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TMI Blog2012 (9) TMI 1100X X X X Extracts X X X X X X X X Extracts X X X X ..... r of claiming deduction u/s 80-IB(10) of the Act, wherein the Assessing Officer himself noted that assessee’s 48 units of Type-A flats; 90 units of Type-B 33,660/- and 58,630 respectively are allocated to Krishna Project, therefore, addition to the extent of 2,92,290/- is sustained. The deletion of addition of balance expenses of 57,66,129/- is upheld. This ground is, therefore, allowed partly. Extra depreciation on computer peripherals/ accessories - Held that:- The assessee claimed 16,500/- to fixed assets in the block of computers and computer peripherals which as per the assessee are depreciable @ 60%, which was denied by the Assessing Officer . We find that the ld. CIT(A) considered the issue in a justified manner and deleted the addition of 7425/-. We find no justification to interfere with the same as nothing contrary was brought to our notice disallowance of deduction u/s 80-IB(10) - A.Y. 2007-08 - Held that:- As per sub-section (10) of Sec. 80-IB, the housing project which were approved before 31st day of March, 2008, the benefit will be hundred per cent subject to fulfillment of certain conditions. However, this condition was substituted by the Finance (No.2) Act of 2009 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 10-12-2008 furnished the submissions and the documents filed by the assessee were examined. We further find that in the impugned order, there is no mention of the fact that such additional documents were filed by the assessee which were not filed before the Assessing Officer. Therefore, the assertion of the ld. Sr. DR that the is violation of Rule 46A is without any basis. Even otherwise, the ld. CIT(A) has co-terminus power that of the Assessing Officer. As per Sub-section (4), the CIT(A) before disposing off any appeal may make any inquiry as he thinks fit or may direct the Assessing Officer to make further inquiry and report the result of the same to him. It is not the case that the ld. CIT(A) is not empowered to decide the appeal without consulting/ confronting the Assessing Officer . It is not the case that any new evidence was admitted by the ld. CIT(A). The evidence in the form of computation of built up area was furnished during assessment proceedings itself and the ld. DR has not specifically pointed out as to which was the additional evidence filed before the ld. first appellate authority. Therefore, we find no justification to interfere with the conclusion drawn by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Officer noted from the details submitted by the assessee that three types of flats were sold by the assessee and in the type "A" category the area is 1386.03 sq. ft., whereas in type "B" the total area is 1122.48 sq. ft., and in type "C" flat, the total area is 811.84 sq. ft. per flat. These details were submitted by the assessee vide letter dated 12-12-2008 before the ld. CIT(A) and earlier before the Assessing Officer. Such details have been reproduced at page 4 of the impugned order. There is a factual recording that stair case is common area between the two adjacent flats measuring 8.172 sq. mts. and if this area is reduced from the total area of the unit then certainly it comes below the prescribed limit of 1500 sq. ft. This being the first year of claiming deduction u/s 80-IB(10) of the Act, wherein the Assessing Officer himself noted that assessee's 48 units of Type-A flats; 90 units of Type-B & Type-C units were under construction, the Assessing Officer himself computed the built up area by including the stair case area, therefore, it exceeded the prescribed limit. Such factual finding recorded in the impugned order was not controverted by the Revenue by bringing any posi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ive and other expenses which include salary, bonus other perquisites, employees welfare and the rates and taxes, general expenses, newspaper and periodicals, legal and professional expenses, postage & telephone charges, power fuel and water charges, printing & stationery, vehicle repair & maintenance expenses etc. are incurred separately and debited separately to Krishna Lok restaurant and other projects. Such expenses are business specific and not commonly incurred. On careful scrutiny of allocated expenses, we find that the expenses in the nature of "audit fee" and "director remuneration" are for the assessee as a whole and not specific to the business. Consequently, the expenses of ₹ 33,660/- and ₹ 58,630 respectively are allocated to Krishna Project, therefore, addition to the extent of ₹ 2,92,290/- is sustained. The deletion of addition of balance expenses of ₹ 57,66,129/- is upheld. This ground is, therefore, allowed partly. 5. The last ground pertains to deletion of addition of ₹ 7,425/- made on account of extra depreciation on computer peripherals/ accessories ignoring that the rule only allows for computer and computer software for such depre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment is that requirement of completion certificate was merely directory and not mandatory. Reliance was placed upon the decision dated 29-2-2012 of Hon'ble Karnataka High Court (ITA no. 138 of 2010) to the effect that it is prospective in nature. 