I.T.O. 10(1)(4), MUMBAI vs. KRISHNA KUMAR PITTIE, MUMBAI

O R D E R PER R.C.SHARMA (A.M): This is an appeal filed by the revenue and cross objection filed by the assessee against the order of CIT(A) 21, Mumbai, dated 21-09-2011, for the assessment year 2004-2005, in the matter of order passed u/s.147 r.w.s.144 of the I.T.Act. Assessee has filed the Cross Objection against the order of CIT(A).

2. The grounds raised

2. The appellant prays that the order of CIT(A) on the above ground be set aside and that of the assessing officer be restored.”

3. In the Cross Objection assessee has taken following grounds:- “1. The learned Commissioner of Income Tax (Appeals) erred in holding that the AO was justified in assuming jurisdiction u/s. 147 and while doing so he amongst other failed to appreciate that: a. The AO has assumed jurisdiction in pursuance to an invalid notice u/s. 148. b. The AO has not provided the appellant with copy of reasons recorded in writing inspite of the fact that the appellant had made a specific request vide letter dated 20.04.2010. c. The appellant had truly and fully disclosed his income and all the material facts necessary for the assessment. d. There was no income chargeable to tax which had escaped assessment. e. The reasons recorded for reopening of assessment had no live nexus or bearing to the facts obtained in appellants case. f. The A.O., in the order passed u/s. 143(3) had examined in detail the claim made by the appellant u/s. 80IB(10) of the Act. g. Merely on the basis of change of opinion jurisdiction for reassessment cannot be assumed; and h. The appellant was not a works contractor.

4. Rival contentions have been heard and record perused. The facts of the case are that the assessee filed return of income for A.Y.2004-05 declaring income of Rs.1,20,550/-. The assessment u/s. 143(3) of the Act was made vide order dtd. 26.12.2006 determining the total income at Rs.5,05,30,950/-. The assessment order made on enhanced income on account of disallowance of assessee’s claim of deduction u/s. 80-IB of Rs.5,00,55,978/-. As per certificate of Auditors in Form No.10CCB housing project was approved by local authority on 25.01.2001 and the 3 project was completed on 21.08.2003 and comprised of 208 flats and 16 shops aggregating to 1,23,978.62 sq. ft. and none of the units exceeded 1000 sq. ft. The A.O. noticed that assessee violated the conditions of restriction of commercial area and it had actually developed 5227 sq. ft. commercial area. In the original assessment order u/s. 143(3), the A.O. denied deduction u/s.80-IB(10). In an appeal filed before CIT(A), deduction u/s.80IB(10) was allowed to the extent of 96.08% of total claim. Both assessee and the Department filed appeal to the ITAT, vide order 07.05.2009 the Tribunal dismissed revenue’s appeal whereas appeal of assessee was allowed. The Department further filed appeal before Hon'bIe Bombay High Court and the same was dismissed by the Court vide order dated 11-4-2011.Thereafter, the A.O. received information on 18.03.2009 from Jt.CIT (CIB) and on 31.03.2009 from ITO (CIB). The A.O. received new information from the CIB as enclosing thereof the following: (i) enclosing a copy of the commencement certificate dated 19.06.1998 for the development work of property, residential Building No.3, at CTS No.261, 261/1 to 2,263 at Caves Road, Jogeshwari. (ii) enclosing a copy of Occupancy certificate dated 29.10.2001 for Building No.3, at CTS No.261 and 263 at Caves Road, Jogeshwari. (iii) enclosing a copy of intimation of disapproval u/s.346 of BMC Act dtd.13.06.2001 with reference to letter nO.5089 dtd.05.01.2006 issued to Mr.Kiran P. Amin for Building CTS No.261, 261/1 & 2 and 263 at Caves Road, Jogeshwari. (iv) enclosing letter dtd.30.10.2006 addressed to Manoj Paresh Consultants referring to for Building CTS No.261, 261/1 & 2 and 263 at Caves Road, Jogeshwari. From the above information, the A.O. noted that the project of residential building at CTS No.261, 261/1 & 2 and 263 at Caves Road, Jogeshwari were approved earlier and commenced before 01.10.1998. The A.O. was of the opinion that during original assessment proceedings, 4 the assessee did not furnish this correct and true fact to the A.O. The Certificate from BMC referred to assessee's application No.3501 dated 29.09.2000. The assessee had not filed copy of this application No.3501 dtd.29.09.2000 before the A.O. during original assessment proceedings. Thus A.O. had no occasion to examine the same and assessment order shows non application of mind on these facts brought out by CIB Wing of the Department. The A.O. held that during original assessment proceedings, the assessee had withheld all the relevant information of original / earlier plans of entire project and had misrepresented Bldg. No.4 as a housing project and that project as one which commenced only on 25.01.2001. On the basis of above information, the A.O. initiated proceedings u/s. 147 of the Act recording his reasons thereof on the ground that the date of commencement of housing project was before 01.10.1998 and hence assessee was not eligible to claim deduction u/s. 80-IB(10) of the Act. The A.O. issued notice u/s. 148 of the Act dtd.25.03.2010. In response the appellant's Authorized Representative requested that the return filed earlier may be treated as return filed in pursuance to notice u/s.148 of the Act. Thereafter, the A.O. issued notice ujs.142(1) which was delivered on assessee on 28.10.2010. The A.O. asked the assessee to furnish all the original documents submitted to Municipal Authorities and Town authorities for obtaining approval of the plan, all letters conveying approval original as well as modified ones and documents and evidence produced before CA for data mentioned in the certificate for date, residential area, commercial area, etc.

