आयकर अपीलीय अधीकरण, Ûयायपीठ - " ǒव" कोलकाता,
        IN THE INCOME TAX APPELLATE TRIBUNAL "B" BENCH: KOLKATA

     (सम¢)Before ौी एन. ǒवजयकूमारण, Ûयायीक सदःय एवं/and ौी,
                                                        ौी सी.डȣ.राव लेखा सदःय)
                 [Before Shri N. Vijaykumaran, JM & Shri C. D. Rao, AM]

                       आयकर अपील संÉया / I.T.A No. 272/Kol/2010
                           िनधॉरण वषॅ/Assessment Year: 2006-07


M/s. Goldline Writing Instruments Ltd.        Vs.    Income-tax Officer, Wd-6(2), Kolkata
(PAN : AABCG 7408 G)
       (अपीलाथȸ/Appellant)                                        (ू×यथȸ/Respondent)

                       Date of hearing:              05.12.2011
                       Date of pronouncement: 29.12.2011

                       For the Appellant:    S/Shri R. Salarpuria & Subash Agarwal
                       For the Respondent: Shri Niraj Kumar


                                          आदे श/ORDER


Per N. Vijaykumaran, JM (एन. ǒवजयकूमारण, Ûयायीक सदःय)
                                                सदःय

This appeal by assessee is directed against the order of CIT(A)-VI, Kolkata dated 29.12.2009. Assessment year involved is 2006-07. Ground of appeal is as under:

"1. The order of the Ld. CIT(A), Kolkata confirming the action of the Assessing Officer is contrary to the law and facts of the case.

2. On the facts brought on record, the Ld. CIT(A) ought to have held that the learned Assessing Officer erred in disallowing deduction claimed u/s. 80IB of the Income Tax Act 1961 amounting Rs.1,74,12,766/-."

2. The only issue before us is on the disallowance of the claim u/s. 80IB(10) of the I. T. Act. The facts relevant are that the assessee is a company and during this year, the assessee was 2 [ITA No.272/Kol/2010] engaged in construction business and it has claimed to have developed and completed construction of house building project in the name of Regent Garden at Ghosh para Road, Krishnapur, Kolkata. The Assessing Officer was of the view that on inspection by ITO, who visited the site project Regent Garden reported that construction was incomplete till the date of report i.e. on 24.12.2008. The assessee explained that the construction of 12192 sft. was withheld by Hon'ble High Court vide its order dated 19.12.2006 in W.P. No.19380 of 2005 filed by all flat owners of the project. Assessing Officer called for clarification from the Chairman, Rajarhat Gopalpur Municipality. Chairman has given the details as under:

"The (G+4) storied building plan of the project has been approved provisionally on 10.12.2003 vide Sl. No.1182/03-04. The approval was provisional in wanting of the following documents:

1. Mutation and conversion certificate of land as required under section 4C of WBLR Act, 1955.

2. "Consent to Establish"/"Consent to operate as required under section 33A of the Water (Prevention and Control of Pollution) Act, 1974".

3. However, Assessing Officer was not satisfied about the completion certificate issued by the Municipality dated 28.07.2005 as that completion certificate was in the name of Rabindra Nath Mondal & Ors. Further, the Municipality certifies that the building is fit for occupation. The contention of the assessee throughout the proceedings is that it had completed the project well before the stipulated time and subsequently applied for completion certificate from the competent local authority on 11.07.2005. The said Municipality had issued the completion certificate after satisfied with that the project was completed. Assessing Officer, however, on going through the copies of agreement that assesee company had entered into on 15.11.2005 with Vashulinga Finance Pvt. Ltd., New Delhi found that owner shall complete the construction of the flat of the intending buyer by December, 2005. Hence, Assessing Officer doubted the completion certificate and found that the project could not be completed before 11.07.2005 i.e. the date of application for completion certificate.

