Deduction u/s 80-IB(10) cannot be denied merely on the ground that BU permission was not obtained prior to 31/03/08:

AO denied assessee’s claim of deduction u/s 80-IB(10) on the ground that since BU permission was granted to the assessee after March 2008,construction must have been completed after such date. CIT(A) and ITAT allowed the said claim after recording findings that construction was completed before 31/03/08, several units were sold before that date and application was also moved for BU permission on 15/02/06 i.e. almost two years before the cut-off date. The Local authority had rejected such application on 01/07/06 for some technical reasons and not on the ground of non-completion of construction. Thereafter, upon revised efforts from the assessee, it granted the said permission by an order dated 19/03/09.The Hon’ble High Court held that not every condition of the statute can be seen as mandatory. If substantial compliance thereof is established on record, court may take a view that minor deviation thereof would not vitiate the very purpose for which deduction was being made available. Assessee’s claim was thus allowed.

[TARNETAR CORPORATION - TAX APPEAL NO.1241 of 2011 - GHC]