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2018 (4) TMI 698 - AT - Income TaxAssessment u/s 153C - Held that:- The conclusion drawn by the first appellate authority regarding the retrospective application of amended provision of section 153C of the Act cannot be sustained and the assessee’s case would be governed by the provisions of sub–section (1) of section 153C of the Act as it existed prior to its amendment by Finance Act, 2015, w.e.f. 1st June 2015. As discussed earlier, the seized document on the basis of which the Assessing Officer has initiated proceedings under section 153C has been factually proved to be not belonging to the assessee which has also been accepted by the first appellate authority. Therefore, the condition precedent of section 153C of the Act was not satisfied at the time of initiation of assessment proceedings under the said provision. That being the case, the proceedings initiated under section 153C of the Act for the assessment years 2005–06 to 2010–11 are vitiated and as a natural corollary, the assessment orders passed in pursuance to such proceedings have to be held as invalid. Claim of deduction under section 80IB(10) - Held that:- There is nothing either in the statement of Sashikant Chhatrawala or Sameer Bhojwani to conclude that the housing project was constructed as per seized unapproved plan dated 31st December 2001. As regards the allegation of the Assessing Officer that four flats have been merged to make it two flats, thereby, violating the conditions of 80IB(10)(c), the learned Commissioner (Appeals) held, if after the flats were sold by the assessee the purchasers merged the flats the assessee cannot be held responsible for alleged violation of conditions of section 80IB(10) of the Act. Commissioner (Appeals) held, when the assessee has constructed the housing project as per the approved plan with each residential unit having built–up area of less than 1,000 sq.ft, assessee’s claim of deduction under section 80IB(10) cannot be disallowed. Accordingly, he directed the Assessing Officer to allow assessee’s claim of deduction under section 80IB(10) of the Act. Allowance of assessee’s claim of deduction under section 80IB(10) in respect of leave and licence fees - Held that:- The unsold flats, being stock-in-trade of the housing project, being the immediate source of the impugned rental income, we find direct nexus of the said income to the housing project on hand. Therefore, the said income is derived from the housing project, making the income eligible for deduction u/s 80IB(10) of the Act.
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