4. Here the assessee company claims 80IB deduction as the deduction for development of infrastructure project for that assessee company relied on completion certificate and claims it as it 3 [ITA No.272/Kol/2010] qualifies for the deduction. As the completion certificate is in the name of Shri Rabindra Nath Mondal and others, it is explained that as per assessee's paper book pages 81 and 84, the building has to be constructed multistoried building complex and the sanction plan has been obtained from the Municipal Authorities and the copy of such sanctioned plan was available at the time of agreement and that building has to be constructed as per the plan and deviation is not permitted. That being the case as contended by Ld. Counsel that the Municipal Authorities being satisfied that there is no deviation from the plan, issued completion certificate and there is no deviation to the sanctioned plan and that being the position, Assessing Officer cannot re-agitate the issue as the Assessing Officer is not the competent person to decide and adjudicate, over and above the competent authority, who sanctioned the building plan and thereafter issued completion certificate. The competent Municipal Authorities never charged the assessee for violation or deviation of the plan which was already sanctioned till date. Hence, Ld. Counsel for the assessee would submit that the Assessing Officer has overstepped and the competent authority is only the Municipality and the building has to be constructed as per the terms and conditions of the municipal rules, who are the competent authority and Assessing Officer cannot transgress and make an independent opinion than that of the one arrived by the Municipal authorities. Further, the project completion certificate was in the name of Shri Rabindra Nath Mondal & Ors., Ld. Counsel explained that the sanctioned plan is part of the agreement to construct the project. Hence, there is no deviation or there cannot be any fault as the building plan itself is sanctioned in the name of Shri Rabindra Nath Mondal & Ors. The agreement with builder which is available in assessee's paper book pages 53 to 67 dated 6th February, 2004 between the assessee and the contractor M/s. RDB Industries will clearly go to show that the assessee qualifies for the entire project for the claim of deduction u/s. 80IB(10) of the Act and there is no deviation and the Assessing Officer cannot attribute any deviation for the stamp of approval given to the assessee by the Municipal Authorities. Ld. Counsel, therefore, submitted that as per page no. 34 which is the first agreement dated 19.12.2003 between Shri Rabindra Nath Mondal & Ors. with the assessee vendors of the other part, the Assessee Goldline Writing Instrument Ltd. particularly qualifies the internal page 4 of assessee's paper book page no. 34 it is mentioned that and whereas the vendors have agreed to sell and the purchases have agreed to purchase the aforesaid plot of land particularly described in the Schedule hereunder written together with plans sanctioned thereof in fee simple in possession and free from all encumbrances or for the price or sum of Rs.48 lacs only. This will go 4 [ITA No.272/Kol/2010] to show the transaction being a genuine transaction and stood explained why the plan was in the name of Shri Rabindra Nath Mondal & Ors. The indenture between the assessee and the vendors Shri Rabindra Nath Mondal & Ors. will amply explain the claim of the assessee including the extent of land which the assessee possesses.

5. Coming to the area of the building, it has been explained that the assessee has purchased the required one acre which is the condition for claiming 80IB(10), project has also been satisfied though it was purchased in different occasions actually assesee owns and possesses 63 cottahas, which is more than once acre is not in dispute. Hence, assessee's claim is that he qualifies that by way of purchase in addition in the year 2003 four cottahas 22 sft. and 50 cottohas in 2004 and 13 cottahas again in 2004. The date of purchase of land is available in paper book items 2, 3 and 4 i.e. from page no. 15 to 52 of the assessee's paper book. The original sanctioned plan is available in assessee's paper book at page 206, the copy of the revised sanctioned plan is in assessee's paper book page 207 and the completion certificate including the completion plan which is dated 28.7.2005, the copy of which is available in page no. 208 of assessee's paper book. This is also further certified before us that these documents were available before Assessing Officer as well as the CIT(A).