2.3 I have considered the facts of the case. The appellant filed return of income which was scrutinized u/s.143(3) of the Act vide order dtd.26.12.2006. In the return of income the appellant claimed deduction u/s.80-IB( 10) at Rs.5,00,55,978/ - which were disallowed by the A.O. However, appellant, claim was allowed by CIT(A) and ITAT. Thereafter the A.O. received some information from the CIB Wing of the Department. Such information received by A.O. has been reproduced in above paras. As per provisions of sec.80-IB(10), deduction was allowable after the undertaking had commenced construction of housing project on or after 1st day of October, 1998. In the original assessment proceedings, the appellant reiterated that the construction of project had started after 01.10.1998. This condition inter alia is one of the condition and important condition for deciding as to whether the deduction u/s. 80-IB(10) was eligible or not. However, subsequent to original assessment proceedings, the A.O. received information from CIB that the commencement of housing project was prior to 01.10.1998. In the facts and circumstances the A.O. was justified in forming the opinion that prime condition of sec.80- IB 10) was not fulfilled by the appellant and therefore, the income assessed in original assessment u/s.143(3) was subjected to excessive relief allowed to the appellant. As per provision of sec.147 of the Act, the completed assessment can be reopened if the A.O. has reason to believe that any income chargeable to tax had escaped assessment. Thus for reopening of assessment the A.O. should have some reason, such reasons should be bonafide sufficient to make a prima facie belief that income has escaped assessment. Such reasons should be based on some information/material available with the A.O. As per explanation 2 to sec.147, the case of assessment of income subjected to excessive relief under the Act have been considered as sufficient reason for reopening the assessment. In the case under consideration the A.O. reopened assessment on the basis of some information. Such information was relevant to the appellant's claim of deduction u/s. 80-IB(10) of the Act. Therefore, the A.O. was having sufficient reasons to form a belief that income had escaped assessment on this account. What was required under the Act is that there should be some bonafide reasons for reopening the assessment. It was not required that at the stage of reopening the assessment that reasons should conclusively prove the non assessment/ concealment of income, consequently reasons was not to be questioned so long there was a prima facie case of escapement / non assessment.

