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2016 (6) TMI 454 - AT - Income TaxValidity of the proportionate deduction to the assessee’s, a builder and developer, housing project to meet the stipulated criteria of the maximum built-up area of 1000 sq. ft. per section 80-IB(10)(c) - Held that:- Proportionate deduction on the profits of a housing project which otherwise satisfies the condition of section 80-IB(10), i.e., as referable to residential units having the maximum built-up area as prescribed per clause (c) thereof, would qualify for deduction on a proportionate basis, i.e., to the exclusion of the other residential units. Addition u/s. 69C - Held that:- whether the ‘addition’ is of unexplained expenditure, deemed as income u/s. 69C, or would appropriately be disallowable as an expenditure u/s. 37(1)? - Held that:- We are at loss to understand as to how and on what basis the assessee having claimed the expenditure through its’ books of account, so that the source is explained with reference thereto, the Revenue regards it as unexplained expenditure and, consequently, deems it as income u/s. 69-C. We, accordingly, agree with the ld. CIT(A) that even if regarded as bogus purchase, the same would stand to be disallowed u/s. 37(1), leading to an increase in the assessable profits of the eligible unit. We may here also clarify that had it not been so, the addition of income u/s. 69C, i.e., on account of expenditure not explained as to its source, the same would not be liable to be regarded as the profit of the eligible unit. We have already held that the addition as made has been rightly regarded by the ld. CIT(A) as a disallowance u/s. 37(1). We, therefore, accepting the assessee’s plea that the entire amount ‘added’ be regarded as a disallowance, approve of the allowance of the assessee’s claim for deduction u/s.80-IB(10)(a) with reference to the increased amount and directed for the computation of deduction u/s.80-IB(10) at the amount so determined.
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