2016 (6) TMI 548 - AT - Income Tax

Deduction under section 80IB(10) - Held that - In the year under consideration, i.e. A.Y. 2008-09, we find that the learned CIT(A) had examined and found from the report of the Inspector of Income Tax dated 02.03.2007 that with respect to the claim for deduction in respect of the four buildings in Vijay Garden, all requisite documents including the commencement and completion certificates are obtained and placed on record. The learned CIT(A) has also observed that the Occupancy Certificate is issued by the competent authority only after the completion certificate is issued by the Architect and that all the required documentation for issue of the Occupancy Certificate has been placed before the competent authority, and therefore the claim for deduction under section 80IB (10) cannot be denied for the reasons that the completion certificate has not been obtained from the local authorities. It has also been observed by the learned CIT(A) that when the assessee s return for the year under consideration has been e-filed, the original documents/ annexures, Audit Report, etc. are to be produced before the AO in the coruse of assessment proceedings; which has been done in this case. Before us, except for raising the grounds (supra), the learned D.R. for Revenue has not been able to bring on record any material evidence to contradict the findings of facts rendered by the learned CIT(A) that the assessee has fulfilled the conditions laid down for being allowed deduction under section 80IB(10) of the Act. In this factual matrix of the case, as discussed above, we uphold the order of the learned CIT(A) in holding that the assessee is entitled to be allowed deduction under section 80IB(10) of the Act in this year. - Decided in favour of assessee

Issues Involved:
1. Deduction under Section 80IB(10) of the Income Tax Act.
2. Validity of the Commencement and Completion Certificates.
3. Requirement of Separate Audit Reports under Rule 18BBB.
4. Eligibility of specific projects for the deduction.

Detailed Analysis:

Issue 1: Deduction under Section 80IB(10) of the Income Tax Act
The primary issue across all appeals was whether the assessee was entitled to deductions under Section 80IB(10). The Revenue contended that the CIT(A) erred in allowing these deductions, arguing that the assessee did not meet all the stipulated conditions. However, the Tribunal upheld the CIT(A)'s decision, noting that the CIT(A) had followed the precedent set by the Coordinate Bench in the assessee's own case for assessment years 2000-01 to 2006-07, which quashed the CIT's order under Section 263. The Tribunal found no new material evidence to contradict the CIT(A)'s findings and thus dismissed the Revenue's appeals.

Issue 2: Validity of the Commencement and Completion Certificates
The Revenue argued that the assessee failed to obtain valid Completion Certificates from local authorities for several projects. The Tribunal noted that the CIT(A) had verified that the Occupancy Certificates, which are issued based on Completion Certificates from architects, were indeed obtained. The Tribunal agreed with the CIT(A) that the absence of a direct Completion Certificate from the local authority did not invalidate the claim, as the Occupancy Certificates served as sufficient proof of completion.

Issue 3: Requirement of Separate Audit Reports under Rule 18BBB
The Revenue contended that the assessee did not file separate audit reports for each project, as required under Rule 18BBB. The Tribunal observed that the CIT(A) had addressed this issue by directing the assessee to file separate audit reports for each project. The Tribunal found this direction reasonable and upheld the CIT(A)'s decision, noting that the requirement for separate audit reports was curable and did not warrant the disallowance of the entire deduction.

Issue 4: Eligibility of Specific Projects for the Deduction
The Revenue raised concerns about specific projects, such as "Vijay Garden," which allegedly contained row houses exceeding 2000 sq.ft., violating the conditions for deduction under Section 80IB(10). The Tribunal found that the CIT(A) had verified that the deduction was claimed only for eligible buildings within the projects and not for the row houses. The Tribunal upheld the CIT(A)'s findings, noting that the Revenue failed to provide evidence to the contrary.

Conclusion:
The Tribunal dismissed the Revenue's appeals for all assessment years under consideration. The Tribunal upheld the CIT(A)'s decisions, which allowed the assessee's claims for deductions under Section 80IB(10), subject to verification of audit reports and other documentation. The Tribunal found that the CIT(A) had correctly followed the precedent set by the Coordinate Bench and that the Revenue failed to provide new material evidence to challenge the CIT(A)'s findings.

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