8.2. On the other hand, ld. Sr. DR took us to various pages of the assessment order by submitting that the case laws relied upon by the assessee are not applicable to the facts of the present appeal and even no such certificate was issued to the assessee till date, therefore, deduction was rightly denied to the assessee. 8.3. In reply, the learned counsel for the assessee contended that for A.Y. 2006-07 on identical facts deduction was granted to the assessee on some of the flats, therefore, for the sake of consistency no "U turn" is permissible for the next year, specially when the facts are same. 8.4. We have considered the rival submissions and perused the material available on record. The facts in brief are that the assessee declared taxable income of ₹ 5,97,15,620/- in its return filed on 31-10-2007. The case of the assessee was selected for scrutiny. The assessee claimed deduction of ₹ 5,19,92,472/- u/s 80-IB(10). The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and does not ah any discretion about the issue price and require to issue shares through preferential allotment only at the rate as per SEBI guidelines and approved by stock exchange. During the year the assessee company has calculated average market price as per general meeting, certification by statutory auditor etc., has submitted to Bombay Stock Exchange and has issued the preferential share after getting approval from Bombay Stock Exchange. These are normal business transactions because these are issued as per SEBI and Stock Exchange guidelines. These shares are issued to a number of companies and individuals and not only to RGSL. Valuation of these shares are done as per SEBI and Stock Exchange guidelines which were as per average market rats and approved by Board of Directors and General Meeting of CHD, statutory auditor and Bombay Stock exchange approval. There is no close or remote nexus between CHD and RGSL. There is no common relation among the directors or major share holders. Since CHD is listed company it has no control over market rate or guidelines of SEBI and Stock Exchange. It is immaterial for CHD what its shareholder does with their investments. As regard Asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dertaking developing and building housing projects approved before the 31st day of March, 2005 by a local authority, shall be hundred per cent of the profits derived in any 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 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 kilometers from the municipal limits of these cities and one thousand and five hundred square feet at any other place." 8.9. If the aforesaid position of law existing at the time when the plan was sanctioned/ approval was granted to the assessee is analyzed , there was no condition like production of complete certificate. This is a settled legal proposition of law that the law existing at the particular point of time will be applicable unless and until it is specifically made retrospective by the legislature. The substitution ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on'ble High Court that the assessee was entitled to hundred per cent benefit of sec. 80-IB(10). 8.11. Another case cited was from Visakhapatname Bench of the ITAT in the case of M/s Vishnu Builders Vs. ACIT (ITA nos. 178, 179 & 180/Vizag/2011), order dated 27th July 2011. In that case also, completion certificate was not filed before the Assessing Officer and the proof of municipal tax assessment of various flat owners establishing that the housing project was completed before September 2008 was filed. Since there was no practice of issuing the project completion certificate, therefore, it was held that it was not a condition precedent of filing the completion certificate for allowing deduction u/s 80-IB(10) of the Act. 8.12. In the case of CIT Vs. Tarnetar Corporation (Tax appeal no. 1241 of 2011), the Hon'ble Gujarat High Court vide judgment dated 12-9-2012, observed that the confirmation issued by municipal authorities was filed on 15-2-2006 and was rejected on 1-7-2006. The assessee also paid penalty for regularization of the units. Since construction was completed well before 31st March 2008, the outer limit for such construction and the permission was not granted by they mu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ia & others Vs. Kaumudini Narayan Dalal & another 249 ITR 219 (SC). From this angle also, the assessee is having a strong case in its favour. 8.16. Leave apart, we are of the considered opinion that the assessee is expected to complete the project as per the approved plan at a particular point of time and the assessee is not expected to do or to fulfill the conditions which are not in existence at the relevant point of time or made compulsory after making some amendment in the Act from the future date. Since the assessee was to complete the project on or before 31-3-2009 and request was duly made with the Competent Authority on 5-11-2008 mentioning that the project has been completed and completion certificate may be issued and if the same is not issued by the Competent Authority the assessee should not be penalized for the same unless and until some contrary facts are brought on record evidencing that the assessee contravened the conditions contained in the approval granted by such Competent Authority. As per sub-section (10) of Sec. 80-IB, the housing project which were approved before 31st day of March, 2008, the benefit will be hundred per cent subject to fulfillment of certa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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