Assessee's Deduction Claim Upheld under IT Act; Completion Certificate Not Required

The ITAT allowed the assessee's claim of deduction under section 80IB(10) of the IT Act, directing the Assessing Officer to verify the completion of the housing project without insisting on a completion certificate. The ITAT emphasized that for projects approved before the amendment requiring a completion certificate, the law applicable at the time of approval should govern. The appeal by the Revenue was allowed for statistical purposes, remanding the matter for further verification and decision.

---

---

Issues Involved:
1. Erroneous order of CIT(A) on facts and in law.
2. Granting relief to the assessee under section 80IB.
3. Necessity of filing a completion certificate.
4. Ignoring the decision of ITAT in a similar case.

Detailed Analysis:

1. Erroneous Order of CIT(A) on Facts and in Law:
The Revenue contended that the CIT(A)'s order was erroneous both factually and legally. The CIT(A) had allowed the assessee's claim of deduction under section 80IB(10) of the IT Act, which the Revenue disputed.

2. Granting Relief to the Assessee Under Section 80IB:
The CIT(A) granted relief to the assessee by allowing the deduction under section 80IB(10), referencing the ITAT's order in the assessee's own case for AY 2006-07. The ITAT had allowed the deduction for the same housing project, establishing that if the project is completed within the stipulated time and other conditions are met, the deduction should be granted. The CIT(A) followed this precedent and directed the Assessing Officer to allow the deduction for the current year as well.

3. Necessity of Filing a Completion Certificate:
The Revenue argued that as per Explanation (ii) to clause (a) of section 80IB(10), which was effective from 01/04/2005, it was mandatory to furnish a completion certificate from the local authority to claim the deduction. The CIT(A) and ITAT disagreed, noting that the housing project was approved in 1999, and the requirement for a completion certificate was not applicable to projects approved before 01/04/2005. The ITAT cited several judgments, including CIT Vs. CHD Developers Ltd., which supported the view that the amended provision applies prospectively and not to projects approved before the amendment.

4. Ignoring the Decision of ITAT in a Similar Case:
The Revenue cited the ITAT's decision in M/s Sainath Estates Pvt. Ltd., which required a completion certificate for claiming the deduction. However, the ITAT distinguished the present case by noting that the housing project was approved before the amendment requiring the completion certificate. The ITAT emphasized that the law applicable at the time of project approval should govern the requirements, not subsequent amendments.

Conclusion:
The ITAT directed the Assessing Officer to verify the completion of the housing project without insisting on a completion certificate from the local authority. If the assessee could prove the project's completion within the stipulated time using other evidence, the deduction under section 80IB(10) should be allowed. The appeal by the Revenue was allowed for statistical purposes, meaning the matter was remanded for further verification and decision.

Order Pronounced:
The order was pronounced in the open court on 09/06/2014.

---