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2021 (7) TMI 904 - AT - Income TaxDeduction u/s. 80IB (10) - AO was of the opinion that four years have since lapsed and the assessee needs to complete the project within 5 years the AO accordingly formed a belief that the claim of the deduction of the assessee expires and hence not eligible for the claim of deduction u/s. 80IB (10) - HELD THAT - There is no dispute that the assessee has been offering income on project completion method. We find that the CIT(A) while allowing the appeal has given a liberty to the AO to determine the correct profit under the percentage completion method and further given the liberty to withdraw the relief if subsequently the AO finds that the assessee has not complied with any of the requirements of section 80IB (10) of the Act. We do not find any error or infirmity in such finding of the CIT(A) which calls for no interference. - Decided against revenue.
Issues:
Revenue's appeal against deletion of deduction u/s. 80IB (10) of the Act by CIT(A). Analysis: 1. The main issue in this case was the deletion of the addition of ?28,27,269 made by the Assessing Officer (AO) on account of deduction u/s. 80IB (10) of the Income Tax Act. The AO disallowed the claim of deduction as he believed that the project completion time had expired, and the assessee was not eligible for the deduction. The CIT(A) allowed the appeal, stating that the developer had been offering profits under the percentage completion method, and the relief under section 80IB could not be denied based on the completion status of the project. 2. The CIT(A) considered the CBDT instruction No.4 of 2009 and various judicial decisions while concluding that the deduction u/s. 80IB should be allowed. The CIT(A) directed the AO to determine the correct profit under the percentage completion method and withdraw the relief if the assessee failed to comply with the requirements of section 80IB (10) in the future. 3. During the appeal before the Appellate Tribunal, the Departmental Representative (DR) supported the AO's findings but failed to point out any errors in the CIT(A)'s decision. The Tribunal, after considering the arguments and orders of the lower authorities, upheld the CIT(A)'s decision. The Tribunal noted that the CIT(A) had given the AO the liberty to verify compliance with section 80IB (10) in the future, and there was no error in the CIT(A)'s decision that warranted interference. 4. Ultimately, the Tribunal dismissed the revenue's appeal, affirming the CIT(A)'s order to allow the deduction u/s. 80IB of the Act. The decision was announced in the open court in the presence of both representatives. The case highlighted the importance of following the percentage completion method for claiming deductions under section 80IB and the significance of complying with statutory requirements to avail of such benefits.
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