2017 (5) TMI 1824 - HC - Income Tax

Choice of Method of accounting - addition made by the assessing officer to the income of the respondent for the relevant year based on percentage completion method - HELD THAT - Question stands answered in favour of the Assessee and against the Revenue by the order passed by this Court in Shipra Estate Ltd. Jai Kishan Estate Developers Pvt. Ltd 2016 (11) TMI 1758 - DELHI HIGH COURT Consequently no substantial question of law arises on this issue. Deduction u/s 80IB (10) - The following questions are, therefore, framed for consideration - (i) Whether the ITAT was correct in partly allowing the deduction under Section 80IB (10) and whether the project as a whole did not satisfy the conditions in Section 80IB (10) of the Act? (ii) Whether the ITAT was correct in directing the Assessing Officer to exclude the area of balcony which was open to the sky while calculating built up area of a flat which is contrary to the definition of built up area given in the section 80IB? Set down for final hearing on 22nd September, 2017.

Summary

Issues Involved:
Delay in re-filing appeal, Addition made by assessing officer based on percentage completion method, Deduction under Section 80IB (10), Calculation of built-up area of a flat.

Delay in Re-filing Appeal:
The High Court condoned the delay in re-filing the appeal in ITA No. 178/2017 for reasons explained in the application, thereby disposing of the application.

Addition Made by Assessing Officer Based on Percentage Completion Method:
The appeal by the Revenue under Section 260A of the Income Tax Act, 1961 challenged the addition made by the assessing officer to the income of the respondent for the relevant year based on percentage completion method. However, this issue had already been decided in favor of the Assessee by a previous order of the Court, rendering it unnecessary to address again. Consequently, no substantial question of law arose on this issue.

Deduction under Section 80IB (10):
The Court framed questions for consideration regarding the correctness of the ITAT's decision on deduction under Section 80IB (10). The questions included whether the ITAT was correct in partly allowing the deduction and whether the project as a whole satisfied the conditions in Section 80IB (10) of the Act. The Court set the matter for final hearing and directed both parties to file their written notes of arguments and relevant case laws for the next hearing.

Calculation of Built-Up Area of a Flat:
Another question raised was whether the ITAT was correct in directing the Assessing Officer to exclude the area of a balcony open to the sky while calculating the built-up area of a flat, which seemed contrary to the definition provided in Section 80IB. This issue was also scheduled for final hearing on a later date, with instructions for both parties to submit their arguments and relevant documentation.