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2014 (11) TMI 176 - AT - Income TaxValidity of reopening of assessment Allowability of deduction u/s 80IB(10) - Prorate provision for allowing 80IB claim – Held that:- CIT(A) has given categorical finding that there was no reason or evidence to believe that the flat in question was exceeding area of 1,000 sq. ft. - The unit No.105 & 106 of ‘B’ Wing was not the area of flats but it was a prayer hall having area of 1593 sq. ft., which area was treated by the assessee as non-residential area in original assessment proceedings and no deduction u/s 80IB(10) was claimed in respect of that area - Even a survey was conducted on 03.02.06 and the assessee had reduced the deduction in respect of car parking and deposits etc. also - Flat Nos.105 & 106 of ‘A’ Wing were combined was also wrong - It was established before the Ld. CIT(A) that in ‘A’ Wing instead of 105 & 106, the office premises was constructed and in all 11 offices were constructed in ‘A’ Wing upon which no deduction u/s 80IB(10) was claimed - the loose papers upon which the figure was written were not suggestive of the fact that the assessee had received any amount in cash - Even the assessee had properly explained and reconciled the figures before the CIT(A) - there was no reason to believe that the income of the assessee had escaped assessment. Revenue could not draw any document on the file which was found during the second survey action from which it can be said that the AO had reasons to believe that the income of the assessee had escaped assessment - the AY in question being 2004-05, the clause ‘d’ was inserted to section 80IB(10) from 01.04.05 had prospective effect and the assessee was even entitled to claim deduction on the commercial area as decided in CIT v. Brahma Associates [2011 (2) TMI 373 - BOMBAY HIGH COURT] - the deduction u/s 80IB(10) is allowable to a housing project approved by the local authority having residential units with commercial user to the extent permitted under the Development Control rules/regulations framed by the respective local authority and that the clause ‘d’ was not applicable to the projects approved before the insertion of the said clause i.e. from 01.04.05 - the assessee itself has not claimed any deduction in respect of the commercial area - so far the reopening of the assessment is concerned, there was no infirmity in the order of the CIT(A) while holding that the reopening was bad in law – Decided against revenue.
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