2016 (12) TMI 874 - HC - Income Tax

Court affirms deduction for housing project despite permission delay

The High Court upheld the Tribunal's decision, allowing the deduction under Section 80IB of the Income-tax Act for a housing project despite a delay in ... Eligibility of deduction under Section 80IB [10] - Held that:- As the assessee had already completed project/construction with respect to Tower “C” in Poddar Residency and penthouse, the assessee is entitled to deduction under Section 80IB [10] of the Act. No error has been committed by the learned Tribunal in holding in confirmation of the decision of CIT [A] that the assessee shall be entitled to deduction claimed under Section 80IB [10] of the Act. See Income Tax Officer Versus Saket Corporation [2015 (6) TMI 460 - GUJARAT HIGH COURT] - Decided in favour of assessee Issues:1. Interpretation of Section 80IB of the Income-tax Act.2. Validity of completion certificate issued by local authority.3. Denial of deduction under Section 80IB by Assessing Officer.4. Appeal before Commissioner of Income Tax [Appeals].5. Tribunal's decision confirming deduction under Section 80IB.6. Appeal by Revenue challenging Tribunal's decision.Analysis:The case involves a dispute regarding the deduction under Section 80IB of the Income-tax Act for a housing project named 'Poddar Residency.' The main contention was the completion date of the project and the validity of the Building Use Permission (BU Permission) granted by the local authority. The Assessing Officer initially denied the deduction, citing that the BU Permission for Tower 'C' was issued after the relevant date of 31st March 2012. The Commissioner of Income Tax [Appeals] overturned this decision, stating that the project was completed before the deadline, despite the BU Permission being granted later.The Tribunal upheld the decision of the CIT [A], leading the Revenue to appeal the matter. The High Court analyzed the facts, noting that most towers had received BU Permission before the deadline, with only Tower 'C' being granted permission after. However, as the project was substantially completed before the cutoff date, the deduction under Section 80IB was deemed valid. The Court referred to a similar precedent where deduction was allowed for completed units even if some permissions were granted later.Ultimately, the Court found no error in the Tribunal's decision and dismissed the Revenue's appeal, stating that the assessee was entitled to the deduction claimed under Section 80IB. The judgment emphasized that the completion of the project before the specified date was crucial for eligibility, regardless of the timing of specific permissions.