80IB(10) Deduction Denial for Housing Project: ITAT Restores ₹1.73 Cr Claim to AO Relying on SC Precedent on Architect’s Completion Certificate [Read Order]

Housing Project Deduction Claim Revived: ITAT Orders Reassessment of ₹1.73 Crore

In a significant development for real estate developers, the Income Tax Appellate Tribunal (ITAT) has directed the Assessing Officer (AO) to re-examine a claim for deduction under Section 80IB(10) of the Income Tax Act. The case involves a housing project where the assessee’s claim for a deduction of ₹1.73 crore was initially denied.

The Bone of Contention: Project Completion Certification

The primary dispute centered around the proof of project completion. The AO had previously rejected the claim, potentially citing insufficient or inadequate documentation to demonstrate that the housing project met the criteria for claiming the deduction within the stipulated timeframe. However, the ITAT has now intervened, emphasizing the importance of considering an architect’s completion certificate as valid proof.

Supreme Court Precedent Plays Crucial Role

The ITAT’s decision hinged on a precedent set by the Supreme Court. The apex court had previously ruled that an architect’s certificate can be accepted as a legitimate and reliable document to substantiate the completion of a construction project. This ruling significantly strengthens the position of developers seeking deductions under Section 80IB(10). This is particularly relevant for projects where obtaining other forms of official certification might face delays or bureaucratic hurdles.

Implications for Real Estate Developers

This ruling offers a major sigh of relief for real estate developers across India. It provides clarity on the acceptable forms of evidence for claiming deductions under Section 80IB(10). This decision will likely streamline the deduction claim process and reduce potential disputes with tax authorities. Developers should carefully review their documentation and ensure that architect certificates are included where applicable. This ITAT order underscores the importance of staying updated with evolving legal interpretations and precedents in tax matters.

What Next?

• The AO is now mandated to reassess the ₹1.73 crore deduction claim.
• The reassessment must be conducted in light of the Supreme Court’s ruling on architect’s certificates.
• The outcome of the reassessment will determine whether the assessee is ultimately granted the deduction.