DEPUTY COMMISSIONER OF INCOME TAX, JHANDEWALAN, DELHI V. SAHARA INDIA SAHAKARAI AWAS SAMITI LTD, LUCKNOW

ITA 3092/DEL/2023

AI Insights

The case involves the Deputy Commissioner of Income Tax (DCIT) appealing against the orders of the Commissioner of Income Tax (Appeals) which allowed the Sahara India Sahakari Awas Samiti Ltd. to claim deductions under section 80IB(10) for the Assessment Years 2005-06 and 2006-07. The primary contention was whether the assessee was eligible for deductions despite not obtaining a completion certificate from local authorities by the stipulated date, as required by the amended section 80IB(10) effective from April 1, 2005. The Tribunal's decision was influenced by various judicial precedents which supported the view that the conditions for deductions under section 80IB(10) as they existed prior to the amendment applied to the assessee's case.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 126207 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-04-2025
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2006-2007
• Other Referred Cases: CIT V. Sarkar Builders, CIT-I vs. CHD Developers Ltd., CIT V. Brahma Associates, CIT vs. B.M. & Brothers, PCIT vs. Sahara States, Gorakhpur
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ASHISH TRIPATHI
• Assessee Lawyers: AJAY VOHRA
• Keywords: Set aside; Opportunity of being heard; Additional evidence; Reassessment proceedings; Competent authority
• Section: 143(3); 143(2); 13; 139; 80IB

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘A’: NEW DELHI BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER and SHRIS.RIFAUR RAHMAN, ACCOUNTANT MEMBER ITA No.3091/DEL/2023 (Assessment Year: 2005-06) ITA No.3092/DEL/2023 (Assessment Year: 2006-07) DCIT, vs. Sahara India Sahakari Awas Samiti Ltd., Delhi. 1, Kapoorthala Complex, Aliganj, Lucknow – 226 024 (Uttar Pradesh). (PAN : AAGFS9037D) (APPELLANT) (RESPONDENT) ASSESSEE BY : Shri Ajay Vohra, Sr. Advocate Shri Arpit Goyal, Advocate REVENUE BY : Shri Ashish Tripathi, Sr. DR Date of Hearing : 23.04.2025 Date of Order : 23.04.2025 O R D E R PER S. RIFAUR RAHMAN, ACCOUNTANT MEMBER : 1. The Revenue has filed appeals against the orders of the learned Commissioner of Income Tax (Appeals)-23, New Delhi [“Ld. CIT(A)”, for short] both dated 14.08.2023 for the Assessments Years 2005-06 & 2006-07. 2 ITA No.3091 & 3092/DEL/2023 2. Since the issues are common and appeals are inter-connected, the same are being disposed off by this common order. We are taking ITA No.3091/Del/2023 for Assessment Year 2005-06 as lead case. 3. This is second round of litigation. In the first round, the assessee had filed its original return of income u/s 139 (1) of the Income-tax Act, 1961 (for short ‘the Act’) on 30.03.2007, declaring income of Rs.50,24,995/-. In this case, assessment under section 143(3) was completed on 24.12.2007 at taxable income of Rs.12,18,97,430/- after making disallowance of Rs.11,68,72,431/- on account of deduction u/s 80IB(10)(d) of the Act on the grounds that:- a) The total area of commercial & shopping units in the project aggregate to 30300.16 sq. ft. which is way beyond the permissible limit of the 2000 sq. ft. to avail the said deduction; b) The assessee was to obtain a completion certificate prior to 31st March, 2008 and the assessee did not produce such certificate; and c) The assessee cannot be regarded as a developer since it was not actively involved in the development and construction works due to non-employment of capital and labour for the purpose of development and construction. 4. Aggrieved with the order of AO, the assessee had filed appeal before the then Ld. CIT (A)-1, New Delhi and the ld. CIT (A) vide order dated 25.02.2011 allowed the appeal of the assessee holding that conditions (a) 3 ITA No.3091 & 3092/DEL/2023 & (b) were not in existence on the date when approval was granted by Development Authority and regarding (c) held that appointment of SICCL as a contractor for the development and construction of the project cannot lead to the conclusion that the development and construction was carried by the assessee. 5. Aggrieved with the order of ld. CIT(A), the Revenue preferred appeal before the ITAT, New Delhi and the assessee filed cross objections. 