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TMI Blog2014 (1) TMI 79X X X X Extracts X X X X X X X X Extracts X X X X ..... ing proportionate deduction under section 80IB(10) in its return of income though it did not fulfill the conditions required for allowance of the said deduction" 2. The relevant facts are that the assessee is an AOP and developed a Housing Project in the name of "Ekta Meadows". As per return filed for the assessment year, the assessee declared profit on account of the said project of Rs.17.50 crores. In the return of income the assessee claimed proportionate deduction under section 80IB(10) at Rs.11,37,50,000/- on account of total area of 312 flats having built up area less than 1000 sq.ft each, which constitutes 65% of total profit of the project. In the return, the assessee claimed that balance profit of Rs.6,12,50,000/- represents taxab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AO is of the view that once any of the conditions of section 80-lB is violated by the builder appellant , then the appellant looses benefit of deduction it its entirety and such deduction cannot be availed on pro-rata basis/proportionate basis even on those flats which does not violate the size limit prescribed u/s 801B. On the other hand, the case of the appellant is that it is eligible for deduction u/s. 80-lB on pro-rata basis on those flats where there is no violation of section 80-lB. It is noted that in various decisions of ITAT/High Court of Bombay, the issue of deduction u/s. 80-IB have been examined from different angles. In the case of sister concern of the appellant, i.e M/s. Ekta Housing P. Ltd., it has been held by the jurisdic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... im at all. The central issue involved in this appeal is liability of deduction on proportionate basis, which is a highly debatable issue and various higher Courts including the jurisdictional ITAT, Mumbai has decided this issue in favour of the appellant including in the case of sister concern of the appellant. Therefore, I agree with the appellant that in the light of the Apex court decision in the case of Reliance Petroproducts (P) Ltd. (supra), levy of penalty does not appear appropriate on the facts of this case. Accordingly, the penalty levied by the AO is not justified, hence, the same is directed to be deleted". Hence this appeal by department. 4. At the time of hearing, the ld. AR submitted that the return of income was accepted a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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