6. Coming to the explanation of the Writ Petition filed by the flat owners on the dispute over extra space available between the flat owners and the assessee by way of Writ is that the assessee attempted to construct structure on the reserve space which is earmarked for car parking. Further, for that purpose only assessee on 15.11.2005 entered into agreement with Vasulinga Finance Co. Ltd. to sell the area. The writ petition by the flat owners will clearly show that the flat owners have accepted that they were allotted the respective flats and only the dispute which was urged by the writ petition by the flat owners is opposing the action of the assesee that the excess car parking space remained unsold which assessee attempted to convert the car parking space to residential unit. This is only the dispute between the tenements and the assessee. However, as 80IB deduction is concerned, assessee within the stipulated time completed the project and allotted the units to the flat owners. Ld. Counsel took us to the assessee's paper book page no. 9, which is the P&L Account starts from page no. 6 and the schedule 'K' sales and service, out of the total sale during the year Rs.7,95,30,103/- the sale of flats and garage itself is to the tune of Rs.7,44,77,748/-, 5 [ITA No.272/Kol/2010] therefore, Ld. Counsel contends that where a project ended with 31st March, 2006 the total sale of flats and garage were almost completed and Ld. Counsel, therefore, submitted that Sec. 80IB deduction is to be given to the assessee as assesee has completed the project and assessee qualifies for that also. On the other hand, the Ld. DR would submit that the Assessing Officer investigated the matter and found that completion certificate contradicted with the report of inspector of the department, who found on personal inspection that the building was incomplete. The building plan is only a provisional sanction and the conditions never fulfilled. Further, the completion certificate dated 28.7.2005 is not in the name of the assessee. It is in the name of Shri Rabindra Nath Mondal & Ors. Further, the flat owner, Secretary of the Regent Garden informs to the assessee that the construction was incomplete and were never filed copy of the revised plan. Once it is incomplete then assesee is not entitled for 80IB deduction. Further with reference to the agreement with the contractor M/s. RDB Industries, Ld. DR would submit that at the time of agreement assessee does not own required minimum acre of land. Hence, the assessee is not entitled to 80IB deduction in view of explanation (1) of sub-section (a) of section 80IB(10) of the Act. Hence, Ld. DR would submit that orders of the lower authorities are to be confirmed by dismissing the appeal of the assessee.

7. We have considered the rival submissions and perused the material available on record including the precedents. Assessing Officer first doubted that there is further construction. For that Ld. Counsel explained that after completion of the project and after obtaining completion certificate when the Developer found that it was not easy to sale the garages which were saleable commodities. He applied for revised sanction plan and started construction in the said project for converting space for garages in the residential units. The assessee-company was prevented by some flat owners on this extra space utilization and filed a Writ Petition before the Hon'ble High Court and then the Inspector visited the site of the project, he found that extra space construction was going on and hence, reported to the Assessing Officer that the project was incomplete. This is the reason Assessing Officer denied under section 80(B)(10) deduction mainly on the ground that the construction is not completed.

8. The construction as per original plan was duly completed and the completion certificate dated 28.07.2005 from the local authority. That being the position. The CBDT Circular No. F.

[ITA No.272/Kol/2010] No.205/3/2000/ITA dated 04.05.2001 wherein CBDT has clarified that any project which had been approved by the local authority as housing project should be considered as adequate for the purpose of Section 80IB(10). The decision of Hon'ble Bombay High Court in the case of CIT vs. Brahma Associates [2011] 333 ITR 289 (Bom.) will also support this proposition. Here, in this case, it is clearly established that the completion certificate has been duly issued by Rajarhat Gopalpur Municipality in respect of construction of project at Regent Garden. The plan of the project was sanctioned on 10.12.2003 and completed within 11.07.2005 and the completion certificate is dated 28.07.2005. That being the position. Once the appropriate authority issued the completion certificate, it is not warranted on the part of the Assessing Officer to prove the issue further as per the C.B.D.T. Circular cited (supra), clearly prohibits further prohibit and the approval of the local authority should be considered as adequate for the purpose of Section 80IB(10). It is not disputed that as per original sanctioned plan completion certificate has been issued by Rajarhat Gopalpur Municipality.

9. The only issue is on the additional space uitilisation which was objected by the flat owners and the inspection team visited only the extra space construction activity and found that construction was not completed. That is the matter of dispute between the flat owners and the assessee and the utilization on conversion of the garages are the dispute pending before the Hon'ble High Court. But, so far as the deduction under section 80IB(10), it had been made clear that flat has been constructed and completed as per the sanctioned plan as evidenced by the completion certificate issued by the local authority on 28.07.2005. Those documents are available in assessee's paper book at page 208. The original sanctioned plan is in assessee's paper book at page 206 and the revised sanctioned plan No.1182/02-03 dated 10.12.2003 is available in assessee's paper book at page 207. Considering the above facts and on careful consideration of the rival submissions, the assessee who is in the business of construction of housing project in respect of project at Regent Garden which project was sanctioned for 4 blocks on 50 cottah of land initially. Thereafter, assessee-company has purchased their requirement of meeting 60 cottah and in this case assessee has purchased 63 cottah of 'Sali' land from Shri Rabindra Nath Mondal and others. As clearly available from the agreement, the assessee qualifies for in respect of the size of the plot of land which is minimum of 1 acre. 50 cottah of land was purchased on 19.12.2003. The remaining 13 cottah 11 chhatak and 32 sft. was purchased by agreement dated 27.12.2004 as per 7 [ITA No.272/Kol/2010] registration. While purchasing this land, this land was purchased alongwith the sanctioned plan No.1182/2003-04 dated 10.12.2003 as it is more important that the assessee-company not only purchased the property but altogether with the sanctioned plan for construction.

