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2020 (2) TMI 1034 - AT - Income TaxAssessment u/s 153A - Deduction u/s 801B(10) rejected as claimed for the first time in return filed in response to notice under section 153C - HELD THAT - CIT(A) has rejected the section 80IB(10) claim of the assessee on the short ground that it was claimed for the first time in return filed in response to notice under section 153C and that there was no adjudication on the merits. This claim cannot be rejected merely on the ground that the claim has been made for the first time in 153C proceedings and that it has to be therefore adjudicated on merits. In view of the above discussions and bearing in mind the fact that there is no adjudication on merits by the Learned CIT(A) we deem it fit and proper to remit the matter to the file of the Learned CIT(A) for adjudication on merits
Issues Involved:
1. Denial of deduction under section 80IB(10) of the Income Tax Act. 2. Disallowance of "cost of right release expense" on cancellation of booking of customers. 3. Addition under section 68 of the Income Tax Act for deposits received at the time of booking of flats. Detailed Analysis: 1. Denial of Deduction under Section 80IB(10): The primary issue revolves around the denial of deduction claimed under section 80IB(10) of the Income Tax Act. The Commissioner of Income Tax (Appeals) [CIT(A)] confirmed the action of the Assessing Officer (AO) in denying the deduction on the grounds that: - The appellant first claimed the deduction in the return filed in response to notice under section 153C, and no such claim was made in the original return filed electronically. - The requisite auditor's report in Form No. 10CCB was not filed before the due date prescribed under section 80AC read with sections 80IB(13) and 80LA(7). The Tribunal noted that the assessee firm, engaged in the business of construction and development, had acquired development rights in land and incurred various expenses related to the development and construction of a housing project. The Tribunal referenced earlier decisions, including Radhe Developers and Shakti Corporation, which established that the assessee had dominant control over the land and bore all risks associated with the project. The Tribunal concluded that the claim could not be rejected merely because it was first made in the return filed in response to notice under section 153C. Consequently, the matter was remitted back to the CIT(A) for adjudication on merits. 2. Disallowance of "Cost of Right Release Expense": The second issue pertains to the disallowance of expenses incurred on the cancellation of booking of customers. The CIT(A) confirmed the AO's disallowance of ?11,71,000/- and ?6,00,000/- in two separate cases, despite the recipients being duly assessed to tax and the amounts being offered for taxation in their returns. The Tribunal, noting the similarity in facts and circumstances, remitted these matters back to the CIT(A) for fresh adjudication on merits. 3. Addition under Section 68: The third issue involves the addition made under section 68 of the Income Tax Act for deposits received at the time of booking of flats. The CIT(A) confirmed the AO's addition of ?15,68,000/- and ?1,54,000/- in two separate cases, alleging the transactions as bogus. The Tribunal, consistent with its approach in similar cases, remitted these matters back to the CIT(A) for fresh adjudication on merits. Conclusion: All three appeals were allowed for statistical purposes, with the Tribunal remitting the matters back to the CIT(A) for fresh adjudication on merits as per the provisions of law. The Tribunal emphasized that claims under section 80IB(10) should be adjudicated based on merits and not merely on procedural grounds related to the timing of the claim. This order was pronounced in open court on 19/02/2020.
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