ITO 16(2)(4), MUMBAI vs. PRESTIGE BUILDERS, MUMBAI

During the course of hearing, none appeared on behalf of the assessee. Shri S.R. Kirtney, learned departmental representative (in short referred to as „DR‟) argued the matter on behalf of the revenue. It is noted that on earlier date also, none appeared on behalf of the assessee. It is noted by us that the solitary issue raised by the revenue in this appeal is that the CIT(A) has erred in allowing the claim u/s 80IB(10) despite the fact that construction of the project by the builder was not completed within the stipulated period as prescribed under the law. The issue involved in this case is apparently covered by various judgments and therefore under these circumstances, we are proceeding to dispose this appeal ex parte qua the assessee.

Being aggrieved, the assessee filed an appeal before the ld. CIT(A) wherein detailed submissions were made showing that the project of the assessee was completed on 10.2.2008 and application for seeking Occupation Certificate was submitted on 20.2.2008. It was further submitted that issuance of Occupation Certificate by the Thane Municipal Corporation was beyond the control of the assessee. It was also submitted that the project of the assessee was approved on 30.8.2004, and therefore, the amendment made in the law should not be applied retrospectively and in support these arguments, the assessee relied upon various judgments in the written submissions. Various evidences were submitted showing that the project was completed before 20.2.2008, i.e. the date of application for Occupation Certificate. Ld. CIT(A) considered the submissions of the assessee in detail and thereafter decided the issue in favour of the assessee. Being aggrieved, the revenue filed an appeal before the Tribunal. During the course of hearing, the ld. DR has relied upon the order of the AO.

We have gone through the detailed findings of the ld. CIT(A). It is noted by us that he has carefully examined each and every evidences filed by the assessee before arriving at the factual conclusion that completion of the project was done within the stipulated time which is evident from the fact that the assessee applied for obtaining Occupation Certificate from the Thane Municipal Corporation on 20.2.2008. No discrepancy was pointed out by the said authority before granting the Occupation Certificate on 9.7.2009. In this regard, the ld. CIT(A) also analyzed the position of law that if nothing is pending on the part of the assessee, then, after filing application for Completion Certificate with the concerned authority, nothing remains in the control of the assessee, and therefore, on whatever date the Completion Certificate is granted by the authority, it should relate back to the date of filing of the application by the assessee for obtaining the Completion Certificate. We have gone through the facts of the case and find that everything was completed on the part of the assessee on the date of making application for obtaining the Occupation Certificate. Thereafter, granting of the certificate was not in the hands or in the control of the assessee. The delay occurred in granting of the Occupation Certificate by the concerned authority, in our view, should not be attributed on the part of the assessee in the given facts and circumstances of the case particularly when nothing has been brought before us to show that something was pending in the project or that delay occurred due to some reasons attributable to the assessee. The Thane Municipal Corporation granted the Occupation Certificate eventually on 9.7.2009. In our considered view, the date of granting of Occupation Certificate should relate back to the date of filing of application by the assessee i.e. 20.2.2008. Thus, in our considered view, the project has been completed well in time and assessee has made compliance with the mandatory conditions of the law and thus, the assessee was eligible for deduction u/s. 80IB. Our view is fortified by many judgments. We place reliance on the judgment of the Hon'ble Delhi High Court in the case of CIT v. Sandan Vikas (India) Ltd., 335 ITR 117 wherein the Hon'ble High Court has relying upon another judgement of Hon'ble Gujarat High Court in the case of CIT v. Claris Lifesciences Ltd., 326 ITR 251 (Guj.) has taken a similar view. Similar view was taken by the Hon'ble Bombay High Court in the case of CIT v. Ackruti City Ltd., 31 taxmann.com 275 (Bombay) wherein the Hon'ble Bombay High Court held as under :-

Insofar as question (d) is concerned, the Tribunal by the impugned order upheld the order of the Commissioner of Income Tax (A) holding that the respondent - assessee is entitled to the benefit of deduction under Section 80IA(4)(iii) of the Income Tax Act, 1961 ("Act" for short). The objection of the Revenue that the deduction under Section 80IA(4)(iii) of the Act is available to an industrial park only on CBDT notifying the industrial park under Rule 18C of the Income Tax Rules, 1962 ('the Rules' for short). This the CBDT did only on 5th June 2006. Therefore, according to the Revenue the benefit of Section 80IA of the Act in terms of sub-section (4)(iii) thereof would be available as from Assessment Year 2007-08 and not earlier. The Commissioner of Income Tax (A) as well as the Tribunal have held that the Ministry of Commerce and Industry had finally by letter dated 31st December 2004 approved the industrial park and a copy of the same was forwarded to the CBDT. In terms of Rule 18C(4) of the Rules, once the industrial park is approved by the Ministry of Commerce & Industry, the CBDT has to suo-motto issue the notification. The Tribunal, on examination of all facts concluded that all the requisite conditions for claiming benefit under Section 80IA(4)(iii) of the Act has been complied with by the respondent - assessee during the assessment year in question. Further, there is no reason to hold the benefit under Section 80IA(4)(iii) of the Act is available only prospectively from the date of the issue of Notification by the CBDT. In these circumstances, as the decision of the Tribunal is based on finding of fact and mere delay on the part of the Central Board of Direct Taxes in issuing the notification would not warrant the respondent - assessee being denied the benefit of Section 80IA(4)(iii). This is so, particularly when the Revenue has not been able to point out any infirmity in the approval as granted by the Ministry for Commerce and Industry recognizing the respondent - assessee as industrial park. The view of the Commissioner of Income Tax (A) and the Tribunal is a reasonable view in the facts of the case and thus we see no reason to entertain question (d).” (Emphasis supplied)

It is further noted by us that in this case amendment made in Sec. 80IB(10) brought about by insertion of clause (d) w.e.f. 1.4.2005 will not apply to any approval granted in any year prior to A.Y 2005-06. This issue has also been decided in various judgments, including the judgment of Hon'ble Bombay High Court in the case of CIT v. Jogani Constructions Ltd., 35 taxmann.com 9 (Bombay). Similar view has been taken by the Hon'ble Karnataka High Court in the case of CIT v. G.R. Developers, 22 taxmann.com 265 and the Mumbai Bench of the ITAT in the case of Haware Constructions (P) Ltd., 64 DTR 251 (ITAT Mumbai).

Thus, in view of the facts of the case and the settled position of law as discussed above, we find nothing wrong in the findings of the ld. CIT(A), and therefore, these are upheld. Therefore, the grounds raised by the revenue in this appeal are dismissed.

As a result, the appeal of the revenue is dismissed.