Income Tax Appellate Tribunal - Pune
Krishna Haribhau Lohokare, Pune vs Assessee on 31 December, 2012
IN THE INCOME TAX APPELLATE TRIBUNAL
PUNE BENCH "B", PUNE
Before Shri Shailendra Kumar Yadav, Judicial Member,
and Shri R.K.Panda, Accountant Member.
ITA.No.937/PN/2010
(Asstt. Year : 2006-07)
Shri Krishna Haribhau Lohokare,
Prop. Harikrupa Builders,
19, United Apts., East Street,
Pune. .. Appellant
PAN: AAFPL4889D
Vs.
ITO, Ward-4(5),
Pune. .. Respondent
Assessee by : Shri Vipin Gujrathi
Department by : Smt.Vinita Menon
Date of Hearing : 31.12.2012
Date of Pronouncement : 28.02.2013
ORDER
PER SHAILENDRA KUMAR YADAV, JM:
This appeal has been filed by the assessee against the order of the CIT(A) on following grounds:
1. On the facts and in the circumstances of the case and in law, the honourable CIT (Appeal)-II Pune erred in confirming the disallowance of deduction under section 80IB(10) of Rs.1,20,66,344/- made by the learned Income Tax Officer Ward 4(5), Pune without appreciating the facts of the case that the project approved by Pune Municipal Corporation-the then local authority was complete before 31st March 2008. The honourable CIT(A) failed to appreciate that the appellant was executing two separate projects. The appellant prays that the claim of deduction claimed under section 80IB(10) may please be granted.
2. Without prejudice to the first ground of appeal the appellant wishes to prefer the second ground of appeal as follows On the facts and in the circumstances of the case and in law, the honourable CIT (Appeal)-II Pune erred in not allowing the proportionate deduction in respect of residential units/flats for which completion certificate was granted by Grampanchayat Keshavnagar, Mundhwa Pune. The appellant prays that the proportionate deduction under section 80IB(10) in respect of residential units/flats for which completion certificate is granted by the local authority -Grampanchayat Keshavnagar 2 Mundhwa Pune before 31st March 2008 may please be allowed.
3. On the facts and in the circumstances of the case and in law, the honourable CIT (Appeal)-II Pune erred in confirming the allocation of common expenses (which are not directly referable/traceable to the particular project) of Rs. 4,02,958/-
to the projects on the basis of sales/turnover of the projects. The appellant hereby prays that the allocation of common expenses as made by the appellant may please be accepted.
2. The assessee is the proprietor of Harikrupa Builders engaged in the business of real estate development and construction of residential projects. Before us the issue is disallowance of deduction u/s.80IB(10) amounting to Rs.1,20,66,344/-. This claim was made by M/s. Harikrupa Builders being the proprietary concern of the assessee for the project Mahaganesh Nagari situated at Keshavnagar, Mundhwa, Pune. The plot on which the housing project Mahaganesh Nagari was constructed was purchased by a cooperative society named Prestige Panorama Cooperative Housing Society and the development rights of said land were held by the firm M/s. Harikrupa Builders in which the assessee was one of the partners. This partnership firm was dissolved on 08.01.2004 and this particular land was received by the assessee in the process of distribution of assets of this firm on dissolution. Prior to this the first building plan approval was obtained by the firm M/s. Harikrupa Shah & Associates from Pune Municipal Corporation (PMC) dated 31.03.2001 in the name of above mentioned Society. According to this approved building plan, the project consisted of five buildings A, B, C, D and E. On dissolution of the above said firm the assessee received the land under consideration worth Rs.29,48,589/- with the incomplete construction therein valued worth Rs.45,54,692/-. Thereafter the assessee continued the construction as a consequence of the first building plan approval dated 31.03.2001.
