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TMI Blog2014 (1) TMI 1232X X X X Extracts X X X X X X X X Extracts X X X X ..... on to clause (a) to subsection (10) of section 80IB of the Income-tax Act, 1961 was brought in under Finance (No. 2) Act of 2004, effective from 1.4.2005 - Thus, in the absence of any such requirement read into the section, it would be difficult to accept the observation of the AO that the claim for deduction was rejected on the ground that the assessee had not furnished the completion certificate – Relying upon Madras High Court in the case of CIT vs. Jain Housing & Construction Ltd. [2012 (11) TMI 588 - MADRAS HIGH COURT] – the order of the CIT(A) upheld – Decided against Revenue. - ITA No. 696/Hyd/2013, ITA No. 697/Hyd/2013 - - - Dated:- 22-1-2014 - Shri Chandra Poojari And Smt. Asha Vijayaraghavan,JJ. For the Appellant : Smt. K. Haritha For the Respondent : Sri K. C. Devadas ORDER Per Chandra Poojari, AM: These two appeals by the Revenue are directed against different order of the CIT(A), Vijayawada dated 8.2.2013 for A.Ys. 2007-08 and 2008-09. Since the issue involved is identical, these appeals are clubbed together, heard together and are being disposed of by this common order. For the sake of convenience, the grounds and the facts are narrated as given i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion u/s. 80IB(10) of the Act and the assessee went in appeal before the CIT(A) against the order dated 24.12.2009. For the A.Y. 2007-08 the assessee claimed Rs. 3,74,77,241 towards deduction u/s. 80IB(10) of the IT Act. The AO rejected the claim of the assessee on the ground that the assessee did not produce project completion certificate. 4. Before the CIT(A), the AR of the assessee submitted that the assessee complied with all the conditions laid down u/s. 80IB(10) of the IT Act and, therefore, the assessee was eligible for deduction u/s. 80IB(10) of the IT Act. He further, submitted that as can be seen from the assessment order the AO also agreed with the fact that the assessee complied with all the requirements as laid down u/s. 80IB(10) of the IT Act. The objection for the AO for allowing deduction u/s. 80IB(10) was that the completion certificate was not produced and, therefore, it cannot be accepted that the project was completed by 31.3.2008. The AR mentioned that A.Y. 2007-08 is only an intermediately year i.e., 4th year and, therefore, there is no need to produce completion certificate which should be obtained at a future date i.e., 31.03.2008. The AR further mentioned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntents of the communication especially the remarks that the building construction was under progress and out of 490 flats, 207 flats were assessed to municipal tax and 183 flats were not occupied and also that 100 flats were under construction. As can be seen from the said communication of the Deputy Commissioner dated 22.03.2010 no other details such as, the basis for municipal authority for arriving at the conclusion that the building work was in progress and work relating to which flats/blocks was under construction. The letter dated 22.03.2010 mentioned earlier does not indicate the details such as (a) what was the basis for identifying/bifurcating the flats into various categories, (b) how many flats for each block were brought into the earlier mentioned bifurcation, (c) what was the basis for arriving at the conclusion that 100 flats were under construction (i.e., the progress of the stage of construction) and (d) how many flats belonging to the assessee, fall into each category identified/ bifurcated by the authority, etc. 8. Further, from the assessment order, the CIT(A) observed that the AO deputed the inspector for verification of progress of construction and according ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ference cited, M/s Prasanth Sai Builders informed that they are having Registered Office at No. 8-3-318/6/6, Flat No. 501, Bandaru Bhavan Engineers Colony, Yousufguda, Hyderabad, and obtained approval of building plans for Housing Projects from HUDA on 04.11.2003 as GPA Holder of Sri Md. Kadher Sharef and others in Survey. Nos. 10, 18, 19, 21, and 22 of Hafeezpet (V), Serilingampally (M), Ranga Reddy District and the project was completed before 31st March 2008, and they have applied for Building Regularization Scheme on 15.07.2008 and ready to clear the BPS dues, if any, once the Demand Notices are received from GHMC. On the basis of the information furnished vide reference cited, and after verifying the same it is to inform that the construction of the Housing Project "Bhanu Township" as approved by HUDA and released by erstwhile Serilingampally Municipality, R. R. District was completed before 31.03.2008. Therefore, it is certified that the project is completed before 31.03.2008, and this can be filed for the purpose of Income Tax as requested vide reference cited. Yours faithfully, ZONAL COMMISSIONER GHMC,WEST ZONE SERILINGAMPALLY 10. The CIT(A) observed from