2020 (12) TMI 170 - AT - Income Tax

Deduction u/s 80IB(10) denied - date of sanction of project from Surat Development Authority as on 05.02.1997 is gathered by the A.O. from the sale deeds of the land where the assessee undertaken the development of project - permission was granted to earlier owners - assessee has not fulfilled the condition laid down in section 80IB(10) of the Act has the completion of project was not within Four (04) years from 01.04.2004 as laid down under section 80IB(10) - HELD THAT - Considering the decision of Co-ordinate Bench of Tribunal in assessee s case for A.Y. 2010-11 2017 (4) TMI 1522 - ITAT AHMEDABAD on identical set of facts, on identical grounds of appeal and respectfully following the same, we do not find any illegality or infirmity in the order of the ld. CIT(A) wherein the ld.CIT (A) followed the order of his predecessor for A.Y. 2010-11, thus, we affirm the order of Ld. CIT(A). Moreover, the AO has not disputed the fact that the sanction of development of housing project was granted to the assessee only on 23.02.2007 and that the assessee completed the project well within time from 23.02.2007. In the result, appeal of Revenue in Ground No.1 and 2 are dismissed. Addition u/s 68 - HELD THAT - Almost in all cases substantial payments are made by cheques. Therefore, there is no logic to treat those advances as unexplained. Before us assessee also explained that all amounts were received as advance. The assessee executed sale deeds of various units / flats, copy of sale deeds are placed before us. We find that the ld. CIT(A) passed the order after considering all those documentary evidences. Before passing the order the ld.CIT(A) granted opportunity to the AO to furnish his remand report. In the remand report, the AO made a general remark despite the fact that the complete details were available on the registered sale deeds. In view of the above discussion, we do not find any infirmity in the order passed by the ld.CIT(A) in deleting the addition under section 68 - Decided in favour of assessee. Unexplained deposits - HELD THAT - No adverse material is brought against the documentary evidence nor was any contrary submission made by the ld. DR for the revenue. Therefore, keeping in view that the sale deed is registered before Government Authorities and has direct relevance with the fact in issue, therefore the additional evidence admitted. Considering the evidence in the form of registered sale deed in favour of Sandeep Poonamiya for purchase of flat No. B-502, we are in principle agree that the assessee has fully explained this deposit. Thus, we direct the AO to verify the facts and delete this addition - Hence, this part of addition is allowed for statistical purpose.

Summary

Issues Involved:
1. Disallowance of deduction under section 80IB(10) of the Income Tax Act.
2. Addition under section 68 of the Income Tax Act.

Detailed Analysis:

1. Disallowance of Deduction under Section 80IB(10):

The assessee, engaged in the construction business, claimed a deduction of ?1,04,42,145 under section 80IB(10) for the development of a housing project. The Assessing Officer (AO) disallowed this deduction, arguing that the housing project was initially approved by the Surat Urban Development Authority (SUDA) on 05.02.1997, and as per section 80IB(10), any project approved before 01.04.2004 must be completed by 31.03.2008. Since the construction was completed on 01.10.2010, the AO held that the assessee did not meet the conditions for the deduction.

On appeal, the Commissioner of Income Tax (Appeals) [CIT(A)] allowed the deduction, referencing a similar decision for the previous assessment year (2010-11), which was upheld by the Tribunal and the Jurisdictional High Court. The Tribunal confirmed the CIT(A)'s order, noting that the housing project was sanctioned on 23.02.2007 and completed within the permissible time frame, thus meeting the requirements of section 80IB(10). The Tribunal dismissed the Revenue's appeal on this issue.

2. Addition under Section 68:

The AO noted that the assessee received advances from customers totaling ?1,70,91,811 but failed to provide complete details, including PAN numbers and addresses. Consequently, the AO added this amount under section 68 as unexplained cash credits.

The CIT(A) deleted the addition of ?1,23,05,311, finding that the advances matched the payment details in registered sale documents, which included PAN numbers and other relevant details. However, the CIT(A) sustained the addition of ?47,86,500 due to discrepancies and lack of evidence for certain advances.

The Tribunal upheld the CIT(A)'s decision to delete the addition of ?1,23,05,311, agreeing that the advances were substantiated by registered sale deeds and other documentary evidence. For the sustained addition of ?47,86,500, the Tribunal examined each case:

- Anand Vashi: The Tribunal directed the AO to verify the transfer of Flat No. A-801 and delete the addition of ?15,95,000, as the income was offered in the subsequent year.
- Sandeep Poonamiya: The Tribunal admitted additional evidence (sale deed) and directed the AO to verify and delete the addition of ?17,21,500.
- Ravishankar Ratanlal Agarwal: The Tribunal upheld the addition of ?5,00,000 due to lack of evidence for extra work claimed.
- Arvind Dave: The Tribunal deleted the addition of ?5,00,000, accepting the explanation of refunded advances and settlement details.
- Kanti Praful Tayal and Dhirubhai: The Tribunal sustained the additions of ?4,50,000 and ?20,000, respectively, as no documentary evidence was provided.

Conclusion:

- The Tribunal dismissed the Revenue's appeal regarding the disallowance of deduction under section 80IB(10).
- The Tribunal partly allowed the assessee's appeal, directing the AO to verify and delete certain additions under section 68, while sustaining others due to lack of evidence.

Order Pronounced:
- The appeal of the Revenue is dismissed.
- The appeal of the assessee is partly allowed.

Order pronounced on 27-11-2020 as per Rule 34(5) of Income Tax (Appellate Tribunal) Rules 1963.