6. The ITAT vide its order dated 19.07.2021 in ITA No. 2481 & 2482/Del/2011 & CO Nos.221 & 222/Del/2011 decided the appeal on ground (b) and restored the issue to file the AO. Further, the ITAT directed the AO to examine the documents and other details that he may require and decide the issue as per law after giving due opportunity of being heard to the assessee. The ITAT categorically stated that in view of the following additional evidences, the project was completed before 31st March, 2008 and held that since these documents were never produced before the lower authorities, the AO shall examine the documents and any other details that he may require and decide the issue as per fact and law after giving due opportunity of being heard to assessee :- i. Letter from M/s Sahara India Commercial Corporation Ltd to the assessee dated 14.03.2008. ii. Letter from the assessee to M/s Sahara India Commercial Corporation dated 18.03.2008. iii. Architect certificate dated 15.09,2009. 4 ITA No.3091 & 3092/DEL/2023 7. In the second round, in view of the above said direction of the ITAT, New Delhi, AO initiated the set aside assessment proceedings by issuing notice u/s 143(2) of the Act through ITBA on 26.05.2022 and duly served upon assessee. Subsequently, the assessee vide letter dated 30.08.2022 was requested to produce the additional evidences filed before ITAT to prove the completion of the project prior to 31.08.2008. 8. In response to the notice/letter, the assessee produced its reply on 16.09,2022 enclosing therewith the details which were filed before the ITAT as additional evidence. 9. AO examined the reply and its enclosures produced by the assessee and found that the assessee had produced a letter dated 14.03.2008 of M/s Sahara India Commercial Corporation Ltd. informing the assessee of completion of the project. From the letter, AO further found that the Architect of the project had drawn a certificate on 15.09.2009 i.e. after 31st March, 2008 in which the Architect had recommended the concerned authority to issue completion certificate. AO observed that since recommendation for issuance of completion certificate was made by the Architect after 31st March, 2008, the question of completion of project prior to 31st March, 2008 does not arise. He further observed that the letter dated 14.03.2008 in respect of completion of project produced by 5 ITA No.3091 & 3092/DEL/2023 the assessee before the ITAT as additional evidence was written by M/s Sahara India Commercial Corporation Ltd which is related party and sister concern of the assessee, hence, the letter under question is nothing but self-created document and it cannot be accepted at face value as a valid evidence of completion of the project. He further observed that the assessee vide second para of its reply dated 16.09.2022 has also admitted that they had filed application for obtaining completion certificate on 01.10.2009 i.e. after 31 March, 2008. 10. AO further observed that post-amendment, vide Finance Act, 2004, as per scheme of the Act the undertaking shall be eligible for this deduction in that previous year relevant to any Assessment Year when it has commenced development and construction of the housing project on or after 01.10.1998 & also completed such construction & procured completion certificate in respect of' such Housing project issued by the local authority. He observed that since the assessee society has been unable to produce such certificate issued by the local authority, which has been made mandatory after the amendment w.e.f. 01.04.2005 i.e. A.Y. 2005-06 and for subsequent year, therefore, the assessee's case does not qualify for deduction under section 80-IB(10) of the Act, as the conditions specified under section 80-IB(10) are not satisfied by the assessee and accordingly the assessee is not entitled to any deduction 6 ITA No.3091 & 3092/DEL/2023 under section 80-1B(10) of the Act. Accordingly, the AO computed/assessed the income of the assessee at Rs.12,18,97,430/- as under :- Particulars Amount (in Rs.) Gross total income declare by the assessee 12,18,97,426 Less : deduction 80IB (10) not allowed as discussed in para 5 and 6 above Nil Total assessed income 12,18,97,426 Rounded off u/s 288 of the IT Act, 1961 12,18,97,430/- 11. Aggrieved against the above order, assessee preferred an appeal before the ld. CIT (A) and filed detailed written submissions. Ld. CIT (A), after going through the written submissions filed by the assessee, assessment order, other materials placed by the assessee and relying on various judgments, allowed the appeal of the assessee by holding as under :- “9. The assessee is a Cooperative Society registered and is engaged in the business developing of residential and commercial projects, The assessee originally filed return of income in which deduction u/s 80IB(10) was made by the assessee for both the impugned years, The assessment was completed by the Assessing officer u/s 143(3) of the I.T. Act, 1961 after disallowing the deduction claimed under section 80IB(10) of the Income Tax Act 1961 for both the years for the following reasons: (a) Because the total area of the commercial and shopping units in the project was more than 5% of the aggregate built up area specified under section 80IB(10) sub- section(d) of the Income-tax Act, 1961; (b) The assessee could not produce completion certificate of the project before the Assessing Officer. Therefore, the condition of section 80IB(10) applicable in AY 2005-06 was not met. (c) The assessee was not a developer. The actual development of the project was carried out by M/s Sahara India Commercial Corporation Ltd. 7 ITA No.3091 & 3092/DEL/2023 10. Aggrieved with the original assessment order, the appellant filed an appeal before the Ld. CIT(A)-1, New Delhi, who vide his order dated 25.02.2011 for A.Y 2005-06 and 25.02.2011 for the A.Y 2006-07 allowed the appeal of the appellant. 