Housing project – Deduction u/s. 80-IB(10) – A. Ys. 2002-03 to 2007-08 – Architect certifying completion of project, application made to municipal corporation for issuance of completion certificate and fees paid therefor within time specified – Delay by municipal corporation for issuance of certificate – Delay cannot be attributed to assessee – Assessee is entitled to deduction

The assessee was a builder and a developer which undertook a mega housing project on a layout covering an area of about 25 acres. The project was approved in February 2000. The assessee completed part of the project and obtained a completion certificate for that part of the project from the municipal corporation on October 10, 2008. The assessee sought exemption u/s. 80-IB(10) for the A. Ys. 2002-03 to 2007-08 in respect of the profit made in these years from the sale of flats. The claim was denied by the Assessing Officer on the ground that the completion certificate was not issued on or prior to 31st March, 2008. The Tribunal allowed the assessee’s claim and held that in view of the fact that the assessee had made an application seeking a completion certificate prior to 31st March, 2008, the date on which the completion certificate was issued was not material. The delay in issuing the completion certificate was not attributable to the assessee. The delay was beyond its control.

On appeal by the Revenue, the Bombay High Court upheld the decision of the Tribunal and held as under:

“i) The Explanation is quite clear and did not introduce any uncertainty. In other words. The date of completion of a project has to be the date of issuance of completion certificate by the municipal authority. The architect of the project had given a certificate prior to 31st March, 2008. The assessee submitted the application to the municipal authority along with such certificate well in time on 25th March, 2008. The municipal authorities directed the assessee to deposit certain amount for issuance of completion certificate on 27th March, 2008 and the amount was, accordingly deposited on 31st March, 2008.

ii) The delay could not be attributed to the assessee. Therefore, the project for which exemption was sought was completed prior to 31st March, 2008, and entitled to deduction u/s. 80-IB(10).”