6 Considering the facts and circumstances of the case as mentioned above, the A.O. was justified in assuming jurisdiction ujs.147 of the Act. This ground of appeal is therefore, dismissed.

3. The 2nd ground of appeal is that the A.O. erred in not allowing deduction u/s.80-IB(10) of the Act. 3.1 The facts of the case has been explained in above paras. As explained above the appellant claimed deduction u / s. 80- IB(10) of the Act on some housing project. The same was disallowed by A.O. However, the appellant's claim was allowed by CIT(A) and ITAT. As explained above, as per sec.80-IB(10) the deduction was eligible if the housing project had been commenced on or after 1st day of October, 1998. In the original assessment proceedings, the deduction u/s.80- IB(10) of the Act was disallowed by the A.O. on some different reasons and not on the ground that housing project was commenced before 01.10.1998. In the original assessment proceedings, on the basis of documents furnished by appellant, the A.O. was satisfied that the housing project commenced after 01.10.1998. However, subsequent to original assessment proceedings, the A.O. received information from CIB that the housing project was commenced before 01.10.1998. The facts in detail have been mentioned in earlier para. In the reassessment order u/s. 147 of the Act, the A.O. held that the deduction u/s.80-IB(10) was subject to one of the condition that the undertaking should have commenced development of housing project on or after 01.10.1998. The commencement certificate relied by the CA for issuing Form No.10CCB was dtd.25.01.2001. The same referred to Application No.3501 dtd.29.09.2000. The same gave permission to start the development work of Building No.4 CTS No.261, 261/1 to 2, 263 at Caves Road, Jogeshwari, Mumbai. The plans submitted by appellant during original assessment proceedings show that commencement certificate dtd.25.01.2001 relied upon by the CA for issuing such certificate related to Building No.4. The approved plan dtd.12.11.200 1 does not mention as to whether Bldg. No.4 was a separate project or not. In the reassessment proceedings, on the basis of information and documents received from CIS the A.O. held that Building NO.4 had also been issued a commencement certificate before 01.10.1998. The A.O. held that the first commencement certificate was dtd.19.06.1998 and hence approval will have to be prior to that date and eligible condition of the project was that such undertaking had commenced or commences development and construction of the housing project on or after 1 st day of October, 1998. On the basis of commencement certificate dtd.19.06.1998, copy of occupancy certificated dtd.29.10.2001, intimation of disapproval u/s.346 of BMC Act dtd.13.06.2001 (all these documents received by A.O. from CIB Branch), the A.O. held that the appellant's housing project commenced before 01.10.1998 and therefore, the appellant was not entitled for deduction u/s.80-IB of the Act as the condition laid down u/s. 801B(10) of the Act was not fulfilled. The A.O. therefore, disallowed appellant's claim of deduction u/s.80IB(10) of the Act.