3. Subsequently, particular area at Keshav Nagar, Mundhwa including the plot of land was excluded from the PMC jurisdiction vide notification No.PMC3020/1676/CV258/2000/UD22 dated 17.11.2001. As result of same it fell within the jurisdiction of the 3 concern Collector, Pune. The Assessing Officer stated that assessee has revised plan approval from the concern Collector, Pune on 25.01.2007 according to which three buildings F, G & H and ten row houses B-1 to B-10 were added to the original plan. Beside this the amenity building was also proposed which also contained five shops on the ground floor. The Assessing Officer stated that on site visit it was noticed that out of the revised sanctioned plan approval dated 25.01.2007, construction work of buildings A, B, C, D, E, F, G, H were completed but no construction activity was started in buildings B-1 to B-10 and the amenity building. Further the construction of shops 1 to 8 proposed in the ground floor of building 'F' had also not started. Completion certificate from the local authority could not be produced because the area in question had been excluded from the PMC limits. It was contended on behalf of assessee that the Collector, Pune was not issuing the certificate during the relevant point of time. In this background, the Assessing Officer raised the following objections:
a) When the project was started by the firm M/s. Harikrupa Shah & Associates and the first building plan approval dated 31.03.2001 was also obtained by it, how the appellant was eligible for claim of deduction u/s. 80IB(10).
b) The project was not complete as per the revised building plan approval dated 25.01.2007 due to the reasons mentioned above. For the eligibility of claim u/s. 80IB(10), it should have been completed by 31.03.2008 as provided u/s. 80IB(10)(a) of the Act.
c) Appellant could not produce the completion certificate from the local authority i.e. Collector Pune.
4. After considering the assessee's reply in this regard, the Assessing Officer rejected the claim u/s.80IB(10) on following grounds:
a) Even though the Building Plans were revised subsequently additional building cannot be treated as separate project from the one originally sanctioned by the appellant. For this purpose the A.O. reproduced the paras from the sale agreement executed in December 2008 to demonstrate that even after revision of the building plan on 25.01.2007, the appellant was treating the new buildings in the revised plan as 4 part of the same project. This was having a reference to Prestige Panorama Coop. Hsg. Society Ltd. being the owner of the land and the original partnership firm M/s. Harikrupa Shah & Associates, which was having the development rights and the share of the ownership/development rights being received by the appellant on dissolution of the firm, as well as to the original building plan approval.
b) Even otherwise the 1st Layout Plan & Building Plan does not fit into the eligible criteria on the ground that the 5 Buildings A, B, C, D, E is only consuming 3497 Sq. Mt. of FSI (37641.39 Sq. Mt.) thus is less than the requisite 1 acre of Land.
c) The provision of completion of the project as brought by the amendment in section 80IB(10) of the Act by the Finance (No.
2) Act 2004 is applicable to the appellant's project. Also at the time of revision of Building Plans by the appellant the time limit for completion of the project was well defined by the Act.
Therefore, the whole project should be completed before 31/03/2008 including the buildings as per the revised Building plan.
d) The First Layout & Building Plan sanction for the construction of 5 Buildings A, B, C, D, E is not the Separate Project from the revised Layout & Building Plan therefore the appellant is not entitled for the claim for the 5 Buildings Completed.
e) The appellant could not produce the completion certificate from the local authority i.e. from the Collector, Pune, which is the competent local authority as per the Maharashtra Regional Town Planning Act, 1966 to sanction the plan, issue the permission for the commencement.
5. Matter was carried before the First Appellate Authority wherein various contentions were raised and the CIT(A) having considered the same, has rejected the claim of the assessee and upheld the order of the Assessing Officer.
