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TMI Blog2017 (4) TMI 774X X X X Extracts X X X X X X X X Extracts X X X X ..... against Revenue, holding that it is not mandatory and only directory and Assessee cannot be made to suffer if it filed audit report in form 10CCB in the course of assessment proceedings and not alongwith return.- Decided against Revenue - Income Tax Appeal No. 73 of 2010, Income Tax Appeal No. 6 of 2012, Income Tax Appeal No. 1 of 2013, Income Tax Appeal No. 29 of 2014 - - - Dated:- 7-4-2017 - Hon'ble Sudhir Agarwal And Hon'ble Attau Rahman Masoodi, JJ. For the Appellant : D. D. Chopra For the Respondent : A P Singh, Amit Shukla, Surendra K. Garg ORDER ( Delivered by Hon'ble Sudhir Agarwal, J. ) 1. Appeal no. 73 of 2010 has been filed under Section 260-A of the Income Tax Act, 1961 (hereinafter referred to as Act, 1961) by Commissioner of Income Tax-I, Lucknow (hereinafter referred to as 'CIT'), being aggrieved by judgment and order dated 8.4.2010 passed by Income Tax Appellate Tribunal, Lucknow Bench, Lucknow (hereinafter referred to as 'Tribunal') in I.T.A. No. 67/LUC/09 relating to A.Y. (hereinafter referred to as 'A.Y.') 2005-06. It was admitted on two substantial questions of law which read as under: (i) Whethe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at ground in upholding the rejection of appellant's claim for exemption thereunder. (ii) Whether looking to the overall scheme of the 'relief giving provision' as contained in Section 80I-B (10) and the regulatory provisions contained in the allied statutes it could be validly held that in the absence of completion certification having been filed before 31.03.2008, the Assessee's claim for exemption under Section 80I-B (10) stood disqualified, even though the project had duly been executed and completed well in time. (iii) Whether there existed any material / information which could validly lead to an observation that the project formulated by the Assessee (for which approval has been granted by LDA prior to 1st April, 2004) had not been completed by the stipulated dated i.e. 31.03.2008, so as to call for a deviation from the findings recorded by it in its earlier judgments and orders dated 08.04.2010 and 15.12.2011 in the Assessee's own case for the assessment year 2005-06 2007-08 respectively. (iv) Whether the view taken by the Tribunal is not vitiated in law, owning to non-consideration of material and information on record, and misinterpreta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... through which acquisition had been made Area in Sq. Mtrs. (i) 27A/1, Jopling Road, Lucknow. Purchase deed executed by the owner Sri Karuna Shankar Dubey 52.44 (ii) 27A/2, Jopling Road, Lucknow. Builders' agreement dated 24.4.2001 2657.00 (iii) 27A/3, Jopling Road, Lucknow. Builders' agreement 1840.63 Total 4550.07 8. Plan of the project was approved by Lucknow Development Authority (hereinafter referred to as 'LDA') on 22.6.03. Assessee commenced construction and development activities on the aforesaid land in relation to the aforesaid project. Assessee was recognising Revenue on the basis of partial completion method and claimed that it is a recognised method of accounting adopted by Developers of real estate. 9. Owing to aforesaid method, Assessee disclosed income from the project, year, after year commencing from A.Y. 200 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at least one acre had not been fulfilled; (ii) Lucknow Development Authority from whom approval had been obtained for commencement of the project ceased to be local authority after section 10 (20) was amended w.e.f. assessment year 2003-04 whereby such authorities have been excluded from the definition of local authority; (iii) For the same reason as in (ii) above, completion certificate issued by LDA cannot be said to be the certificate of completion issued by local authority as is the requirement of law as per sub-clause (ii) of explanation below clause (a) of sub-section (10) of section 80IB of the Income Tax Act, 1961; (iv) The assessee merely carried out 'works contract' as per the agreement with Shri Karuna Shanker Dubey and for such 'works contract' there is a specific prohibition for claiming deduction under section 80IB (10) as per 'explanation' inserted by the Finance (no. 2) Act, 2009 w.e.f. 1.4.2001. 