2024 (12) TMI 1333 - AT - Income Tax

Denial of deduction u/s 80IB(10) - assessee has not obtained the completion certificate from the Collector, Pune in respect of three projects, thus assessee has not completed the project before the specified date and certain flats in the projects were sold to the same buyers in violation of the provisions of section 80IB(10)(e) - HELD THAT - If the competent authority gives the completion certificate / occupancy certificate on the basis of the applications made by the assessee before the specified date without any deviation, then the assessee in our opinion, is said to have fulfilled the conditions of section 80IB(10) in light of the various decisions relied on by the Ld. Counsel for the assessee - It has to be seen as to whether the assessee has made the applications to the competent authority before the specified date or not which in the instant case is 31.03.2013. In the instant case, admittedly, such applications made to the competent authority before the specified date were filed in the shape of additional evidences only and the same were not produced before the Assessing Officer during the course of assessment proceedings. Although it was stated before the Ld. CIT(A), however, there was no occasion on the part of the Ld. CIT(A) also to verify the same. We deem it proper to restore the issue to the file of the AO with a direction to call for information from the office of the Collector, Pune i.e. the competent authority to find out as to whether the assessee has applied for completion certificate / occupancy certificate before the specified date or not and if so, whether there is any variation in the application filed earlier and subsequently on 30.08.2014. AO may also find out the reasons for the delay in issue of completion certificate i.e. as to whether there was any lapse on the part of the assessee in fulfilling the conditions prescribed for making the application for occupancy certificate. AO shall also decide the prorata deduction and the violation of provisions of section 80IB(10)(e) of the Act afresh - Assessee ground allowed for statistical purposes.

Issues Involved:

1. Eligibility for deduction under Section 80IB(10) of the Income Tax Act, 1961.
2. Interpretation of completion certificate requirements under Section 80IB(10).
3. Alleged violations of Section 80IB(10)(e) and 80IB(10)(f).
4. Claim for pro-rata deduction under Section 80IB(10).

Issue-wise Detailed Analysis:

1. Eligibility for Deduction under Section 80IB(10):

The primary issue was the eligibility of the assessee for claiming deductions under Section 80IB(10) for three projects (R-4, R-5, and R-22). The Assessing Officer (AO) disallowed the deduction on the grounds that the completion certificates for these projects were not obtained before the statutory deadline of March 31, 2013. The AO also noted that certain flats were sold to the same family, violating Section 80IB(10)(c). The CIT(A) upheld the AO's decision, emphasizing the need for strict compliance with the conditions prescribed under Section 80IB(10), as interpreted by the jurisdictional ITAT in the case of ACIT vs. Vijay Tukaram Raundal.

2. Interpretation of Completion Certificate Requirements:

The crux of the dispute revolved around the interpretation of the completion certificate requirements. The assessee argued that the projects were completed before the deadline, and applications for completion certificates were submitted to the competent authority before March 31, 2013. The Tribunal noted that if the assessee had indeed completed the projects and applied for the certificates before the deadline, the delay in issuance by the authority should not disqualify the assessee from claiming the deduction. The Tribunal directed the AO to verify whether the applications were submitted timely and if there were any discrepancies in the applications.

3. Alleged Violations of Section 80IB(10)(e) and 80IB(10)(f):

The AO also disallowed deductions based on alleged violations of Sections 80IB(10)(e) and (f), which pertain to the sale of multiple units to the same family and the size of the units, respectively. The CIT(A) did not adjudicate this issue, and the Tribunal directed the AO to examine this aspect afresh, considering the submissions of the assessee that these provisions were not applicable for the assessment years in question due to their prospective nature.

4. Claim for Pro-rata Deduction:

The assessee claimed pro-rata deductions for eligible units. The AO rejected this claim, and the CIT(A) upheld the decision. The Tribunal directed the AO to re-evaluate this claim in light of the findings on the completion certificate issue and the alleged violations of Section 80IB(10)(e) and (f).

Conclusion:

The Tribunal restored the matter to the AO for fresh adjudication, directing a thorough verification of the completion certificate applications and an examination of the alleged violations of Section 80IB(10)(e) and (f). The Tribunal emphasized the need for the AO to provide the assessee with an opportunity to present evidence and arguments. Both appeals were allowed for statistical purposes, pending the AO's re-evaluation.

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