ITA1.12 -1- rt IN HIGH COURT OF JUDICATURE AT BOMBAY BENCH AT AURANGABAD ou INCOME TAX APPEAL NO. 1 OF 2012 Commissioner of Income Tax C Aayakar Bhavan, near Holy Cross School, Cantonment, AURANGABAD ...Appellant versus h Hindustan Samuh Awas Limited, ig Block 1-9, First Floor, Narayan Plaza Cannaught Place, CIDCO AURANGABAD ...Respondent H WITH INCOME TAX APPEAL NO. 2 OF 2012 y ba Commissioner of Income Tax Aayakar Bhavan, near Holy Cross English School, Cantonment, AURANGABAD ...Appellant om versus Hindustan Samuh Awas Limited, Block 1-9, First Floor, Narayan Plaza Cannaught Place, CIDCO B AURANGABAD ...Respondent ..... Mr. Alok M. Sharma, advocate for appellant Mr. Anil S. Bajaj, advocate for respondent sole ..... CORAM : A. V. NIRGUDE AND V. K. JADHAV, JJ. DATED : 2nd FEBRUARY, 2015 ::: Uploaded on - 17/02/2015 ::: Downloaded on - 15/02/2016 10:34:21 ::: ITA1.12 -2- ORAL JUDGMENT (PER A.V. NIRGUDE, J.):- rt 1. These Appeals by Revenue challenged judgment and ou order passed by Income Tax Appellate Tribunal, Pune, in Appeal Nos. 945 to 950/PN/2010. facts leading to these Appeals are as C under : h 2. respondent is builder and developer company. They ig had undertaken Mega Housing Project on layout covering area of about 25 acre at Aurangabad. project was approved in H February, 2000. respondents completed part of project and obtained Completion Certificate for that part of project from y Aurangabad Municipal Corporation on 10.10.2008. respondent ba sought exemption under Section 80-IB(10) of Income Tax Act in all assessment years 2002-2008. It was their case that profit om made in these years from sale of flats etc. from this project is exempted from Income Tax. Their claim was denied by Assessing Officer on ground that Completion Certificate was not B issued on or prior to 31.03.2008. Relevant provision of Income Tax Act reads as under : 80-IB (10) amount of deduction in case of undertaking developing and building housing projects approved before 31st day of March, 2008 by local authority shall be hundred per cent of profits derived in previous year relevant to any assessment ::: Uploaded on - 17/02/2015 ::: Downloaded on - 15/02/2016 10:34:21 ::: ITA1.12 -3- year from such housing project if, rt ou (a) such undertaking has commenced or commences development and construction of housing project on or after 1st day of October, 1998 and completes such construction C (i) in case where housing project has been approved by local authority before 1st day of April, 2004, on or before 31st day of March, 2008; h (ii) in case where housing project has been, or, is approved by local authority on or after 1st day of April, 2004 but ig not later than 31st day of March, 2005, within four years from end of financial year in which housing project is H approved by local authority; (iii) in case where housing project has been approved by local authority on or after 1st day of April, 2005, within five y years from end of financial year in which housing ba project is approved by local authority. Explanation. For purposes of this clause, (i) in case where approval in respect of housing project om is obtained more than once, such housing project shall be deemed to have been approved on date on which building plan of such housing project is first approved by local authority; B (ii) date of completion of construction of housing project shall be taken to be date on which completion certificate in respect of such housing project is issued by local authority; (b) project is on size of plot of land which has minimum area of one acre: ::: Uploaded on - 17/02/2015 ::: Downloaded on - 15/02/2016 10:34:21 ::: ITA1.12 -4- Provided that nothing contained in clause (a) or clause (b) shall rt apply to housing project carried out in accordance with scheme framed by Central Government or State ou Government for reconstruction or redevelopment of existing buildings in areas declared to be slum areas under any law for time being in force and such scheme is notified by Board C in this behalf; (c) residential unit has maximum built-up area of one thousand square feet where such residential unit is situated within h cities of Delhi or Mumbai or within twenty-five kilometres from municipal limits of these cities and one thousand and five ig hundred square feet at any other place; (d) built-up area of shops and other commercial H establishments included in housing project does not exceed three per cent of aggregate built-up area of housing project or five thousand square feet, whichever is higher; y (e) not more than one residential unit in housing project is ba allotted to any person not being individual; and (f) in case where residential unit in housing project is allotted to person being individual, no other residential unit in om such housing project is allotted to any of following persons, namely: (i) individual or spouse or minor children of such B individual, (ii) Hindu undivided family in which such individual is karta, (iii) any person representing such individual, spouse or minor children of such individual or