the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction He agreed with the submission of the AR that the authority who has to issue the completion certificate was not defined in the Act. As per section 80IB(10) Explanation (ii) the fact that requires confirmation is whether the housing project was completed by 31.03.2008. General observations without any specific particulars such as which flats were assessed to tax by 11.12.2009 and as to how 207 flats were occupied in the absence of occupancy certificate issued by the authority, which flats were not occupied and the details of flats under construction, cannot be considered as a conclusive evidence for arriving at a conclusion that the project was not completed by 31.03.2008. The CIT(A) also observed that the observation of the AO that the Zonal Commissioner issued the completion certificate basing on self certification of the assessee cannot hold water because the concerned authority issued the certificate confirming the fact that the project was completed by 31.03.2008 and no material was brought on record to reject the contents of such certificate. Once a competent authority issues a certificate the same has to be taken into consideration unless and until it is proved to be inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch those details were gathered and other details such as the details of flats, blocks etc. From the details it is clear that the claim of the assessee is supported by positive documentary evidence. The conclusion of the AO is basing on certain assumptions. Such assumptions cannot override the basic facts with regard to the claim available on record. 16. The CIT(A) also observed that there is force in the contention of the AR that no opportunity was allowed with regard to the report furnished by the Inspector of Income-tax during the course of regular assessment proceedings or photographs submitted along with Remand Report claiming the same as evidence and, therefore, those informations cannot be the basis for arriving at any conclusion. In the interest of natural justice as held by various judicial authorities proper opportunity ought to have been allowed by the AO. However, as far as decision with regard to the present appeal is concerned those points do not have vital role to play. In the light of facts of the case coupled with the judicial decisions cited, the reasonable and judicious conclusion that can be arrived at is that the assessee completed the "housing project" as on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ommences development and construction of the housing project on or after the 1st day of October, 1998; (b) the project is on the size of a plot of land which has a minimum area of one acre; and (c) the residential unit has a maximum built-up area of one thousand square feet where such residential unit is situated within the cities of Delhi or Mumbai or within twenty-five kilometres from the municipal limits of these cities and one thousand and five hundred square feet at any other place." 19. As is evident from the substitution of Section 80IB(10)(a) of the Act, prior to the amendment, there was no such requirement as regards furnishing of completion certificate and the deduction provision pointed out to the grant of 100% deduction on the profits derived from a housing project, if the undertaking had commenced development and construction of the housing project on or after 1st October, 1998. Thus, till 2005, there was no clause dealing with completion, in which event, one cannot read into the provision as a condition, which is not specifically provided for therein. 20. As far as the present case is concerned, though the assessee's case is related to A.Ys. 2007-08 and 2008- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... projects Jains Sagarika, MRC Nagar, Chennai and Jains Swarnakamal, Vadapalani, Chennai and the projects at Velacherry, Chitlapakkam and Virugambakkam. As far as the projects at Manapakkam and Pallavaram are concerned, if the assessee had submitted certificates from sewerage and Electricity Board, which according to the Commissioner would not satisfy the requirement of the Rules, as already pointed out, in the absence of any requirement under Section 80IB(10)(a) of the Income Tax Act and going by the provision, as it stood during relevant assessment year, 2004-05, it is difficult to accept the contention of the Revenue that the claim for deduction rested on the assessee's production of completion certificates." 22. In view of the above discussion, there is no infirmity in the order of the CIT(A) and the same is to be confirmed. 23. Further there is a controversy regarding issue of completion certificate by the Zonal Commissioner, vide his letter dated 26.2.2010. Admittedly, there was a certificate issued by Zonal Commissioner, GHMC, West Zone, Serilingampally which was discussed by the CIT(A) in para 6 of his order for A.Y. 2008-09. Contrary to this, there is one more letter is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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