2011 (7) TMI 1236 - AT - Income Tax

Summary

Issues involved: The judgment involves the following issues: 1. Eligibility to claim deduction u/s.80IB(10) of the Income Tax Act,1961 based on the built-up area of units. 2. Charging of interest u/s.234B and 234D of the Act. 3. Confirmation of penalty proceedings u/s 271(1)(c) of the Act.

Issue 1: Eligibility for deduction u/s.80IB(10) of the Act:
The appeals filed by the assessee contested the denial of deduction u/s.80IB(10) based on the built-up area of units exceeding 1500 sq.fts. The CIT(A) upheld the disallowance, citing non-fulfillment of the condition in clause (c) of sec. 80IB(10) of the Act. However, subsequent findings in other assessment years supported the assessee's claim, leading the ITAT to set aside the CIT(A)'s order for fresh consideration. The ITAT directed a reevaluation in light of the previous findings, allowing both parties sufficient opportunity for input.

Issue 2: Charging of interest u/s.234B and 234D:
The ground related to the levy of interest u/s.234B and 234D was dismissed as the assessee did not present any submissions on this matter. The ITAT noted the mandatory nature of the levy as per legal precedents, leading to the dismissal of this ground. The AO was directed to provide any consequential relief necessary in line with the order.

Issue 3: Confirmation of penalty proceedings u/s 271(1)(c):
The appeals also raised concerns regarding the initiation of penalty proceedings u/s 271(1)(c) of the Act. However, since no appeal could be made against the mere initiation of penalty proceedings and no submissions were made on this matter, the ITAT dismissed this ground as well.

Additional Observations:
No additional grounds were raised in the appeals, leading to the dismissal of the residuary ground. The ITAT partly allowed both appeals for statistical purposes. The order was pronounced on 22-07-2011, emphasizing the decisions made on each issue raised in the appeals.