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2021 (2) TMI 997 - HC - Income TaxProportionate deduction u/s 80IB(10) - flats measuring less than 1500 square feet - whether the benefit under section 80IB(10) is in respect of the entire "housing project" and not in respect of the flats/units specific independently? - HELD THAT:- All substantial question of law has already been answered in favour of the assessee by judgment of this court in (i) CIT VS. BRIGADE ENTERPRISES LTD', [2020 (9) TMI 1137 - KARNATAKA HIGH COURT] (ii) CIT VS. SJR BUILDERS [2012 (3) TMI 615 - KARNATAKA HIGH COURT] and (iii) CIT VS. S.N.BUILDERS & DEVELOPERS [2021 (1) TMI 789 - KARNATAKA HIGH COURT] Tribunal held that the assessee would be entitled to deduction under section 80IB(10) in respect of 12th and 13th floor flats, when the flats were combined and were measuring more than 1500 square feet - Second substantial question of law has been answered in favour of the assessee in (i) UCO BANK VS. CIT [1999 (5) TMI 3 - SUPREME COURT] (ii) STATE OF KERALA AND OTHERS VS. KURIAN ABRAHAM PRIVATE LIMITED AND ANOTHER [2008 (2) TMI 289 - SUPREME COURT] (iii) NAVNITLAL ZAVERI VS. K.K.SEN [1964 (10) TMI 16 - SUPREME COURT] and (iv) AZADI BACHAO ANDOLAN [2003 (10) TMI 5 - SUPREME COURT] Whether assessee was entitled to deduction of the flats at the 12th and 13th floor when the assessee has not claimed benefit in the return of income filed, without revising the original return of income? - Third substantial question of law is covered by NATIONAL THERMAL POWER CO. LTD. VS. COMMISSIONER OF INCOME TAX [1996 (12) TMI 7 - SUPREME COURT] Computation of income - ITAT held that income of the assessee from project "Mantri Sarovar" has to be computed for the Assessment year 2006 07 on the basis of "Project computation method" - as per AS7 and AS9, the assessee has to follow percentage completion method as the assessee is a builder and developer - HELD THAT:- As under Section 145(1) of the Act, the income chargeable under the head 'Profits and Gains of Business' shall be computed in accordance with either cash or mercantile system of accounting regularly employed by the assessee. The general provision is subject to accounting standards that the Central Government may notify. The assessee is a builder and developer and not a construction contractor simplicitor. Accounting Standard- 7, titled construction contracts is applicable only in case of contractors and does not apply to the case of developers and builders which is evident from opinion rendered by expert advisory committee of ICAI. It is pertinent to note that the assessee had offered the income for Assessment Year 2007-08 and no income from the project was offered for the Assessment Year 2007-08 on the basis of project completion method and that either method of accounting finally lead to the same results in terms of profits and therefore, revenue neutral. - Decided in favour of assessee.
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