7 3.2 During appellate proceedings, the appellant repeatedly argued that it had claimed deduction u/s. 801B(10) of the Act on housing project completed in respect of Building no.4 of CTS No.261, 261/1 & 2, 263 at caves Road, Jogeshwari. The appellant further explained that during reassessment proceedings, vide its letter dtd. 13.12.2010 it was intimated to the A.O. that the construction of housing project was at Building No.4 of CTS No. 261/161/1 & 2, 263 at caves Road, Jogeshwari. During appellant proceedings, the appellant filed copy of Municipal Corporations letter dtd.12.11.2001 addressed to appellant's Consultant Shri Manoj Paresh in support of its argument that the plan/application made to the Municipality was in respect of proposed Building no.4 on said plot of land. The appellant also filed Municipality letter dtd.12.11.2001 addressed to its Consultant conveying no objection to the construction of proposed Building No.4 at property bearing the above said CTS No. The appellant also filed intimation of disapproval issued by Municipality dtd.07.11.2000 in which it was specifically mentioned that the construction was on proposed building no. 4 of CTS No. 261/161/1 & 2, 263 at caves Road, Jogeshwari. A copy of commencement certificate issued by Municipality dtd.25.01.2001 had also been filed with reference to appellant's application No.3501 dtd.29.09.2000 for development/permission and grant of commencement certificate at proposed Building No.4 on the above aforesaid plot at Jogeshwari, Mumbai. The appellant also filed copy of its application dtd.29.09.2000 bearing Municipality acknowledgement no. 3501 requesting for permission to develop the property. The appellant further explained that on plot CTS No. 261/161/1 & 2,263 at caves Road, Jogeshwari, Mumbai various buildings were proposed to be constructed/developed. One of the Building developed/constructed by appellant was Building No.4. The appellant further argued that during original assessment proceedings, during appellate proceedings and during appellate proceedings before ITAT this was very much explained that the appellant had developed/constructed housing project on Building No.4 and housing project commenced after 01.10.1998. The appellant further argued that subsequent to original assessment proceedings, the information received by A.O. from CIB Branch (on the basis which assessment order was reopened) was in respect of residential Building no.3 on the same plot of land bearing CTS No. 261, 261/1 & 2, 263. The appellant argued that the commencement certificate dtd.19.06.1998, occupancy certificate dtd. 29.10.2001, intimation of disapproval dtd.13.06.2001 and letter dtd.30.10.2006 addressed to its consultant Shri Manoj Paresh, all these documents received by A.O. from CIB Branch was pertaining to residential Building no.3 and hence were not relevant to the appellant's claim of deduction u/s. 80-IB(10) of the Act since the deduction was claimed for housing project completed on Building No.4. In view of the above contradictory facts, i.e. Building No.3 or 4, vide this office letter dtd.24.03.2011, the A.O. was asked to explain the following. The contents of this office letter dtd.24.03.2001 are reproduced hereunder: "The appellant Shri Krishna Kumar Pittie, proprietor of M/ s. Victoria Construction was the builder and developer.

taken by Department before ITAT against the order of CIT(A). The ground was in respect of element of commercial area in the residential project. There was no ground that the project was completed on Bldg. No.3 or on 4.

6. Page No.7 is ITAT order in which the ITAT allowed the appellant's appeal.

7. Page No.8, 9 & 10 are the appeal filed by Department in the High Court against the ITAT order. In the statement of facts on page 10, the Department stated that the appellant constructed project at Bldg. No.4.

8. Please refer Page No. 11 & 12 i. e. copy of assessment order u/s.147 r.w.s.144. In para 2(1),2(2),2(3) & 2(4) of the assessment order there is a reference of Bldg. No.3 at CST No.261, 261/1 to 2,263. The reopening u/s. 147 has been made solely on the ground that during original assessment proceedings the appellant mispresented completion of residential project at Bldg. no.4 whereas the actual residential project completed was on Bldg. No.3. On this basis the reopening has been made and since there was no compliance from appellant's side during reassessment proceedings, the assessment was completed u/ s. 144 rejecting appellant's claim of deduction u/s. 80-IB.

9. The appellant has contended that there existed a plot CST No.261, 261/ 1 to 2 and 263. On these plots, different buildings were completed/ constructed by different persons. The appellant has argued that the commencement certificates, occupancy certificate and other documents referred to in para 2 of the assessment order pertains to Bldg. No.3 on the same plot, which building was not constructed by the appellant but was completed by some other person. The appellant has argued that it has constructed residential project at Bldg. No.4 only.

10. In view of the above, you are requested to, (a) report as to whether the documents enclosed herewith as page No. 1, 2 & 3 were filed by appellant during original assessment proceedings. (b) furnish copies of all documents mentioned in para 2 of assessment Order u/s.144 r.w.s. 147 to this office. (c) report-how the documents mentioned in para 2 of reassessment order were pertaining to the appellant or project completed by the appellant.