6. Before us, the Ld. Authorised Representative submitted that the Assessing Officer erred in disallowing the claim u/s.80IB(10) of Rs.1,20,66,344/-. He did not appreciate the facts of the case in proper prospective. He reiterated the submissions made before the authorities below and requested to allow the claim in question. Main thrust of the Ld. Authorised Representative was that assessee's lay out plan was approved on 29.03.2001 and first building plan for 5 buildings, i.e., A, B, C, D and E was approved on 31.03.2001. The Ld. Authorised Representative submitted that Keshav Nagar Village was included in the jurisdiction of PMC in 1997. However, it was excluded from PMC vide notification dated 5 17.11.2001. The construction activity went on with regard to buildings as approved vide order dated 31.03.2001. Second plan was approved on 25.01.2007 by concerned Collector, Pune with regard to buildings F, G & H and 10 row houses as the said land was excluded from PMC limit by that time and same was completed on 28.02.2008. In this regard, the Ld. Authorised Representative drew our attention to page 76 of the Paper Book-II, inter alia, mentioned that at the time of second approval buildings A, B, C, D and E were mentioned as existing buildings. Ld. Authorised Representative also drew our attention to the FSI statement of Plot A-1 wherein buildings A, B, C, D & E have been mentioned as existing one while buildings F, G & H have been mentioned as proposed FSI. In this background, it was submitted that buildings A, B, C, D & E is one and independent project for the purpose of claiming deduction u/s.80IB(10) while subsequent approval is with regard to buildings F, G & H and 10 row houses which is independent in itself, which is not subject matter before us. So claim has to be allowed. On the other hand, Ld. Departmental Representative relied on the order of the authorities below and submitted since the housing project approved on 31.03.2001 was not completed within the stipulated time limit of 31.03.2008 so assessee failed to qualify for deduction u/s.80IB(10). Same should be upheld.
7. After going through the rival submissions and material on record, we find that the assessee Shri Krishna Haribhau Lohokare is an individual and is engaged in the business of real estate development and building construction as a proprietor of Harikrupa Builders. The assessee was engaged in construction of two housing projects at relevant point of time, namely Mahaganesh Nagari situated at Keshavnagar, Mundhwa, Pune and Mayureshwar Vihar situated at Katraj. The assessee has claimed deduction of Rs.1,20,66,344/- u/s. 80IB(10) of the Act for the year under consideration in respect of profits derived from project named Mahaganesh Nagari located at Keshavnagar, Mundhwa, Pune.
6Before going further for sake of convenience let us reproduce the provisions of section 80IB(10) of the Act which are as under:
10) The amount of deduction in the case of an undertaking developing and building housing projects approved before the 31st day of March, 2007 by a local authority shall be hundred per cent of the profits derived in the previous year relevant to any assessment year from such housing project if,--
(a) such undertaking has commenced or commences development and construction of the housing project on or after the 1st day of October, 1998 and completes such construction,--
(i) in a case where a housing project has been approved by the local authority before the 1st day of April, 2004, on or before the 31st day of March, 2008;
(ii) in a case where a housing project has been, or, is approved by the local authority on or after the 1st day of April, 2004, within four years from the end of the financial year in which the housing project is approved by the local authority.
Explanation.--For the purposes of this clause,--
(i) in a case where the approval in respect of the housing project is obtained more than once, such housing project shall be deemed to have been approved on the date on which the building plan of such housing project is first approved by the local authority;
(ii) the date of completion of construction of the housing project shall be taken to be the date on which the completion certificate in respect of such housing project is issued by the local authority;
(b) the project is on the size of a plot of land which has a minimum area of one acre:
Provided that nothing contained in clause (a) or clause (b) shall apply to a housing project carried out in accordance with a scheme framed by the Central Government or a State Government for reconstruction or redevelopment of existing buildings in areas declared to be slum areas under any law for the time being in force and such scheme is notified by the Board in this behalf;
(c) the residential unit has a maximum built-up area of one thousand square feet where such residential unit is situated within the city of Delhi or Mumbai or within twenty-five kilometers from the municipal limits of these cities and one thousand and five hundred square feet at any other place; and
(d) the built-up area of the shops and other commercial establishments included in the housing project does not exceed five per cent of the aggregate built-up area of the housing project or two thousand square feet, whichever is less.] 7
8. The stand of the assessee has been that details of project Mahaganesh Nagari, in respect of which deduction has been claimed, are as under:
a) The assessee has constructed housing project on land admeasuring about 1.31 Hector (3.27 Acres) situated at Mundhwa, Pune.
b) The assessee was a partner of the partnership firm named Harikrupa Shah & Associates which had started the construction of the project under consideration in the F.Y. 2002-03 relevant to A.Y. 2003-04. However, the said partnership firm was dissolved on 16.12.2003.