15. Tribunal, however, allowed appeal preferred by Assessee and held on this question that project has started on integrated plot of more than one acre, therefore, requirement under Section 80IB(10) was satisfied. This aspect ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... day of March, 2008 by a local authority shall be hundred percent of the profits derived in the previous year relevant to any assessment year from such housing project if,- (a) such undertaking has commenced or commences development and construction of the housing project on or after the Ist day of October, 1998 and completes such construction- (i) in a case where a housing project has been approved by the local authority before the Ist day of April, 2004, on or before the 31st day of March, 2008; (ii) in a case where a housing project has been, or, is approved by the local authority on or after the Ist day of April, 2004 but not later than the 31st day of March, 2005, within four years from the end of the financial year in which the housing project is approved by the local authority. (iii) in a case where a housing project has been approved by the local authority on or after the Ist day of April, 2005, within five years from the end of the financial year 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... val of doubts, it is hereby directed 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). 22. In the appeal preferred before CIT (A) by Assessee, the ground relating to size was decided in his favour but on the ground of lack of approval certificate, disallowance of deduction under Section 80IB (10) was upheld vide order dated 6.2.2013. 23. Revenue preferred appeal against order dated 6.2.2013 insofar as the ground relating to size was answered in favour of Assessee and Assessee also filed cross-objections with regard to denial of deduction for want of completion certificate. Tribunal vide judgement dated 11.4.2014 has dismissed Revenue's appeal upholding Assessee's cross-objection hence Assessee has brought the I.T.A. No. 29 of 2014 in which the questions raised have already been quoted above. 24. First of all, we propose to consider substantial question of law raised in Revenue's appeal regarding area of plot under Section 80IB (10)(b), as to whether it will be a single plot or contiguous joint plots. This will cover ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0 it had deposited a sum of ₹ 836640/- as free-hold charge for the entire land bearing number 27-A. It shows that plot no., 27-A was a nazul land owned by State of U.P. and up to 10.10.2000 ownership of State continued. 35. The aforesaid facts show; (i) the first land i.e. plot no. 27-A/2 area 2657 sq. mtrs. came to be possessed by Assessee pursuant to builder's agreement dated 24.4.2001 executed between Assessee and Karuna Shankar Dubey; (ii) housing project was approved by LDA on 24.11.2001. Thus, on the date when housing project was approved, the only land available with the Assessee in any capacity had a total area of only 2657 sq. mtrs; (iii) Second part of land i.e. plot no. 27-A/1 area 52.44 sq. mtrs. was purchased by Assessee from Karuna Shankar Dubey vide sale deed dated 15.4.2002; and (iv) third part of land i.e. plot no. 27-A/3 area 1840.63 sq. mtrs. came to be possessed by Assessee pursuant to builder's agreement dated 14.10.2003. 36. There is no condition in Section 89 and 80IB (10) that developer must hold the plot it proposed to develop by constructing a housing project, still area of land for which housing project was approved by LDA on 24.11.200 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pproval when granted on 22.6.2003, total area of 2 plots was only 2657 sq. mtrs. and 52.44 sq. mtrs. which was again less than one acre. 40. With regard to question no. 2 in ITA No. 73 of 2010, we are of the view that it is not mandatory. This question is regarding filing of audit report in form 10CCB. If it is not filed alongwith return but filed before assessment, will it amount to non-compliance of Section 80IB (13) read with Section 80IA (7). 41. In CIT Vs. Ace Multitaxes System (P) Ltd. [2009] 317 ITR 207 (Karnataka), it was held that when a relief is sought for under Section 80-IB of Act, 1961, there is no obligation on the part of Assessee to file return accompanied by audit report, thereby, holding that same is not mandatory. 42. Same view was taken by Delhi High Court in CIT Vs. Contimeters Electrical (P) Ltd. [2009] 317 ITR 249; by Madras High Court in CIT Vs. Jayant Patel [2001] 248 ITR 199. 43. Supreme Court in Commissioner of Income Tax Vs. G.M. Knitting Industries (P) Ltd. [2015] 376 ITR 456 dismissed appeal of Revenue and confirmed the view taken by Madras High Court holding that filing of audit report and form 10CCB along with return is not mandatory. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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