Hindu undivided family in which such individual is karta; Explanation. For removal of doubts, it is hereby declared that nothing contained in this sub-section shall apply to any undertaking ::: Uploaded on - 17/02/2015 ::: Downloaded on - 15/02/2016 10:34:21 ::: ITA1.12 -5- which executes housing project as works contract awarded by rt any person (including Central or State Government). ou 3. respondent's appeal before Commissioner of Income Tax (Appeals), was dismissed. As against this, respondent went C before Income Tax Appellate Tribunal, where impugned order was passed. h 4. ig ITAT held that in view of fact that respondent had made application seeking Completion Certificate prior to 31.03.2008, H date on which Completion Certificate was issued was not material. It also held that delay in obtaining Completion y Certificate was not attributable to respondent. This delay was ba beyond their control. om 5. following substantial question of law arises in these appeals: B Is it permissible in law to compute date on which completion certificate in respect of housing is issued by local authority as provided in explanation to section 80IB(10) of Income Tax Act? If yes, how? 6. We have heard submissions at bar at length. We have ::: Uploaded on - 17/02/2015 ::: Downloaded on - 15/02/2016 10:34:21 ::: ITA1.12 -6- also perused opposite view expressed by Commissioner rt (Appeals), in his judgment. In said judgment, he opined that ou explanation to Section 80-IB(10)(a)(ii) of Act must be strictly construed. He rejected respondent s contention that this C provision has introduced doubt. He preferred literal interpretation of Section 80-IB(10) and explanation referred to above. h 7. ig Mr. Sharma, learned council for appellant contended that H we should adhere to opinion expressed by Commissioner (Appeals) and set aside judgment of ITAT. In support of his contentions, he placed reliance on following judgments : y ba i. Union of India vs. Dharamendra Textile processors reported in 2008 SCC (13) 369, and (para 13 and 14) om ii. Commissioner of Central Excise, Bhavnagar vs. Saurashtra Chemicals Limited, reported in (2007) 10 SCC 352. (para B 13) Para Nos. 13, 14 and 15 in case of Union of India vs. Dharmendra Textiles (supra) read as under:- 13. It is well settled principle in law that court cannot read anything into statutory provision or stipulated condition ::: Uploaded on - 17/02/2015 ::: Downloaded on - 15/02/2016 10:34:21 ::: ITA1.12 -7- which is plain and unambiguous. statute is edict of rt legislature. language employed in statute is determinative factor of legislative intent. Similar is position ou for conditions stipulated in advertisements. 14. Words and phrases are symbols that stimulate mental C references to referents. object of interpreting statute is to ascertain intention of legislature enacting it. (See institute of Chartered Accountants of India v. Price Waterhouse h 1977 (6) SCC 312). intention of legislature is primarily ig to be gathered from language used, which means that attention should be paid to what has been said as also to what H has not been said. As consequence, construction which requires for its support, addition or substitution of words or which results in rejection of words as meaningless has to be y avoided. As observed in Crawford v. Spooner (1846) 6 MOO pc1, courts cannot aid legislature's defective phrasing of ba Act, they cannot add or mend, and by construction make up deficiencies which are left there. (See State of Gujarat v. om Dilipbhai Nathjibhai Patel 1989 (3) SCC 234). It is contrary to all rules of construction to read words into Act unless it is absolutely necessary to do so. [see Stock v. Frank Jones (Tipton), Ltd 1978 (1) ALL ER 948.] Rules of interpretation do B not permit courts to do so, unless provision as it stands is meaningless or of doubtful meaning. courts are not entitled to read words into Act of Parliament unless clear reason for it is to be found within four corners of act itself. (Per Lord Loreburn, L. C. in Vickers Sons ) 15. question is not what may be supposed and has been intended but what has been said. statutes should be construed ::: Uploaded on - 17/02/2015 ::: Downloaded on - 15/02/2016 10:34:21 ::: ITA1.12 -8- not as theorems of Euclid , Judge Learned Hand said, but rt words must be construed with some imagination of purposes which lie behind them . ou C Para No.13 in case of Commissioner of Central Excise, Bhavnagar vs. Saurashtra Chemicals Limited (supra) reads as h under:- ig 13. beneficent statute may have to be considered liberally H but where statute does not admit of more than one interpretation, literal interpretation must be resorted to. provision allows taking of credit but same is circumscribed y by condition as is apparent from use of words subject to and is limited to amount not exceeding 50% of ba duty paid on such capital goods. term subject to in contest assumes some importance. In Ashok Leyland Ltd. om v. State of T.N. This Court held: (SCC p. 36, para 79) 79. 