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2012 (7) TMI 306 - AT - Income TaxEntitlement to deduction u/s 80IB(10) on the amount disallowed u/s 40a(ia) - Held that:- The expenditure of eligible unit stands disallowed consequently the same results in increase of the profit of the eligible unit. The deduction under section 80IB is allowable in respect of profits and gains derived from the industrial undertaking, thus any disallowance of business expenditure of the eligible unit will logically result in enhancement of deduction allowable under section 80IB - During the year as the expenditure of the eligible business is disallowed the assessee's business income derived from the eligible business of the industrial undertaking stands at increased figure and therefore, the assessee will be eligible for deduction of enhanced amount under section 801B - there cannot be a double deduction to the assessee. Since the assessee is deriving its income only from the eligible business of construction of flats in respect of which the assessee is entitled to deduction u/s 80 IB(10) there is nothing to suggest that the amount disallowed u/s 40a(ia) is not related to the business of the industrial undertaking - upholding the findings of the CIT(A) that the assessee is entitled to deduct ion u/s 80IB(10) on the amount disallowed u/s 40a(ia) - in favour of assessee.
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