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TMI Blog2021 (1) TMI 914X X X X Extracts X X X X X X X X Extracts X X X X ..... out of the total 346 units constructed by the assessee. Thus 86% of the total units were registered in the name of the ultimate customers before the end of the financial year 2011 12, which is also the cut-off date for getting the completion certificate. Therefore, it was held that that the project of the assessee was completed much before the cut-off date as per the provisions of the act i.e. 31st of March 2012. In view of this, we hold that the date of completion of the project has correctly been claimed that 21st of February 2011 and it is in accordance with the provisions of Section 80 IB (10) - we allow ground number [1] of the appeal of the assessee. Non-fulfillment of the condition laid down as per clause (f) of Section 80 IB (10) - AO has disputed the eligibility to claim deduction u/s 80 IB (10) on the ground that appellant has violated the provisions of clause (f) by allotting more than one residential unit to persons belonging to the same family - AR submitted that only proportionate disallowance could be made - HELD THAT:- This issue is now squarely covered in favour of the assessee by the decision of the honourable Bombay High Court in Kamat Constructions Pvt. L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Authority is fulfilled. 2. That the learned Commissioner of Income Tax (Appeals) grossly erred in upholding the disallowance of deduction u/s 80IB(10) of the Income Tax Act, 1961 in entirety on non fulfillment of the condition laid down under clause (f) of section 80IB(10) of the Act. 3. That having regard to the facts and circumstances of the case, the learned Commissioner of Income Tax (Appeals) has erred in law and on facts in not reversing the action of the learned Assessing Officer in charging interest u/s 234B of the Income Tax Act, 1961. 4. That having regard to the facts and circumstances of the case, the learned Commissioner of Income Tax (Appeals) has erred in law and on facts in not reversing the action of the learned Assessing Officer in charging interest u/s 234C of the Income Tax Act, 1961. 03 The brief fact of the case shows that assessee is a builder company engaged in the business of construction and sale of flats in Ghaziabad and other places. 04 The assessee filed its return of income for Assessment Year 2012-13 on 30th September, 2012 declaring total income of ₹ 199,98,55,110/-. In the return of income, assessee has claimed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een given to customers on 21 February 2011, during Financial Year 2011-12. Thus, according to the assessee the project was completed on 21/02/2011 i.e. within five years from the end of the financial year in which the project was approved (i.e. 26/9/2006). The Assessing Officer noted that according to the provisions of Section 80IB(10) of the Act the project should have been completed within 5 years from the end of the financial year for which the housing project was approved by the local authority. He noted that the project for eligibility of deduction, the last date of completion would be 31st of March 2012. The AO noted that Ghaziabad Development Authority (GDA) through its Joint Secretary issued completion certificate on 21.02.2013. However, according to the assessee the application was submitted for completion certificate vide letter dated 29.09.2012. The assessee submitted that GDA has approved the date of project as on 21.02.2011. It further states that application after the completion of the project was submitted to the authority and the authorities constituted an inspection committee. As per the report and recommendation of the committee, the GDA approved the date of the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT (Appeals). Before him, the assessee submitted that project is completed in time. Therefore, order under Section 250(4) of the Act was passed by him giving direction to the AO to ascertain the correct date of completion by obtaining and examining the relevant details from the Development Authority and assessee. The report of the Assessing Officer states that committee of GDA was constituted on 25th October, 2012, inspected the site on 21.02.2013 and on the basis of the documents noting the fact that registration of sale of flat commenced on 21.02.2012 , the GDA stated that the date of completion of the project is 21.02.2011. The Assessing Officer also submitted a copy of the report of the committee. It also gave the minutes of the committee of GDA. The assessee given an opportunity and submitted its rejoinder of 21.02.2015, which is as per para No. 5.1.4 of the order of the ld. CIT (Appeals). The ld. CIT (Appeals) also put before the assessee the decision of the Hon ble Madhya Pradesh High Court in CIT Vs. Global Reality dated 21.08.2015 wherein it was held that issuance of completion certificate after cut-off date by local authority mentioned the completion of the date of proje ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the year. As assessee has failed to do so, the Assessing Officer computed that interest liability under Section 234B 234 C of the Act of ₹ 4.8 crores. 10 The assessee contended that the issue is squarely covered in favour of the assessee by the decision of the co-ordinate bench in the case of Ram S. Sarda Vs. DCIT (2012) 13 ITR (T) 457. The ld. CIT (Appeals) held that if the assessee does not contest the liability of advance tax then assessee couldn t question the liability of interest under Section 234B of the Act. He, therefore, noted that when advance tax liability is not disputed, it becomes a case of exercise of discretion by the Assessing Officer in levying or not levying interest under Section 234B or 234C of the Act. 11 Thus, assessee aggrieved with the order of the ld. CIT (Appeals) has preferred this appeal before us. 12 The ld. AR on the issue of completion of the housing project for claiming deduction u/s 80 IB (10) of the act, submitted that appellant obtained the approval on 26.09.2006 for developing housing project in the name of Neo Project, Phase I, as on 11056 sq. mtrs. of land situated at Plot No. 11, Indirapuram, Ghaziabad. The permissibilit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 80IB (10) of the Act. He further submitted that the fact of completion before the cut-off date is also supported by certificate of architect. He further stated that though CIT (Appeals) for this assessment year has not allowed the claim of the assessee. However, he referred to the order of the ld. CIT (Appeals) dated 23.01.2018 for Assessment Year 2013-14 and order dated 10.05.2018 for Assessment Years 2014-15 and 2015-16 wherein the claim of the assessee was thoroughly discussed and the addition on account of disallowance of deduction under Section 80IB(10) of the Act was allowed. He, therefore, submitted that the claim of the assessee deserves to be allowed. 