2019 (6) TMI 712 - HC - Income Tax

Deduction u/s 80IB(10) - project was complete on or before 31.03.2009 when occupation certificate was accorded only in respect of 9206.30 Sq.Mtr. against sanction of 11960.15 Sq. Mtr. - HELD THAT - Record of the case would show that CIT (Appeals) and Tribunal concurrently came to the conclusion that the assessee had proposed the housing project comparison of buildings A,B,C,D,E and F. Out of a total area of 11960.15 sq. meters to be constructed as per the building construction permission, the assessee had completed construction of 11,592.43 sq.meters. Necessary completion certificates from the local authority were also issued from time to time and last such certificate was issued on 1st December, 2008. Thus, the construction was completed and duly certified by the local authority before 31st March, 2009. The record further shows that the buildings E and F were not to be constructed and the land was to be handed over to the landlord on account of further developments and dispute. This was the only remaining portion of the construction out of the originally sanctioned plan. The assessee had claimed deduction in respect of the income arising out of sale of construction only for which completion certificates were issued. That being the position, we do not find any error in view of the Tribunal granting deduction under Section 80IB(10) - Decided against revenue

Summary

Issues:
1. Interpretation of completion of a housing project for claiming deduction under Section 80IB(10) of the Income Tax Act, 1961.

Analysis:
The appeal before the Bombay High Court involved a dispute regarding the completion of a housing project for claiming deduction under Section 80IB(10) of the Income Tax Act, 1961. The Assessing Officer disallowed the claim, alleging that the project was not completed before the prescribed deadline of 31st March, 2009. However, the CIT (Appeals) found that the assessee had fulfilled all necessary conditions, including completion of the housing project before the due date. The CIT (Appeals) highlighted that the buildings A & B, on which the deduction was claimed, had received occupation certificates before the deadline, indicating their completion. The AO's objection regarding buildings E & F, not part of the claimed deduction, was dismissed as irrelevant by the CIT (Appeals). The High Court noted that the construction of 11,592.43 sq. meters out of the sanctioned 11,960.15 sq. meters was completed and certified by the local authority before 31st March, 2009.

The Tribunal, affirming the CIT (Appeals) decision, concluded that the completion certificates were issued for the constructed area before the deadline, and the remaining portion involving buildings E & F, not part of the claimed deduction, did not impact the eligibility for deduction under Section 80IB(10). The High Court concurred with the Tribunal's findings, emphasizing that the completion and certification of the constructed area were sufficient to meet the requirements of the law. The High Court held that no error was found in the Tribunal's decision to grant the deduction under Section 80IB(10) and dismissed the Income Tax Appeal, stating that no question of law arose from the case.