Housing project deduction and sub-contractor payments turn on completion evidence, book entries, and proof beyond suspicion.

Deduction under section 80IB(10) was considered available where the housing project satisfied the statutory completion requirement, including completion certificate and approval timelines, and earlier Tribunal reasoning supported the claim for the initial years. For later years, the recorded factual findings showed timely completion, so the deduction was treated as admissible. Payments to sub-contractors were also examined in light of construction activity, TDS compliance where applicable, and entries in the books. The presence of bills or papers at the premises was not treated as enough to prove bogus expenditure, and suspicion alone was insufficient without cogent contrary material.

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Issues: (i) Whether the assessee was entitled to deduction under section 80IB(10) of the Income-tax Act, 1961 for the assessment years 2006-07 to 2012-13. (ii) Whether the disallowance of payments made to sub-contractors was justified.

Issue (i): Whether the assessee was entitled to deduction under section 80IB(10) of the Income-tax Act, 1961 for the assessment years 2006-07 to 2012-13.

Analysis: The claim for deduction for assessment years 2006-07 to 2008-09 was examined against the requirement of timely completion of the housing project and completion certificate. For assessment years 2009-10 to 2012-13, the completion certificate and approval dates were found to satisfy the statutory time limit. The earlier Tribunal decision on the same project and the absence of contrary material in the search assessment were relied upon for the earlier years, while the factual findings of timely completion were accepted for the later years.

Conclusion: Deduction under section 80IB(10) was allowed for all the relevant assessment years, in favour of the assessee.

Issue (ii): Whether the disallowance of payments made to sub-contractors was justified.

Analysis: The payments were considered in the context of construction activity requiring labour and petty contractors. The assessee had made tax deduction at source wherever applicable, the expenditure was recorded in the books, and the presence of bills or related papers at the premises was not treated as conclusive proof of bogus payments. The Tribunal followed the cited coordinate bench reasoning to hold that the evidence did not justify treating the payments as non-genuine.

Conclusion: The disallowance of sub-contractor payments was deleted, in favour of the assessee.

Final Conclusion: The substantive additions were deleted and the assessee's appeals were accepted while the Revenue's appeals were rejected.

Ratio Decidendi: A deduction under section 80IB(10) cannot be denied where the statutory completion requirement is satisfied on the facts, and sub-contractor payments recorded in the books and supported by surrounding evidence cannot be disallowed merely on suspicion without cogent contrary material.

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