2018 (3) TMI 590 - HC - Income Tax

Deduction u/s 80IB(10) denied for failure to obtain completion certificate on or before 31st March 2005 - Gram Panchayat authorization to issue the completion certificate - Held that - As decided in case of Sai Krupa Developers 2014 (10) TMI 868 - BOMBAY HIGH COURT prior to 31st March 2005 there was no requirement of obtaining any completion certificate. Thus deduction under Section 80IB(10) of the Act could not be denied for failure to obtain completion certificate on or before 31st March 2005. - Decided in favour of assessee.

Summary

Issues:
1. Validity of completion certificate issued by Gram Panchayat
2. Applicability of completion certificate conditions to projects approved before 31.03.2005

Issue 1: Validity of completion certificate issued by Gram Panchayat
The High Court heard an appeal challenging the Income Tax Appellate Tribunal's order related to the Assessment Year 2010-11. The Tribunal had allowed the Respondent's appeal based on a previous decision for the Assessment Year 2009-10. The Respondent, engaged in construction business, had claimed a deduction under Section 80IB(10) of the Income Tax Act but was denied due to not producing a completion certificate from CIDCO by a specified date. However, the Tribunal, following a previous case, held that before 31st March, 2005, there was no requirement for a completion certificate. The Revenue appealed to the High Court, citing a previous case involving similar issues, but the Court found no distinguishing features and dismissed the appeal. The Court concluded that deduction under Section 80IB(10) could not be denied for projects approved before 31st March, 2005, for failure to obtain a completion certificate.

Issue 2: Applicability of completion certificate conditions to projects approved before 31.03.2005
The High Court examined whether the conditions of a completion certificate were applicable to projects approved by the competent authority before 31.03.2005. The Respondent had been granted a commencement certificate by CIDCO on 1st March, 2004, and claimed a deduction under Section 80IB(10) for the Assessment Year in question. The Revenue disallowed the deduction due to the absence of a completion certificate by 5th March, 2008. The Tribunal, however, allowed the deduction based on the view that no completion certificate was required before 31st March, 2005. The High Court upheld the Tribunal's decision, emphasizing that the requirement to obtain a completion certificate did not exist in the provision before 1st April, 2005. Therefore, the Court held that the two questions raised did not give rise to any substantial legal issues and dismissed the appeal, with no order as to costs.