11. The then CIT(A) has discussed all the three issues and on all the three issues raised by the Assessing Officer for making the disallowance of the claim of deduction u/s 80IB(10), the appeal of the appellant was allowed. 12. Aggrieved by the order of the CIT(A), the Department preferred an appeal before the Hon'ble Income Tax Appellate Tribunal. The Hon'ble Income Tax Appellate Tribunal vide its order dated 19.07.2021 (for the both the impugned years) decided the issues of commercial space being more than 5% of the aggregate built up area; and the appellant not being a developer, in favour of the appellant. Thus, two issues mentioned at (a) and (c) stands decided. 13. In respect of issue relating to completion of the project and completion certificate, the Hon'ble ITAT has directed as under:- \"So far as the second objection of the revenue is concerned, i.e. completion of the project on or before 31.03.2008 is concerned, it is the submission of the ld. Counsel that the project as completed before 31stmarch, 2008 in view of the following additional evidences:- (i) Letter from M/s Sahara India Commercial Corporation Limited dated 14.03.2008 [Pg 5 of additional evidence compilation) (ii) Letter by the assessee to M/s Sahara India Commercial Corporation Limited dated 18.03.2008 (Pg 6 of additional evidence compilation]. (iii) Architect certificate dated 15.09.2009 alongwith the official translation [Pg 7 and 8 of additional evidence submitted,] Since these documents were never produced before the lower authorities and were filed before the tribunal for the first time in the shape of additional evidence, therefore, we admit the additional evidences filed in terms of rule 29 of the income tax (Appellate tribunal) 1963 and deem it proper to restore the issue relating to completion of the project prior to 31st march 2008 to the file of the AO for adjudication of this issue i.e., completion of the project prior to 31 March 2008. The AO shall examine the documents and any other details that he may require and decide the issue as per fact and law after giving the opportunity of being heard to the assessee. 14. On the above mentioned direction of the Hon’ble ITAT the assessment was taken up by the Assessing Officer, He examined the documents furnished by the appellant concluded that the appellant is not eligible to claim the 8 ITA No.3091 & 3092/DEL/2023 deduction u/s 80IB(10). The AO based his conclusion on the ground that the appellant has not been able to furnish the completion certificate issued by the local authorities which was mandatory for claiming deduction under the said u/s 8OIB(10) w.e.f. 01.04.2005. 15. Aggrieved with the assessment order dated 29.09.2022 for both the years, the appellant is in appeal for the both the assessment years i.e. A.Y 2005-06 and 2006-07. 16. During the course of appellate proceedings, the appellant could not furnish any certificate of completion issued by the local authorities. The appellant stated that vide letter dated 15.09.2009, the Architect of the project had made an application before the local authorities for issuing completion certificate. However, the same has not been issued till date. It was further stated that the contractor of the project has handed over the project to the appellant after completion of the project and the flats residential units in the said project has been sold by the appellant. It was also stated that the architect of the project has issued necessary certificate in respect of completion of the project. 17. During the course of the appellate proceedings, the appellant argued that as the project had commenced before 01.04.2005, therefore, there was no requirement of completion certificate by any local authorities. In support of its contentions, the appellant has relied on various case laws. 18. It is seen that the approval of the project was granted on 26.03.2003. The date when the project was approved by the Local Authority (Lucknow Development Authority), the following condition were required to be met as per the provisions of the then existing section 80IB(10). (a) That the housing project should have commenced on or after 01.04.1998; (b) That the project should be on a land area of once acre or more; and (c) The dwelling to be constructed should have individually in area of 1500 sq. ft. per units in all cities except Delhi and Mumbai. 