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2015 (9) TMI 606 - AT - Income TaxEligibility of deduction u/s 80IB(10) - CIT(A) confirmed the action of the AO by observing that the society, Punit (Motera) Cooperative Hsg. Society Ltd., Ahmedabad was the sole owner of the land and the assessee has not incurred expenses on purchases of cement, steel etc. and that the assessee constructed and sold shops in the scheme, the built up area of which exceeds limit of 2000 sq.ft prescribed in clause (d) of section 80IB(10) with respect to shops constructed - Held that:- Facts in the present appeal are similar as were in the case of M/s.Skyland Developers (2014 (6) TMI 704 - ITAT AHMEDABAD) except that in the instant case, it has also been alleged by the Revenue that the assessee has not debited purchase of cement, steel etc. in the profit & loss account. Thus, we find that it is not in dispute that the assessee has actually made purchases of cement, steel etc. Actually, the AR of the assessee explained that as per the terms of agreement, the assessee was entitled to receive all the expenditure incurred for materials and 25% above that amount, apart from labour charges at ₹ 700/- per square feet. Thus, the agreement for development was cost-plus-method. The assessee instead of debiting the cost of material in the profit & loss account and crediting the profit & account with cost, and 25% thereof has credited the profit & loss account with only 25% of the cost of material and set off the expenses incurred for cost of material with corresponding receipts. In our considered view, simply because of the above presentation of account, which may not be fully correct, the assessee cannot be denied deduction under section 80IB, if the assessee is otherwise eligible for the same. As we find that apart from the above, other facts involved in the instant case is similar to the facts in the case of M/s.Skyland Developers (supra), the said decision is squarely applicable in the instant case. In the instant case, the project was approved by the Ahmedabad Urban Development Authority vide permission dated 11.6.1999, which was before the date of amendment to section 80IB(10) w.e.f. 1.4.2005. Therefore, this amendment is not applicable to the project under consideration, in view of the above quoted decision of the Hon'ble Gujarat High Court. Therefore, we hold that for the above cited reasons, the AO was not justified in not allowing deduction under section 80IB(10) to the assessee for the assessment years 2000-01, 2001-02, 2002-03 and Asstt.Year 2006-07 of ₹ 11,24,990/- each and for the Asstt.Year 2003-04 & 2004-05 of ₹ 21,86,870/- each. - Decided in favour of assessee.
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