13 The ld. DR heavily relied upon the order of the ld. Assessing Officer and the CIT (Appeals). He also extensively relied on the decision of the Hon ble Madhya Pradesh High Court in CIT vs. Global Reality and stated that the issue in the case of the assessee is squarely covered against the assessee. It was further stated that merely stating of the decision by the Hon ble High Court does not obliterate the binding precedent of the order unless it is quashed. With respect to the order of the ld. CIT (Appeals) in subs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ers during financial year 2011 2012. Consequent to the above request of the assessee dated 30 November 2011 to the Ghaziabad development authority, on 21 February 2013, it issued a letter for payment of fees of ₹ 3,243,830/ and completion certificate stating that date of completion of the project is accepted as 21st of February 2011. The fee was also charged from the assessee from 1/4/2006 to 21st/2/2011. Further, it was also noted that the flat was registered in favour of the buyer on 21 February 2011, which was requested as per letter dated 15 February 2011 to Ghaziabad development authority to register a flat number SNC 1104. Along with this letter, the assessee has also submitted, and it stated that the construction of above-mentioned flat is according to the approved map and therefore the above let may be registered in the name of the buyer. Further, the committee constituted by the Ghaziabad development authority also certified that the date of completion of the above project is 21 February 2011. Further, a letter was issued by Ghaziabad development authority on 13th of March 2015 to the assessee wherein also the date of completion is stated to be 21st/2/2011. Thus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted to the assessee after the expiry of three months. In the present case, the assessee made an application on 30 November 2011; therefore, on this ground also the completion date is within the five years limitation. It is also interesting to note that for assessment year 2013 14 identically the deduction u/s 80 IB 10 was disallowed by the learned assessing officer however on appeal before the learned and CIT A allowed the claim of the assessee wide order dated 23 January 2018. Further, similarly for assessment year 2014 15 also the learned CIT appeal allowed the claim of the assessee as per order dated 10 May 2018. However, both these orders are in challenge before the coordinate bench. However, the reasons given therein are required to be considered. An interesting fact has been recorded by the learned CIT A for assessment year 2013 14 that during the financial year 2010 11 five of the units got registered in favour of the customers by the appellant company and another 291 units were transferred in financial year 2011 12 out of the total 346 units constructed by the assessee. Thus 86% of the total units were registered in the name of the ultimate customers before th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fficer noted that there are [3] instances where such violation has been noted. The assessee explained that barring the above [3] exceptions there are no such instances when the units have been so sold. The assessee himself submitted before the learned assessing officer that the amount of deduction excess claimed on this account proportionately is only ₹ 52.47 lakhs and it was surrendered. Before the learned CIT A also assessee submitted that only proportionate disallowance can be made. However the learned CIT A rejected contentions of the assessee. 16 The learned authorised representative submitted that only proportionate disallowance could be made. The learned departmental representative relied upon the order of the learned and CIT A. 17 We have carefully considered the rival contention and perused the orders of the lower authorities. This issue is now squarely covered in favour of the assessee by the decision of the honourable Bombay High Court in Kamat Constructions Pvt. Ltd. Vs ACIT (Bombay High Court) Tax Appeal No. 47 of 2016 dated 01/12/2020 AY 2012-13. Accordingly, we hold that only proportionate deduction to the extent of violation of the provisions of Se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arging of the interest u/s 234C and 234B of the Act. 20 The ld AR relied up on plethora of decision of the coordinate benches to support case that no interest is chargeable u/s 234C of the act prior to 30/03/2012. 21 The ld DR relied up on the orders of the LD CIT A. 22 We have heard the rival contentions and perused the orders of the lower authorities. Fact shows that appellant has sold shares worth ₹ 200 crores being 10,000 equity shares of Gul properties private limited. Out of the sale, consideration the appellant received ₹ 127 crores in financial year 2007 08 the AO has observed that the appellant has considered the date of sale to be 30 March 2012. The CIT A of the view that appellant having received more than 51% of the consideration in previous years the appellant ought to have paid advance tax during the year Under account and therefore the interest liability u/s 234B and 234C of the act are leviable. The learned CIT A relied heavily on the decision of the Honourable Allahabad High Court. However on careful reading of the decision of the honourable Allahabad Court, it was on the issue that Where assessment made originally by Assessing Officer is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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