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2021 (8) TMI 1205 - AT - Income TaxExemption u/s 10(23FB) - Assessee has made investment in VCUs (Venture Capital Undertakings) - as per AO said VCU is not engaged in carrying out any real estate business during the financial year 2015-16 as there was no financials maintained by the company and as the directors of the said entity were in custody for making defaults -Amrapali Smart City Developers Pvt. Ltd. (ASCD) - HELD THAT:- CIT(A) has accepted the claim which has also been reiterated by the assessee that interest income accruing from the said concern had been allocated to various investors who would have included the same in their return for income tax and paid the due tax in terms of section 115U and taxing the said income in the hands of the assessee would result in double taxation. In this regard we note that learned Counsel of the assessee has made further submissions before us that in the subsequent financial year the assessee has reversed the interest entries from this concern on the ground that receipt was extremely doubtful - As pointed out that the assessee has not claimed deduction of the said reversion in financial accounts. In this view of the matter, in our considered opinion order of CIT(A) on this issue is cogent and does not need any interference in our part. Disallowance made with respect to CSN Estates Pvt. Ltd - CIT(A) is correct in holding that CSN is engaged in the development of the project. That it has purchased and provided land for the project, obtained necessary approvals and sanctions and has entered into development agreement with Lemon Tree for development and construction. Hence, in our considered opinion disallowance made by the Assessing Officer has been rightly deleted by learned CIT(A) Whether income of VCF shall be exempt only to the extent it is from the investment in venture capital undertaking ? - CIT- A deleted the addition - HELD THAT:- Observation of the AO that, VCF was eligible for deduction under a specific section 10(23FB) and therefore it cannot claim deduction under another section 10(35) of the Act is totally inapplicable in the facts and circumstances of the case. Exemption under section 10(23FB) and exemption under section 10(25) of the Act operates in different fields. CIT(A) is correct in holding that operations of these sections are independent. Assessee’s income in VCU is exempt under section 10(23FB) of the Act and the dividend income is exempt under section 10(35) of the Act. Hence, there is no infirmity in the assessee’s claim of exemption on dividend income under section 10(35) - Decided against revenue.
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