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TMI Blog2013 (8) TMI 74X X X X Extracts X X X X X X X X Extracts X X X X ..... claring total income of Rs. 27,11,540. The Assessing Officer completed the assessment u/s. 143(3) of the Act. The assessee claimed Rs 1,50,74,474 as deduction u/s. 80IB(10) of the Act. The Assessing Officer did not allow the deduction on the ground that the assessee had not submitted a completion certificate the prescribed form from the municipal authorities. The Assessing Officer made the addition on the reason that the AR of the assessee could not furnish the completion certificate of the apartment which was completed during the relevant financial year. When it was pointed out to the AR that deductions u/s 80IB(10) would be disallowed on the basis of non production of completion certificate by the municipal authority, the AR furnished a copy of Instruction No. 4/2009 dated 30.06.2009 issued by the Board wherein it is clarified as under:- "The deduction can be claimed on a year to year basis where the assessee is showing profit from partial completion of the project in every year." 4. The Assessing Officer observed that Form No. 10CCB, enclosed to return of income, the firm commenced its operation by 10.03.2006. In order to claim deduction u/s 80IB(10) of the Act, the firm shoul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... During the first appellate proceedings a copy of all the appeal documents was sent to the Assessing Officer. However, during appeal proceedings the written submissions of the assessee along with the certificates were also sent to the Assessing Officer on 1st November, 2012 for comments. Until the last date of hearing no comments were received from the Assessing Officer. The CIT(A), therefore concluded that the Assessing Officer does not wish to state anything further on the issue. Further, the certificates being in the nature of additional evidence and having an important bearing on the case are ordered to be admitted. 7. Before the CIT(A), the assessee stated that the completion certificate could not be submitted during assessment proceedings because the Assessing Officer never asked for the certificate and also did not provide any opportunity to the assessee to submit the same. Before the CIT(A), the assessee stated as under: "1. The assessment was completed under section 143(3) on 30.12.2011 determining the total income at Rs. 1,77,86,014 after disallowing the Assessee's claim of deduction under section 80IB(10) of the Income-tax Act, 1961 amounting to Rs. 1,50,74,474. 2. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wilful concealment of income particulars or furnishing of inaccurate income particulars whatsoever. 9. Here, it is humbly submitted that there was no enhancement whatsoever in the gross total income returned by the Assessee." 8. The CIT(A) was of the opinion that there is no merit in the argument of the assessee that no opportunity was provided for submission of the completion certificate. Notwithstanding the merits of the completion certificate, the facts are that the certificate in question is dated 20.09.2011 whereas the assessment order is dated 30.12.2011. As per the assessment order hearings took place on the following dates i.e. 02.08.2011, 09.12.2011 and 30.12.2011. It was well within the knowledge of the assessee and its highly qualified taxation advisers that without the completion certificate the concerned deduction would not be allowable. However, no such certificate was produced. It is incorrect on the part of the assessee to state that the completion certificate was never asked for and when required on 30 December 2011 there was no time to produce the same as the order was passed on the same day. This is a deliberate falsification of facts and misrepresentation befo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e at all as facts show that it was not issued by the end of 2011. Further, it is not a valid completion certificate and does not even bear the seal of the municipal authorities. It does not bear a valid dispatch number. Therefore, the CIT(A) concluded that the assessee did not complete the buildings in question up to the statutory date i.e., 30th of March. 2011. Accordingly, the deduction under section 80IB(10) has been denied by the CIT(A). Aggrieved, the assessee is in appeal before us. 12. We have heard both the parties and perused the material on record. The contention of the assessee is that the assessee commenced its business by 10.3.2006 and in order to claim deduction u/s. 80IB(10) the firm should have completed the project within 5 years from the end of the financial year in which the housing project is approved by the local authority. As per the provisions, the assessee should have completed the project on or before 31.3.2011. The project was completed by 31.3.2011 relevant to the assessment year 2011-12 and for which completion certificate was received on 20.9.2011. Further it was stated that though the assessee was following block-wise completion contract method of acc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ituation, factual as well as legal, so thereupon brings a dictum ought to be legally sustainable in the eyes of law. In the present situation, the Revenue is taxing the profit accepting the assessee's method of accounting but suggesting to grant deduction only on completion of the project. If the stand of the Revenue is accepted then only on completion of project an assessee would be entitled for deduction u/s. 80IB(10), then undisputedly an anomaly shall arise as to how and when the tax should be charged. This is not the scheme of the Act, to first tax an income in a particular year and grant deduction on that very income in a different later year i.e., on completion of the project as was canvassed by the Department. The accepted principle is that the year of the assessment of income and connected deduction shall fall in the same assessment year. If the Revenue is taxing the profit in the year under consideration on the ground that the assessee is adopting "Percentage Completion Method" then the natural corollary should be that the connected deduction ought to be granted simultaneously in this year or the other method of computation is that the Revenue must not tax the profit of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5 years from the end of the financial year it has received approval. Explanation under clause (a) only specified how to reckon the day of approval and date of completion. It would not mean that the assessee can have the benefit of section 80IB(10) only in the year of completion of the project, especially so, for an assessee not following project completion method for accounting its income. If otherwise interpreted, it would be equivalent to forcing an assessee to follow a particular method of accounting, which would never have been the intention of legislation. Intention would only have been that for the project as a whole, there should be certification from the relevant authority proving the commencement and completion, and not that a completion certificate should be there in every year of the project span. The certifications are for ensuring that the project span does not exceed the prescribed period and nothing more. Of course if such period exceeded the prescribed limit, Revenue would be well within its rights to withdraw the claims already allowed, following the procedure prescribed under the Act. Thus, the Assessing Officer need not insist on the completion certificate in thi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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