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2020 (9) TMI 193 - AT - Income TaxDeduction u/s 80lB(10) - Profit attributable to Car parking space and preferential location charges - Revenue contended that, assessee does not qualify for exemption beyond 1500 sq. ft. if car parking space and PLC are included and thereby violating sec. 80IB(10) - HELD THAT:- Taking note of the decision of the Hon’ble Bombay High Court ‘s decision in the case of Purvankara Projects Ltd [2011 (7) TMI 1352 - BOMBAY HIGH COURT] and M/s.Vaman Estate [2012 (10) TMI 1208 - ITAT MUMBAI] we find that the car parking space sold to the owners of the residential unit of the housing projects are eligible for claiming of deduction u/s. 80IB(10) of the Act and it has been rightly claimed by the assessee because the profits derived from sale of car parking space as well as preferential location charges (PLC) &Height Escalation Charges (HEC) are part and parcel of the housing projects. Since these are integral part of the housing project, the profit derived from sale of car parking space as well as on PLC & HEC is eligible for deduction u/s. 80IB (10) of the Act since deduction u/s 80 IB is available in respect of eligible housing project. Therefore profits derived by assessee from eligible housing project including the profit from sale of car-parking/PLC&HEC as discussed has been rightly allowed by the Ld CIT(A). Therefore, we do not deem it necessary to interfere in the impugned order of the ld. CIT(A) and accordingly, ground No.1 & 2 raised by the revenue are dismissed. Addition for compensation paid u/s. 37(i) and 40(a)(ia) - CIT- A deleted the addition - HELD THAT:- Payment has been made through banking channel, which fact has not been disputed by the revenue. The assessee has given justification for compensation of payment to the said persons. The AO has alleged that the assessee failed to deduct TDS on such payment. And the AO disallowed the expenditure u/s. 37(1) read with section 40(a)(ia) of the Act. However, we note that there is no specific provision specified in Chapter XVII(B) of the Act by virtue of which assessee is obliged to deduct tax at source. We note that if these two persons were not evicted the assessee could not have completed the housing project and these two would not have vacated unless they were paid compensation as agreed between them. Therefore the compensation paid to these two persons was on account of commercial expediency, so it is an allowable deduction. CIT(A) has rightly deleted the same. Therefore, we do not want to interfere with the impugned order of the Ld. CIT(A) on this issue and so we uphold the same. This ground of revenue is dismissed.
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