2011 (1) TMI 1542 - AT - Income Tax

Summary

Issues Involved:
1. Deduction u/s.80IB(10) on sale proceeds of stilt parking.
2. Allocation of expenses against income from Saki Naka project.

Issue 1: Deduction u/s.80IB(10) on sale proceeds of stilt parking:
The appeal by the revenue challenged the direction of the CIT(A) to allow deduction u/s.80IB(10) on the sale proceeds of stilt parking. The AO contended that the entire consideration received for stilt parking is not eligible for deduction u/s.80IB(10) as it is not considered part of residential premises. However, the CIT(A) held that stilt parking is integral to the housing project and approved by the competent authority, thus qualifying for the deduction. The Tribunal, based on previous rulings, upheld the CIT(A)'s decision, emphasizing that stilt parking is essential for residents and falls within the purview of sec.80-IB(10).

Issue 2: Allocation of expenses against income from Saki Naka project:
The second issue pertained to the allocation of expenses against income from the Saki Naka project. The AO observed that the assessee had debited expenses against income from the Saki Naka project, which is fully taxable, leading to a discrepancy in the allocation of expenses. However, the CIT(A) found that the AO's reallocation of expenses lacked concrete evidence and justification. The CIT(A) ruled in favor of the appellant, stating that separate accounts were maintained for each project, and the AO failed to identify any defects in the accounts. The Tribunal upheld the CIT(A)'s decision, emphasizing the separate maintenance of accounts and lack of evidence supporting the AO's reallocation of expenses.