Income Tax Appellate Tribunal (ITAT), Mumbai bench consisting of Aby T Varkey, Judicial Member and S Rifaur Rahman, Accountant Member held that deduction u/s 80IB (10) should not be denied merely because of non-acceptance of occupancy certificate.
The assessee firm, M/s. Atul Properties is engaged in the business of building of development of real estate. The original return of income declaring total income of Rs.29,75,430/-. Later, the case was selected for scrutiny and notice u/s 143(2) was issued and thereafter notice u/s 142(1) was also issued directing the assessee to file basic details such as copy of the return of income, copy of audited profit and loss account and balance-sheet along with the relevant papers. Pursuant to which the assessee filed the details as called for by the AO. The AO noted that assessee had claimed deduction u/s 80IB (10) of the Act for having developed housing project (Blue Meadows) which according to it has fulfilled the requisite conditions prescribed therein u/s 80IB (10) of the Act.
For the said project (Blue Meadow), the assessee had obtained fire NOC from the Fire Department and the licence for working/using of the lift was received and submitted its application to the MCGM along with the completion certificate in part dated 12.07.2011 and 24.12-2011 along with the certificate of structure by the architect. However, the same was not accepted by the MCGM. Meanwhile the possession of flats was given to 121 occupants in all the three Wings which fact has been acknowledged by the MCGM. And thereafter since the assessee realised that no occupation certificate (OC) was issued by MCGM, it withdrew its claim of deduction u/s 80IB (10) of the Act on 27.03.2012 and the assessee filed the revised return declaring total income of Rs.23,62,14,990/-. The AO completed the scrutiny assessment based on the original return of income and disallowed the deduction claimed u/s 80IB (10) of the Act of Rs 23,32,39,561/-.
The CIT allowed the claims of the assessee hence the Revenue is in appeal before the Tribunal. The Tribunal held that “Deduction u/s 80IB(10) of the Act should not be denied merely because MCGM did not accept/issue occupancy certificate on 05.01.2012 or before 31.03.2012”.
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