10. Then the assessee-company entered into an agreement with M/s. R.D.B. Industries Ltd., Contractors for construction of the project. It is evidenced by way of agreement dated 06.02.2004. Therefore, assessee qualifies the conditions for the eligibility of Section 80IB(10).

11. The only doubt in the mind of Assessing Officer is that assessee does not own minimum requirement of one acre has been clearly proved by the assessee whereby with relevance to the copies of documents proved that the project for construction is in the extent of land of 63 cottah. Further, while purchasing the land together with the land, the sanctioned plan for project construction was also part of the purchase. Then after purchase assessee entrusted the matter with the contractor for completing the project within the stipulated time. The next doubt in the mind of Assessing Officer is that the construction was not completed. That doubt also removed by the explanation of the assessee that the construction was completed and the local authority has given completion certificate as per the decision of Hon'ble Bombay High Court in the case of CIT vs. Brahma Associates [2011] 333 ITR 289 (Bom.). This is sufficient compliance. CBDT Circular relied also, hence, the stand of the assessee. Once the local authority sanctioned housing project it should be considered as adequate for the purpose of Section 80IB deduction. Hence, we are of the view that assessee qualifies for the deduction under section 80IB(10). Once the assessee qualifies for 80IB being the beneficial provision and as per the decision of Hon'ble Supreme Court in the case of Bajaj Tempo Limited vs. CIT [1992] 196 ITR 188 (SC) and the decision of Hon'ble Jurisdictional High Court in the case of Andaman & Nicobar Islands Forest & Plantation Development Corporation Ltd. vs. CIT [2006] 280 ITR 118 (Cal.). This ratio also helps the contention of the assessee as the assessee is fulfilling all the conditions laid down in Section 80IB(10). The claim of the assessee for the above deduction has to be considered as qualified for beneficial deduction under section 80IB. Hence, we are of the view that the order of authorities to be reversed and the assessee should be given with the deduction claimed under section 80IB amounting to Rs.1,74,12,766/- as the assessee qualifies for the requirement of conditions laid 8 [ITA No.272/Kol/2010] down under section 80IB.

12. In the result, the appeal of the assessee is allowed.

Order pronounced in open court on 29.12.2011.

                Sd/-                                              Sd/-
      सी.डȣ.राव, लेखा सदःय                            एन. ǒवजयकूमारण, Ûयायीक सदःय
         (C. D. Rao)                                        (N. Vijaykumaran)
      Accountant Member                                      Judicial Member

                        तारȣख)
                        तारȣख) Dated : 29th December, 2011
                       (तारȣख

वǐरƵ िनǔज सिचव Jd.(Sr.P.S.)

आदे श कȧ ूितिलǒप अमेǒषतः- Copy of the order forwarded to:

1. अपीलाथȸ/APPELLANT - M/s. Goldline Writing Instruments Ltd., Bikaner Bldg. 8/1, Lal Bazar Street, 1st floor, R. No. 11, Kolkata-71..

 2      ू×यथȸ/ Respondent, ITO, Ward-6(2), Kolkata.

 3.     आयकर किमशनर (अपील)/ The CIT(A),                  Kolkata
 4.     आयकर किमशनर/CIT,               Kolkata
 5.     वभािगय ूितनीधी / DR, Kolkata Benches, Kolkata

                स×याǒपत ूित/True Copy,
                                                          आदे शानुसार/ By order,

                                                      सहायक पंजीकार/Asstt. Registrar.