9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2015 (10) TMI 2306 - HC - Income TaxDeduction u/s 80IB - assessee claim was denied by AO on the ground that Completion Certificate was not issued on or prior to 31.03.2008 - ITAT allowed claim - Is it permissible in law to compute the date on which the completion certificate in respect of housing is issued by the local authority as provided in explanation to section 80IB(10) of the Income Tax Act? Held that - Date of completion of a project has to be the date of issuance of Completion Certificate by the Municipal authority. Admittedly, the Architect of the project had given a certificate prior to 31.03.2008. The respondent submitted application to the Municipal authority along with such certificate well in time on 25.03.2008. It seems that the Municipal authorities directed the respondent to deposit certain amount for issuance of Completion Certificate on 27.03.2008 and the amount was accordingly deposited on 31.03.2008. Thereafter, the certificate was issued in October, 2008. This delay cannot be attributed to the respondent assessee. In view of this, we are inclined to hold that the project, for which exemption is sought, was completed prior to 31.03.2008 and therefore, we are inclined to record our answer in affirmative to the substantial question of law referred to above. - Decided in favour of assessee.
Issues:
1. Interpretation of Section 80-IB(10) of the Income Tax Act regarding the date of completion of a housing project for exemption under the Act. Analysis: The case involved a dispute over the interpretation of Section 80-IB(10) of the Income Tax Act regarding the date of completion of a housing project for claiming exemption. The respondent, a builder and developer company, had undertaken a Mega Housing Project in Aurangabad and sought exemption under Section 80-IB(10) for the assessment years 2002-2008. The Assessing Officer denied the claim as the Completion Certificate was issued after 31.03.2008. The Income Tax Appellate Tribunal (ITAT) held that the date of issuance of the Completion Certificate was not material if the application was made before 31.03.2008 and the delay in issuance was beyond the respondent's control. The main issue before the High Court was whether the explanation to Section 80-IB(10) introduced an element of uncertainty in determining the date of completion of a housing project. The appellant argued for a strict interpretation of the provision, citing precedents like Union of India v. Dharamendra Textile processors and CCE v. Saurashtra Chemicals Ltd. The respondent contended that the explanation, although clear, introduced unnecessary strictness, favoring a more practical approach. The High Court analyzed the legislative intent behind the provision and the explanation, emphasizing that the explanation aimed to resolve controversies regarding the date of completion. It noted that the explanation's strictness could render the main provision nugatory, as it solely relied on the Municipal authority's Completion Certificate, overlooking the architect's certificate. The Court highlighted that the project's physical completion should be the determining factor, not just the issuance of the Municipal Completion Certificate. In the present case, the Architect had certified the project's completion before 31.03.2008, and the respondent had applied for the Completion Certificate in time. The delay in issuance by the Municipal authority was not attributable to the respondent. Therefore, the High Court held that the project was completed before 31.03.2008, granting the respondent the exemption sought. The Court dismissed the appeals and answered the substantial question of law in the affirmative, emphasizing the practical application of the provision over strict interpretation. In conclusion, the High Court's judgment clarified the interpretation of Section 80-IB(10) regarding the date of completion of a housing project for claiming exemption under the Income Tax Act, emphasizing the practical completion of the project rather than solely relying on the Municipal Completion Certificate.
|
