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Income Tax Appellate Tribunal, DELHI BENCH ‘A’ NEW DLEHI
Before: SHRI ANIL CHATURVEDI & SHRI N.K. CHOUDHRY
Since the facts and question of law involved in both the appeals are similar therefore both theappeals are being disposed of by this consolidated order, for the sake of convenience and brevity.
First we will decide the appeal of the Revenue department for the assessment year 2005-06.
3.1 In the instant case, the Assessee had claimed deduction u/s. 80IB(10) of the Act for a sum of Rs.2,43,22,929/- qua eligible projects, that is –
(i) East End Housing Project Rs.4,46,538/- (ii) AvantikaAakiriti Housing Project Rs.33,73,860/- (iii) Golf Link-I Housing Project Rs.51,25,834/- (iv) Golf Link-II Housing Project Rs.39,03,429/- (v) Green Glace-II Housing Project Rs.80,39,006/- (vi) Green Glace-II Housing Project Rs.34,34,262/- ------------------- Rs.2,43,22,929 -------------------
As per the directions of the Hon’ble ITAT in para No. 42 3.2 at page 30 of its order28-03-2017 the issue was verified by the Assessing Officer and vide order dated 27.11.2017 disallowed the said deduction on the ground that completion certificates were not produced during the assessment proceedings as well as during the appellate proceedings in the [3] office of ld. CIT(A)-I, hence, no relief in this regard is being allowed.
Being aggrieved by the action of the Assessing Officer in disallowing the claim, the Assesseepreferred first appeal before the ld. Commissioner, who during the appeal proceedings, sought remand report from the Assessing Officer, wherein the Assessing Officer verified completion certificates qua the completed projects referred above on test check basis and found the same in order. Therefore, the ld. Commissioner while relying upon the remand report of the Assessing Officer, directed the Assessing Officer to allow the claim of the Assessee for deduction u/s. 80IB(10) of the Act for the A.Y. under consideration in respect of residential units with built up areas less than 1000 square feet in accordance with the direction of the Hon’ble ITAT, Delhi.
The Revenue Department being aggrieved preferred the instant appeal and in support of its case submitted that the Assessing Officer has not made any enquiry regarding the correctness and +genuineness of the completion certificates submitted by the Assessee and has merely verified the same on test check basis during the remand proceedings. Secondly, the Assessing Officer, in his order u/s. 254/143(3) dated 27.11.2017 categorically stated that the completion certificates had not been produced during the assessment proceedings as well as during the appellate proceedings.
[4] Further, the ld. Commissioner did not discuss about fulfilling all the conditions for the eligibility of deduction u/s. 80IB(10) of the Act other than verification of completion certificates.
6 We observe that in the assessment year 2004-05, identical issue was involved, wherein the Revenue department against the order of the then ld. CIT(Appeals)has also preferred the appeal before the Tribunal . The Hon’ble coordinate Bench at Delhi in vide order dated 31.05.2022 upheld the action of the ld. Commissioner in allowing the deduction claimed u/s. 80IB(10) of the Act. For ready reference and brevity, the concluding part of the order of the Hon’ble coordinate Bench is reproduced herein below:
“5. Heard the parties and perused the material available on record. The case of the Revenue is that the Assessee had failed to produce the completion certificates during the assessment proceedings as well as during the appellate proceedings and as per requirement of provisions of section 80IB(10) of the Act, the housing project involved should have been completed, for which the deduction u/s. 80IB(10) of the Act has been claimed.
Further, the Assessing Officer during the remand proceedings has not made any enquiry regarding the correctness and genuineness of the completion certificates submitted by the assessee and has merely verified the same on “test check basis”.
5.1 We have perused the orders passed by the authorities below and given our thoughtful consideration to the conclusion drawn by the ld. Commissioner while allowing deduction to the assessee and find that during the course of [5] appellate proceedings before the ld. Commissioner, the Assessing Officer vide its remand report dated 04.01.2019 had reported as under:
“In connection with the above, your goodself has directed the undersigned to examine the documents filed by the assessee vide letter dated 13.11.2018. The assessee company has been given an opportunity of being heard vide letter dated 22.11.2018. In response to the same, Assessee’s AR appeared and the issues involved have been discussed. The completion certificates in respect of the following projects have been verified on test- check basis and the same has been found to be in order”:
(i). East End Housing Project; (ii). AvantikaAkriti Housing Project; (iii). Golf Link-I Housing Project; (iv). Golf Link-II Housing Project; (v). Green Glade-I Housing Project; and (vi). Green Glade-II Housing Project
5.2 The learned Commissioner, while considering the remand report filed by the AO, wherein the completion certificates of the projects of the Assessee have been verified on test-check basis and found to be in order, allowed the deduction u/s. 80IB(10) of the Act for the assessment year under consideration and therefore the main contention of the Revenue Department is that the completion certificates have not been produced during the assessment proceedings as well as appellate proceedings, is devoid of merits.
