Tribunal dismisses Revenue's objections, restores completion certificate issue for fresh review.

The Tribunal dismissed the Revenue's objections regarding the built-up area and the assessee's status as a developer. However, it restored the issue of obtaining the completion certificate to the AO for fresh adjudication. The appeals filed by the Revenue were allowed for statistical purposes, and the Cross Objections filed by the assessee were dismissed.

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Issues Involved:
1. Eligibility for deduction under section 80IB(10) of the Income Tax Act, 1961.
2. Compliance with conditions regarding built-up area of commercial establishments.
3. Requirement of obtaining a completion certificate prior to 31st March 2008.
4. Determination of the assessee's status as a developer.

Detailed Analysis:

1. Eligibility for Deduction under Section 80IB(10):
The primary issue revolves around the eligibility of the assessee, a cooperative society involved in the development and construction of residential projects, for claiming a deduction under section 80IB(10) of the Income Tax Act, 1961. The assessee claimed a deduction of Rs. 11,68,72,431 for A.Y. 2005-06 and Rs. 5,19,52,369 for A.Y. 2006-07.

The Assessing Officer (AO) denied the deduction on three grounds:
- The built-up area of commercial establishments exceeded the statutory limit.
- The assessee failed to obtain a completion certificate by the stipulated date.
- The assessee was not actively involved in the development and construction work.

2. Compliance with Conditions Regarding Built-up Area of Commercial Establishments:
The AO noted that the built-up area of the shops and commercial establishments in the project was 30,300 sq. ft., exceeding the limit of 5% of the aggregate built-up area or 2000 sq. ft., whichever is less, as prescribed under section 80IB(10)(d) inserted by Finance (No.2) Act, 2004 w.e.f. 01.04.2005. However, the CIT(A) allowed the claim, stating that these conditions were not in existence when the project was approved by the Development Authority before 01.04.2005.

The Tribunal upheld the CIT(A)'s decision, citing the Supreme Court's rulings in CIT vs. Sarkar Builders and CIT vs. Vatika Township Pvt. Ltd., which clarified that the amendment does not apply to projects approved before 01.04.2005.

3. Requirement of Obtaining a Completion Certificate Prior to 31st March 2008:
The AO disallowed the deduction because the assessee did not produce a completion certificate by 31st March 2008, a requirement introduced by the Finance (No.2) Act, 2004. The CIT(A) ruled that this condition was not applicable to projects approved before 01.04.2005.

The Tribunal admitted additional evidence submitted by the assessee, including letters and an architect's certificate indicating the project's completion before 31st March 2008. The Tribunal restored this issue to the AO for fresh adjudication, instructing the AO to examine the new evidence and decide accordingly.

4. Determination of the Assessee's Status as a Developer:
The AO argued that the assessee was not a developer because it had contracted out the development work to M/s Sahara India Commercial Corporation Ltd. (SICCL) and was not actively involved in the construction. The CIT(A) disagreed, stating that appointing a contractor does not negate the assessee's role as a developer.

The Tribunal supported the CIT(A)'s view, noting that the assessee bore the project's risks and responsibilities, and the initial years' assessments had accepted the assessee's status as a developer. The Tribunal emphasized that without disturbing the initial year's assessment, the Revenue could not disallow the deduction in subsequent years.

Conclusion:
The Tribunal dismissed the Revenue's objections regarding the built-up area and the assessee's status as a developer. However, it restored the issue of obtaining the completion certificate to the AO for fresh adjudication. The appeals filed by the Revenue were allowed for statistical purposes, and the Cross Objections filed by the assessee were dismissed.

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