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2015 (10) TMI 1858 - AT - Income TaxEntitlement to deduction u/s.80IB(10) - additional receipts offered by the assessee against the project undertaken by the assessee - Held that - The issue in the present appeal is identical to the issue before Pune Bench of the Tribunal in Shri Naresh T. Wadhwani Vs. DCIT, ITA Nos.18, 19 & 20/PN/2013 (2014 (11) TMI 689 - ITAT PUNE) wherein held assessee is eligible for deduction u/s 80IB(10) of the Act even in relation to impugned additional income offered in a statement deposed u/s 132(4) of the Act during the course of search and subsequently declared in the return of income filed in response to notice u/s 153A(1)(a) of the Act and following the same parity of reasoning, we hold that the assessee is entitled to the claim of deduction under section 80IB(10) of the Act on the additional receipts offered by the assessee against the project undertaken by the assessee during the year under consideration. Thus, the grounds of appeal raised by the Revenue are dismissed. - Decided in favour of assessee.
Issues Involved:
1. Eligibility of Rs. 40 lakhs as business income for deduction under section 80IB(10) of the Income-tax Act, 1961. 2. Substantiation of the claim and onus of proof regarding the origin of undisclosed receipts. 3. Nexus of undisclosed receipts with the specific project 'Prime Plus'. Issue-wise Detailed Analysis: 1. Eligibility of Rs. 40 lakhs as Business Income for Deduction under Section 80IB(10): The primary issue revolves around whether the sum of Rs. 40 lakhs, declared as undisclosed receipts, qualifies as business income eligible for deduction under section 80IB(10) of the Income-tax Act, 1961. The CIT(A) allowed the claim, holding that the additional receipts were business receipts from the project 'Prime Plus', thus qualifying for the deduction. The Tribunal upheld this view, noting that the sum was included in the total income for the assessment year 2010-11 based on the method of accounting followed by the assessee. The Tribunal referenced a similar case, Shri Naresh T. Wadhwani Vs. DCIT, where additional income declared during a search was considered eligible for deduction under section 80IB(10). 2. Substantiation of the Claim and Onus of Proof: The Revenue contended that the assessee failed to substantiate its claim with supporting evidence, such as date-wise receipts and details of customers. The Assessing Officer (AO) noted that the assessee did not provide information on the customers who made bookings or contributed on-money. Despite this, the CIT(A) found that the declaration of Rs. 40 lakhs as undisclosed receipts was supported by statements recorded during the search and a subsequent letter dated 23.09.2008, which outlined the bifurcation of receipts entity-wise and year-wise. The Tribunal agreed with the CIT(A), emphasizing that the receipts were part of the business activities and thus constituted business income. 3. Nexus of Undisclosed Receipts with the Specific Project 'Prime Plus': The AO disallowed the deduction on the grounds that the assessee did not prove the nexus between the undisclosed receipts and the 'Prime Plus' project. However, the CIT(A) and the Tribunal found that the sum of Rs. 40 lakhs was clearly reflected as receipts from the 'Prime Plus' project in the financial year 2007-08. The Tribunal noted that the undisclosed receipts were included in the assessee's income based on the group's disclosure during the search, which indicated that the receipts were from the 'Prime Plus' project. Consequently, the Tribunal held that since the receipts arose from the business activities of the project, they were eligible for deduction under section 80IB(10). Conclusion: The Tribunal dismissed the Revenue's appeal, affirming the CIT(A)'s decision that the assessee was entitled to the deduction under section 80IB(10) for the additional receipts of Rs. 40 lakhs from the 'Prime Plus' project. The Tribunal's decision was based on the consistent application of legal principles and precedents, particularly the similar case of Shri Naresh T. Wadhwani Vs. DCIT, where additional income declared during a search was deemed eligible for deduction under section 80IB(10). Order Pronounced: The appeal of the Revenue was dismissed, and the order was pronounced on the 11th day of February 2015.
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