INCOME TAX ACT, 1961

Section 80-IB(10)

Deduction under section 80-IB(10) - Income from developing and building housing project - Completion certificate vis-à-vis conditions precedent - Assessee applied for completion certificate within stipulated period but the same was not issued by local authority

Assessee was engaged in business of promoters, builders and land developers. It claimed deduction under section 80-IB(10) in respect of a housing project. AO found that completion certificate in respect of the said project was not issued by local authority within 4 years from the date of commencement of project. Assessee submitted that he applied for completion certificate within the stipulated period but the same was not issued by the local authority. It was also submitted that his claim of having completed the said housing project was duly supported by a certificate issued by the architect of the said project. However, the AO by relying on Explanation (ii) below section 80-IB(10)(a), held that the housing project of the assessee was not completed within the specified period and accordingly, he disallowed the claim for deduction under section 80-IB(10). Held: It was found that all the NOCs required for the purpose of applying for completion certificate from local authority were obtained by assessee before the due date of completion. Further, the certificate from architect was furnished by the assessee confirming that construction of the housing project was duly completed before due date of completion. Further, the application for obtaining the completion certificate from the local authority was submitted by the assessee within the stipulated period and all the flats of the project were sold out and possession of the same were physically handed over by the assessee to the flat owners even before due date of completion. Therefore, as the claim of the assessee of having completed the project within the stipulated time was duly supported and substantiated by details and documents and as the assessee substantially complied with the requirements of section 80-IB(10), the AO was not justified in denying his claim for deduction under the said section merely on technical ground that the completion certificate was not issued by local authority before the due date of completion.

Relied:CIT-IV v. Tarnetar Corporation 2013 TaxPub(DT) 1397 (Guj-HC) M/s. Siddhivinayak Kohinoor Venture v. Addl. CIT (2014) 159 TTJ 390 (Pune) : 2014 TaxPub(DT) 0460 (Pune-Trib)

REFERRED :

FAVOUR : In assessee's favour

A.Y. :

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