c) The assessee got the land admeasuring 1.62 Hectors situated at Mundhwa, Pune on distribution of assets on dissolution of the firm which included the land admeasuring 1.31 Hector with incomplete construction thereon.
d) The first building plan is approved by Pune Municipal Corporation on 31.03.2001 in the name of Prestige Panorama Co-Op Housing Society, which included five buildings A, B, C, D, & E. A copy of the commencement certificate issued by PMC has been annexed on page 5 of the Paper Book-I.
e) The project consisted of five Buildings A, B, C, D & E. Each building consisted on 16 flats. The total number of flats included in the project were 80 each admeasuring less than 1500 square feet. The said village Mundhwa was included in the PMC limit by Maharashtra Government Gazette No PMC 3096/1798/CR 259/UD-22 dated 11.09.1997, which has been placed at page 9 and English translation of the same has been placed at page 10 of the Paper Book-I.
f) The said village Mundhwa was excluded from Pune Municipal Corporation limit by Maharashtra Government Gazette No PMC 3020/1676/cr 258/2000/UD 22 dated 17.11.2001. A copy of the Maharashtra Govt. Gazette is appearing on pages 11 to 13 and English translation thereof is appearing on page 14 of the Paper Book-I, appearing at Sl.No.13 of the said Notification. The village Mundhwa after being excluded from PMC limits fall in the jurisdiction of the Collector, Pune, for administrative purpose including building activities etc.
g) The assessee got the building plan approved from the Collector Pune on 25.01.2007 on the recommendation of Assistant Director of Town Planning Pune Branch, Pune, dated 14.11.2006. The building plan approved by Collector, Pune, also mentioned originally approved five Buildings A, B, C, D & E and has been clearly mentioned in the approved plan as existing structure and new buildings namely F, G, & H and 10 row houses and a building in Amenity Area were approved. A copy of the building plan approved by Collector Pune is appearing on pages 76 to 79 of the paper book-II, wherein it has been clearly mentioned 8 that buildings A, B, C, D & E are existing ones and buildings F, G & H and 10 row houses and building in amenity area are proposed constructions.
h) The assessee had completed the project consisting of five buildings in F.Y. 2007-08 and obtained the certificate of completion from Keshavnagar Grampanchayat in respect 128 flats on 28.02.2008 in respect of all buildings namely - A, B, C, D, E, F, G & H and applied for completion certificate at the strength of the Architect Certificate appearing on page 16 of the Paper Book-I, and completion certificate was issued by the Grampanchayat, Keshavnagar, Mundhwa, which is placed on page 15 of the paper book-I and English translation is appearing on page 75 of the paper book-II. At the time of completion of the project PMC was no more local authority as the village Mundhwa was excluded from the limits of PMC w.e.f. 17.11.2001 as stated above.
i) During the year under consideration the assessee has claimed deduction in respect of profits derived from 68 flats out of 80 flats falling in five buildings A, B, C, D & E as approved by PMC as stated above.
9. As stated above the Assessing Officer disallowed the claim of the assessee on grounds that the project is not complete as according to him the project approved on 25th January 2007 was revision/extension of the project approved by PMC on 31st March 2001. According to him the project consisting of Building A, B, C, D, E, F, G, & H and Ten Row Houses B-1 to B-10 and building in Amenity Space was required to be completed before 31st March 2008 to be eligible for claiming deduction. Secondly Keshavnagar Grampanchayat was not local authority competent to issue completion certificate. According to learned Assessing Officer the Local Authority to issue completion Certificate was the Collector Pune. Thirdly on the ground that the built up area of five building A to E approved on 31st March 2001 was 3497 square meters i.e. less than one acre 4047 Square Meters and fourthly the appellant himself was treating the entire project as one project even after the approval of building plan on 25th January 2007 by the Collector Pune. The learned AO reached conclusion on the basis of preamble of the agreement between the appellant and flat purchasers. The Assessing Officer observed that the competent authority to issue the completion certificate was the Collector Pune (Town Planning 9 Department, Pune). Since the assessee neither applied nor obtained certificate from Collector Pune it was not eligible for deduction.