19. In making disallowance u/s 80IB(10), the AO in the impugned assessment order has relied upon the provisions of 80IB(10) that was amended by the Finance Act, 2004 w.e.f. 01.04.2005. For the A.Y 2005-06 and 2006- 07, there was a mandatory condition in 80IB(10) that if the project was approved by the Local Authorities before 01.04.2004 then the developer was required complete the project before 31.03.2008. Apparently, in this case, there was no completion certificate. The A0 concluded that the appellant has not fulfilled the mandatory requirements of section 80IB(10) that was applicable since A.Y 2005-06 onwards. As the appellant has not fulfilled the 9 ITA No.3091 & 3092/DEL/2023 requirements for claiming deduction u/s 80IB(10), therefore, the denial of claim of deduction was once again made by the AO. 20. The issue of denial of deduction u/s 80IB(10) to the appellant for both the years has already been decided by the CIT(A) vide his following orders:- i. Appeal No. 68/09-10 dated 25.02.2011 for A.Y 2005-06 ii. Appeal No.139/09-10 dated 25.02.2011 for A.Y 2006-07 21. It is well settled law that the amendment u/s 80IB(10) of the Act with effect from 01.04.2005 is not retrospective in effect and is only prospective i.e. in relation to project started from 01.04.2005 onwards, This view has been upheld in various judicial pronouncements. 22. The Hon'ble Supreme Court in the case of CIT V. Sarkar Builders 375 ITR 392(SC), has held as under: \" Having regard to the above, let us take note of the special features which appear in these cases: (a) In the present case, the approval of the housing project, its scope, definition and conditions, all are decided and dependent by the provisions of the relevant DC Rules. In contrast, the Judgement in M/s, Reliance Jute and Industries Ltd. was concerned with Income tax only. (b) The position of law and the rights accrued prior to enactment of Finance Act, 2004 have to be taken into account, particularly when the position becomes irreversible. (c) The provisions of Section 801B(10) mention not only a particular date before which such a housing project is to be approved by the local authority, even a date by which the housing project is to be completed, is fixed. These dates have a specific purpose which gives tine to the developers to arrange their affairs in such a manner that the housing project is started and finished within those stipulated dates. This planning, n the context of facts in these appeals, had to be much before 01.04,2005. (d) The basic objective behind Section 801B(10) Is to encourage developers to undertake housing projects for weaker section of the society, inasmuch as to qualify for deduction under this provision, it is an essential condition that the residential unit be constructed on a maximum built up area of 1000 sq.ft. where such residential unit is situated within the cities of Delhi and Mumbai or within 25 C.I.T Mumbai vs M/S Sarkar Builders on 15 May, 2015 Indian Kanoon htp://indiankanoon.orgfdoc/1081 i7499/ 12 kms. from the municipal limits of these cities and 1500 sq.ft. at any other place (e) It is the cardinal principle of interpretation that a construction resulting in reasonably harsh and absurd results must be avoided. 10 ITA No.3091 & 3092/DEL/2023 (f) Clause (d) makes it clear that a housing project includes shops and commercial establishments also. But from the day the said provision was inserted, they wanted to limit the built up area of shops and establishments to 5% of the aggregate built up area or 2000 sq.ft., whichever is less. However, the Legislature itself felt that this much commercial space would not meet the requirements of the residents. Therefore, in the year 2010, the Parliament has further amended this provision by providing that it should not exceed 3% of the aggregate built up area of the housing project or 5000 sq.ft., whichever is higher. This is a significant modification making complete departure from the earlier yardstick. On the one hand, the permissible built up area of the shops and other commercial shops is increased from 2000 sq.ft. to 5000 sq.ft. On the other hand, though the aggregate built up area for such shops and establishment is reduced from 5% to 3%, what is significant is that it permits the builders to have 5000 sq.ft. or 3% of the aggregate built up area, 'whichever is higher. In contrast, the provision earlier was 5% or 2000 