Ita/478/2015 Of The Commissioner Of Income Tax v. M/S Narayan Builders

IN THR HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 29 DAY OF FEBRUARY 2016 PRESENT THR HON’BLE MR.JUSTICE JAYANT PATEL AND THR HON’BLE MRS. JUSTICE B.V.NAGARATHNA INCOME TAX APPEAL No.478/2015.aITA No.641/2015 BETWHREN 1.THR COMMISSIONER OF INCOME TAX ~CR BUILDING|QUEENS ROADBANGALORE |CR BUILDING|QUEENS ROADBANGALORE | 2.THR INCOMB-TAX OFFICERWARD-6(3)WARD-6(3) RASHTROTHANA BHAVAN) NRUPATHUNGA ROAD BANGALORE 560001 _. APPBLLANTS (BY SRI.K.V.ARAVIND, ADVOCATE)| AN): M/S. NARAYAN BUILDERSNO.101/104, 1ST FLOORSKHSHADRIPURAMBANGALORE 560 O20PAN: AAFFN 3285 R _. RESPONDENT. THRESH INCOMB TAX APPRALS ARB FILEDUNDER SEC.260-A OF INCOME TAX ACT 1961,ARISING OUT OF ORDER DATED:31/03/2015 PASSEDIN ITA NO. 474/BANG/2013 & SP NO.77/BANG/2013—FOR THR ASSBSSMEBNT YBAR 2009-2010 PRAYING TOFORMULATE THE SUBSTANTIAL QUESTIONS OF LAW|STATED ABOVE AND ALLOW THR APPRAL AND SBHKASIDE;THEORDERSPASSEDBY|THEITAT,BENGALURU IN ITA NO. 474/BANG/2013 & 8.P.NO..1(/BANG/2013 DATED:31/03/2015 AND CONFIRMTHR ORDBR OF THR APPBLLATR COMMISSIONER|CONFIRMING THE ORDER PASSED BY THE [INCOMETAX OFFICER, WARD-6(3), BENGALURU. THERESE APPEALS COMING ON FOR ADMISSIOTHIS DAY,JAYANT PATEL J©, DELIVERED THE)KHOLLOWING: JUDGMBNT The appellant-Revenue, by raising the followingsubstantial questions of law, has preferred the presentappeal: — “Whether on the facts and in thecircumstances of the case, the Tribunal isright in law in directing the assessingauthority to give deduction under sectionSOIB(10) of the Act if the assessee hascompleted construction when the assessee|had failed to file audit report in Form-10CCB_alongwiththecompletioncertificateobtained from the Local Authority showingthecompletionoT|constructionoT|thebuilding/apartment as required under thelawTO claimdeductionunder|sectionSOIB(10) of the Act”? 2.We have heard Mr.Aravind K.V., learned counsel appearing for the appellant-Revenue. The Tribunal inthe impugned order at paragraph-7 has observed thus: “7. Having regard to the rival contentions and thematerial on record, we find that the Hon’ble High Court,in the case of Ittina Properties has held that where theconstruction of building within the stipulated period isproved, then submission of completion certificate is notmandatory.TheHon'bleCOUTT|has|also.furtherconsidered the requirement of filing of the occupancycertificate and at para.1o has held as under: “lo. From an overall analysis of the decisions|and the material on record, it is seen that 1f|assessee has committed certain violations in the construction, then those violations could| be compounded under the ‘Akrama-Sakrama’ocheme floated by the Karnataka Government. The object of this certificate is to ascertain|whether the time limit provided in the.provision for construction of the building had)been adhered to or not by the assessee. The.assessee had handed over the possession,|occupants are residing in the building and.they had water, electricity connection etc.,|meaning thereby the project was completed.within the stipulated period. The Assessing.Officer has not disputed this fact nor did an.inspection. He assumed that submission of,completion certificate is a condition precedent. If there are building violations, then it is for.the municipal authorities to penalize the.assessee or charge compounding fees. This.aspect has been considered by the ITAT in the.order extracted supra. Therefore, following the order of the coordinate bench, as well as of theGujarat and Karnataka High Courts, we allow.the appeal of the assessee and direct the.Assessing Officer to grant deduction u/s 80IB.of the Act. The Assessing Officer shall verify|the computation made by the assessee and.then determine the quantum of deduction.” As the facts and circumstances of the case beforeus are also similar and the assessee has proved bydocuments filed before the authorities below as well as/before us that construction of the building wascompleted,|theaSSECSSCEhasalso.appliedfor.occupancy/completion certificate but was not issued bythe relevant authority, we do not find that there is anycase for denial of deduction u/s 80-IB(10) of the Act on this ground. However, the documents filed by theassessee have not been verified by the AO. Therefore, wedeem it fit and proper to remand the issue to the file ofthe AO solely for verification of the documents filed bythe assessee and if it is found that the documents are'genuine, then no disallowance shall be made. Thesround Nos.6 and 7 are treated as allowed for statisticalpurposes.” 3. The aforesaid shows that, the Tribunal, whiledeciding the matter has been guided by the decision ofthis Court in case of Ittina Properties in ITA No.556/13_and allied matters decided on 15/7/2014. However,Mr.Aravind, learned counsel appearing for the appellantcontends that the facts of the case in Ittina propertiescannot be compared with the facts of the present caseinasmuch as, in the said case, Panchayat had issuedcompletion certificate and same was produced on recordwhereas, in the present case, no certificate whatsoeverwas issued and therefore, the Tribunal ought not to have relied upon the decision and observation made inthe case of Ittina Properties, supra. 4. We may record that, this Court, in the case ofIttina Properties supra did not take the view onlybecause completion certificate from Panchayat was.produced, but on the contrary, in the said decision itwas found by this Court that neither in the Income TaxAct nor in Karnataka Municipal Corporations Act, isthere any provision for issuance of completion certificateby the local authorities and therefore, Revenue oughtnot have insisted for production of such certificate forsetting benefit under the Income Tax Act. Therefore,distinction as sought to be canvassed by the learnedcounsel for the appellant-Revenue would not dilute thelegal position as held by this Court in the above appeal. o. In any event, for examination as to whether theconstruction was completed or not, the matter isremanded by the Tribunal. When the Tribunal hadfollowed the decision of this Court, we do not find thatany substantial question of law would arise forconsideration as sought to be canvassed. Hence, theappeals are dismissed. | ok/- Sd/-.JUDGE| Sd/-.JUDGE|