Madras High Court
The Commissioner Of Income Tax vs M/S. True Value Homes (India) Pvt. ... on 2 March, 2021
T.C.A.No. 782 of 2013
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATE: 02.03.2021
CORAM:
THE HON'BLE MR. JUSTICE M.DURAISWAMY
AND
THE HON'BLE MRS.JUSTICE T.V.THAMILSELVI
T.C.A.No. 782 of 2013
The Commissioner of Income Tax,
Chennai. ... Appellant
v.
M/s. True Value Homes (India) Pvt. Ltd
TVH Triveni,
21-CV Raman Road,
Alwarpet,
Chennai – 600 018. ... Respondent
Appeal preferred under Section 260A of the Income Tax Act,
1961, against the order of the Income Tax Appellate Tribunal, Madras,
"D" Bench, dated 18.03.2013 in I.T.A.No.1333/Mds/2012 for the
Assessment Year 2005-06
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T.C.A.No. 782 of 2013
For Appellant : Mr. M.Swaminathan
Senior Standing Counsel
and Mrs. V. Pushpa
For Respondent : Mr.R.Sivaraman
JUDGMENT
(Judgment was delivered by M. DURAISWAMY, J.)
Challenging the order passed in I.T.A.No.1333/Mds/2012 in
respect of the Assessment Year 2005-06 on the file of the Income Tax
Appellate Tribunal, Chennai, ''D'' Bench (for brevity, the Tribunal), the
Revenue has filed the above appeal.
2.1 The assessee is a builder and flat promoter. The assessee
filed its return of income for the assessment year 2005-06 admitting
total income of Rs.2,46,93,950/- and the return was processed under
section 143(1). The assessment under section143(3) was completed on
30.11.2007. Subsequently, the assessment was reopened under section
147 due to escaping assessment. In the scrutiny assessment, assessee
claimed Rs.6,29,31,397/- as deduction under section 801B(10) and the
same was accepted. For the purpose of claiming deduction under
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T.C.A.No. 782 of 2013
section 801B(10), the project should have been completed within four
years from the end of the financial year in which the housing project was
approved by the local authority. On verification of record, it was seen
that the assessee has not produced the completion certificate from the
local authority evidencing the completion of the project within four years
from the year in which the approval was obtained. Notice under section
148 was issued and served on 01.04.2010. The assessee, vide letter
dated 16.10.2010, sought the return filed on 31.10.2005 to be treated as
return in response to the notice issued under section 143(2) and also
sought for reason for reopening vide letter dated 14.12.2010. Notice
under section 143(2) was served on the assessee and thereafter
assessment was finalized . Disallowance made under section 801B(10)
amounting to Rs.6,29,31,393/- and the taxable income was arrived at
Rs.8,76,25,346/-.
2.2 Aggrieved over the order passed by the Assessing Officer,
the assessee filed an appeal before the Commissioner of Income Tax
(Appeals) questioning the reopening of assessment and disallowance
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T.C.A.No. 782 of 2013
under section 801B(10). The Commissioner of Income Tax (Appeals)
held that the reopening assessment was not valid and also the
disallowance made under section 801B(10) was deleted and decided the
issue in favour of the assessee.
2.3 Aggrieved over the same, the Department has filed an appeal
before the Income Tax Appellate Tribunal, which upheld the order
passed by the Commissioner of Income Tax (Appeals) on the question
of deduction made made under section 801B(10) and decided the issue in
favour of the assessee. Challenging the order passed by the Income Tax
Appellate Tribunal, the Revenue has filed the above appeal.
3.The appellant has raised the following substantial questions of
law in the grounds of appeal :
“ (i) Whether on the facts and circumstances
of the case, the Tribunal was right in holding that
the reopening of assessment was bad in law?
(ii) Is not the finding of the Tribunal bad by
holding that the reopening of assessment was not
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T.C.A.No. 782 of 2013
proper especially when the Assessing Officer had
not formed any opinion in the first instance while
framing the assessment for the first time?
(iii) Whether on the facts and circumstances of
the case, the Tribunal was right in holding that the
claim of deduction made by the assessee under
section 801B(10 is to be allowed?"
4. When the appeal is taken up for hearing, : Mr. M.Swaminathan,
learned Senior Standing Counsel appearing for the appellant fairly
submitted that the questions of law raised in the present appeal is
covered by the decisions of the Hon'ble Division Bench of this court
reported in 2013(255) CTR 156 [Commissioner of Income Tax v.
Sanghvi and Doshi Enterprise] wherein the Division Bench of this
Court held as follows:-
" ... 32 This takes us to the second question as
regards the completion certificate. As already pointed out
in the preceding paragraphs, the assessee had evidently
completed the construction as early as 05.03.2006, a fact
which is not disputed by the Revenue. It is also an admitted
fact that the approval was granted for construction, both
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T.C.A.No. 782 of 2013
by the Chennai Metropolitan Development Authority and
the local authority, namely, Chennai Corporation. The
letter of the Chennai Metropolitan Development Authority
according sanction to the project as early as 23.9.2003
clearly points out that the sanction was also subject to the
approval by the Corporation. Thus, with the planning
details being subjected to the approval by the Corporation
as the competent local authority and it having certified as
to the completion as early as 28.12.2007, we are satisfied
that the completion being on or before 31.3.2008, the
reliance placed on Explanation (2) to reject the assessee's
case could not be sustained. In any event, given the fact
that the approval, which is an administrative process, is
purely at the hands of the Statutory Authority concerned,
over which, the assessee could not have any control, the
Explanation cannot, in any manner, have a negative effect
on a factual aspect of the matter, namely, completion of the
construction. Thus, in a case like this, where, the local
authority, being the Corporation, had already certified
about the completion of the project as per the approved
plan, the fact that one of the Authorities, namely, Chennai
Metropolitan Development Authority had issued a letter
only on 13.6.2008, per se, cannot negative the assessee's
claim for deduction. ...."
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T.C.A.No. 782 of 2013
5. In view of the submissions made by the learned Senior
Standing Counsel appearing for the appellant, following the ratio laid
down by the Hon'ble Division Bench reported in 2013(255) CTR 156
[cited supra], we decide the questions of law in favour of the assessee
and against the Revenue. In these circumstances, the Tax Case Appeal
is liable to be dismissed. Accordingly, the same is dismissed. No
costs.
[M.D., J.] [T.V.T.S., J.]
02.03.2021
Index : Yes/No
Internet : Yes
Rj
To
The Income Tax Appellate Tribunal,
Chennai, ''D'' Bench
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T.C.A.No. 782 of 2013
M. DURAISWAMY, J.
and
T.V. THAMILSELVI, J.
Rj
T.C.A.No. 782 of 2013
02.03.2021
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