2015 (4) TMI 1213 - HC - Income Tax

Admission of appeal on following substantial questions of law (i) Whether on the facts and in the circumstances of the case and in law, the Income Tax Appellate Tribunal erred in allowing assessee s claim of deduction under section 80IB(10) when assessee had not completed the project by 31st March, 2008 thus violating the provisions of sub section (i) of clause (a) to section 80IB(10) of the Act? (ii) Whether on the facts and in the circumstances of the case and in law, the Income Tax Appellate Tribunal erred in allowing the assessee s claim of deduction under section 80IB(10) of ₹ 3,39,22,395/for the assessment year 2004-05 when the assessee had not commenced by 31st March, 2008 the construction of 2 out of 6 buildings comprised in the housing project in respect of which approval had been sanctioned by the local authority on 12th December, 2001?

Summary

Issues:
1. Admissibility of deduction under section 80IB(10) for incomplete project by a certain deadline.
2. Admissibility of deduction under section 80IB(10) for specific construction commencement timelines.

Issue 1:
The High Court admitted the Appeal based on substantial questions of law regarding the Income Tax Appellate Tribunal's decision to allow the assessee's claim of deduction under section 80IB(10) despite the project not being completed by the specified deadline of 31st March, 2008. The Tribunal's decision raised concerns about the violation of provisions under sub-section (i) of clause (a) to section 80IB(10) of the Act. The Court highlighted the importance of addressing this issue in conjunction with another related Income Tax Appeal.

Issue 2:
Another substantial question of law raised in the Appeal was regarding the Income Tax Appellate Tribunal's decision to allow the assessee's claim of deduction under section 80IB(10) amounting to &8377;3,39,22,395 for the assessment year 2004-05. This decision was questioned due to the assessee's failure to commence the construction of 2 out of 6 buildings in the housing project by 31st March, 2008, even though the approval had been sanctioned by the local authority on 12th December, 2001. The Court emphasized the need to examine the legality of granting deductions under section 80IB(10) based on specific timelines for project commencement.

In conclusion, the High Court admitted the Appeal for further consideration on the substantial questions of law related to the admissibility of deductions under section 80IB(10) concerning incomplete project completion and specific construction commencement timelines. The Court directed the Registrar to summon the original record from the Tribunal for inspection and emphasized the importance of preparing a complete paper book in accordance with the Rules. The Tribunal was instructed to act accordingly upon receiving intimation of the Appeal's admission.