9911796707
TMI Blog2011 (11) TMI 638X X X X Extracts X X X X X X X X Extracts X X X X ..... er cannot be revised u/s 263 of the Act. We, therefore, find no merit in the order of the CIT in this regard. Interest on partners drawings - Held that:- The withdrawals were made out of the interest free funds. Similar was the position in the assessment year 2007-08 in which the partners credit balance was at ₹ 61,17,712/- and the withdrawal by the partner were at ₹ 26,06,753/-. Since the withdrawals were made out of the interest free funds, no corresponding disallowance of interest paid on loans, can be made. The CIT has not brought out anything in his order that the interest bearing funds were withdrawn by the partners. Moreover, this aspect was duly examined by the assessing officer by making necessary queries. Therefore, we are of the view that without bringing out anything on record that interest bearing funds were diverted for a non-business purpose, the CIT is not justified in holding that the assessing officer ought to have disallowed the corresponding interest on the withdrawal made by the partners of the assessee firm. Thus, we are of the view that the CIT has wrongly exercised his jurisdiction u/s 263 of the Act and we accordingly set aside his order. - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e thereto, it was submitted that the assessee has commenced housing project after obtaining approval from the local authority on 10.6.2004 and total residential units constructed are 150. These units were sold starting from financial year 2004-05 to 2008-09. During the course of assessment proceedings, it was explained that in Vijayawada, there was no practice of issuing project completion certificate and the date of levy of municipal tax of the relevant unit can be taken as the date of completion. In support of his claim, he filed the copy of letters dated 3.2.2011 of Vijayawada Municipal Commissioner addressed to Shri O. Shivshankar before the A.O., in which it was accepted by the municipal authorities that no completion certificates are issued to the constructions which were constructed according to the plan approved by the municipal corporation. 4. With regard to the interest on partners drawings, it was submitted that in assessment year 2006-07, no interest was charged or provided on partners drawings as well as capital because of partners credit balance was at ₹ 2,86,738/- and interest free amount received from Mega Estate was at ₹ 70,66,978/-. Therefore, inter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cipal authorities and the assessee has placed the municipal tax assessment records of all the flat owners, the same was rightly examined by the A.O. before accepting the claim of the assessees. The filing of completion certificate is not a condition precedent for allowing a claim of deduction u/s 80IB of the Act. It is merely a proof of evidence about the completion of project. Moreover, it is a debatable issue whether the filing of completion certificate is a condition precedent for allowing a claim of deduction u/s 80IB. The order of the assessing officer having accepted the completion of project on other evidence cannot be revised u/s 263 of the Act, as the assessing officer has taken one of the plausible view. So far as the interest on partners drawings are concerned, the Ld. Counsel for the assessee has submitted that during the course of assessment proceedings, a specific query was raised in this regard and it was explained before the A.O. with regard to the availability of the interest free funds and having examined these facts, the A.O. did not make a disallowance in this regard. Therefore, the assessing officer has examined both the issues before accepting the claim of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deduction u/s 80IB(10) of the Act? 8. In this regard, we have carefully perused the relevant provisions of section 80IB(10) and we are of the view that deduction u/s 80IB(10) can only be allowed if the housing project is approved and completed within the period prescribed in clause (a) subject to fulfillment of other conditions prescribed u/s 80IB(10) of the Act. With regard to the date of completion of construction of the housing project, it was clarified through explanation that date of completion of construction of the housing project shall be taken to be the date on which the completion certificate in respect of such housing project is issued by the local authorities. Nothing has been stated in this section about a situation wherever completion certificate are not being issued by the local authorities; how the date of completion can be ascertained. What we find that in this section through explanation is that the date of completion of construction can be taken as the date of completion certificate, where the completion certificates are issued by the local authorities. But in case where the completion certificates are not being issued by the local authorities, nothing has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion u/s 80IB(10) of the Act without obtaining a completion certificate. In this regard, we do not agree with this proposition of law as laid down by the CIT. The requirement of law u/s 80IB(10) for allowing a deduction under this section is only that the project should be commenced and completed within the period prescribed under clause (a) of this section 80IB(10) of the Act. To prove the completion of project within the specified period if the assessee is not able to file a completion certificate other evidence in this regard may be taken into account to determine the actual date of completion. Therefore, the filing of completion certificate is not a condition precedent for allowing a deduction u/s 80IB(10) of the Act. Moreover, we are dealing with the order of the CIT passed u/s 263 of the Act. It is a settled position of law that where the issue is debatable and the assessing officer has taken one of the plausible view, the assessment order cannot be revised u/s 263 of the Act. In the instant case, we are of the view that assessing officer has allowed the deduction u/s 80IB(10) after having examined the other evidence of completion of project which appears to be plausible view. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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