TaxTMI 
TaxTMI 
2011 (11) TMI 638
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....-08. Assessee claimed deduction u/s 80IB(10) in respect of its housing project. Deduction claimed and allowed by the assessing officer by the assessing officer in the assessment order for the assessment year 2005-06 & 2006-07 passed u/s 143(3) read with section 153C and for the assessment year 2007-08 passed u/s 143(3). On scrutiny, the CIT observed that as per the record the housing project was approved on 10.6.2007 and was completed by September, 2008. As per section 80IB(10), a completion certificate issued by the local authority is a necessary condition for availing deduction u/s 80IB(10) and since the completion certificate as required was not furnished, the A.O. has erred in allowing the deduction u/s 80IB(10). The CIT accordingly held that assessment order for the assessment year 2005-06 to 2007-08 in which claim of deduction u/s 80IB(10) was wrongly allowed, is erroneous and prejudicial to the interest of the revenue. 3. The CIT has also noticed that partners of the assessee firm has drawn a sum of Rs. 60,25,973/- and Rs. 26,06,753/- during the assessment year 2006-07 & 2007-08 respectively. But no interest was charged on these drawings. However, the assessee has claimed i....
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....d the A.O. to re-examine the issue afresh. 5. Aggrieved, the assessee has preferred an appeal before the Tribunal with the submission that before the assessing officer, assessee has placed the relevant evidence to prove that the project was completed within the prescribed period. In Vijayawada, there was no practice of issuing a project completion certificate and the date of levy of municipal tax for the relevant unit can be taken as a date of completion and in this regard. The assessee has filed the municipal tax assessment of various flat owners to whom the residential units were sold with the submission that after having the evidence duly examined the assessing officer has allowed the claim of deduction u/s 80IB of the Act. On merit, the Ld. Counsel for the assessee has submitted that for allowing a deduction u/s 80IB of the Act, the project should be approved and completed within the prescribed period. The proof of completion to be completion certificate was simply defined in the explanations to section 80IB(10) but in case when the completion certificate is not available, other evidence should be looked into to decide whether the project is completed or not. In the instant ca....
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...., the CIT has rightly set aside his order after having observed that the assessment order is erroneous and prejudicial to the interest of the revenue. 7. Having heard the rival submissions and from a careful perusal of the record, we find that there is no dispute about the approval of the project and its completion within the prescribed period. The CIT himself has observed in his order that as per the record, housing project was approved on 10.6.2004 and was completed by September, 2008. He has set aside the order of the assessing officer only for the reasons that deduction u/s 80IB(10) cannot be granted in the absence of a completion certificate. Undeniably, the completion certificate was not filed before the assessing officer. But the assessee has filed the municipal tax assessment of various flat owners to whom the residential units were sold to establish that the housing project was completed even before September, 2008. It was also stated before the assessing officer that in Vijayawada, there is no practice of issuing project completion certificate and the date of levy of municipal tax of the relevant unit can be taken as a date of completion. Now the question arise, whether ....
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....ii) In a case where a housing project has been, or, is approved by the local authority on or after the 1st day of April, 2004 [but not later than the 31st day of March, 2005], within four years from the end of the financial year in which the housing project is approved by the local authority; (iii) In a case where a housing project has been approved by the local authority on or after the 1st day of April, 2005, within five years from the end of the financial year in which the housing project is approved by the local authority. Explanation.-For the purpose of this clause,-- (i) In a case where the approval in respect of the housing project is obtained more than once, such housing project shall be deemed to have been approved on the date on which the building plan of such housing project is first approved by the local authority. (ii) The date of completion of construction of the housing project shall be taken to be the date on which the completion certificate in respect of such housing project is issued by the local authority." 9. In the instant case, no dispute was raised by the CIT with regard to the completion of a project within the prescribed period. His grievance was o....