2018 (10) TMI 1031 - AT - Income Tax

Denial of claim of deduction u/s 80IB - non issuance of completion certificate - deemed certificate - Held that - As rightly observed by the Tribunal, though the assessee has completed the project by 31.03.2008 and had requested the local authorities for issuance of completion certificate since there was no provision under the GHMC Act of 1985 for issuance of completion certificate, the same was not furnished by the assessee. However, as per section 455 of the GHMC Act and sub section (2) thereof, no person shall occupy or permit to be occupied any such building, or use or permit to be used the building or part thereof affected by any work, until (a) Permission has been received from the Commissioner in this behalf ; or (b) The Commissioner has failed for twenty-one days after receipt of the notice of completion to intimate his refusal of the said permission. If the Commissioner does not intimate refusal to give the occupancy certificate, then it is deemed to have been given. In these circumstances also, we hold that the assessee is eligible for deduction u/s 80IB(10) as the relevant A.Y before us i.e. A.Y 2007-08 which is subsequent to the initial A.Y of the claim and the Tribunal has already allowed the deduction in the earlier A.Ys. - Decided in favour of assessee.

Summary

Issues involved:
Claim of deduction u/s 80IB of the Income Tax Act for the A.Y 2007-08.

Detailed Analysis:

1. Background and Assessment Proceedings:
The assessee, an AOP engaged in land development and house construction, filed its return for A.Y 2007-08 claiming a deduction u/s 80IB. The AO disallowed the claim as completion certificate wasn't furnished, leading to an appeal before the CIT (A) and subsequently before the ITAT.

2. Assessee's Argument:
The counsel argued that the project commenced in A.Y 2003-04 and completion certificate was not mandatory for projects approved before 1.4.2005. Referring to previous Tribunal decisions, it was highlighted that the completion certificate issue was not applicable to projects approved prior to the amendment.

3. Revenue's Stand:
The DR supported the lower authorities' decisions to disallow the deduction based on non-furnishing of completion certificate.

4. Tribunal's Decision and Precedents:
The ITAT referred to a previous decision in the assessee's case, emphasizing that the project started after 01-10-1998, making the completion certificate requirement irrelevant. Citing the Supreme Court's ruling in another case, the Tribunal upheld that the amendment's conditions should not apply retroactively.

5. Occupancy Certificate and GHMC Act:
The Tribunal noted that under the GHMC Act, if the Commissioner doesn't refuse occupancy within 21 days of completion notice, it is deemed granted. This provision further supported the assessee's eligibility for the deduction.

6. Final Verdict:
Given the completion of the project by 31-03-2008 and the absence of a provision for completion certificate issuance, the Tribunal allowed the assessee's appeal, affirming eligibility for deduction u/s 80IB(10) for A.Y 2007-08.

In conclusion, the ITAT Hyderabad allowed the assessee's appeal, emphasizing that the completion certificate requirement did not apply to projects approved before the relevant amendment, thus upholding the deduction claim u/s 80IB for the A.Y 2007-08.