2012 (4) TMI 852 - AT - Income Tax

Date of completion under Section 80IB(10) is the local authority's certified date even if certificate issued later; AO to re-examine.

The ruling treats the 'date of completion' for claiming deduction under Section 80IB(10) as the date certified by the competent local authority; a later ... Deduction under Section 80IB(10) - date of completion of housing project - completion certificate issued by Local Authorities - certified date of completion versus date of issuance of certificate - remand for fresh consideration and verificationDeduction under Section 80IB(10) - date of completion of housing project - completion certificate issued by Local Authorities - certified date of completion versus date of issuance of certificate - remand for fresh consideration and verification - Whether the assessee is eligible for deduction under Section 80IB(10) in respect of the housing project and whether the matter should be remanded to the Assessing Officer for verification of completion date certified by local authorities. - HELD THAT: - The Tribunal examined the statutory requirement that the date of completion of a housing project for the purpose of Section 80IB(10) is the date mentioned in the completion certificate issued by the Local Authorities, and held that the date mentioned in the certificate certifying completion is determinative rather than the physical date on which the certificate is issued. The Tribunal noted that where the assessee has intimated completion to the Local Authority and the Authority thereafter issues a certificate which expressly states that the project was completed prior to the statutory cutoff, the delay in issuance of the certificate by the Local Authority does not by itself defeat the assessee's entitlement. Applying that principle, the Tribunal directed that the assessee procure from the Municipal/Competent Authority a completion certificate clearly mentioning the date of completion, and remitted the matter to the Assessing Officer to decide afresh after verification of such certificate and after affording the assessee an opportunity of being heard. The present appeal by the Revenue was therefore allowed for statistical purposes only and the substantive issue was remanded for fresh consideration in the light of the foregoing direction. [Paras 3, 4]Matter remitted to the Assessing Officer to verify any completion certificate clearly mentioning the date of completion and decide the assessee's claim for deduction under Section 80IB(10) afresh after giving the assessee an opportunity of being heard; Revenue's appeal allowed for statistical purposes.Final Conclusion: The Tribunal held that the certificate of completion issued by the Local Authorities must state the date of completion and that the date mentioned therein, not the date of issuance, is determinative; directed the assessee to obtain such a certificate and remitted the matter to the Assessing Officer for fresh decision after verification and hearing; the Revenue's appeal was allowed for statistical purposes. Issues: Whether the assessee is entitled to deduction under Section 80IB(10) of the Income-tax Act, 1961 by treating the date of completion of the housing project as the date mentioned in a completion certificate/letter from local authorities, notwithstanding that the certificate may have been issued after 31.3.2008; and whether the matter should be remitted to the Assessing Officer for fresh decision on production of such certificate.Analysis: The governing legal provision is Section 80IB(10) of the Income-tax Act, 1961 and Explanation (ii) thereto which defines the date of completion as the date on which a completion certificate in respect of the housing project is issued by the local authorities. The Tribunal's earlier reasoning (reproduced and applied) recognises that where the local authority's certificate or contemporaneous municipal record clearly mentions a date of completion prior to 31.3.2008, the fact that the physical issuance of the certificate took place later does not by itself defeat eligibility; what is material is the date of completion as certified by the competent local authority. The tribunal therefore directs that the assessee may procure from the municipal/competent local authority a certificate or record clearly stating the date of completion and that, upon production, the Assessing Officer shall examine the document and decide the claim afresh in accordance with law, giving the assessee opportunity of hearing.Conclusion: The assessee may produce a completion certificate/municipal record specifying the date of completion; upon receipt, the Assessing Officer shall decide the claim for deduction under Section 80IB(10) afresh in accordance with law after providing the assessee an opportunity of hearing. The present appeal is allowed for statistical purposes only.