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TMI Blog2017 (4) TMI 401X X X X Extracts X X X X X X X X Extracts X X X X ..... se nos. CIT(A)- I/CC.1(4)/313/2011-12, CIT(A)-I/CC.1(4)/314/2011-12, CIT(A)-I/CC.1(4)/315/2011-12 & CIT(A)-I/CC.1(4)/318/2011-12; respectively in proceedings u/s.143(3) r.w.s. 153A of the Act. 2. We advert to relevant pleadings first. The assessee's appeal ITA No.1787/Ahd/2011 for assessment year 2005-06. It raises three substantive grounds in challenging the CIT(A)'s order affirming Assessing Officer's findings disallowing/adding Bombay Stock Exchange payment of Rs. 60,000/- as penalty, assets written off amounting to Rs. 59,35,105/- treated as capital loss and rejection of Section 80IB(10) deduction claim of Rs. 2,79,31,077/-. Learned counsel takes us to CIT(A)'s order page 3 para 2.3 holding that in the event the assessee succeeds on the said deduction issue, the impugned disallowance pertaining to Bombay Stock Exchange penalty issue would only increase business income otherwise is eligible for deduction. He seeks to apply the same analogy qua the abovestated second ground as well. We however find no merit in this contention since the CIT(A)'s order in para 3.3 page 5 confirms the impugned disallowance by recording assessee's concession thereby treating the same as an instance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atives inform us at the outset that the main issue on merits therefore is that of correctness of assessee's deduction claim raised u/s.80IB(10) of the Act in all the impugned assessment years. We sought to know about details of the relevant housing projects. Learned Authorized Representative files a compilation chart indicating following residential projects vis-à-vis their dates of approval as under: IT(SS)A No. 122/Ahd/13 A.Y. 04-05 38250213 IT(SS)A No. 123/Ahd/13 A.Y. 05-06 28194396 IT(SS)A No. 124/Ahd/13 A.Y. 06-07 10482953 IT(SS)A No. 127/Ahd/13 A.Y. 09-10 7185020 India Colony- 09/08/99 Nisarg-18/05/02 Vibhusha- 15/11/2000 India Colony- 09/08/99 Nisarg-18/05/02 Vibhusha- 15/11/2000 India Colony- 09/08/99 Nisarg-18/05/02 Vibhusha- 15/11/2000 Shubhnagar- 03/03/2005 Learned Departmental Representative is fair enough in not disputing the correctness of the above compilation. We thereafter sought to know the reason of listing assessee's appeal ITA No.1787/Ahd/2011 for assessment year 2005-06. Learned representatives inform us that the same pertains to regular assessment followed by the abovestated search involving the latter cons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the project before 1-04-2008 is not fulfilled in most of the projects as found by the assessing officer during survey. No completion certificate was issued by the local authority and therefore these projects which were not completed before the deadline are not eligible for deduction. In the light of above facts, the appellant is not eligible for deduction under section 80 IB (10) of IT act. However appellant relied upon the decision of ITAT Ahmedabad in the case of Radhe developers in which the deduction was allowed even to those developers who are not registered owners of land and were developing projects after signing development agreements with transferring the land. However after this decision, ITAT Ahmedabad in another decision in group cases- Shakti Corporation and others, Baroda held that the earlier decision in the case of Radhe developers will apply only in the case where developer takes entire risk of the project and is not a mere contractor getting remuneration for construction and other activities. Wherever entire risk of the project is not taken by such person, they are not eligible for deduction under section 80 IB (10). In view of the facts of the appellant menti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... We thus reverse CIT(A)'s first five reasons by following hon'ble jurisdictional high court's judgment hereinabove. 8. We now proceed to deal with the next equally important issue of completion of projects. There is no dispute that assessee's abovestated projects stood approved well before the coming into operation of the amended Section 80IB(10) w.e.f. 01.04.2005. The legislature inserted these amendments vide Finance Act, 2004. The Revenue's argument accordingly before us is that the above non completion of projects on assessee's part before 31.03.2008 in first three projects and before 31.03.2009 in the fourth one renders it ineligible for Section 80IB(10) deduction in view of clause (a)(i)(ii) r.w. Explanation (ii). It quotes hon'ble Madhya Pradesh high court's judgment in [2015] 379 ITR 107 (MP) CIT vs. Global Reality that such a completion has to be before the said stipulated dates. And also that the date of completion of the housing project is to be taken on the date of which the completion certificate is issued by the concerned local authority. Shri Patel vehemently argues that the assessee's deduction claim in all the assessment years in question is hit by the above amende ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Project; on 18/05/2002 for the Nisarg Project and on 15/11/2000 for the Vibhusha Project and, therefore, provisions of section 80-EB (10) as existed prior to its substitution by the Finance (No 2) Act, 2004 w.e.f. 01-04-2005 were applicable. As per said provisions, there was no time limit by which the appellant was required to complete the project. Likewise, there was no stipulation in the said provisions that the project will be considered to be completed on the date on which completion certificate is issued by the Local Authority. It is also seen that the assessment u/s 143(3) for this assessment year was made on 28/04/2006 wherein disallowance was made on the ground that the appellant was not a owner of land and therefore, it was held that the appellant was not the developers under the provisions of section 80-IB (10). However, it is also noticed that while making assessment, the Assessing Officer had not made any such disallowance for want of completion certificate. 6.1 It is also seen that for Nisarg & Vibhusha Projects appellant had its own land and had not entered into any development agreement with any society. The addition made by the AO was deleted by the Ld. CIT (A) an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and initiated on or before 01.04.2005. 6.4 The Hon'ble Gujarat High Court in the case of Tarnetar Corporation reported in 26 Taxman 180 (Guj) has held that if substantial compliance of provisions has been made and if assessee is able to show that the project was completed within the statutory time limit, deduction u/s 80-IB (10) cannot be denied merely because assessee has not been able to obtain project completion certificate before the specified time limit. 6.5 It is also seen that various Tribunals have consistently held that in respect of the projects which were approved and initiated on or before 01.04.2005, disallowance cannot be made solely for the reason that the assessee failed to obtain project completion certificates within the specified time limit. It is seen that Vishakhapatnam Bench of IT AT in the case of Vishnu Builders vs. ACIT (ITA No. 178-180/2011), Kolkata Bench of Tribunal in the case of ACIT vs. North City Developers (ITA No. 1307/Kol/2010) and have also held that the deduction u/s 80- IB (10) cannot be denied merely because assessee has not been able to obtain project completion certificate before the specified time limit. 6.6 In the case of the app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... before 01.04.2004, the said assessee applied for BU permission to the local authority before 31.03.2008 which stood rejected followed by subsequent revised permission on 19.04.2009. Their lordships observe in said factual backdrop that delay in getting BU permission cannot be held to be fatal to Section 80IB(1) deduction claim as "not every condition of the statute can be seen as mandatory" in case the same stands substantially complied with. We are of the opinion in this factual and legal backdrop that we have to necessarily follow hon'ble jurisdictional high court's decision even if the Revenue finds strong support of any hon'ble non jurisdictional high court deciding the very issue against the assessee. Other case laws (supra) seem to deal with clause (d) of the statutory provision pertaining to commercial area permissible in a residential project which is not the issue before us. We thus do not deem it appropriate to venture into a detailed discussion. We accordingly accept assessee's deduction claim of Rs. 2.97 crores in ITA No.1787/Ahd/2011 for assessment year 2005-06. This appeal is partly allowed in above terms. 11. We follow our detailed discussion on the issue of complet ..... X X X X Extracts X X X X X X X X Extracts X X X X
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