10. It is the claim of the assessee before us that there was no procedure of issuing completion certificate by the Collector. Therefore he made inquiries under Right to Information Act. During the course of appellate proceedings, the assessee produced the certificate from the Collector, Pune, before the CIT(A) that no completion certificate was granted by the office of the Collector to any project approved before 31.12.2007. A copy of the reply issued by the Collector, Pune and its English translation is appearing on pages 26 & 27 of the Paper Book-I, inter alia, mentioned as under:
"TRANSLATION OF LETTER FROM OFFICE OF COLLECTOR PUNE REGARDING COMPLETION CERTIFICATE ISSUED UPTO 31sT DECEMBER 2007 From Office of the Collector Pune Revenue Department Date: 14/01/2010 To Mr. Haribhau Lohkare 19, United Apartment Camp, East Street Pune 411 001 SUBJECT: INFORMATION UNDER RIGHT TO INFORMATION ACT IN RESPECT OF COMPLETION CERTIFICATE GRANTED WITHIN THE LIMITS VILLAGE MUNDHWA, KESHAVNAGAR, TAL PUNE IN RESPECT OF BUILDING PLANS APPROVED BEFORE 31sT DECEMBER 2007 Reference: Your application dated 31st December 2009 This has reference to the above mentioned application. It is to inform to you that no completion certificate has been granted by this Office (the Office of Collector, Pune) in respect of any construction done within the limits of Village Mundhwa, Keshavnagar Grampanchyat approved before 31st December 2007. Kindly take note of the information.
In case you have any complaint in respect of this information you may contact the Deputy Collector of Pune-1.
Yours faithfully, Information Officer- State Govt. Maharashtra Revenue Department"10
11. In this background the stand of the assessee has been that the relevant provisions of State of Maharashtra Revenue Department were amended by the Finance (No.2) Act, 2004, are prospectively applicable and are not applicable to project which commenced the construction before 31.03.2005. The stand of the assessee has been that the project approved by PMC on 31.03.2001 and project approved by Collector, Pune, on 25.01.2007 are separate projects which was not accepted by the CIT(A) by holding that building plan approved on 25.01.2007 is the revision/extension of building plan approved on 31.03.2001. He further held that approval by two different authorities is coincidence. So the CIT(A) confirmed the disallowance on the ground that buildings A to E were not physically separate from buildings F, G & H approved on 25.01.2007. As stated above he held that the first building plan approved on 31.03.2001 cannot be treated separately from building plan approved on 25.01.2007. Therefore assessee was not allowed the claim u/s.80IB(10) in respect of its claim as discussed above.
12. The main objection of the Assessing Officer for rejecting the assessee's claim was that project was started by M/s.Harikrupa and Shah Associates by obtaining the commencement certificate but the project could not be completed by the said partnership firm which was dissolved on 16.12.2003. The project was transferred to the assessee and therefore the assessee is not eligible for claiming deduction. According to us provisions of section 80IB(10) does not require that commencement and completion certificate should be in the name of the assessee/developer. The only requirement is that the project should be approved by local authority and the assessee should obtain the completion certificate from the local authority. We find that Hon'ble Gujarat High Court in the case of CIT vs. Radhe Developers 204 Taxmann 543 (Guj.) has held that the assessee is entitled to deduction u/s.80IB(10) even if the title of the land is not passed on to the assessee or the land is not owned by the assessee or development permissions may have been obtained in the name of original owner. Similar view has been taken by Ahmedabad Bench in the case of Amaltas Associates vs. ITO 142 11 TTJ 849 (Ahd) and KZK Developers vs. CIT 130 TTJ 157 (Cuttack). In view of this, we find that the Assessing Officer was not justified in observing that the assessee is not eligible for deduction since commencement certificate and completion certificate are not in the name of the assessee.
