2019 (4) TMI 1164 - AT - Income Tax

Deduction u/s 80IB(10) on pro-rata basis - certain residential units had built up area in excess of prescribed limit of 1,000 sq.ft. - assessee had violated the provisions of section 80IB(10)(e) and 80IB(10)(f) - HELD THAT - We find that Ld. CIT(A) had decided this ground in favour of assessee by relying upon the various judgments of Jurisdictional ITAT mentioned in its order and also the orders in assessee s own case for AY 2012-13 wherein the claim of deduction had been allowed on pro-rata basis. Even during the year under appeal, the assessee had sold two flats and had worked the proportionate disallowance. Hence, CIT(A) had rightly directed the AO to disallow the claim of deduction on pro-rata basis of the two flats and allow the claim of deduction on the balance amount. No new facts or contrary judgments have been brought on record before us in order to controvert or rebut the findings so recorded by Ld. CIT(A). Therefore, there are no reasons for us to interfere into or deviate from the findings so recorded by the Ld.CIT(A). Hence, we are of the considered view that the findings so recorded by the Ld. CIT (A) are judicious and are well reasoned. Resultantly, this ground raised by the revenue stands dismissed.

Summary

Issues:
Appeals filed by revenue and assessee against CIT(A) order for AY 2013-14 & 2014-15; Ex-parte hearing due to absence of assessee; Challenge to deduction u/s 80IB(10) for violation of Act's provisions.

Analysis:
1. The appeals and Cross Objections (COs) were filed against the Commissioner of Income Tax (Appeals) order for AY 2013-14 & 2014-15. Despite the absence of the assessee and no adjournment application, the hearing proceeded ex-parte with the Revenue's representative present.
2. Since the issues in the appeals and COs were common, they were clubbed for convenience. The main appeal for AY 2013-14 focused on challenging the CIT(A) order allowing deduction u/s 80IB(10) on a pro-rata basis despite alleged violations of sections 80IB(10)(e) and 80IB(10)(f) of the IT Act.
3. The Revenue contended that the entire deduction was disallowed by the AO due to the sale of two flats to the same persons, violating Act's provisions. However, the CIT(A) allowed deduction on a pro-rata basis, citing various judicial precedents supporting proportionate deductions.
4. The CIT(A) reasoned that the appellant fulfilled conditions under section 80IB(10) except for selling two flats to the same persons. Relying on jurisdictional ITAT orders and appellant's previous case, deduction was allowed on a pro-rata basis for the two flats sold.
5. The ITAT upheld the CIT(A)'s decision, noting no new facts or contrary judgments presented by the Revenue. The findings were considered judicious and well-reasoned, leading to the dismissal of the Revenue's appeal.
6. In the appeal for AY 2014-15, the ITAT applied the same findings as the AY 2013-14 appeal to maintain judicial consistency. Consequently, the Revenue's appeal for AY 2014-15 was dismissed.
7. The COs filed by the assessee were also dismissed in line with the decisions on the Revenue's appeals. Ultimately, all appeals were dismissed with no order as to costs, maintaining the CIT(A)'s orders.

This detailed analysis covers the issues involved in the judgment, providing a comprehensive overview of the legal arguments, decisions, and reasoning presented by the ITAT Mumbai.