By TIOL News Service

MUMBAI, NOV 09, 2016: THE ISSUE IS - Whether furnishing of 'completion certificate' can be said to be a sine qua non, for purpose of obtaining deduction u/s 24(b), even if the assessee has acquired/completed the construction within three years from the end of financial year in which the capital was borrowed. NO IS THE VERDICT.

Facts of the case:

The assessee is an individual. During the subject year, he had purchased a flat from Marathon Realty Limited by availing loan from IDBI Bank and had claimed deduction of interest to the extent of Rs.1,50,000/- u/s 24(b). During assessment, the AO asked the assessee to produce completion certificate indicating completion of the flat during the F.Y under consideration. Since the assessee failed to furnish the same, the AO disallowed such claim of assessee. On appeal, the CIT(A) also confirmed the order of AO by holding that the assessee did not furnish completion certificate from the appropriate authority.

ITAT's holding:

1. This Tribunal is of the view that there is merit in the submissions made by AR. A careful perusal of the second proviso to section 24 would show that the assessee should acquire or complete construction within three years from the end of financial year in which the capital was borrowed. In the instant case, the assessee has furnished certificate from the Cooperative Society to show that the possession of the flat was taken in October 2006 and March 2007.

2. Further, the proviso nowhere states that the assessee should furnish completion certificate from the Government authorities. In our view, the evidences furnished by the assessee sufficiently prove that the assessee has taken possession of the flat during the relevant financial year under consideration. Accordingly, this court is of the view that the assessee is entitled to claim deduction of Rs.1,50,000/- u/s 24(b).

(See 2016-TIOL-1884-ITAT-MUM)