13. The next objection of the Assessing Officer is that the project is not complete on 31.03.2008. The Assessing Officer observed that on visit to the project site during assessment proceedings in December, 2008, the construction of buildings B-1 to B-10 and amenity building and shop was not started which proved that the project is not complete. In this regard, we find that the Assessing Officer has not been able to appreciate the fact that building plan approved by the PMC on 31.03.2001 consisting of five buildings as stated above and subsequent building plan approved by the concerned Collector on 25.01.2007 consisting of 3 buildings & row houses alongwith amenity space was basically other than first five buildings, whose approval was taken on 31.03.2001. It is more clear from the fact that said approval dated 25.01.2007 acknowledges the existence of five buildings. It makes it clear that approval dated 25.01.2007 with regards to proposed 3 buildings, 10 row houses and amenity space acknowledge existence of five buildings. The profit on sale of some flats out of it is subject matter before us. These buildings A, B, C, D & E were already existing at the strength of approval dated 31.03.2001. This is the reason that second approval with regard to F, G & H, 10 row houses and amenity space was obtained on 25.01.2007. It does not make any difference if it acknowledged/refer existence of earlier five buildings constructed. This second approval acknowledges the existence of first five buildings. Hon'ble Bombay High Court in the case of CIT vs. Vandana Properties in ITA.No.3633 of 2009 (Bom) has held as under:
'The expression 'housing project' is neither defined under Section 2 of the Act nor under Section 80IB(10) of the Act. Even under the Mumbai Municipal Corporation Act, 1988 as also under the Development Control Regulations for Greater Mumbai, 1991, the expression 'housing project' is not defined.12
Therefore, the expression 'housing project' in Section 80IB(10) would have to be construed as commonly understood.
As rightly contended by Mr. Inamdar, learned Senior Advocate appearing on behalf of the assessee and Mr. Mistri, learned Senior Advocate and Mr. Joshi, learned Advocate appearing on behalf of the intervenors, the expression 'housing project' in common parlance would mean constructing a building or group of buildings consisting of several residential units. In fact, the Explanation in Section 80IB(10) supports the contention of the assessee that the approval granted to a building plan constitutes approval granted to a housing project. Therefore, it is clear that construction of even one building with several residential units of the size not exceeding 1000 square feet ('E' building in the present case) would constitute a 'housing project' under Section 80IB(10) of the Act."
14. In this background we find that the authorities below failed to appreciate that lay out can have number of housing projects and the fact that the building plan approved on 25.01.2007 by the Collector, Pune, was independent and was not the extension of the building plan approved on 31.03.2001 by PMC with regards to five earlier buildings. We find that ITAT Pune Bench in the case of Rahul Construction Co. Vs. ITO in ITA.No.1250/PN/2009 and 707/PN/2010 held observed that there is a difference between the layout plan and building plan. It was held that approval of housing project and approval of building plan are two different concepts.
Thus it was held that whatever portion of the housing project is otherwise found to be eligible, has to be considered as a housing project for the purposes of deduction u/s.80IB(10). The next objection of the Assessing Officer is that the assessee could not produce the completion certificate from the local authority i.e., Collector, Pune, the competent authority who has sanctioned the revised lay out and building plan of the project. According to the Assessing Officer, Keshavnagar Grampanchayat Mundhwa was not local authority competent to issue completion certificate. It is undisputed that the assessee has obtained completion certificate in respect of 80 flats included in buildings A, B, C, D & E and 48 flats included in buildings F, G & H from Grampanchayat Keshavnagar, Mundhwa, as mentioned above vide order dated 28.02.2008. The 13 Assessing Officer did not appreciate the fact that there was no procedure for issuing completion certificate by Collector, Pune, in respect of any building plan approved by him. The assessee after the completion of the construction made enquiry under Right to information Act as to the number of approvals granted by the Collector within the limits of village Mundhwa, Keshavnagar. The office of the Collector vide letter dated 14.01.2010 communicated that no completion certificate was granted to any project approved before 31.12.2007, as mentioned above. Similarly, during the course of appellate proceedings, the assessee brought to the notice of the CIT(A) that clarification was issued by the Town Planning authority that in respect of area falling outside the