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2014 (9) TMI 1012 - AT - Income TaxDeduction claimed by the assessee u/s 80IB(10) denied - Held that - This is settled position of law that the Law existing at the particular point of time will be applicable unless and until it is specifically made retrospective by the legislator. In our opinion, the assessee is expected to complete the project as per the approved plan at a particular point of time and the assessee is not expected to do or fulfill the conditions which are not in existence at the relevant point of time or made compulsory after making such amendment in the Act from the future date. When the project approved, the competent authority has given specified date that project should have completed by that date. The Section 80IB(10), which was in existence there nowhere required the assessee to complete the project within a particular period. Therefore, in our view, the restriction, which has been imposed subsequently by amending the provisions of the law will not apply to the assessee that the project should have been completed within four years from the end of the financial year in which housing is approved by the local authorities. We, therefore, set-aside the order of the CIT(A) on this issue and allow the ground taken by the assessee in both the assessment years. - Decided in favour of assessee.
Issues Involved:
1. Deduction claimed under Section 80IB(10) of the Income-tax Act, 1961. 2. Imposition of interest under Sections 234B and 234C of the Income-tax Act, 1961. Issue-wise Detailed Analysis: 1. Deduction claimed under Section 80IB(10): The primary issue revolves around the assessee's claim for deduction under Section 80IB(10) for the assessment years 2005-06 and 2007-08. The facts reveal that a search and seizure operation was conducted under Section 132 at the premises of certain individuals associated with the assessee. The assessee filed returns declaring nil income after claiming the deduction under Section 80IB(10). Initially, the returned income was accepted under Section 143(1), but later proceedings under Section 147 were initiated, leading to the disallowance of the deduction claim. The Assessing Officer (AO) disallowed the deduction on two grounds: - The assessee was not the owner of the land, as the building permission was obtained by the seller before the assessee purchased the land. - The assessee failed to submit the completion certificate of the project within the stipulated time. The CIT(A) ruled in favor of the assessee regarding the ownership issue, stating that ownership of the land or permission in the developer's name was not necessary for claiming the deduction. The Revenue did not appeal this finding. However, the CIT(A) upheld the disallowance based on the failure to complete the project within the stipulated time, as the completion certificate was issued after the deadline. The Tribunal noted that the project was approved on 24.4.2003, and the relevant provisions at that time did not require completion within a specified period. The Tribunal referenced the Finance Act amendments and concluded that the law applicable at the time of project approval should govern the requirements. The Tribunal found that the subsequent amendments imposing a completion deadline did not apply retrospectively to the assessee's project. Consequently, the Tribunal allowed the assessee's appeal on this issue, following the principle that the law existing at the time of project approval governs the conditions for deduction. 2. Imposition of interest under Sections 234B and 234C: The second issue pertains to the imposition of interest under Sections 234B and 234C for the assessment years 2005-06 and 2007-08. These sections deal with interest for defaults in payment of advance tax. Given that the Tribunal allowed the assessee's claim for deduction under Section 80IB(10), the interest calculations under Sections 234B and 234C would need to be recomputed based on the revised income assessments. The Tribunal directed the Assessing Officer to recompute the interest under Sections 234B and 234C based on the income as finally determined in consequence of the Tribunal's order. Conclusion: The Tribunal's judgment resulted in the following outcomes: - The appeal for the assessment year 2005-06 was partly allowed. - The appeal for the assessment year 2007-08 was fully allowed. The Tribunal's decision emphasized the importance of applying the law as it existed at the time of project approval and clarified the conditions under which deductions under Section 80IB(10) could be claimed. The recomputation of interest under Sections 234B and 234C was directed to align with the revised income assessments following the Tribunal's order.
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