sq.ft., whichever is less'. (g) From this provision, therefore, it is clear that the housing project contemplated under sub-section (10) of Section 80IB includes commercial establishments or shops also. Now, by way of an amendment in the form of Clause (d), an attempt is made to restrict the size of the said shops and/or commercial establishments. Therefore, by necessary implication, the said provision has to be read prospectively and not retrospectively. As is clear from the amendment, this provision came into effect only from the day the provision was substituted. Therefore, it cannot be applied to those projects which were sanctioned and commenced prior to 01.04.2005 and completed by the stipulated date, though such stipulated date is after 01.04.2005. These aspects are dealt with by various High Courts elaborately and convincingly in their judgments. It is not necessary to go in to the detailed reasoning given by these High Courts. However, we would like to extract the following discussion from the judgment dated 25.07.2014 of the Bombay High Court in ITA Nos.201 and 308 of 2012, where this very aspect is answered in the following manner :- 36. There is yet another reason or coming to the aforesaid conclusion. Take a scenario where an Assessee, following the project completion method of accounting has completed the housing project approved by the local authority complying with all the conditions as set out in section 80-IB (10) as it stood prior to 1st April, 2005. If we were to accept the argument of the Revenue, then in that event, despite having completed the entire construction prior to 1st April, 2005 and complying with all the conditions of section80-IB(10) as it stood then, the Assessee would be disentitled to the entire deduction claimed in respect of such housing project merely because he offered his profits to tax in the A.Y. 2005-06. In contrast, if the same Assessee had followed the work-in-progress method of accounting, he would have 11 ITA No.3091 & 3092/DEL/2023 been entitled to the deduction under section 80-IB (10) upto A.Y. 2004-05 and denied the same from A.Y. 2005-06 and thereafter. It could never have been the intention of the Legislature that the deduction under section 80-IB(10) available to a particular C.I.T., Mumbai vs M/s Sarkar Builders on 15 May, 2015 Indian Kanoon httpindankanoon.org/doc/108117499/13, Assessee would be determined on the basis of the accounting method followed. This, to our mind and as rightly submitted by Mr. Mistry, would lead to startling results, We therefore have no hesitation in holding that section 8-IB(10) is prospective in nature and can have no application to a housing project that is approved before 31st March, 2005. As the deduction sought to be claimed under section 80-IB(10) is inseparably linked with the date of approval of the housing project, it would make no difference if the construction of the sad project was completed on or after 1st April, 2005 or that the profits were offered to tax after 1stApril, 2005 Le. in A.Y. 2O05-06 or thereafter. We therefore find no substance in the argument of the Revenue that notwithstanding the fact that the housing project was approved prior to 31st March 2005, if the construction was completed on or after 1st April, 2005 or if the profits are brought to tax in the A.Y. 2005- 06 or thereafter, the said housing project would have to comply with the provisions of clause (d of section 80-IB(10). To our mind, we do not think that the condition/restriction laid down in clause (d) of section 80-IB(10) has to be revisited and/or looked at and complied with in the assessment year in which the profits are offered to tax by the Assessee. When the Assessee claims a deduction under section 80-IB(10), the Assessee is required to comply with such a condition only if it is on the statute- book on the date of the approval of the housing project and it has nothing to do with the year in which the profits are brought to tax by the Assessee. We have come to this conclusion only because we find that clause (d) of section 80-IB(10) Is inextricably linked to the date of the approval of the housing project and the subsequent development/construction of the same, and has nothing to do with the profits derived therefrom. We may hasten to add that if a particular condition is not inseparably linked to the date of approval of the housing project, different Considerations would arise. However, we are not called upon to decide any such condition and hence we are not laying down any general proposition of law, save and except that clause (d) of section 80-IB(10), being a condition linked to the date of the approval of the housing project, would not apply to any housing project that was approved prior to 31st March, 2005 irrespective of the fact that the profits of the said housing project are brought to tax after the said provision was brought into force.