2018 (1) TMI 1031 - AT - Income Tax

Tribunal Denies Deduction for Residential Project Due to Missing Completion Certificate

Mukeshbhai Vitthalbhai Patel, C/o V.P. Patel And Co. Adv. Versus Income-tax Officer, Ward – 3, Gandhinagar

The tribunal upheld the denial of Section 80IB(10) deduction for the residential project 'Shalin Tenements' in assessment years 2006-07 and 2007-08. ... Deduction u/s 80IB(10) denied - non submission of documentary evidence - Held that:- Learned counsel is very fair in the beginning itself in submitting that both the lower authorities have followed their respective orders for assessment years 2005-06 denying a similar claim qua the very residential project. He states that assessee’s appeal for preceding assessment year 2005-06 is pending before this tribunal. As directed the registry to find out necessary details of assessee’s alleged appeal stated to be pending. We are informed that a co-ordinate bench in assessment year 2005-06 had decided assessee’s appeal [2011 (7) TMI 1320 - ITAT AHMEDABAD] remitting the very issue back to the Assessing Officer on 22.07.2011. Case records in both these appeals reveal that AO had already finalized consequential proceedings well before issuing 148 notices in question. There is no other appeal pending in this tribunal as per our records. Therefore uphold the CIT(A)’s findings under challenge denying the Section 80IB(10) deduction in question wherein held despite granting numerous opportunity of being heard to the appellant, he has failed to attend before me to rebut the findings of the AO with documentary evidences. In absence of documentary evidences, the claim of the appellant cannot be allowed. - Decided against assessee Issues:Assessment years 2006-07 and 2007-08 - Reopening proceedings disallowing Section 80IB(10) deduction.Analysis:1. Validity of Reopening Proceedings:The counsel representing the assessee did not press for the challenge to the validity of reopening in both assessment years. As a result, the former identical ground challenging the validity of reopening was rejected.2. Section 80IB(10) Deduction:The main issue revolved around the denial of Section 80IB(10) deduction by both lower authorities for the residential project named 'Shalin Tenements.' The tribunal noted that a similar claim for the preceding assessment year 2005-06 was pending. The Assessing Officer had already finalized consequential proceedings before issuing the 148 notices. The tribunal upheld the CIT(A)'s findings denying the deduction, emphasizing that the AO had disallowed the claim based on the previous year's decision. The tribunal considered the appellant's submissions, which included details of the project, maintenance of accounts, and compliance with statutory provisions. The appellant argued that all conditions for the deduction were met, providing various evidence to support their claim. However, the tribunal, considering the AO's assessment order and the appellant's submissions, confirmed the disallowance of the deduction under Section 80IB(10) for both assessment years. The tribunal highlighted the appellant's failure to provide the 'Certificate of Project Completion' as a crucial factor in denying the deduction.3. Judicial Precedents and Legal Arguments:The appellant relied on case laws such as CIT Vs. Radhey developers and Medha Constructions p. Ltd. to support their claim for the deduction under Section 80IB(10). The appellant argued that the housing project was completed before the stipulated time limit, fulfilling all conditions for the deduction. The tribunal, however, based its decision on the lack of documentary evidence provided by the appellant, especially the absence of the 'Certificate of Project Completion,' which was deemed essential for claiming the deduction.4. Final Decision:Ultimately, the tribunal agreed with the Departmental Representative's contentions and rejected the assessee's substantive ground on merits. Both appeals by the assessee were dismissed, and the addition made by the AO for the assessment years 2006-07 and 2007-08 was confirmed.This detailed analysis of the judgment highlights the issues surrounding the denial of Section 80IB(10) deduction for the residential project 'Shalin Tenements' in the assessment years 2006-07 and 2007-08, emphasizing the importance of providing necessary documentary evidence to support such claims.