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2022 (5) TMI 1177 - AT - Income TaxProportionate deduction u/s. 80IB(10) - Assessee made alternate claim seeking proportionate deduction u/s. 80IB(10) of the Act for flats which are compliance with the provisions of the Act - AO denied the same - HELD THAT - CIT(A) observed that there were numerous decisions by the Tribunals and High Court and held the assessee is entitled to get the proportionate deduction on the profits of the eligible units which comply with the provisions of section 80IB(10) of the Act, accordingly, directed the AO to allow deduction u/s. 80IB(10) of the Act on eligible units vide para 6.15 of impugned order. Having considering the facts and circumstances of the case and decisions of this Tribunal in respect of allowing proportionate deduction u/s 80IB(10) of the Act which was not disputed by the ld. DR, in our opinion, the CIT(A) rightly allowed deduction for eligible units by placing reliance on the decisions of Hon‟ble High Court which were followed by the Tribunals. Thus, we find no infirmity in the order of CIT(A) in holding the assessee is entitled to have deduction u/s 80IB(10) of the Act on eligible units. Thus, grounds raised by the Revenue fails and are dismissed. Denying deduction u/s 80IB(10) of the Act in respect of 10 flats - HELD THAT - We find the contentions raised by the ld. AR were raised before both the authorities below. It was contended that the assessee erected an additional wall and a box like window instead of a regular window shed which was separated from the internal wall of the said residential unit with 6 cavity is not usable. In order to verify the same, the AO sought report from the DVO, who clearly stated the said 10 flats exceeding the prescribed built up area of 1500 sft. and particularly held that the said window is includable in the built up area. Therefore, it is clear the additional wall and box like window is to be included in the built up area which is above the prescribed built up area as required for claiming deduction u/s 80IB(10) of the Act. There is no dispute with regard to this position by the ld. AR. Therefore, we find no infirmity in the order of CIT(A) as it was thoroughly discussed from para No.6.10 to 6.12 of the impugned order. Thus, we hold that the assessee is not entitled to claim deduction u/s80I(10) of the Act and we completely agree with the reasons recorded by the CIT(A) and it is justified. Thus, ground No.1 raised by the assessee fails and is dismissed. Disallowance on account of warranty expenses - HELD THAT - We note that the CIT(A) in the impugned order clearly held that the assessee has not elaborated as to how the facts and issues are identical with the case of its sister concern i.e. Gera Developments Pvt. Ltd. 2013 (3) TMI 719 - ITAT PUNE and by following the ratio of Hon‟ble Supreme Court in the case of Rotork Controls India Pvt. Ltd. 2009 (5) TMI 16 - SUPREME COURT held that the assessee is not entitled to claim warranty expenses allowable u/s 37 of the Act. We find no submissions made before us substantiating the claim of the assessee in terms of the order in the case of Gera Developments Pvt. Ltd. as relied on by the ld. AR. Therefore, in view of the same, we find no infirmity in the order of CIT(A) and it is justified. Thus, ground No.2 raised by the assessee is dismissed. Disallowance made by the AO on account of hawala bills - HELD THAT - We note that admittedly no details were submitted before the lower authorities below as it is evidenced from the impugned order - DR did not report objection in remanding the matter to the file of AO. Therefore, considering the facts and circumstances of the case and in the interest of justice, we deem it proper to remand the matter to the file of AO for fresh consideration in terms of the material evidences as filed before us at pages 43 to 71. The assessee further is at liberty to file evidences, if any, in support of its claim. Thus, ground No.3 raised by the assessee is allowed for statistical purposes.
Issues:
1. Eligibility for claiming proportionate deduction u/s. 80IB(10) of the Income-tax Act, 1961. 2. Denial of deduction u/s 80IB(10) of the Act in respect of 10 flats. 3. Disallowance of warranty expenses. 4. Disallowance of hawala bills. Analysis: Issue 1: The judgment involved two appeals filed by the Revenue and the assessee against a common order passed by the Commissioner of Income Tax (Appeals) for assessment year 2011-12. The primary issue was whether the assessee was eligible for claiming proportionate deduction u/s. 80IB(10) of the Income-tax Act. The assessee, engaged in real estate development, sought deduction for eligible units complying with the Act. The CIT(A) allowed the deduction based on Tribunal and High Court decisions, which the ITAT Pune upheld, dismissing the Revenue's appeal. Issue 2: In the appeal by the assessee, the challenge was against the denial of deduction u/s 80IB(10) of the Act in respect of 10 flats. The contention was regarding the inclusion of certain structures in the built-up area calculation. The ITAT Pune upheld the CIT(A)'s decision, stating that the additional structures were to be included in the built-up area, making the assessee ineligible for the deduction. Issue 3: The second ground raised by the assessee was the disallowance of warranty expenses. The ITAT Pune referred to a previous Tribunal order involving a sister concern of the assessee. It noted that the assessee failed to demonstrate the identical nature of facts and issues with the previous case. Consequently, the ITAT Pune upheld the CIT(A)'s decision, denying the warranty expenses claim. Issue 4: The third ground challenged the disallowance of hawala bills. The ITAT Pune observed that no details were submitted before the lower authorities. However, the assessee presented evidence during the appeal. The ITAT Pune decided to remand the matter to the AO for fresh consideration based on the new evidence, allowing the ground for statistical purposes. In conclusion, the ITAT Pune dismissed the Revenue's appeal and partially allowed the assessee's appeal for statistical purposes, addressing the various issues raised in the judgment.
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