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Issues involved:
The judgment involves issues related to the condonation of delay in filing an appeal u/s 154 of the Act, calculation of tax effect for appeal u/s 80IB(10), and denial of deduction on interest income and disallowed amounts u/s 40(a)(ia). Condonation of Delay in Filing Appeal u/s 154: The appeal u/s 154 of the Act was time-barred by 742 days, but the delay was condoned by the tribunal after considering the technical nature of the delay and the explanation provided by the Departmental Representative. Calculation of Tax Effect for Appeal u/s 80IB(10): The tribunal dismissed the argument that the tax effect for appeal u/s 80IB(10) was less than the prescribed limit, stating that the tax effect should be calculated after considering the rectifications made u/s 154 of the Act. Denial of Deduction on Interest Income u/s 80IB(10): The tribunal held that interest income received from bank deposits cannot be considered as profits derived from the business activity of developing and building housing projects, as required by section 80IB(10). Citing legal precedent, the tribunal set aside the order of the CIT (A) and restored the assessing officer's decision on this issue. Denial of Deduction on Disallowed Amounts u/s 40(a)(ia): The tribunal disagreed with the Departmental Representative's argument that disallowances made u/s 40(a)(ia) cannot be treated as income derived from business activity. It upheld the CIT (A)'s decision that deductions u/s 80IB(10) are allowable on disallowed amounts under section 40(a)(ia) as they are related to the business activity of the assessee. In conclusion, the tribunal partly allowed one appeal and dismissed the other, pronouncing the judgment on 22nd November 2010.
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