Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, DELHI BENCH ‘A’ NEW DLEHI
Before: SHRI N.K. BILLAIYA & SHRI N.K. CHOUDHRY
This appeal has been preferred by the Revenue Department against the order dated 21.01.2019, impugned herein, passed by the learned Commissioner of Income-tax (Appeals)-1, New Delhi (in short ‘ld. Commissioner’) u/s. 250(6) of the Income-tax Act, 1961 (in short ‘the Act’) for the assessment year 2004-05.
In the instant case, the return of income was filed by the assessee on dated 01.11.2004 by declaring total income of Rs.1,58,08,470/-, which resulted into passing an assessment order dated 27.12.2006 u/s. 143(3) of the Act , whereby the income of the Assessee was determined at Rs.5,27,28,910/- as against returned income of Rs.1,58,08,470/-.
2.1 Against the said assessment order, the assessee has preferred an appeal before the then ld. Commissioner who vide order dated 27.08.2008, partly allowed the appeal (No. 553/06-07) of the assessee.
2.2 The Assessee, being aggrieved, challenged the order passed by the then ld. Commissioner and the Hon’ble Tribunal vide order dated 28-03-2017, allowed the appeal of the assessee and remanded the case to the Assessing Officer with a direction to verify the claim of the assessee to the effect as to whether it has completed all the projects before terminal date of completion and as to whether completion certificates have been received or not.
2.3 The Assessing Officer while giving effect to the order of the Hon’ble Tribunal, vide order dated 27.11.2017 passed u/s. 254/143(3) of the Act, disallowed the claim of deduction u/s. 80IB of the Act by concluding “as per the directions of the Hon’ble ITAT at page No. 21 & 22 para 28, the issue was verified. It is noticed that the completion certificates were not produced during the assessment proceedings as well as during the appellate proceedings in the office of ld. CIT(A)-1. Hence, no relief in this regard is allowed”.
Being aggrieved by the order u/s. 254/143(3) of the Act passed by the Assessing Officer, the Assessee preferred an appeal before the ld. Commissioner, who vide order, impugned herein, dated 21.01.2019 allowed the deduction claimed by the assessee u/s. 80IB(10) of the Act by concluding as under :
“5.3 Decision: 5.3.1 Vide order dated 28.03.2017 in for AY 2004-05, Hon'ble ITAT has directed that - “As far as the third issue regarding non-fulfilling of the condition of completion of units is concerned, the contention of the Id. Counsel is that the amendment is prospective. However, he has also pointed out that in the case of assessee, all the projects were completed before the terminal date of completion and completion certificate were also received in majority of the units / houses. Therefore, we do not consider it necessary to go into the issue regarding amendment being prospective or not. The claim of the assessee is that actually it has complied with the conditions as per amended provisions. The Assessing Officer is directed to verify this aspect and allow the claim in accordance with law. In the result this ground is partly allowed for statistical purpose." 5.3.2 During the course of the appellate proceeding, Ld. AR had submitted the completion certificates of various projects which were forwarded to the AO forverification. In this regard the AO has reported vide the letter F.No.ACIT/Cir.2(2)/Remand Report/304 dated 04.01.2019 as under: “In connection with the above, your good self has directed the undersigned to examine the documents filed by the assessee vide letter dated 13.11.2018. The assessee company has been given an opportunity of being heard vide letter dated 22.11.2018. In response to the same assessee's AR appeared and the issues involved have been discussed. The Completion Certificates in respect of the following projects have been verified on Test-Check basis and the same has been found to be in order. SI. Name of the project Amount (In No. Rs.) East End Housing Project 63,15,760/-
1. 1. AvantikaAkriti Housing Project 9,96,784/- 2.
