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TMI Blog2016 (5) TMI 319X X X X Extracts X X X X X X X X Extracts X X X X ..... ich is engaged in the business of development and construction of buildings. It filed its return of income for the relevant assessment year on 07.10.2010 declaring income of Rs. 9,24,627. In the computation of total income, the assessee had claimed deduction of Rs. 1,51,12,561 under section 80IB(10) of the Act. During the assessment proceedings under section 143(3) of the I.T. Act, the assessee submitted a note stating that the firm has undertaken construction of a residential complex at Hubli, Bangalore and that the assessee is satisfying all the conditions as per section 80IB(10). The A.O. examined the development agreement dated 23.03.2006, the sanctioned plan approved by the Bruhat Bangalore Mahanagar Palike, Bangalore dated 07.10.2005 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h the assessee's contention and observed that the assessee has to furnish the completion certificate issued by the local authorities for claiming deduction under section 80IB(10) of the Act. He therefore, disallowed the claim of deduction under section 80IB(10) and brought it to tax. Aggrieved, assessee preferred an appeal before the Ld. CIT(A) who confirmed the order of the A.O. and the assessee is in second appeal before us. 3. The Ld. Counsel for the assessee, Mr. S. Rama Rao, submitted that the project was in Karnataka and in the local Municipal Act, there is no provision for issuance of a completion certificate. He has relied upon the judgment of the Hon'ble Karnataka High Court in the case of CIT vs. Ittina Properties P. Ltd., (2014) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... we are of the view that the Tribunal has recorded a finding that the building was completed within the stipulated period and therefore de hors this certificate issued by the Panchayat after the building is completed, the assessee is entitled to the said benefit. In that view of the matter, we do not see any merit in these appeals. Accordingly the appeals are dismissed. 7. The finding of the Tribunal is solely on the facts of these cases and it cannot be cited as a precedent nor the judgment rendered, because we are also confining on the facts of these cases. 8. It is unfortunate that when the Parliament has extended the benefit of exemption from payment of Income Tax to a builder who undertakes group housing activity, the department i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing to him, the deduction under section 80IB(10) ought to be allowed to the assessee. 4. The Ld. D.R. on the other hand, relied upon the orders of the authorities below and further relied upon the judgment of the Hon'ble Madhya Pradesh High Court in the case of CIT vs. M/s. Global Realty in ITA.No.40 of 2012 dated 21.08.2015 wherein after taking note of the differences in the municipal acts of various states, the Hon'ble Madhya Pradesh High Court has held that the requirement of securing completion certificate issued by the local authority before the cut-off date is not directory but is mandatory and that the completion certificate granted by the local authority must bear the date of having been issued before the cut-off date. The Ld. D.R. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under section 80IB(10) is that the assessee has not filed the completion certificate issued by the local authority as an evidence that the project has been completed within the time specified under the Act. In the case before us, the undisputed facts are that the project is at Hubli, Karnataka. Under the Karnataka Municipal Corporation Act, there is no provision for issuance of completion certificate to any of the assessees. The Hon'ble Karnataka High Court has taken note of this provision in the case of Ittine Properties P. Ltd., (cited supra), and has held that the assessee cannot be called upon to perform an impossible act. In the case of Global Realities, the Hon'ble Madhya Pradesh High Court was dealing with the provisions of local Mu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mine and verify whether the total plinth declared by the individual owners includes the common area and if it is found that the built-up area of any of the flats is exceeding 1500 sq. feet, then the deduction under section 80IB(10) shall be computed proportionately. The issue with regard to filing of completion certificate for the claim of deduction under section 80IB(10), is covered in favour of the assessee by the decision of Hon'ble Karnataka High Court in the case of Ittina Properties P. Ltd., (cited supra) and therefore, the A.O. shall not insist upon the said certificate for allowing deduction under section 80IB(10) of the Act.
7. In the result, appeal of the assessee is allowed.
Order pronounced in the open Court on 24.03.2016. X X X X Extracts X X X X X X X X Extracts X X X X
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