11. The report on the above issues may be forwarded to this office by 11.04.2011. In response the A.O. vide its letter dtd.05.04.2011 furnished remand report reiterating that facts on the basis of which original assessment order was completed as well as the material on the basis of which the said assessment order was reopened. The contents of remand report are reproduced hereunder: "Thus there was no objection from the assessee's side regarding the correctness and applicability of the information received from the CIB as not pertaining to the building constructed by assessee at any stage and hence, no further enquiry was done at this end. Had the assessee objected, further information. would have been collected from the concerned department of BMC regarding the building no.4 and its earlier approvals, if any, through further enquiries. As such it is placed that assessee may not be granted any relief on this point unless the original facts as ascertained and forwarded by CIB Wing is proved as incorrect and no such approval in the form of commencement certificate had been issued before 1.10.98 for the building no.4 constructed by assessee. " The copy of Remand Report was furnished to the appellant for furnishing its counter comments. The appellant vide letter dtd.06.05.2011 submitted its submissions reiterating its arguments that: (i) Information received from CIB was pertaining to Building No.3 whereas it had claimed deduction u/s. 80-IB on housing project at Building No.4. (ii) This issue had already been examined during original assessment proceedings / appellate proceedings that the appellant claimed deduction u/s. 80-IB(10) of the Act on completion of housing project of Building No.4. The appellant requested that it had fulfilled all the conditions laid down u/s. 80-IB(10) of the Act and therefore the disallowance made by A.O. should be deleted.

