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2019 (7) TMI 1529 - AT - Income TaxProportionate deduction u/s 80IB(10) - where there is violation of provisions of clauses (e) and (f) of section 80IB(10) of the Act, wherein more than one flat was allotted to an individual, then the assessee is not entitled to the claim of deduction under section 80IB(10) of the Act on such flats - HELD THAT - In view of clear mandate of the Legislature, the assessee is not entitled to claim any deduction under section 80IB(10) of the Act in respect of four flats against which there is violation of clauses (e) and (f) of section 80IB(10) of the Act. However, the assessee is entitled to claim proportionate deduction in respect of balance flats sold by assessee in the aforesaid housing project. Upholding the order of CIT(A), we dismiss the ground of appeal raised by Revenue.
Issues:
Appeal against CIT(A) order allowing proportionate deduction under section 80IB(10) of the Income-tax Act, 1961. Detailed Analysis: 1. Issue of Deduction under Section 80IB(10) of the Act: The appeal filed by the Revenue challenges the CIT(A)'s decision to allow a proportionate deduction under section 80IB(10) of the Income-tax Act, 1961. The case revolves around a housing project constructed by the assessee and the eligibility for deduction under section 80IB(10) of the Act. 2. Factual Background and Assessment: The assessee had claimed deduction under section 80IB(10) for a housing project in Pune. During scrutiny, it was found that multiple flats were allotted to the same individuals, which raised concerns regarding compliance with the provisions of section 80IB(10)(f) of the Act. The Assessing Officer issued a show cause notice as the conditions were not met. 3. CIT(A) Decision and Legal Interpretation: In the appeal before the CIT(A), it was argued that the assessee had complied with the provisions and was entitled to the deduction. However, the CIT(A) found violations of clauses (e) and (f) of section 80IB(10) and disallowed the full deduction claimed. The CIT(A) did allow an alternate plea for a proportionate deduction. 4. Tribunal's Decision and Precedents: The Tribunal analyzed the issue in light of previous decisions, notably the case of ACIT Vs. M/s. Namrata Developers. It was held that where violations of clauses (e) and (f) of section 80IB(10) occur, the assessee cannot claim deduction on the affected units. However, proportionate deduction can be claimed on the compliant units within the housing project. 5. Final Judgment and Dismissal of Appeal: The Tribunal upheld the CIT(A)'s decision to allow a proportionate deduction and dismissed the Revenue's appeal. It was concluded that the assessee could not claim deduction on the units in violation of the Act but was entitled to a proportionate deduction on the remaining compliant units within the housing project. In conclusion, the judgment clarifies the application of section 80IB(10) of the Income-tax Act, emphasizing compliance with its provisions for claiming deductions in housing projects. The decision provides guidance on proportionate deductions in cases of non-compliance, ensuring adherence to the legislative requirements for tax benefits.
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