3. Golf Link-I Housing Project 14,59,067/- 4. Golf Link-II Housing Project 3,46,750/- 5. Green Glade -I Housing Project 1,01,92,368/- Green Glade -II Housing Project 19,74,011/- 6 TOTAL 2,12,84,740/-
In the instant case, the AO has reported that the Completion Certificates in respect of the above projects have been found to be in order. Accordingly, the AO is directed to allow the claim of the appellant company for deduction u/s 80IB(10) of Income Tax Act 1961 for AY 2004-05 in accordance with the direction of Hon’ble ITAT, Delhi. This ground of appeal is decided in favour of the appellant.”
Being aggrieved by the impugned order, the Revenue is in appeal before us on the following grounds:
“1. On the facts and in the circumstances of the case, the Ld. CIT (A) has erred in allowing deduction u/s 80(IB)(10) of the I.T. Act for the following reasons:-
(i) The CIT(A) has not discussed about the fulfilling of the following two conditions for the eligibility of deduction u/s 80IB( 10) other than the verification of completion certificates: (a) Housing projects should have been commenced on or after 0.10.1998. (b) The project should have completed on or before 31.03.2008. (c) The residential unit should have maximum built-up area of 1000 sq. ft. where such residential unit is situated within the city of Delhi or Mumbai or within 25 kms. from the municipal limits of these cities. (ii) The AO in his order u/s 254/ 143(3) dated 27.11.2017 categorically stated that the completion certificates had not been produced during assessment proceedings as well as during appellate proceedings.
(iii) As per the requirements of the provisions of Section 80IB( 10) of the I.T. Act, the housing project as a whole should have been completed for which the deduction u/s 801 B( 10) has been claimed.
(iv) Before submitting his remand report, the AO has not made any enquiries regarding the correctness and genuineness of the Completion Certificates submitted by the appellant and has merely verified the same on ‘Test Check basis’.”
Heard the parties and perused the material available on record. The case of the Revenue is that the Assessee had failed to produce the completion certificates during the assessment proceedings as well as during the appellate proceedings and as per requirement of provisions of section 80IB(10) of the Act, the housing project involved should have been completed, for which the deduction u/s. 80IB(10) of the Act has been claimed.
Further, the Assessing Officer during the remand proceedings has not made any enquiry regarding the correctness and genuineness of the completion certificates submitted by the assessee and has merely verified the same on “test check basis”.
5.1 We have perused the orders passed by the authorities below and given our thoughtful consideration to the conclusion drawn by the ld. Commissioner while allowing deduction to the assessee and find that during the course of appellate proceedings before the ld. Commissioner, the Assessing Officer vide its remand report dated 04.01.2019 had reported as under:
“In connection with the above, your goodself has directed the undersigned to examine the documents filed by the assessee vide letter dated 13.11.2018. The assessee company has been given an opportunity of being heard vide letter dated 22.11.2018. In response to the same, Assessee’s AR appeared and the issues involved have been discussed. The completion certificates in respect of the following projects have been verified on test- check basis and the same has been found to be in order”:
(i). East End Housing Project; (ii). AvantikaAkriti Housing Project; (iii). Golf Link-I Housing Project; (iv). Golf Link-II Housing Project; (v). Green Glade-I Housing Project; and (vi). Green Glade-II Housing Project 5.2 The learned Commissioner, while considering the remand report filed by the AO, wherein the completion certificates of the projects of the Assessee have been verified on test-check basis and found to be in order, allowed the deduction u/s. 80IB(10) of the Act for the assessment year under consideration and therefore the main contention of the Revenue Department is that the completion certificates have not been produced during the assessment proceedings as well as appellate proceedings, is devoid of merits.
We may clarify that the Assessing Officer has to assess and determine the claim of the assessee as per the directions of the higher authority but by using his own wisdom, which in the instant case has been correctly done by verifying the completion certificates on ‘test check basis’ and found the same in order. Hence, on the aforesaid consideration and analyzations, we are inclined not to interfere with the order under challenge, as the same does not suffer from any perversity and impropriety and/or illegality. Consequently, the appeal filed by the Revenue is liable to be dismissed. Page 6 of 8
In the result, the appeal filed by the Revenue Department is dismissed.
Order pronounced in the open court on 31/05/2022