10 In the remand report dated 05.04.2011, the A.O. did not furnish his report on the appellant's claim that the appellant had constructed building No.4 and not building no.3. The A.O's remand report dtd.05.04.2011 was incomplete and was not based on the facts of the case. Therefore, vide this office letter dtd.11.08.2011, the Addl. CIT Range 10(1), Mumbai [Supervisory Authority of A.O., ITO 10(lH4)] was specifically directed to obtain a further report from A.O. It was brought to the notice of Add. CIT 10(1) that during original and reassessment proceedings the appellant had denied that he had completed housing project on building no.3. In view of appellant's this claim, the onus was on the A.O. to prove that the appellant constructed housing project on building no.3. The Addl. ClT 10(I) was requested to direct the A.O. to prove that the appellant constructed housing project on building no.3. The A.O., ITO 10(1)(4), Mumbai furnished his report d td.30.08. 2011. The A.O's this remand report was mechanically sent by Addl. CIT Rg 10(I) to this office vide his letter dtd.07.09.2011. Acting as a post office, the Addl. CIT Rg 10(1) sent A.O's remand report to this office without appreciating the facts/issue for which a further remand report was called for. In this second remand report, the A.O. reported that :- Reference is invited to the communication by the local authority i.e. Municipal Corporation of Greater Mumbai vide letter No. CE/72-76/WS/ AE of 13/11/2001 dtd.12.11.200 1 addressed to Manoj Paresh Consultants Pvt. Ltd., wherein it was clear that they have considered the construction of entire area for the plot area of 21,644 Sq. mts. As one housing project on plot CST No.261 /261 /2 & 263 and proposed building no.4 is only a part of the project on part of the plot. There is neither separate/independent Municipal demarcation of plot for building no.4 nor there is separate/independent area calculation for Municipal purposes. The order under ULC Act was also not made available. The correspondence and/ or approval by local authority was to Mr. Pankaj Shah, C.A. to Caron Ltd. and was in reference to the housing project on plot bearing No.CST No.261 /261 /2 & 263 which include building No.4 on part of the plot bearing No.261, 261/2 & 263. Proforma-1, provided alongwith the building plan of building no.4, provides area of plot (for the project) as 21,644 sq mts. with net area of the plot as 15980 sq. mts. The statement shows the composite calculation of built up area at 20,268 sq mts. for building no., 1 ,2,3 & 4. "Certificate of Plot Area" certifies the plot area as 21,644 sq. mts. It directly implies that building no.4 is not an independent housing project. Building no.4 is only a building plan under a housing project on the plot bearing CST No.261,261 /2 & 263 which includes 'existing' building no.1 and also includes building no2 and building no.3. The remand report of A.O. was made available to the appellant for its counter comments. In its submissions dtd.19.09.2011, the appellant filed detailed counter submissions. The appellant pointed out that the A.O. had not disputed that the appellant had constructed and developed housing 11 project (Bldg. No.4) and that the commencement certificate for this project was 12.11.2001. Relying on the record of another building, which had neither been constructed or developed by him, could not disentitle his claim for deduction u/s.80-IB(10). Further, relying on the commencement certificate of Bldg. No.3, reopening/reassessment proceedings could not be justified when the factum of commencement certificated for Bldg. No. 4 dated12.11.2001 was not in dispute. The appellant further explained that in para 8 of remand report dtd.30.08.2011, the A.O. has without prejudice to the facts stated in assessment order has referred to the communication by MCGB vice letter no.CE/72-76/WS/AE dtds.12.11.2011 addressed to Manoj Paresh Consultants Pvt. Ltd. The A.O. has stated that as per the said communication MCGM had considered the construction of entire area for the plot area of 21,644 sq. mts. as one housing project on plot CST No.261, 261/2 and 263 and proposed Bldg. No.4 was only a part of the project on part of the plot and that there was neither separate/independent demarcation of plot of Bldg. No.4 nor there was separate independent municipal demarcation of plot for Bldg. No.4. In this respect the appellant submitted that in the communication by MCGB vide letter No.CE/72- 76 /WS/ AE dtd.12.11.200 1 addressed to Manoj Paresh Con sultant s Pvt. Ltd. it had been clearly stated that the housing project plans for the proposed Bldg. No.4 were approved and that the area on which Bldg. No.4 was to be constructed and developed was 5,500 sq. mts. Having regard to these facts it was clear that Bldg. No.4 was on a separate/independent earmark portion on the plot of land. In this respect the appellant invited attention to the copies of plans filed in the paper book during appellate proceedings. In para 9 of remand report dtd.30.08.20 11, the A.O. had stated that correspondence/approval by Local Authority was to Mr. Pankaj Shah, C.A. to Carona Ltd. and was in reference to the housing project on plot bearing CST no.261, 261/2 & 263 which included Bldg. No.4 on part of the plot bearing CST No.261, 261/2 & 263. In this respect the appellant filed its counter reply stating that firstly the averments made by A.O. were factually incorrect and wrong. The A.O. himself vide his remand report dtd. 05.04.2011 had enclosed the copies of correspondence and or approvals by local authority to the C.A. to Carona Ltd. From these certificates, it could be seen that the occupancy certificate bearing no. CE/6597 dtd. 29.10.2001 was for the completion of development work of Bldg. No.3 on plot bearing CST No.261, 261/2 & 263. The commencement certificate bearing no. CE/6597 dtd.19.06.1998 was for the development work of Bldg. No.3 on plot bearing CST No.261, 261/2 & 263 as per approved plan dtd. 17.11.1998. The appellant further explained that Bldg. No.4 was not a part of approval granted in CE/6597 dtd.19.06.1998 on plot bearing CST No.261, 261/2 & 263. From these facts it was established that the plan approved by MCGM was only with reference to the development work for Bldg. No.3 and not at all with reference to the approved plan for Bldg. No.4. merely because plans were approved by the MCGM for Bldg. No.3 it could not be presumed that the plans for Bldg. No.4 were deemed to have been approved on the same date.

