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2012 (12) TMI 60 - AT - Income TaxLate filing of the audit report in form 10CCB alleged that the assessee should have filed the audit report in the prescribed form no.1OCCB along with the return of income as required under section 80IA(7) read with section 80IB(13) of the IT Held that:- Assessing officer was not right in rejecting the appellants claim for deduction under section 80-18(10) on the ground that the audit report was not submitted in time or was defective - requirement of filing the audit report along with the return is directory and not mandatory In favor of assessee Deduction u/s.80IB(1O) alleged that the assessee did not own one acre of land at the time of commencement of project and also at the time of approval of the project Held that:- Area of plot of land at the time of approval of the first plan has a limited when it was revised after adding the deficit area in the area of plot and finally the project was completed on the plot of land having more than one acre as required under clause (b) of sec. 80IB(10) - when the project was completed on the plot of land having more than one acre, then the condition as prescribed u/s 80IB(10)(b), is fulfilled because the plan was sanctioned and occupancy certificate was issued by the local authorities to the project on more than one acre of land - approval of the project has per clause (a) of sec. 80IB is relevant for completion of the project within the prescribed time period - assessee has complied with the requirement of having the project on the area of plot of land minimum of one acre - in favour of assessee Deduction u/s.80IB(1O) - ownership of land alleged that the assessee is not the full-fledged owner in respect of an area of one acre which is the minimum requirement for eligibility for deduction uls.80IB(1O) as the assessee has sold undivided interest over the land held by entering into agreements with individuals for transfer of undivided share of interest in land and into contracts for construction of residential units Held that:- Assessee has developed the project in its own name; therefore, transfer of undivided share in the land to the identified buyers of the constructed residential units is only a modus-operandi by the assessee to transfer the project in two parts viz constructed units and interest in the land separately. This method appears to be adopted by the assessee to save the stamp duty as different rate is applicable if the residential unit along with the undivided interest is sold together in comparison of the rate applicable on separate sale of land and building. Further, this arrangement was to facilitate the finance from banks In favor of assessee Disallowance of interest alleged that assessee firm had advanced a peak interest free loan to the sister concern - Assessing Officer held that there was diversion of interest bearing funds for non business Held that:- Assessee was having sufficient credit balance in the bank account as well as advances received from the customers when the advance was given to the sister concern - in the absence of direct nexus between the interest bearing funds and advance given to the sister concern, the disallowance is not justified in favor of assessee
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