[6]
We may clarify that the Assessing Officer has to assess and determine the claim of the Assessee as per the directions of the higher authority but by using his own wisdom, which in the instant case has been correctly done by verifying the completion certificates on ‘test check basis’ and found the same in order. Hence, on the aforesaid consideration and analyzations, we are inclined not to interfere with the order under challenge, as the same does not suffer from any perversity and impropriety and/or illegality. Consequently, the appeal filed by the Revenue is liable to be dismissed.
In the result, the appeal filed by the Revenue Department is dismissed.”
6.1 We observe that it is not the case of the Assessing Officer or the revenue Department that the conditions for eligibility of deduction u/s. 80IB(10) other than verification of completion certificates have not fulfilled by the Assessee or not verified by the AO in the Remand proceedings. The Assessing Officer in its order dated 27.11.2017 passed u/s. 254/143(3) of the Act, disallowed the deduction claimed only on the ground that completion certificates were not produced during the assessment proceedings as well as during the appellate proceedings in the office of the CIT(Appeals), hence, no relief in this regard is being allowed.
6.2 We find that while allowing the claim u/s. 80IB of the Act to the Assessee, the ld. Commissioner sought the remand report from the Assessing Officer, who in the remand proceedings verified the completion certificates on test check basis and found the completion certificates in order and [7] accordingly, the ld. Commissioner while relying upon the remand report, allowed the claim of the Assessee qua deduction u/s. 80IB(10) of the Act. Therefore, we are of the considered view that the contention with regard to the non- fulfilling of twin conditions for the eligibility of deduction u/s. 80IB(10) of the Act and not making any enquiries regarding correctness and genuineness of the completion certificates submitted by the Assessee, is not tenable and hence, the same is dismissed. On the aforesaid analyzations and considerations, the appeal of the Revenue is liable to be dismissed, as the order under challenge does not suffer from any perversity, impropriety and/or illegality.
6.3 In the result, the appeal filed by the revenue department stands dismissed.
Now coming to the appeal i.e. filed by the Assessee, we observe that on the similar facts and circumstances, the Assessing Officer disallowed the deduction of Rs.96,12,352/-, which was claimed by the Assessee u/s. 80IB(10) of the Act, on the ground that the Assessee has not produced completion certificates of all the projects/units within the prescribed time. Therefore, the Assessee is not entitled for deduction of Rs.97,00,719/- claimed u/s. 80IB(10) of the Act.
7.1 The Assessee being aggrieved, preferred the first appeal against the assessment order dated 27.11.2017 passed u/s. 254/143(3) of the Act before the ld. Commissioner, who vide impugned order in para No. 5.3.2 of its order, though taken
[8] into consideration the remand report dated 04.01.2019 wherein completion certificates in support of the projects have been verified on test check basis and has been found the same in order, however, declined to allow the claim of deduction u/s. 80IB of the Act on the ground “thatin the present case, Hon’ble ITAT has directed the A.O. to verifiy the completion certificates. Inthe operating part of the order, Hon’ble ITAT has allowed the appeal of the Revenue without any direction.”
7.2 The controversy in the instant case revolves around the completion certificates of the projects, on which the Assessee has claimed deduction u/s. 80IB(10) of the Act. Once, the completion certificates on test check basis found to be in order in the remand proceedings conducted by the Assessing Officer on the direction of the ld. Commissioner, and the same has been accepted by the ld. Commissioner as it reflects in the impugned order, nothing survives against the claim of deduction of the Assessee. As the facts and circumstances of the instant case are exactly similar as involved in Assessee’s case for A.Y. 2004-05 and even 2005-06 as well, therefore, we are inclined to allow the appeal of the Assessee. Consequently, the claim of the Assessee qua the deduction claimed u/s. 80IB(10) of the Act is allowed. In the result, the appeal of the Assesseeis allowed.
[9]
In the result, Revenue Department stands dismissed and filed by the Assessee stands allowed.
Order pronounced in open Court on 27/06/2022.