jurisdiction of PMC, the procedure is to obtain completion certificate from the registered Architect and it was also pointed out that Grampanchayat Wagholi was the local authority for this purpose. In this regard, the stand of the assessee has been that there was no procedure to issue completion certificate by Town Planning Department in respect of construction beyond the PMC limits. Section 80IB(10) does not define a local authority and it does not require that completion certificate should be granted by the same authority which has approved the building plan or issued the commencement certificate. Moreover, it was not possible in this case because land in question was excluded from PMC limit at relevant point of time as stated above. So there is no question of issuing completion certificate from PMC at relevant point of time after exclusion of same from PMC limits as stated above. In such circumstances the Assessing Officer was not justified in holding that Grampanchayat Keshavnagar is not a local authority. The expression local authority has neither been defined u/s.2 nor u/s.80IB(10) of the act. However, the expression local authority is defined in Explanation 2 to section 10(20) of the Act as under:
Explanation - For the purposes of this clause, expression "local authority" means
(i) Panchayat as referred to in clause (d) of Article 243 of the Constitution or
(ii) Municipality as referred to in clause (e) of the Article 243P of the constitution or 14
(iii)Municipal Committee or District Board, legally entitled to or entrusted by the Government with the control and management of Municipal or local fund
(iv) Cantonment Board as defined in section 3 of the Cantonment Board Act 1924
15. In view of above we hold that assessee should not suffer for any administrative change with regard to applicability of building bye laws in particular area. The problem arose with regard to completion certificate by PMC by virtue of the fact that area of the land in question was excluded from PMC limits at relevant point of time as discussed above. In such peculiar conditions, the benefit bestowed on assessee should not be denied for no fault of the assessee. Such liberal interpretation should be used in favour of assessee when he is incapacitated in complying certain provisions for the reasons beyond his control. In case before us, problem arose due to the change of jurisdiction with regard to confusion of applicability of building bye laws because of change of jurisdiction by virtue of exclusion of land in question from PMC limits. The assessee should not suffer for the same. Under such circumstances, liberal interpretation should be used in favour of the assessee. It is settled legal position that law always gives remedy and law does wrong to no one. We are aware that provisions of section 80IB(10) suggest about only completion of construction and no adjective should be used alongwith word 'completion'. This strict interpretation should be given in normal circumstances but facts before us are peculiar because of change of jurisdiction of land for the purpose of applicability of building bye laws. Assessee was incapacitated to obtain completion certificate from PMC because of exclusion of land in question from PMC limits which is beyond the control of the assessee. Assessee should not suffer for the same.
Moreover, concerned Gram Panchayat who issue completion certificate within stipulated time is entitled for issuing completion certificate as stated above after exclusion of the land in question from PMC limits. The taxing statute granting incentives for promotion of growth and development should be construed liberally and that provisions for promoting economic growth has to be 15 interpreted liberally. At the same time, restriction thereon has to be construed strictly so as to advance the object of provision and not to frustrate the same. The provisions of taxing statute should be construed harmoniously with the object of the statute to effectuate legislative intention. This view is fortified by decision of Pune Tribunal in the case of Ramsukh Properties (supra), Rahul Construction Co. (supra) and others.
16. In view of above, we hold that gram panchayat Keshav Nagar, Mundhwa, Pune, is local authority for the purpose of issuing completion certificate for claiming deduction u/s.80IB(10) in respect of profit from sale of eligible flats in project in question. Assessee fulfilled all conditions laid down for claim of deduction u/s.80IB(10) of the Act as detailed above. The Assessing Officer is directed accordingly.
17. As a result, the appeal filed by the assessee is allowed.
Pronounced in the open court on this the 28th day of February, 2013.
Sd/- Sd/-
( R.K.PANDA ) ( SHAILENDRA KUMAR YADAV )
ACCOUNTANT MEMBER JUDICIAL MEMBER
gsps
Pune, dated the 28th February, 2013
Copy of the order is forwarded to:
1. The Assessee
2. The ITO, Ward-4(5), Pune.
3. The CIT(A)-II, Pune.
4. The CIT-II, Pune.
5. The DR "B" Bench, Pune.
6. Guard File.
By Order
//TRUE COPY//
Private Secretary,
Income Tax Appellate Tribunal,
Pune.