'Subject to' is expression whereby limitation is expressed. order is conclusive for all purposes. B This Court further noticed dictionary meaning of subject to stating: (SCC p. 38, paras 92-93) 92. Furthermore, expression 'subject to' must be given effect to. 93. In Black's Law Dictionary, 5th Edn. at p. 1278, ::: Uploaded on - 17/02/2015 ::: Downloaded on - 15/02/2016 10:34:21 ::: ITA1.12 -9- expression 'subject to' has been defined as under: rt 'Liable, subordinate, subservient, inferior, obedient ou to; governed or affected by; provided that; provided; answerable for. Homan V. Employers Reinsurance Corpn. C h 8. learned council for appellant asserted that though Sub- ig section (10) is provision relating to exemption, since explanation does not introduce any uncertainty, it must be read and H interpreted literally. y 9. On other hand, learned council for respondents ba contended that even assuming that there is no doubt arising from interpretation of Section 80-IB and explanation referred to above, om there is scope for holding that interpretation had inducted element, which goes against spirit and purpose of Section. He also placed reliance on judgment of Gujarat High Court in B case of CIT vs. Tarnetar Corporation reported in [2014] 362 ITR 174 (Guj.) on point. We have perused judgment of Gujarat High Court and found that situation before Gujarat High Court was similar. High Court was examining correctness of findings recorded by Income Tax Appellate Tribunal. High Court mainly placed reliance on crucial fact that application ::: Uploaded on - 17/02/2015 ::: Downloaded on - 15/02/2016 10:34:21 ::: ITA1.12 -10- seeking Completion Certificate was submitted to Municipal rt Corporation prior to 31.03.2008 and therefore, they confirmed ou finding of Court that requirement of Section was not mandatory in nature. C 10. We have no difficulty to accept this contention. We also hold that explanation is quite clear and does not introduce any h uncertainty. In other words, date of completion of project has to be ig date of issuance of Completion Certificate by Municipal H authority. 11. question we raise here is whether explanation y introduced element of harshness to such extent that it ba rendered main provision nugatory? In our view, explanation is introduced recently to put end to controversy, which might om arise before Assessing Officer about date of completion. intention of legislature in providing explanation to fix date of B completion of project is quite helpful when this provision is utilized in practice. In our view explanation has introduced unnecessarily strictness in provision which is in nature of exemption and not in nature of charging. Sub-section (10) mentions that housing project should be complete before 31.03.2008 so as to get exemption. Completion of housing ::: Uploaded on - 17/02/2015 ::: Downloaded on - 15/02/2016 10:34:21 ::: ITA1.12 -11- project is physical act. It can be demonstrated on spot and also rt through certificate issued by architect who is appointed for ou supervising construction work. He is professional who would declare that project is complete. Unfortunately, Sub-section (10) C and explanation do not give any importance to issuance of such Completion Certificate by concerned architect. It gives importance only to certificate of Municipal authority. It is common h knowledge that application for Completion Certificate submitted to ig Municipal Authorities is accompanied by Completion Certificate H issued by concerned architect. No doubt, Municipal authorities then cause inspection of site and verify claim. Thereafter, they issue Completion Certificate. But, if project is y really complete before 31.03.2008 and application is moved quite ba in time, for seeking Completion Certificate from Municipal authorities, and if they do not take steps urgently and delay om issuance of Completion Certificate from their side, can it be said that such certificate would alone decide date of completion of B project? answer is in negative. 12. In facts of this case, admittedly, Architect of project had given certificate prior to 31.03.2008. respondent submitted application to Municipal authority along with such certificate well in time on 25.03.2008. It seems that Municipal ::: Uploaded on - 17/02/2015 ::: Downloaded on - 15/02/2016 10:34:21 ::: ITA1.12 -12- authorities directed respondent to deposit certain amount for rt issuance of Completion Certificate on 27.03.2008 and amount ou was accordingly deposited on 31.03.2008. Thereafter, certificate was issued in October, 2008. This delay cannot be attributed to C respondent assessee. 13. In view of this, we are inclined to hold that project, for h which exemption is sought, was completed prior to 31.03.2008 and ig therefore, we are inclined to record our answer in affirmative to H substantial question of law referred to above. Both appeals are accordingly dismissed. y ba ( V. K. JADHAV, J.) ( A. V. NIRGUDE, J. ) rlj/ om B ::: Uploaded on - 17/02/2015 ::: Downloaded on - 15/02/2016 10:34:21 ::: Commissioner of Income-tax v. Hindustan Samuh Awas Limited