2014 (8) TMI 1018 - AT - Income Tax

Disallowance of deduction u/s. 80IB(10) - AO held that the assessee lost eligibility for claiming deduction u/s. 80IB(10) since the assessee failed to obtain project completion certificate from VMSS for the entire project - Held that - We find that in the instant case, the housing project was approved on 10.03.2004 by the competent authority. The above fact is not in dispute. On the above fact, as per the decision of the Hon ble Delhi High Court in the case of CIT Vs. CHD Developers (2014 (1) TMI 1542 - DELHI HIGH COURT), the condition for obtaining completion certificate within four years of the date of approval for being eligible for deduction u/s. 80IB(10) is not applicable. The Departmental Representative could not point out any good reason as to why the aforesaid decision of the Hon ble Delhi High Court should not be followed in the instant case. We, therefore, respectfully following the above decision of the Hon ble Delhi High Court, set aside the order of the Commissioner of Income Tax (Appeals) on this issue and delete the disallowance of deduction u/s. 80IB(10) of the Act to the assessee - Decided in favour of assessee

Summary

Issues:
Appeal against disallowance of deduction u/s. 80IB(10) due to lack of project completion certificate.

Analysis:
The Appellate Tribunal, ITAT Ahmedabad, heard an appeal by the assessee against the Commissioner of Income Tax (Appeals)'s order. The sole issue was the disallowance of deduction u/s. 80IB(10) by the Assessing Officer, citing the absence of a project completion certificate from the local authority. The Commissioner upheld the disallowance solely based on the lack of the completion certificate, despite accepting other contentions of the assessee related to the housing project development. The Authorized Representative argued that the requirement for a completion certificate came into effect from April 1, 2005, applicable to projects approved after that date. Citing a decision by the Hon'ble Delhi High Court, it was contended that the stringent condition of obtaining a completion certificate within four years of approval did not apply to projects approved before the amendment. The housing project in question was approved on March 10, 2004, making the completion certificate condition inapplicable as per the Delhi High Court decision.

The Tribunal found that the housing project had indeed been approved before the amendment requiring a completion certificate within four years. Relying on the decision of the Hon'ble Delhi High Court, the Tribunal set aside the Commissioner's order and allowed the deduction u/s. 80IB(10) for the assessee. The Tribunal held that the completion certificate condition was not applicable in this case, following the precedent set by the Delhi High Court. Consequently, the appeal of the assessee was allowed, and the disallowance of deduction u/s. 80IB(10) was deleted. The order was pronounced in court on August 14, 2014, in Ahmedabad.