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TMI Blog2018 (12) TMI 401X X X X Extracts X X X X X X X X Extracts X X X X ..... rence to the relevant facts. In the interests of justice, parties are directed to refer to specific visits specifying the persons travelling and the countries travelled to as mere filing of bills raised by travel agent cannot be said to be sufficient compliance. The issue is restored to the AO to decide the same on the basis of facts and evidences. The expenses of children or personal expenses, it goes without saying, have to be disallowed. The assessee in its own interest is directed to place full facts and evidences on record. The documents filed admittedly are not sufficient and complete - set aside the issue back to the file of the AO directing the assessee to place supporting facts and evidences as relying upon generalized arguments would be of no help. The ground No. 3 allowed for statistical purposes - ITA Nos. 635 & 637/CHD/2017 - - - Dated:- 30-11-2018 - Smt. Diva Singh, JM And Dr. B.R.R. Kumar, AM For the Assessee : Shri T.N.Singla For the Revenue : Shri Jagmohan Kumar Garg, CIT-DR ORDER PER BENCH These two appeals filed by the assessee pertain to 2009-10 and 2012 13 assessment years which are part of the consolidated order dated 22.02.2017 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ring the record noted that the first approval from the competent authority available on record was dated 14.10.2005 and in terms of the provisions of Section 80IB, it was noted that the Completion Certificate should have been obtained on or before 31.03.2011. The assessee, it is seen made various arguments before the AO justifying the entitlement of deduction u/s 80IB @ 100% in terms of the first approval. The arguments were also advanced contesting that the approval granted by PUDA on 14.10.2005 was not an approval granted by a Competent Authority as it was not a local authority as required by the Income Tax Act and thus, though the material was procured and construction activity started, it was ultimately the second approval by Zirakpur Municipality which was relevant. Thus, the completion letter dated 09.03.2009 on the basis of which Completion Certificate dated 01.06.2012 and 17.10.2012 was given, was relied upon. It was canvassed that approval by the Municipal Council, Zirakpur which was the local authority, granted on 24.10.2007 on the basis of which the Completion Certificate could have been obtained on or before 31.03.2013, the certificate granted in June,2012 and O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gned project by Punjab Pollution Control Board. 5. Certificate of Registration of the Residents Welfare Society of the impugned housing project dated 23.9.2010. 6. Application submitted for issuance of completion certificate for the impugned project dated 9.3.2009. 7) Application for permission to occupy building, under Building bye-laws, for the impugned project dated 20.01.2009 and forming part of the application submitted for issuance of completion certificate, submitting therein that the building had been completed in all respects according to the sanctioned plan and was fit for use for which it had been erected. 8) Form-E, being a certificate required under the building byelaws No.3.12(iii), issued by a Registered Architect certifying that the impugned project had been completed on 15.9.2008 in accordance with sanctioned plan and submitted alongwith application for issuance of completion certificate. 9) Completion Certificate by a Registered Architect or Engineer in Form-C certifying that the project was supervised and completed by it on 15-09-08 in accordance with Punjab Regional and Town Planning and Development Act,1995. 10) Letter written by the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upon the decision of the jurisdictional High Court in the case of Pr. CIT Vs Ambey Developers Pvt. Ltd. in ITA 263 of 2016 (P H) wherein the specific issue had come up for consideration apart from decisions of Gujrat and Bombay High Court in CIT Vs Tarnetar Corporation and CIT Vs Hindustan Samuh Awas Ltd. respectively. 8. The ld. CIT-DR had vehemently relied upon the orders of the authorities below and had canvassed that the assessee is supposed to know from where the approval is to be sought and by trying to rely upon the subsequent approval which is affirming the original approval of dated 14.10.2005, it was submitted, the assessee was trying to extend the time which is well fixed by the Statute. It was also his submission that the assessee may be called upon to explain as to on which date, the entire flats stood sold. 9. The ld. AR in reply submitted that the sale of flats is in continuous flux as they are frequently resold and if some flats were lying unsold, the said arguments cannot be a ground for denying the benefit because as far as the assessee is concerned, Project is complete i.e. in regard to its construction. Sale of the flats would depend upon the market condi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ready reference, we reproduced para 8 of the said decision : 8. Adverting to the interpretation and meaning to be assigned to Explanation (ii) to Section 80IB(10(a) of the Act, essentially it has to be seen whether the term shall used therein is to be treated as mandatory or it is in the nature of a directory requirement. In our opinion, though the word used in Explanation (ii) to Section 80IB(10)(a) of the Act is shall , but it would not necessarily mean that in every case, it shall be taken to be mandatory requirement instead would depend upon the intent of the legislature and not the language in which the provision is clothed. The meaning and the intent of the legislature would be gathered not on the basis of the phraseology of the provision but keeping into consideration its nature, its design and the consequences which would follow from interpreting it in a particular way alone. The purport of the said Explanation (ii) to Section 80IB(10)(a) of the Act is to safeguard the interest of the revenue wherever the construction has not been completed within the stipulated period. Thus, it cannot mean that the requirement is mandatory in nature and would disentitle an assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the provisions of section 80IB(10) of the Act, the assessee was required to obtain completion certificate in respect of the housing project by 31.3.2011. The Ld. counsel for assessee contended that the impugned housing project had been completed within the stipulated time which was evident from the following documents: 1) Possession certificates given to more than 600 allottees out of the total number of flats constructed of 782, by 31.3.2011. 2) Certificate of electricity connection released to 602 flats owners out of the total number of flats constructed of 782, by 31.3.2011. 