2014 (7) TMI 302 - AT - Income Tax

Claim of deduction u/s 80IB of the Act Belated completion certificate - Held that - CIT(A) rightly followed the decision in M/s. Satish Bora & Associates Versus Assistant Commissioner of Income Tax 2011 (1) TMI 1215 - ITAT PUNE - deemed issue of occupancy certificate would be applicable provided there are no major deviations in the plan - There is no evidence on record to show that any such major deviation took place - objections raised after expiry of 21 days no major deviation or unauthorised construction if any has been shown, it would be just and proper to treat the date after expiry of 21 days from receipt of Completion Certificate as date of completion for the purpose of meeting the requirement of Explanation (ii) below Sec. 80IB(10)(a) with this understanding that PMC will continue with its action against the assessee to set the stated objections if any, at right - there is no need to interfere with the orders of the CIT(A) the order of the CIT(A) is upheld and the assessee is entitled to deduction u/s 80IB and obtaining a completion certificate belatedly is only a technical default which does not affect the claim of the assessee Decided against Revenue.

Summary

Issues:
Claim of deduction under section 80IB of the Income Tax Act for residential construction projects.

Detailed Analysis:

Issue 1: Claim of Deduction under Section 80IB
The appeal by Revenue challenged the denial of deduction under section 80IB for profits from three housing projects due to incomplete completion certificates before the specified deadline. The Assessee obtained approval for the projects within the stipulated period but faced delays in receiving the completion certificate from the GHMC. The A.O. relied on Explanation-(ii) to Section 80IB(10)(a) to disallow the deduction. However, the Ld. CIT(A) allowed the deduction following ITAT orders from previous years and examined relevant municipal laws and rules. The Ld. CIT(A) noted that the GHMC Act and Revised Building Rules were similar to those in Pune, where the issue of occupancy certificate, not completion certificate, was crucial. The Ld. CIT(A) concluded that the delay in obtaining the certificate was beyond the Assessee's control, and the technical default did not impact the eligibility for deduction under section 80IB.

Judgment Analysis:
The ITAT upheld the Ld. CIT(A)'s decision, emphasizing that there was no justification to interfere with the order. The ITAT concurred with the Ld. CIT(A) that the Assessee was entitled to the deduction under section 80IB despite the delayed completion certificate being a technicality. The ITAT's decision aligned with previous directions to the A.O. in prior years and consistent principles from other Coordinate Benches. Consequently, the Revenue's appeal was dismissed, affirming the Assessee's right to claim the deduction under section 80IB for the relevant assessment year.

This comprehensive analysis of the judgment highlights the key legal issues, arguments presented, and the final decision rendered by the ITAT, providing a detailed understanding of the case's intricacies and legal implications.