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TMI Blog2017 (9) TMI 1939X X X X Extracts X X X X X X X X Extracts X X X X ..... ated 12-12-2011 submitted his written submissions stating that the assessee claimed deduction u/s.80IB(10) against the profits of the housing project being developed by the company at Tapadia Estate in Gut No.110, 111 and 112 situated at Tisgaon, Nagar Road, Aurangabad. In respect of Gut No.110, Mr. Garju Sonawane raised the dispute and there was stay order issued against the assessee company. By virtue of the said stay order by the court, the company stopped the construction work of the project. AO assessed the income of the assessee at Rs. 34,03,060/- and denied the benefit of deduction u/s.80IB(10) of the Act. CIT(A) confirmed the addition made by the AO. Aggrieved with such order of the CIT(A) the assessee is in appeal before us. 3. Referring to the issue raised in Ground No.2(i) which relates to inapplicability of the amended provisions of the section 80IB(10) of the Act by the Finance (No.2) Act, 2004 w.e.f. 01-04-2005 to the assessee's housing project, which was approved prior to the said amendment, Ld. Counsel for the assessee submitted that asssssee's project was approved in the year 2001 and the same is incomplete as on date. The amended sub-section (10) provides for due ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to contents of Para Nos. 58 to 66 of the said judgment to demonstrate that the said projects approved prior to the amendment are required to be completed before 31-03- 2008. In case of failure, the assessee become ineligible for deduction. In this matter, the Hon'ble Allahabad High Court approved the judgment of Hon'ble Madhya Pradesh High Court in the case of CIT Vs. Global Reality (2015) 62 taxmann.com 204 (MP). Further, the Ld. Departmental Representative for the Revenue brought our attention to the decision of the Coordinate Bench of the Tribunal in the case of Padmavati Developers Vs. DCIT and vice versa in ITA Nos. 1691 to 1694/PN/2012 and ITA No.2463/PN/2012 order dated 29-05- 2015 and read out the contents from Para No.28 onwards of the said order for an identical proposition, i.e. projects approved prior to the amendment are required to be completed on or before 31-03-2008 failing which the deduction is not available. 6. We heard both the sides on this limited issue relating to explaining the provisions of section 80IB(10)(a)(i) of the Act and perused the orders of the Revenue authorities. To start with, we proceed to examine the relevant provisions from the said se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with retrospective effect from 01.04.2002, requirement of completion of project was dispensed with and reintroduced w.e.f. 01.04.2005 by Finance Act, 2004. Thus, this requirement was not existing only between 01.04.2002 to 31.03.2005. 59. Assessee got approval of housing project for the first time on 08.01.2002. At that time, it was not within ambit of benefits under Section 80-IB(10). However, with the amendment of Section 80-IB(10) by Finance Act, 2003, not only Assessee got included within beneficial ambit of Section 80-IB(10) but even condition of completion of project disappeared. This condition came to be reintroduced w.e.f. 01.04.2005. 60. Thus, it is not a new condition. It cannot be said that it was inserted for the first time by Finance Act, 2004. In fact, this condition was there altogether but for a small period from 01.04.2002 to 31.03.2005, it remained out of statute book. Otherwise, it was consistently there and governed deduction under Section 80-IB(10). It is not a condition which made things impossible but gives sufficient time to Assessee to complete project, i.e., upto 31.03.2008. 61. This aspect has been considered in detail by Madhya Pradesh High Court ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ad to uncertainty about the date of completion of the project which is the hallmark for availing of the benefit of tax deduction. Only with this intent the legislature in its wisdom has predicated that, "the completion of construction" of the housing project is taken to be "the date on which" the completion certificate "is issued" by the Local Authority. To interpret it to include an ex post facto certificate or such certificate issued by the Local Authority after the cut off date, would not only result in rewriting of the express provision and run contrary to the unambiguous position pronounced in the Section, but also doing violence to the legislative intent. For, Explanation (ii) will then have to be read as "date of completion of construction of the housing project shall be taken to be the date as certified by the Local Authority in that behalf", irrespective of the date of issuance of such certificate by the Local Authority. Indeed, in a given case if the assessee is able to substantiate that the completion certificate "was in fact issued" by the Local Authority before the cut off date, but could not be produced by him within time due to reasons beyond his control, the argumen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppeal No. 9 of 2014 and questions (iii), (iv) and (v) in Income Tax Appeal No. 13 of 2017 are answered in favour of Revenue and against Assessee. 66. We are clarifying that aforesaid questions are answered in favour of Revenue in the manner that requirement of completion of project reintroduced w.e.f. 01.04.2005 by Finance Act, 2004 would be applicable to Assessee but whether project in question was completed by Assessee within specified time, cannot be examined at this stage since Tribunal has not looked into this aspect of the matter and this is a question of fact, hence, in our view, this aspect would now have to be examined by Tribunal." 9. Further, we proceed to examine the relevance of the ratio of the order of the Tribunal in the case of Padmavati Developers (supra). We find the contents of Para No.28 read as under : "28. As referred by us in paras hereinabove under the provisions of section 80- IB(10) of the Act, the conditions are laid down which entitles the assessee to the claim of equivalent to 100% of the profit derived from the development and building of housing projects. Admittedly, the assessee has fulfilled the conditions laid down in clauses (b), (c) and (d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y clearly talks of all the housing projects which have been approved by the local authority before 1st day of April, 2004 and have to be completed on or before 31 st day of March, 2008, for making it eligible for the claim of deduction under section 80-IB(10) of the Act. The beneficial provisions provided by the legislature have to be interpreted and it is not the intention of the legislature that liberty should be given to the builders not to complete the projects within the time frame which, in turn, would put the prospective buyers at disadvantage. The conditions have been laid down in the said section in order to streamline the development and building of the housing projects which, in turn, would be handed-over to the prospective buyers within the time frame. Further period of four years have been provided in the sub-section for compliance to the conditions laid therein. Accordingly, we hold that in the present case, where the assessee had received permission for construction vide order dated 15.12.2003 and following the provisions of clause (a)(i) to section 80-IB(10)of the Act, the said project had to be completed before 31st day of March, 2008, in order for the assessee to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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