12 In respect of A.O's comments regarding the proforma-1, the appellant in its counter reply stated that the A.O. has enclosed the proforma-1 which was forming part of the approved plans for Bldg. No.4 vide approval granted by MCGM in CE/7276/WS/AK dtd.12.11.2001. Thus the A.O. himself has admitted that the construction and development of the housing project of Bldg. No.4 was commenced only on or after the commencement certificated dtd.12.11.200 1. The A.O. also admitted that the approval for the housing project was granted only on 12.11.2001. In respect of para 11 of remand report dtd.30.08.20 11, the appellant explained that the A.O. was incorrect and not justified. Bldg. No.3 had not been constructed or developed by the appellant. The appellant had obtained an independent approval of local authority for construction and development of Bldg. No.4 on 12.11.2001. The appellant has commenced the construction and development only after receipt of approval from the local authority. Thus merely because there was a construction and development of a building on the larger plot it could not be said that the said building gets amalgamated to the other buildings which were subsequently constructed on that plot. The appellant further stated that the findings recorded in para 8 to 11 of remand report were incorrect on facts and law. 3.3 I have carefully considered the facts in detail as explained above and various documents on the basis of which the A.O. had reopened the completed assessment. The appellant has explained that on plot CTS No.261, 261/1 & 2, 263 various buildings were to be constructed. The appellant explained that he had constructed/developed Building No.4 only. The appellant has categorically stated that the Building No.3 on the aforesaid plot was never developed or constructed by him. From the facts as explained above, from original assessment order, appeal order and ITAT order it has been gathered that the appellant very well informed that he had constructed housing project namely Building No.4 only. The copies 01 Municipality letter dtd.12.11.2000 addressed to its Consultants Shri Manoj Paresh, Municipality letter dtd.12.11.2001 addressed to its Consultants, Municipality intimation of disapproval dtd.7.11.2000, commencement certificate dtd.25.01.2001 with reference to appellant's application no. 3501 dtd.29.09.2000 shows that the subject matter was Building No.4 of CTS No. 261, 261/1 & 2, 263. The A.O. received commencement certificate dtd.19.06.1998, occupancy certificate on 29.10.2001 and other documents from the CIB Branch. However, all these documents were pertaining to Building No.3 on the aforesaid plot. The said building no.3 was never constructed by the appellant. In the remand report proceedings, the A.O had not carried out any enquiry on the reason that "thus there was no objection from the assessee's side regarding the correctness and applicability of the information received from the CIB as not pertaining to the building constructed by assessee at any stage and hence, no further enquiry was done at this end." Thus the A.O. also accepted that the documents received from CIB were pertaining to building no.3. However, in the remand report, the A.O. objected allowing any relief to the appellant or the ground that in case of objection from appellant, further information 13 would have been collected from BMC in respect of building no.4 and its earlier approval. However, such approvals, etc. issued by BMC in respect of building no.4 were already on record during original and reassessment proceeding. In the remand report, the A.O. conveniently ignored to comment on the issue that building no.3 was not constructed by the appellant. In the facts and circumstances, vide this office letter dtd. 11.08.2011, the Addl. CIT Range 10(1), Mumbai was directed to obtain a fresh report from the A.O. to prove that the appellant constructed housing project on Bldg Bo.3 and not Bldg. No.4. The A.O. was also asked to explain the other aspects. In response the A.O. furnished remand report dtd. 30.08.2011. This contents of this report had been reproduced in above paras. However, in the said report the A.O. did not furnish comments on the points asked for by the undersigned. In the said report the A.O. also failed to prove that the documents received from CIB Branch were pertaining to Bldg. No.4. In its counter reply to the A.O.’s remand report dtd. 30.08.2011, the appellant has explained that the facts mentioned in the said remand report were incorrect. The appellant has furnished satisfactory reply to each and every point raised by A.O. in remand report. The A.O.’s this finding is without any support and base. Had the entire are been one housing project, there was no need for Municipality to issue separate building. There could be many housing projects on one plot of land and it need not be demarcated by separate boundaries as incorrectly understood by the A.O. There was no necessity of order under ULC Act (Urban Land Ceiling Act) as incorrectly mentioned by A.O. In the facts and circumstances, the appellant’s claim of deduction u/s. 80- IB(10) of the Act appears to be correct that it had constructed Building No.4 on the aforesaid plot of land and commencement of the said project was made after 01.10.1998. The documents pertaining to Building No.3 cannot be used against the appellant as it had not constructed any Building No.3. In the facts and circumstances the A.O. was not justified in disallowing appellant’s claim of deduction u/s.80-IB(10) on the basis of documents pertaining to Building No.3 which was never constructed by the appellant. In the facts and circumstances the appellant’s claim of deduction u/s.80-IB(10) on completion of Building No.4 was justified. The disallowance of appellant’s claim of deduction u/s. 80-IB(10) is therefore, deleted. This ground of appeal is allowed.

