2022 (3) TMI 969 - AT - Income Tax

Deduction u/s 80IB(10) - unaccounted receipt - HELD THAT - It is undisputed fact that impugned on money was pertained to the undisclosed business receipt attributable to the Pimpri project of the assessee. A.O has not proved contrary to the claim of the assessee that the aforesaid on money was business receipt - Following the decision of M/S. SURANA MUTHA BHASALI DEVELOPERS VERSUS ACIT, CIRCLE 11 (2) , PUNE 2021 (7) TMI 104 - ITAT PUNE . We direct the A.O to allow deduction u/s 80IB(10) - Accordingly, the appeal of the assessee is allowed.

Summary

Issues involved:
1. Denial of deduction u/s 80IB(10) by the assessing officer.
2. Dismissal of appeal by CIT(A) regarding penalty u/s 271(1)(c) based on the assumption of opting for Vivad se Vishwas Scheme.

Issue 1: Denial of deduction u/s 80IB(10) by the assessing officer:
The appeal was filed against the CIT(A)'s order confirming the assessing officer's decision not to allow a deduction of ?2,76,05,035 under section 80IB(10) of the Income Tax Act for A.Y. 2007-08. The assessing officer had added unexplained income from the Pimpari Project to the total income, leading to the denial of the deduction claimed by the assessee. The assessing officer argued that since the project was completed in 2008-09, the deduction under section 80IB(10) was not applicable for the assessment year 2007-08. However, the ITAT referred to precedents and held that the unaccounted receipt of ?33,54,000 from the project qualified for the deduction under section 80IB(10) as it was attributable to the housing project. The ITAT directed the assessing officer to allow the deduction on this amount, thereby allowing the appeal of the assessee.

Issue 2: Dismissal of appeal by CIT(A) regarding penalty u/s 271(1)(c) based on the assumption of opting for Vivad se Vishwas Scheme:
The CIT(A) dismissed the appeal against the penalty levied under section 271(1)(c) of the Act, amounting to ?11,28,956, on the grounds that the assessee had opted for the Vivad se Vishwas Scheme. However, during the appellate proceedings, the assessee contended that they had not opted for the scheme in relation to the penalty imposed by the assessing officer. The assessee provided copies of relevant forms and submissions to support their claim. The ITAT, after considering the submissions and material on record, found merit in the assessee's contention and decided to restore the issue to the CIT(A) for a fresh decision on the matter. Consequently, the appeal of the assessee was allowed for statistical purposes.

In conclusion, the ITAT allowed the appeal of the assessee regarding the deduction under section 80IB(10) on the unaccounted receipt from the project and allowed the appeal for the penalty issue to be reconsidered based on the clarification provided by the assessee regarding the Vivad se Vishwas Scheme.