(2013) 84 DTR 383 (Pune) Ramsukh Properties vs. DCIT A.Y.: 2007-08 Dated: 25.7.2012

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Section 80-IB(10) – Assessee is entitled to deduction in respect of completed flats if the entire project could not be completed due to reasons beyond his control

Facts:
The assessee claimed a deduction u/s. 80-IB(10) in respect of a project consisting of six buildings and 205 flats although the completion certificate was obtained only for 173 flats within the statutory time period. The assessee contended that 85% of the project was completed within statutory time period and revenue was fully booked in accordance with the project completion method of accounting. The latecompletion was due to the fact that the assessee submitted certain modifications/rectifications for the top floors of the buildings. The said revision could not be completed as the Pune Municipal Corporation could not approve the modification as their files had been taken over by the CID for investigation under ULC Act by the Government of Maharashtra. The Assessing Officer rejected the claim of deduction on account of violation of basic condition of completing the construction within the given time period and even an alternative plea of the assessee to allow the proportionate deduction.

Held:
In case such a contingency emerges which makes the compliance with provision impossible, then the benefit bestowed on an assessee cannot be completely denied. Such liberal interpretation should be used in favour of assessee when he is incapacitated in completing project in time for the reasons beyond his control. The assessee was prevented by sufficient reasonable cause which compelled the impossibility on part of the assessee to have completion certificate in time. It is settled legal position that the law always give remedy and the law does wrong to no one. Plain reading of section 80-IB(10) suggests about only completion of construction and no adjective should be used along with the word ‘completion’. This strict interpretation should be given in normal circumstances. However, in this case, assessee was prevented by reasonable cause to complete construction in time due to intervention of CID action on account of violation of provisions of Urban Land Ceiling Act applicable to land in question. Assessee should not suffer for same. The revision of plan is vested right of assessee which cannot be taken away by strict provisions of statute. The taxing statute granting incentives for promotion of growth and development should be construed liberally and that provision for promoting economic growth has to be interpreted liberally. At the same time, restriction thereon too 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 statue to effectuate the legislative intention. In view of above facts and circumstances, it was held that assessee is entitled for benefit u/s. 80-IB(10) in respect of 173 flats completed before prescribed limit.