2020 (10) TMI 406 - AT - Income Tax

Eligibility of deduction u/s.80IB(10) - area violation - completion certificate has been issued by MCGM as constructed as per approved plan - HELD THAT - As decided in own case 2017 (4) TMI 1513 - ITAT MUMBAI AO should be directed to examine the date of approval of the project in question and apply the said decisions on the said clause (Ex. Emgeen Holdings (P) Ltd 2011 (7) TMI 199 - ITAT MUMBAI (Mumbai) . Accordingly we order. AO shall grant reasonable opportunity of being heard to the assessee as per the set principles of natural justice. Appeals of the revenue are allowed for statistical purposes.

Summary

Issues:
1. Allowance of deduction u/s 80IB(10) of the Income Tax Act, 1961.
2. Fulfillment of conditions for eligibility of deduction u/s 80IB(10).
3. Completion certificate issuance and compliance with approved plan for deduction u/s 80IB(10).
4. Interpretation of section 80IB(10) and requirement for ambiguity.
5. Justification of granting proportionate deduction u/s 80IB(10) in the case.
6. Assessment of eligibility for deduction u/s 80IB(10) based on project completion method and survey findings.

Analysis:
The appeals before the Appellate Tribunal ITAT Mumbai concerned the allowance of deduction u/s 80IB(10) of the Income Tax Act, 1961 for the assessment years 2013-14 and 2014-15. The issues involved identical grounds raised by the revenue challenging the decisions of the ld. Commissioner of Income Tax (Appeals) regarding the eligibility of the assessee for the deduction. The primary contention was the fulfillment of conditions stipulated for the deduction u/s 80IB(10), specifically related to the completion certificate, approved plan compliance, and amalgamation of residential units. The revenue argued against the interpretation proposed by the assessee, emphasizing the clear language of section 80IB(10) and the legislative intent behind it.

The Tribunal noted that the assessee, a partnership firm engaged in real estate development, claimed deduction under section 80IB(10) based on the Project Completion Method. The ld. AO disallowed the deduction citing a survey action, statements, and reports indicating non-compliance with the conditions for claiming the deduction. The ld. CIT(A) reversed the disallowance based on previous orders and directed the ld. AO to grant the deduction for the relevant assessment year. The Tribunal referred to a previous decision in the assessee's case for A.Y. 2010-11, where the issue was remanded to the ld. AO for further examination based on specific directions regarding area and ownership violations in the project.

In light of the previous decision, the Tribunal remanded the current grounds raised by the revenue back to the ld. AO for a detailed assessment in accordance with the directions provided in the A.Y. 2010-11 case. Consequently, both appeals of the revenue were allowed for statistical purposes. The judgment emphasized the importance of examining compliance with statutory provisions and project-specific conditions for claiming deductions under section 80IB(10) while ensuring a fair opportunity for the assessee to present their case in accordance with natural justice principles.