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2016 (4) TMI 205 - AT - Income TaxEligibility of deduction u/s 80IB - whether CIT(A) is justified in treating WBIHDCO as Local Authority for allowing deduction u/s 80IB although it does not fall under the categories as defined in Section 10(20) of the I.T.Act? - Held that:- The order of the CIT(A) does not call for any interference. The only reason assigned by the AO for not allowing deduction u/s.80-IB(10) of the Act was since the housing project in question was approved by WBHIDCO and since income of WBHIDCO is not covered by Explanation below section 10(20) of the Act and the housing project of the Assessee, it cannot be said that the housing project was approved by local authority and therefore the deduction u/s.80-IB(10) of the Act is not admissible. As rightly contended by the Assessee and held by the CIT(A), the explanation below Sec.10(20) of the Act is only for the purpose of Clause (20) of Sec.10 and this has been made very clear in the said explanation itself. It cannot therefore be extended to the provisions of Sec.80-IB(10) of the Act. WBHIDCO has been appointed as a Planning authority in respect of the Planning area of Rajarhat pursuant to notification issued under the WB Town and Country (Planning & Development) Act, 1979. For the purpose of Sec.80-IB(10) of the Act it is natural that the authority in charge of planned developed in an area should be the proper authority to sanction plans for housing project keeping in view the need for planned and organized development. We are of the view that the AO misdirected himself in making reference to provisions of Explanation to Sec.10(20) of the Act which defines the term "Local Authority" only for the purpose of the purpose of Clause (20) of Sec.10. For the reasons given above, we confirm the order of the CIT(A) and dismiss the appeal by the Revenue. - Decided in favour of assessee
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