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2015 (4) TMI 907 - AT - Income TaxDenial of deduction u/s 80IB(10) - Unapproved project - Completion certificate not obtained - Dis-allowance of expenses on material consumed & Labour expenses - Unexplained and unreconciled differences - Held that - The Revenue is raising the issue regarding two objections that the project was not approved project and secondly that the project was not completed because no completion certificate has been issued. Regarding the first objection of the Revenue that the project was not approved, we find that as per the approval letter of U.P. Avas Avam Vikas Parishad dated 21/06/2003 available on page No. 51 & 52 of the paper book, the project was approved on this date and such approval was valid for five years up to 20/06/2008. In this regard, it was one of the main objections of the Assessing Officer that U.P. Avas Avam Vikas Parishad is not a local authority. In this regard, in Para 9.6 of his order, CIT(A) has referred to a judgment of Hon'ble Apex Court in the case of R. C. Jain reported in [1981 (2) TMI 200 - SUPREME COURT OF INDIA]in which it was held by Hon'ble Apex Court that local authority includes Delhi Development Authority. Regarding the second aspect i.e. regarding completion of the project, we find that although the completion certificate has not been issued but the assessee has already made application for issue of completion certificate on 23/07/2007, copy of which is available on record.Here are various judgments of various High Courts in which, it was held that even if completion certificate is not issued but it is otherwise established that the project was completed, deduction u/s 80IB (10) is allowable. Dis-allowance of expenses - We find that a clear finding has been given by CIT(A) that the Assessing Officer while making this disallowance has not brought any specific material on record and in absence of any specific finding on this addition, the addition cannot be sustained. He has also given a finding that as the entire earnings of the assessee from the project is deductible u/s 80IB(10), there is no question of claiming higher expenses and any addition, even if made, shall increase the deduction available u/s 801B(10). We find that a clear finding is given by CIT(A) that those flats for which premium was paid by the assessee were sold for higher amounts. Since by making this payment of premium of ₹ 10 lac, the assessee has actually made extra income because of sale of those flats on higher price, we do not find any justification for making disallowance and therefore, we decline to interfere in the order of CIT(A) on this issue also. Unexplained and unreconciled differences - We find that a clear finding is given by Cit(A) that the Assessing Officer has taken the debit balance as credit balance. He has also given a finding that these amounts are not relatable to current year but are brought forward balances from previous years and the same has been accepted in the previous year u/s 143(3). These findings of CIT(A) could not be controverted by Learned D.R. of the Revenue and hence, we decline to interfere in the order of CIT(A) on this issue. - Decided against the revenue.
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