2011 (7) TMI 1184 - AT - Income Tax

2014 (2) TMI 303 - AT

Issues Involved:
1. Applicability of clause (d) of sub-section (10) of section 80-IB.
2. Reopening of assessment u/s. 147 for A.Y. 2005-06.
3. Disallowance of deduction u/s. 80IB(10) for A.Y. 2005-06 and 2006-07.
4. Enhancement of claim for deduction u/s. 80IB(10) without filing a revised return.

Summary:

1. Applicability of clause (d) of sub-section (10) of section 80-IB:
The assessee, engaged in real estate development, claimed deduction u/s. 80IB(10) for its housing project "Apnaghar Complex" for A.Y. 2005-06 and 2006-07. The Assessing Officer (AO) disallowed the deduction, citing that the aggregate built-up area of shops exceeded the 2000 sq.ft. limit set by clause (d) of sub-section (10) of section 80-IB. The AO argued that non-fulfillment of any condition under section 80-IB(10) disqualifies the assessee from the deduction.

2. Reopening of assessment u/s. 147 for A.Y. 2005-06:
The assessee challenged the reopening of assessment u/s. 147, arguing that all relevant facts were available during the original assessment u/s. 143(1). The AO justified the reopening, stating that the assessee did not qualify for the deduction u/s. 80IB(10). The CIT(A) upheld the reopening, but the Tribunal held that reopening was not justified as it was based on a mere change of opinion without "tangible material," referencing the Supreme Court's decision in CIT Vs Kelvinator of India Ltd. 320 ITR 561.

3. Disallowance of deduction u/s. 80IB(10) for A.Y. 2005-06 and 2006-07:
The AO disallowed the deduction for both years, stating the assessee did not fulfill all conditions of section 80IB(10). The assessee argued that the deduction should be allowed based on the decision in Brahma Associates. The CIT(A) dismissed the claim, citing the Supreme Court's decision in Goetz (India) Ltd., which requires a revised return for any additional claims. The Tribunal, however, held that the CIT(A) has the power to admit additional grounds and allowed the deduction based on the decision in Brahma Associates.

4. Enhancement of claim for deduction u/s. 80IB(10) without filing a revised return:
The assessee sought to enhance the deduction claim during appellate proceedings without filing a revised return. The AO and CIT(A) rejected this, citing the Supreme Court's decision in Goetz (India) Ltd., which restricts the AO from entertaining claims not made through a revised return. The Tribunal clarified that while the AO cannot entertain such claims, the appellate authority has the power to admit additional grounds, referencing the decision in Jute Corporation of India Vs CIT 187 ITR 688.

Conclusion:
The Tribunal allowed the appeals filed by the assessee, granting the deduction u/s. 80IB(10) for both A.Y. 2005-06 and 2006-07, and held that the reopening of assessment for A.Y. 2005-06 was bad in law. The Tribunal emphasized the appellate authority's power to admit additional grounds and the applicability of the decision in Brahma Associates for the deduction claim.

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