\" At this juncture, we would like to quote the following passage from Commissioner of Income Tax, U.P. v. M/s. Shah Sadiq and Sons[7]:\"14. Under the Income Tax Act of 1922, the assessee was entitled to carry forward the losses of the speculation business and set off such losses against profits made from that business in future years. The right of carrying forward and set off 12 ITA No.3091 & 3092/DEL/2023 accrued to the assessee under the Act of 1922. A right which had accrued and had become vested continued to be capable of being enforced notwithstanding the repeal of the statute under which that right accrued unless the repealing statute took away such right expressly or by necessary implication. This is the effect of section 6 of the General Clauses Act, 1897. 23. The identical issue arose before the Hon’ble Delhi High Court in the case of CIT-I vs. CHD Developers Ltd. reported in (2014) 362 ITR 177. In this case, the fats were as under :- “The assessee, a real estate developer, launched a project in Vrindavan. It obtained the approval of the project form the Mathura Vrindavan Development Authority on 16.3.2005. In the return of income filed for the assessment year 2007-08, it claimed deduction under section 80-IB. The Assessing Officer applied the provisions of sub-section (10) of section 80-IB being substituted by the Finance (No.2) Act, 2004, with effect from 1-4-2005 and disallowed the claim of deduction on the reasoning that the completion certificate in terms of Explanation (ii) to clause (a) of section 80-IB(10)had not been granted to the assessee so as to enable it to avail the benefit provided by section 80-IB. The assessee also contended before the Assessing Officer that vide letter dated 5-11-2008 it had applied for completion certificate but the same was not issued, which was beyond its control and power. On appeal, the Commissioner (Appeals) upheld the order of the Assessing officer. On second appeal, the Tribunal held that sub-section (10) of section 80-1B was substituted by the Finance (No. 2) Act, 2004, with effect from 1.4.2005. In the instant case, the approval of the project was granted by the Competent Authority on 16.3.2005. Meaning thereby the project was approved before sub-section (10) of section 80-IB was substituted by the Finance (No. 2) Act, 2004, with effect from 1.4.2005. If the position of sub-section (10) of section 80-IB existing at the time when the approval was granted to the assessee was analyzed, there was no condition like production of completion certificate. Since the approval was granted to the assessee on 16-3-2005, it was not expected to fulfil the conditions which were not on the statute when such approval was granted. It, therefore, allowed the assessee's claim for deduction under section 80-IB. 24. Based on such facts, the Hon'ble High Court has held as under:- \"In the present case concededly the approval for the project was given by the Mathura Vrindavan Development Authority on 16.03.2005. Clearly the approval related to the period prior to 2005, i.e. before the amendment, which insisted on issuance of the Completion certificate by the end of the 4 year period was brought into force. We are in full agreement with the Gujarat High Court that the application of such stringent conditions, which are left to an independent body such as the local authority who is to issue the completion certificate, would have led to not only hardship but absurdity. As a consequence, we are of the opinion that the reasoning and conclusions of the 13 ITA No.3091 & 3092/DEL/2023 Karnataka High Court and the Gujarat High Court are fully applicable to the facts of this case. The Tribunal was not, therefore, in error of law while holding in favour of the assessee. 25. In the case of CITV. Brahma Associates reported in 333 ITR 289 (Bom), the Hon'ble Bombay High Court has held as under: \"Held, that clause (d) inserted to section 80-IB (10) with effect from April 1,2005, is prospective and not retrospective and hence could not be applied for the period prior to April 1,2005. Since deductions under section 80-IB(10) were on the profits derived from the housing projects approved by the local authority as a whole, the Tribunal was not justified in restricting the section 80-IB(10) deduction only to a part of the project. However, in the present case, since the assessee had accepted the decision of the Tribunal in allowing section 80-IB(10) deduction to a part of the project, the findings of the Tribunal in that behalf could not be disturbed.