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TMI Blog2013 (10) TMI 1123X X X X Extracts X X X X X X X X Extracts X X X X ..... s less than 1 acre and ii) the assessee had not furnished a completion certificate) held that the assessee was not eligible for deduction u/s 80IB(10) and assessed the total income at Rs. 25,88,920/-. 3. On appeal, the CIT(A) following the decision of the ITAT in assessee's case for the AY 2008-09 in ITA No. 364/Hyd/2012 dated 07/03/2013 allowed the assessee's claim of deduction u/s 80IB(10). The Tribunal in AY 2008-09 rejected the Assessing Officer's view on both the aforementioned aspects and allowed the assessee's appeal with regard to denial of deduction u/s 80IB(10) of the Act. 4. Aggrieved by the order of the CIT(A), the revenue is in appeal before us. 5. None appeared on behalf of the respondent- assessee at the time of hearing before us. However, we proceed to decide the appeal after hearing the learned DR as the issue in dispute is covered by the decision of the Tribunal in assessee's own case for AY 2008-09. 6. The learned DR has not disputed the facts on record nor brought any contrary decision in this regard. 7. We find that the issue in dispute is squarely covered by the decision of the ITAT in assessee's own case for AY 2008-09 (supra) wherein the Tribunal held a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re us that the assessee's plot is more than one acre and, beyond his control, a potion of the plot was earmarked for roads. Being so, liberal interpretation of section 80IB is to be considered. In our opinion, if a portion of the plot area is earmarked for roads after the assessee entered into development agreement and the plan was duly sanctioned by the competent authority, we cannot find fault with the assessee to deny the deduction u/s. 80IB(10) of the Act. Accordingly, we are of the opinion that the area of the plot available to the assessee for housing project is more than 1 acre. Accordingly, the claim of the assessee cannot be denied on this ground if it is available at the time of entering into development agreement and deduction u/s. 80IB(10) is to be given to the assessee. 14. Regarding non-production of completion certificate, the learned AR submitted that the circumstances brought on record show that the project is completed. He relied on judgement of Gujarat High Court in the case of Manan Corporation vs. ACIT in TA No. 1053 of 2011 dated 3.9.2012 wherein held that there is no necessity of strict interpretation of section 80IB(10) of the Act as it is a beneficial prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the Revenue must not tax the profit of the project yearly on the basis of "Percentage Completion Method" but tax the entire profit on completion of the project by applying "Project Completion Method. 15. In view of the foregoing discussion, we direct the Assessing Officer to allow deduction u/s. 80IB(10) of the Act in the light of the order of the Tribunal in Hiranandani Akruti JV v. DCIT (39 SOT 498)." 15. Coming to the facts of the present case, the project was approved by the Municipal Corporation of Hyderabad vide their permit No. 48/49 f. No. 0069/CSC/TP-5/04 dated 3.11.2004. As per certificate of assessee's architect dated 3.9.2008, the project was completed on 1.10.2007. The learned AR submitted before us that the assessee has completed the project by this date and the assessee is following contract completion method. The claim for deduction u/s. 80IB(10) was made by the assessee for the first time which was denied by the authorities on the reason that there is no completion certificate. 16. The meaning of "date of completion" has been given in Explanation (ii) to clause (a) to section 80IB(10). Date of completion of construction would mean date on which completion cert ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uld 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 cannot insist on the completion certificate in the impugned year. This view has also been taken by CBDT in its Instruction No. 4 of 2009 dt. 30.6.2009, paras 2 to 4 of which are reproduced hereunder: "2. Clarifications have bee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 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 the project yearly on the basis of "Percentage Completion Method" but tax the entire profit on completion of the project by applying "Project Completion Method". 19. In view of the above discussion, the Assessing Officer is directed to consider the claim of the assessee in the light of the above observations." 8. As the issue in dispute is materially identical to that of the case decided by the Tribunal in assessee's own case for AY 2008-0 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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