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2013 (3) TMI 148 - AT - Income TaxDeduction u/s 80IB(10) - housing project - validity of the certificate issued by Corporation of Chennai - whether the Corporation of Chennai can be considered a local authority - held that:- No doubt, “local authority” has not been defined anywhere in Section 80-IB(10) of the Act. However, sub-section (2) of Section 10 exempts income of a local authority which is otherwise chargeable to tax under the head Income from house property, capital gains or income from other sources. Explanation thereunder states that local authority will definitely include a Municipal Committee, Panchayat and Cantonment Board. Therefore, we are of the opinion that ld. CIT(Appeals) was correct in reaching a conclusion that a local authority will include Corporation of Chennai. - Decided in favor of assessee. Deduction u/s 80IB(10) - disproportionate profits when compared to projects on which there was no such claim - held that:- There is no case for the Revenue that any of the expenses was not properly allocated to the projects nor that some of the expenses were exclusively incurred on the projects for which there was a claim of deduction under Section 80-IB(10) of the Act. Therefore, a finding that the projects on which claim of deduction under Section 80-IB(10) of the Act was preferred had higher margin of profit, would not be sufficient enough reason to reject such a claim. Deduction u/s 80IB(10) - works contractor versus developer - held that:- No doubt, Finance (No.2) Act of 2009 with retrospective from 1.4.2001 had added an explanation to Section 80-IB(10) whereby it has been declared that deduction under Section 80-IB(10) could not be given to an undertaking which executes a housing project as works contractor. But, as already held by us, here the assessee could not be considered as a mere works contractor, it having been concerned with acquisition of land, promotion of the project, construction and selling of the flats. Undue reliance was placed by the A.O. on the agreements entered by the assessee with prospective buyers in this regard. - Deduction allowed - Decided in favor of assessee.
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