2022 (7) TMI 162 - AT - Income Tax

Deduction u/s 80IB - Disallowance of deduction on the ground that completion certificates were not produced during the assessment proceedings as well as during the appellate proceedings in the office of ld. CIT(A)-I, hence, no relief in this regard is being allowed - HELD THAT - We find that while allowing the claim u/s. 80IB of the Act to the Assessee, the ld. Commissioner sought the remand report from the Assessing Officer, who in the remand proceedings verified the completion certificates on test check basis and found the completion certificates in order and accordingly, the ld. Commissioner while relying upon the remand report, allowed the claim of the Assessee qua deduction u/s. 80IB(10) of the Act. Therefore, we are of the considered view that the contention with regard to the non-fulfilling of twin conditions for the eligibility of deduction u/s. 80IB(10) of the Act and not making any enquiries regarding correctness and genuineness of the completion certificates submitted by the Assessee, is not tenable and hence, the same is dismissed. On the aforesaid analyzations and considerations, the appeal of the Revenue is liable to be dismissed, as the order under challenge does not suffer from any perversity, impropriety and/or illegality. Appeal filed by the revenue department stands dismissed Validity of Completion certificates of the projects, on which the Assessee has claimed deduction u/s. 80IB(10) - Once, the completion certificates on test check basis found to be in order in the remand proceedings conducted by the Assessing Officer on the direction of the ld. Commissioner, and the same has been accepted by the ld. Commissioner as it reflects in the impugned order, nothing survives against the claim of deduction of the Assessee. As the facts and circumstances of the instant case are exactly similar as involved in Assessee s case for A.Y. 2004-05 and even 2005-06 as well, therefore, we are inclined to allow the appeal of the Assessee.

Summary

Issues:
- Disallowance of deduction u/s. 80IB(10) for assessment years 2005-06 and 2006-07.
- Verification of completion certificates by Assessing Officer.
- Appeal by Revenue Department against the order allowing deduction.
- Appeal by Assessee challenging disallowance of deduction.

Analysis:
1. The appeals by the Revenue Department and Assessee were against the orders of the Commissioner of Income-tax for assessment years 2005-06 and 2006-07 under section 250(6) of the Income-tax Act, 1961, regarding the disallowance of deduction u/s. 80IB(10) for eligible projects.

2. The Revenue Department contended that completion certificates were not produced during assessment and appellate proceedings, leading to the disallowance of the deduction. However, the Commissioner directed the Assessing Officer to allow the claim based on a remand report verifying completion certificates for residential units with built-up areas less than 1000 square feet.

3. The Revenue Department argued that the correctness and genuineness of completion certificates were not adequately verified, and conditions for eligibility under section 80IB(10) were not discussed by the Commissioner, leading to the appeal.

4. The Tribunal referred to a similar case for the assessment year 2004-05 where the Commissioner's decision to allow the deduction was upheld, emphasizing the importance of verifying completion certificates on a test-check basis.

5. The Tribunal found that the Assessing Officer correctly verified completion certificates in the remand proceedings and allowed the deduction based on this verification, dismissing the Revenue's appeal due to lack of merit in their contentions.

6. In the appeal by the Assessee for assessment year 2006-07, the Tribunal noted that completion certificates were verified on a test-check basis and found in order, leading to the allowance of the deduction under section 80IB(10) as the facts were similar to previous cases.

7. Consequently, the Tribunal dismissed the Revenue Department's appeal and allowed the Assessee's appeal regarding the disallowance of deductions under section 80IB(10) for the respective assessment years.