6. Against the above order of CIT(A), the revenue is in further appeal before us.

7. We have considered rival contentions, carefully gone through the orders of the authorities below and also deliberated on the judicial pronouncements referred by lower authorities in their respective orders as well as cited by ld. AR and DR during the course of hearing before us.

14 From the record we found that in the remand proceedings, the AO declined claim of deduction u/s.80IB(10) on the plea that housing project was approved and commenced prior to 1998, therefore, not eligible for claim of deduction. The CIT(A) after calling for the remand report had categorically recorded a finding to the effect that the AO has wrongly relied with respect to commencement certificate issued in respect of building No.3, whereas the assessee has categorically stated that he has not constructed building No.3, but it was building No.4. From the record we found that commencement certificate as referred by AO bearing No.CE/6597, dated 19-6-1998 passed for the development and work of building No.3 on plot bearing No.CST No.261, 261/1, 261/2 and 263 as per approved plan dated 17-11-1998. Furthermore, the occupancy certificate bearing No.CE/6597 dated 29-10-2001 was for completion of development work of building No.3 on plot bearing CST No. No.261, 261/1, 261/2 and 263. We further found that building No.4 was not a part of approval granted in CE/6597 dated 19-6-1998 on plot bearing CST No. No.261, 261/1, 261/2 and 263. Thus, the plan approved by MCGM was only with reference to the work of building No.3 not at all with reference to the approved plan of building No.4. Mere because plan approved by MCGM for building No.3 it cannot be presumed that plans for building No.4 were deemed to have been approved on the same date. It is also in not dispute and also a matter of record that building No.3 had not been converted or developed by the assessee and the assessee has obtained an independent approval of local authority for construction and 15 development of Bldg. No.4 on 12.11.2001. Only after receipt of approval from the local authority, the assessee has commenced the construction. Merely because there was a construction and development of a building on the larger plot it could not be said that the said building gets amalgamated to the other buildings which were subsequently constructed on that plot. After considering the remand report sent by the AO, the CIT(A) has recorded a finding to the effect that on plot CTS No.261, 261/1 & 2, 263 various buildings were to be constructed and that assessee had constructed/developed building No.4 only. Even during the original assessment proceedings and appellate proceedings and also during the second appeal, it has been gathered that the assessee very well informed that he had constructed housing project namely building No.4 only. The copies 01 Municipality letter dtd.12.11.2000 addressed to its Consultants Shri Manoj Paresh, Municipality letter dtd.12.11.2001 addressed to its Consultants, Municipality intimation of disapproval dtd.7.11.2000, commencement certificate dtd.25.01.2001 with reference to assessee's application no. 3501 dtd.29.09.2000 shows that the subject matter was Building No.4 of CTS No. 261, 261/1 & 2, 263. The A.O. received commencement certificate dtd.19.06.1998, occupancy certificate on 29.10.2001 and other documents from the CIB Branch. However, all these documents were pertaining to Building No.3 on the aforesaid plot. The said building no.3 was never constructed by the assessee. Thus, we found that even reopening of assessment was not based on correct reasoning insofar as building No.4 constructed by the assessee was after 16 receipt of approval letter from the municipality dated 25-1-2001 with reference to application No.3501, dated 29-9-2000. Thus, there was no reason to believe that there was any escapement of income with respect to building No.4.