2019 (11) TMI 1447 - HC - Income Tax

Deduction u/s 80IB - Reopening of assessment - HELD THAT - In the instant case, that a completion certificate came to be issued by the registered architect on February 27, 2008 certifying that the project in question had been completed on February 25, 2008. This certificate has admittedly been issued in terms of section 310 of the KMC Act read with rule 5.6(1) of the building bye-laws in the format prescribed under Schedule VIII of the building bye-laws. It is on enclosing this completion certificate issued by the registered architect that letters dated March 5, 2008 and May 7, 2008 were written to the Commissioner, BBMP by the assessee to issue an occupancy certificate, the copies of which were also made available to the AO during the assessment proceedings u/s 148 - Though the said material evidence being available, the same had been ignored by the Assessing Officer and the same was taken note of by the Commissioner of Income-tax (Appeals) to allow the deduction claimed under section 80-IB of the Act by the assessee. As such, we are not inclined to accept the contention raised by the Revenue. There being no substantial questions of law involved in this appeal for being formulated, adjudicated and answered admitting the appeal does not arise.

Summary

Issues:
1. Correctness and legality of the order passed by the Income-tax Appellate Tribunal in I. T. A. No. 1629/Bang/2016.
2. Disallowance of claim made under section 80-IB(10) of the Income-tax Act, 1961.
3. Requirement of completion certificate for claiming deduction under section 80-IB(10) of the Act.

Analysis:
1. The Revenue appealed against the ITAT's order dismissing their appeal challenging the Commissioner of Income-tax (Appeals) order allowing the claim under section 80-IB(10) of the Income-tax Act. The respondent-assessee, involved in development and construction, filed for deduction under section 80-IB for the assessment year 2008-09. The Assessing Officer disallowed the claim due to lack of completion certification for the residential project "Majestic Residency." However, the Commissioner of Income-tax (Appeals) allowed the claim, stating the project was completed within the required timeframe. The ITAT upheld this decision, citing a similar case precedent. The Revenue contended that without a completion certificate, substantial legal questions arose. The Court noted the requirement of a completion certificate under section 80-IB(10) and analyzed the definition under the Karnataka Municipal Corporations Act, rejecting the Revenue's argument.

2. The completion certificate, as per the Court, is issued under building bye-laws and signifies the project's completion and compliance with regulations. In this case, a completion certificate was issued by a registered architect, confirming project completion. The certificate was submitted to the Commissioner for an occupancy certificate. The Assessing Officer disregarded this evidence, but the Commissioner considered it, leading to the allowance of the deduction. The Court found no legal questions warranting consideration, as the completion certificate was in line with requirements, as seen in a previous case.

3. The Tribunal affirmed the completion certificate's validity, stating the project met the criteria under section 80-IB. The Court upheld the Tribunal's decision, emphasizing the importance of the completion certificate issued by a registered architect for claiming deductions under section 80-IB(10). The appeal was dismissed, and the Tribunal's order for the assessment year 2008-09 was affirmed, as the completion certificate fulfilled the statutory requirements.