Housing project deduction under section 80IB(10) upheld despite delayed completion certificate and commercial area issue.

Deduction under section 80IB(10) was considered for housing projects where completion certificates were issued late by the local authority and the projects contained commercial area. The projects were treated as separate and independent, and the assessee had applied for completion or occupancy certificates in time, completed construction, and handed over possession in substance; the later certificate was treated as relating back to the date of application because the delay was beyond the assessee's control. The restriction on commercial area was held to be prospective and inapplicable to projects approved before 31 March 2005, and the assessee was also found compliant with the land ceiling condition. Deduction was therefore available.

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Issues: Whether the assessee was entitled to deduction under section 80IB(10) of the Income-tax Act, 1961 in respect of the housing projects, despite delay in issuance of completion certificate by the local authority and inclusion of commercial area in the project.

Analysis: The projects were found to be separate and independent. The assessee had applied for completion/occupancy certificate within time, had completed construction and handed over possession in substance, and the delay in issuance of the certificate was attributable to the local authority and technical objections beyond the assessee's control. The certificate issued later was treated as relating back to the date of application. On the commercial area issue, the projects had been approved before 31 March 2005 and the later restriction on commercial area under section 80IB(10) was held to be prospective and not applicable to such earlier approved projects. The assessee was also found to have complied with the relevant land ceiling-related condition.

Conclusion: The assessee was entitled to deduction under section 80IB(10); the disallowance was set aside.

Ratio Decidendi: Where a housing project approved before the restrictive amendment is substantially completed and the completion certificate is delayed for reasons beyond the assessee's control, deduction under section 80IB(10) cannot be denied merely because the local authority issued the certificate later or because the project contained commercial area beyond the later statutory limit.

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