2012 (9) TMI 977 - AT - Income Tax

Summary

Issues involved: Appeal against order allowing deduction u/s.80IB on disclosed income of Rs. 50,00,000 treated as business income.

Facts: The assessee firm engaged in construction had a survey u/s.133A and a search u/s.132 conducted, during which Rs. 50,00,000 was declared as unaccounted income from on-money received for booking flats. The Assessing Officer disallowed the deduction u/s.80IB, stating the amount did not represent business income.

Appellant's Argument: The appellant had no other income except from the housing project eligible for deduction u/s.80IB. The amount represented sale consideration from booking flats and was pleaded as business income, citing relevant case laws.

First Appellate Authority's Decision: The CIT(A) held that the income was disclosed under the head of business income and was eligible for deduction u/s.80IB as it had a direct connection with the construction business. Citing legal precedents, the deduction was allowed on the additional income of Rs. 50,00,000.

Revenue's Argument: The Revenue contended that the amount was disclosed as miscellaneous income, not business income, and should not qualify for deduction u/s.80IB. The nature of the receipt being cash component was highlighted to support disallowance.

Final Decision: The Tribunal confirmed the CIT(A)'s finding, stating that the disclosed amount had a direct connection with the construction business and was eligible for deduction u/s.80IB. Citing a relevant case, the appeal of the Revenue was dismissed.