3) Fire Safety Certificate issued, dated 27.1.2009, by the office of Fire Station after checking the fire safety arrangement inside the impugned project and finding them satisfactory. 4. Certificate of Air Pollution Control dated 11.6.2009 issued to the impugned project by Punjab Pollution Control Board. 5. Certificate of Registration of the Residents Welfare Society of the impugned housing project dated 23.9.2010. 6. Application submitted for issuance of completion certificate for the impugned project dated 9.3.2009. 7) Application for permission to occupy building,under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the concerned authority was not compulsory and if the assessee had substantially complied with the conditions of completing the project within stipulated time, it should be treated as sufficient compliance with the condition of section 80IB(10) of the Act enabling the assessee to claim the deduction of its projects as specified therein. Copy of the order was placed before us. 7. The Ld. D.R., on the other hand relied upon the order of the CIT (A) pointing out therefrom that the assessee got first approval for the impugned project on 14.10.2005 from PUDA which was the competent authority and reckoned from that date completion certificate was to be obtained by the assessee by 31.3.2011 but the assessee had not completed the project in this period the completion certificate having given to it only on 1.6.2012 and 17.10.2012 which is after five years of sanctioning of the project. Therefore, clearly the assessee had not complied with the conditions of section 80IB of the Act and authorities below had, therefore, rightly denied deduction claimed by the assessee under the said section. 11.1 It is seen that the Co-ordinate Bench has considered the issue in the following manner : ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the project was completed well before the end of five years period i.e. 31.3.2011. It is not disputed that the assessee had applied for completion certificate alongwith the Architect certificate in the prescribed form, etc on 9.3.2009. It is also not disputed that out of the total number of flats constructed of 782, possession of 624 flats had been given by 31.3.2011 proving that the project had been completed by the end of that period. Admittedly and undisputedly 602 electricity connections had been released to flat owners in the impugned project. Also fire fighting system had been installed in the project by 12.12.2008 which is evident from the copy of letter submitted by the assessee to the aforesaid station officer requesting it to issue final NOC/completion certificate in this regard which was duly issued on 27.1.2009 by the office of the Fire Station, Derabassi stating in its certificate that an official of the office had visited and checked fire safety arrangement inside Penta Homes and found them satisfactory at the time of inspection. Further even Pollution Control Certificate had been issued to the project by the Punjab Pollution Control Board on 11.6.2009. Even the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IB(10)(a) of the Act is shall , but it would not necessarily mean that in every case, it shall be taken to be mandatory requirement instead would depend upon the intent of the legislature and not the language in which the provision is clothed. The meaning and the intent of the legislature would be gathered not on the basis of the phraseology of the provision but keeping into consideration its nature, its design and the consequences which would follow from interpreting it in a particular way alone. The purport of the said Explanation (ii) to Section 80IB(10)(a) of the Act is to safeguard the interest of the revenue wherever the construction has not been completed within the stipulated period. Thus, it cannot mean that the requirement is mandatory in nature and would disentitle an assessee to the benefit of Section 80IB(10)(a) of the Act even in respect of those cases where the assessee had completed the construction within the stipulated period and had made an application to the local authority within the prescribed time. The issuance of the requisite certificate was within the domain of the competent authority over which the assessee had no control. From the findings recorded by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion that it was an expenditure for updating the Directors with the latest design and structure and latest technology being used in Real Estate business was not accepted on the grounds that there was no evidence as to what conference, seminar etc. was attended and what latest technology was acquired etc. The receipts of the expenses on foreign tour supported by bills were stated to be not sufficient. It was further noticed that the assessee had travelled alongwith his wife Mrs. Meetika Singh, also a Director, alongwith three more persons and her children. The relevant discussion from the assessment order is extracted hereunder : This itself indicates that the assessee's travel expenditure has nothing to do with the purpose of business as no relevance to the business with the travelling was established by the assessee. The assessee has incurred these expenditure for the personal purpose for example It is found that from the bills/vouchers submitted by the assessee that Mrs. Meetika Singh (Director) has travelled outside India with three more persons. During the assessment proceedings, the authorized representative has stated that she travelled outside India alongwith her ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e above assessment year an amount of ₹ 20,23,712/- was incurred on foreign travel expenses, the detail of which was supplied during the course of assessment/proceedings. It was a/so explained that the visits were made or keeping the management updated on designing and structure and latest technology being used in real estate business. The information was collected from various sources by the visiting persons by making spot visits and making enquiries from the builders under the garb of customer. Since the company is into the construction business and was preparing to come up with new projects the information was relevant for the conduct of the business. It was further explained that no part of the expenditure incurred could be said to be personal in nature. The disallowance has, therefore, been made without bringing on record any adverse evidence. In fact the decision taken is perverse to the facts on record. It is therefore, requested that the addition may kindly be deleted or in the alternative reduced accordingly. 9.2 I have considered the rival arguments as also the evidence on record. The AO has held that the business purpose of the travelling expenses has not been ..... X X X X Extracts X X X X X X X X Extracts X X X X
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