an amount of Rs. 66,73,761/-. The case was selected for scrutiny through CASS, therefore, notice u/s 143(2) was served upon the assessee along with questionnaire. The assessee attended the proceedings from time to time and preferred written submissions. The books of accounts, bills, vouchers were also produced. The learned Assessing Officer was of the view that deduction u/s 80IB(10) of the Act is allowable "to an undertaking developing and building housing project approved before 31st March, 2007 by the local authority" and since the assessee was not selling any constructed properties to customers and the sums so received were credited as construction receipt and further only the registry of the lan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etion certificate was not granted to the assessee till date and the area is very much prescribed in the section itself, therefore, no deviation is required to be made from the provisions of the Act. It was emphatically submitted that in the year 2005, built up area was defined, therefore, balconies and mumties are very much part of the bungalows/constructed area. From 1.4.2005, the definition of built up area was argued to be changed. It was strongly contended that the cases relied upon by the assessee are not applicable to the facts of the present appeal. The ld. CIT DR relied upon the decision of the Mumbai Bench in Heeranandani Akruti J.V. vs. DCIT (2010) 39 SOT 498 by submitting that this case clearly supports the case of the Revenue. Reliance was also placed upon the cases which have been mentioned in the impugned order. 4. We have considered the rival submissions of ld. representatives of both sides and perused the material available on record. The brief facts are that the assessee is engaged in the business of developing housing projects declared total income at Nil, after claimed deduction of Rs.1,45,55,377/- u/s 80IB(10) of the Act on 31.10.2006 in its return. The assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /s 80IB(10). The section 80IB(10) prescribed that the date of completion is to be taken as the date on which completion certificate was issued by the Local Authority. No such certificate has been issued by the Local Authority." In the light of the above objections, we are reproducing hereunder the relevant provisions of the Act: 80-IB. (1) Where the gross total income of an assessee includes any profits and gains derived from any business referred to in sub-sections (3) to [(11), (11A) and (11B)] (such business being hereinafter referred to as the eligible business), there shall, in accordance with and subject to the provisions of this section, be allowed, in computing the total income of the assessee, a deduction from such profits and gains of an amount equal to such percentage and for such number of assessment years as specified in this section. ....................................................................................................................................... ..................... ....................................................................................................................................... ..................... [(10) The amount ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... clauses (e) and (f) shall be inserted after clause (d) of sub-section (10) of section 80-IB by the Finance (No. 2) Act, 2009, w.e.f. 1- 4-2010 : (e) not more than one residential unit in the housing project is allotted to any person not being an individual; and (f) in a case where a residential unit in the housing project is allotted to a person being an individual, no other residential unit in such housing project is allotted to any of the following persons, namely:- (i) the individual or the spouse or the minor children of such individual, (ii) the Hindu undivided family in which such individual is the karta, (iii) any person representing such individual, the spouse or the minor children of such individual or the Hindu undivided family in which such individual is the karta. [Explanation.-For the removal of doubts, it is hereby declared that nothing contained in this sub-section shall apply to any undertaking which executes the housing project as a works contract awarded by any person (including the Central or State Government).] 5. If the language used in the provisions of the Act (supra) is kept in juxtaposition with the facts of the present appeal along with the argumen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in which the undertaking commences the commercial production or refining of mineral oil; [(iv) in the case of an undertaking engaged 20[in the business of processing, preservation and packaging of fruits or vegetables or] in the integrated business of handling, storage and transportation of foodgrains, means the assessment year relevant to the previous year in which the undertaking begins such business;] [(v) in the case of a multiplex theatre, means the assessment year relevant to the previous year in which a cinema hall, being a part of the said multiplex theatre, starts operating on a commercial basis; (vi) in the case of a convention centre, means the assessment year relevant to the previous year in which the convention centre starts operating on a commercial basis;] [(vii) in the case of an undertaking engaged in operating and maintaining a hospital in a rural area, means the assessment year relevant to the previous year in which the undertaking begins to provide medical services;] (d) "North-Eastern Region" means the region comprising the States of Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim and Tripura; [(da) "multiplex theatre" means a buil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 10(a) is to complete the housing projects within five years from the end of the F.Y. in which the housing project is approved by the local authority. The approval was granted by the local authority to the assessee on 6.8.2002 and till date, no completion certificate was issued by the local authority, meaning thereby, the housing project was not completed within the prescribed period, therefore, the assessee is not entitled to claim the deduction. 7. During hearing, the ld. Counsel for the assessee relied upon the decision in the case of M/s. D.K. Construction vs. ITO [2011] 17 ITJ 1 (Tribunal) wherein the completion certificate was obtained on 15.12.2008 and application was made for the certificate prior to 31.3.2008 and there was a regular follow-up. Since the completion certificate was issued to the assessee, therefore, this case may not help the assessee because no completion certificate was issued to the assessee till date. It is pertinent to mention here that since no date was mentioned on the completion certificate, therefore, the matter was remanded to the Assessing Officer. So far as the decision Essar Construction P. Ltd. (17 ITJ 138), relied upon by the assessee, is conc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 002-03, the law applicable was that the condition regarding completion of the project before 31.3.2003 was dispensed with. 9. For the assessment year 2003-04 and 2004-05, the law applicable was that all the conditions remained same except the condition regarding the approval of the project from the local authority which could be before 31.3.2005. Another important change was that the period of completion of the construction on or before 31.3.2003 was dispensed with and there was no time-limit given for completion of the construction. This was the law for assessment year 2004-05 when the assessee submitted its proposal for slum rehabilitation and the permission for carrying out the development was accorded on 17.11.2003 and when the assessee commenced development. 10. By the Finance Act, 2004 w.e.f. 1.4.2005, clause (d) to sec. 80IB(10) was introduced which provided that built-up area of shops or other commercial establishments included in the housing project should not exceed 5 per cent of the aggregate built-up area of the housing project or 2000 sq.ft. whichever is less. The provisions as they read applicable from assessment year 2005-06. In the present appeal, the assessment y ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sub-section (10) of section 80IB was with effect from 1.4.2005, thus, the amended provision is very much applicable to the facts of the present appeals, consequently, the assessee is supposed to fulfill all the conditions laid down in the Act at the relevant time, therefore, the contention of the learned counsel for the assessee that the law applicable when the project was approved will be applicable is not tenable because the legislature in its wisdom has made the amendment and the language used is unambiguous. If there would have been the intention, as claimed by the assessee, then nothing prevented the legislature to specifically incorporate the same. This proposition of law is very much clear from the plain and unambiguous words of clause (a), (i) of section 80IB which specifically mentions the dates on or after 1.10.1998 and before 1.4.2004. The interpretation which makes the provision oteise has to be avoided. The housing project of the assessee was approved by the local authority on 3.1.2004 i.e. before 1.4.2004, therefore, the assessee was expected to complete the construction on or before 31.3.2008. The assessee was also supposed to get completion certificate from the loca ..... X X X X Extracts X X X X X X X X Extracts X X X X
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