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2012 (11) TMI 176 - AT - Income TaxDeduction under S.80IB of the Act - sale of flats at semi-finished condition of the flat – Held that:- Circular of the CBDT dated 30.6.2009 makes it very clear that deduction under S.80IB(10) of the Act can be claimed on year to year basis, where the assessee is showing the profits from partial completion of the project in each year - project was not completed within four years, the deduction granted to the assessee in earlier years shall be withdrawn - When the developer is offering profits under percentage completion method, the estimated profits that the developer will have on completion of the project is spread over the earlier years and offered every year a percentage of that profit based on percentage of project completed that years - except in the last year, the assessee will be offering income even though the project (and in the individual flats) would not have been completed. As clarified in the Circular such profits offered are also entitled relief u/s 80IB – matter remanded to the file of the AO Estimation of profits - AO considered 5% to be too low in this line of business – AO found that certain expenditure were not completely verifiable and not all details were available in respect of expenditure, therefore, adopted rate of 8% for estimating profit as against 5% adopted by the assessee – Held that:- Appellant has adopted the rate of profit at 5% without any basis - In respect of turnover of up to ₹ 40 lakhs net profit is presumed to be @ 8% u/s 44AD - profit to be estimated at 8% - appeal of the assessee is dismissed Business expenditure u/s 37(1) - construction of a temple in the housing project – Held that:- Construction of temple is for welfare of the employees to instill spirituality to lead peaceful life, therefore, the expenditure incurred towards construction of temple is a part of the housing project, which is allowable as capital expenditure – In favor of revenue Disallowance towards cost of lift – alleged that bill was raised on dated 23/03/2005 not related to the assessment year under consideration – Held that:- Assessee failed to substantiate its claim by producing the bills raised by the supplier in AY 2004-05 and other evidence to prove that the expenditure is relating to AY 2004-05 - matter remanded to AO
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