Tribunal overturns CIT(A)'s decision, denies deduction under section 80IB(10)

The Tribunal allowed the Revenue's appeal, overturning the CIT(A)'s decision and restoring the AO's order. The assessee's cross-objection was dismissed, affirming the ineligibility for deduction under section 80IB(10) and the applicability of section 115JC.

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Issues Involved:
1. Eligibility for deduction under section 80IB(10) of the Income-tax Act, 1961.
2. Date of completion of the housing project.
3. Date of approval of the housing project by the local authority.
4. Levy of tax under section 115JC of the Income-tax Act.

Detailed Analysis:

1. Eligibility for Deduction under Section 80IB(10):
The primary issue raised by the Revenue was whether the assessee was eligible for a deduction of Rs.45,89,97,747/- under section 80IB(10) despite allegedly failing to complete the project within the stipulated time. The assessee, a Builder and Developer, had claimed this deduction for the housing project "Teerth Towers." The Assessing Officer (AO) rejected the claim, arguing the project was not completed within five years from the end of the financial year in which it was approved. The CIT(A) overturned this decision, but the Revenue appealed.

2. Date of Completion of the Housing Project:
The Tribunal examined whether the project was completed within the required five-year period. According to section 80IB(10), the construction must be completed within five years from the end of the financial year in which the project was approved. The completion date is defined as the date on which the completion certificate is issued by the local authority. The AO found the project was completed on 30-03-2013, more than six years after the approval date. The assessee argued that the project was actually completed on 07-03-2012, based on a letter to the District Collector. However, the Tribunal found discrepancies in the letter dated 07-03-2012 and concluded the project was not fully completed by 24-09-2012. Thus, the Tribunal determined the project was completed after 24-09-2012 but before 30-03-2013, failing to meet the five-year requirement.

3. Date of Approval of the Housing Project by the Local Authority:
The Tribunal addressed the timeline for the project's approval. The AO argued the approval date was 30-03-2007, while the assessee contended it should be 22-08-2007, when the demarcation certificate was issued. Section 80IB(10) requires the construction to be completed within five years from the end of the financial year in which the project is approved. The Tribunal held that the approval date was 30-03-2007, as the demarcation certificate was a procedural requirement and not the approval itself. Thus, the five-year period ended on 31-03-2012, and the project completion beyond this date disqualified the assessee from the deduction.

4. Levy of Tax under Section 115JC:
The assessee challenged the levy of tax under section 115JC, arguing it should not apply because the housing project commenced in an earlier year. Section 115JC mandates that if the regular income tax payable is less than the alternate minimum tax, the adjusted total income is deemed the total income for that year. The Tribunal found no merit in the assessee's argument, stating section 115JC applies to the previous year as a whole and does not exclude housing projects approved before its enactment. The Tribunal dismissed the assessee's challenge to the levy of tax under section 115JC.

Conclusion:
The Tribunal allowed the Revenue's appeal, overturning the CIT(A)'s decision and restoring the AO's order. The assessee's cross-objection was dismissed, affirming the ineligibility for deduction under section 80IB(10) and the applicability of section 115JC.

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