2021 (4) TMI 404 - HC - Income Tax

Court dismisses Revenue's appeal challenging deductions under Section 80IB(10)

PR. COMMISSIONER OF INCOME TAX-1, THE JOINT COMMISSIONER OF INCOME TAX, (OSD) Versus M/s ESTEEM ROYALE

The Court dismissed the appeal filed by the Revenue challenging the Tribunal's decision on deductions under Section 80IB(10) for the assessment years ... Deduction u/s 80IB(10) - Mandation of submitting project completion certificate - Whether Tribunal is justified in directing the AO to allow deduction under Section 80IB(10) without observing the violation of Section 310 of the Karnataka Municipal Corporation Act, which directs the assessee to apply for completion certificate only after the project is completed: whereas it is evident from records that the assessee has submitted application for completion certificate on or before 31.03.2009 which is mandatory as per provisions of Section 80IB(10) of the Act.? - HELD THAT:- As the substantial questions of law involved in this appeal stands concluded against the Revenue and in favour of the assessee in view of the following decisions rendered by the Hon'ble Supreme Court, by the Bombay High Court and by this Court in P. SHYAMARAJU VS.KEB, BANGALORE [1996 (11) TMI 477 - KARNATAKA HIGH COURT], HINDUSTAN SAMUH AWAS LIMITED [2015 (10) TMI 2306 - BOMBAY HIGH COURT], MAJESTIC DEVELOPERS [2019 (11) TMI 1447 - KARNATAKA HIGH COURT] and NARAYAN BUILDERS [2016 (2) TMI 1298 - KARNATAKA HIGH COURT] Thus the substantial questions of law involved in this appeal are answered against the Revenue and in favour of the assessee. In the result, we do not find any merit in the appeal and the same is hereby dismissed. Issues:Appeal under Section 260-A of the Income Tax Act, 1961 against the judgment of the Income Tax Appellate Tribunal for the assessment years 2008-09 and 2012-13. Substantial questions of law: (1) Deduction under Section 80IB(10) without observing violation of Section 310 of the Karnataka Municipal Corporation Act, (2) Application of a previous court decision to the present case.Analysis:The appeal was filed by the Revenue challenging the Tribunal's decision regarding deductions under Section 80IB(10) for the assessment years 2008-09 and 2012-13. The substantial questions of law raised included whether the Tribunal was justified in allowing the deduction without considering the violation of Section 310 of the Karnataka Municipal Corporation Act, which requires the completion certificate application only after project completion. The assessee had submitted the application before the deadline, as mandated by Section 80IB(10), but the Tribunal's decision was questioned. Additionally, the Tribunal's application of a previous court decision involving a different scenario was also challenged.During the hearing, the Senior counsel for the assessee argued that the substantial questions of law raised in the appeal had been settled in favor of the assessee by various decisions, including those by the Hon'ble Supreme Court, Bombay High Court, and the Court itself. The counsel cited specific cases such as P. SHYAMARAJU VS.KEB, CIT VS. HINDUSTAN SAMUH AWAS LIMITED, ACIT VS. MAJESTIC DEVELOPERS, and ITO VS. NARAYAN BUILDERS to support the contention that the decisions were in favor of the assessee.The Revenue's counsel failed to counter the submissions made by the Senior counsel for the assessee regarding the settled nature of the substantial questions of law based on the cited judgments. Consequently, the Court relied on the previous decisions and found in favor of the assessee. The Court concluded that the substantial questions of law raised in the appeal were answered against the Revenue and in favor of the assessee. As a result, the appeal was dismissed, with the Court finding no merit in the Revenue's arguments based on the precedents and legal interpretations provided in the cited judgments.