\" 26. Similarly in the case of CIT vs. B.M. & Brothers 225 TAXMAN 149(Gujarat) (Mag.) in which Hon'ble Gujarat High Court has held as follows:\"Considering the provisions of Section 80-IB(10) when the 'housing project' named 'Maninagar at Rajkot was approved prior to 1.4.2004 and different units were constructed before 31.03.2008, it cannot be said that ITAT has committed any error granting deduction under section 80-IB(10) with respect to only those units of housing project named 'Maninagar’ approved prior to 01. 04.2004 and or which constructions have been completed prior to 31.03.2008. It cannot be disputed that the 'housing project' named 'Maninagar' was already approved prior to 1.4.2004 with respect to different units. The 'housing project' was approved prior to 1.4.2004 and constructions that have been put up have been completed prior to 31.3.2008. \"ȚPara6] 27. Similar view has been taken by the Hon’ble High Court of Allahabad in the case of PCIT vs. Sahara States, Gorakhpur reported in 418 ITR 168 (All) in which Allahabad High Court has held as follows :- “Prior to April 1, 2005, Section 80-IB (10 of the income-tax Act, 1961 provided only three conditions for the eligibility for the deduction. There was no such condition that the project in question should be completed and completion certificate obtained within the period of four years, The condition was imposed by the amendment with effect from April 1, 2005. The condition will be applicable prospectively and not retrospectively. Held accordingly, that once it had come on record by the fact finding authority that there was no such condition to have the completion certificate within four years from the local authority granting approval of the projects, the reassessment proceedings taken against the assessee were bad and against the settled principles of law. 14 ITA No.3091 & 3092/DEL/2023 28. Similar view has been taken by the Hon'ble Bombay High Court in the judgment of CIT Vs. Happy Home Enterprises 372 ITR-1(Bom): Manan Corporation V. ACIT 356 ITR 44; and CIT V. G.R. Developers 353 ITR- 1(Karnataka) 29. In light of the facts of the case and various judicial pronouncements referred above, the interpretation of the Assessing Officer that the project ought to have been completed by 31.03.2008 is misplaced. The various decisions of Hon'ble Courts have upheld that there was no requirement of completion certificate if the project had commenced before 01.04.2005. 30. It is held that the appellant even though had not got completion certificate from the local authority before 31.03.2008, the appellant is entitled to claim the deduction u/s 80IB(10) for both the impugned assessment years. 31. In view of the above, the addition of Rs.11,68,72,431/- for A.Y 2005- 06 and Rs.5,19,52,369/- for the A.Y 2006-07 made on account of disallowance of claim of deduction u/s 80IB(10) are deleted.” 12. Aggrieved against the above order, Revenue is in appeal before us raising following grounds of appeal :- “1. That the order of the Ld. CIT(A) is not correct in law and facts. 2. That on the facts and circumstances of the case, the Ld. CIT(A) has erred in allowing the claim of Rs.11,68,72,431/- u/s 80IB(10) of the I.T. Act. 13. At the time of hearing, ld. DR of the Revenue relied upon the order of the Assessing Officer. 14. On the other hand, ld. AR of the assessee submitted that ld. CIT (A) had given elaborate finding and relying on the same, he pleaded that the grounds of appeal taken by the Revenue be dismissed. 15. Considered the rival submissions and the material available on record. We find that the issue under consideration is squarely covered in favour of the assessee and ld. CIT (A) has rightly deleted the addition made by 15 ITA No.3091 & 3092/DEL/2023 the AO relying on the decision of Hon’ble Supreme Court and Hon’ble High Courts. The project was initiated before 01.04.2005 and Assessing Officer cannot apply the amended provisions of section 80IB (10) of the Act. Hence, we do not find any infirmity in the order of the ld. CIT (A) and the grounds taken by the Revenue are dismissed. 16. In the result, the appeal of the Revenue for AY 2005-06 is dismissed. 17. Since the facts are exactly similar to AY 2006-07 our above findings in AY 2005-06 are applicable mutatis mutandis in Assessment Year 2006- 07,. Accordingly, the appeal filed by the Revenue for AY 2006-07 is dismissed.. 18. To sum up : both the appeals filed by the Revenue for AYs 2005-06 and 2006-07 are dismissed. Order pronounced in the open court on this 23rd day of April, 2025. Sd/- sd/- (VIKAS AWASTHY) (S.RIFAUR RAHMAN) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 23.04.2025 TS Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals). 5. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI "