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2022 (7) TMI 1290 - AT - Income TaxEstimation of income - bogus purchases - CIT-A disallowing only 12.5% of the total bogus purchase in the case of the assessee who was engaged in the business of construction activities - HELD THAT:- As CIT(A) correctly held that only the profit embedded in respect of the sale on the purchases in question (bogus) should be brought to tax and not the entire purchases as done by the AO. - he correctly relied on the ratio of CIT Vs. P. Simit Sheth [2013 (10) TMI 1028 - GUJARAT HIGH COURT] wherein held that the entire purchases cannot be added, but only the profit element embedded in such questionable purchases should be added to the income of the assessee. Therefore, the Ld. CIT(A) has restricted the addition to 12.5% of the bogus purchases correctly. Deduction u/s 80IB(10) - whether ‘substantial compliance’ has been made by the assessee for claiming the exemption/deduction? - admission made in the report by MCGM rejected - HELD THAT:- Applying the principle of ‘substantial compliance’ in the facts of this case it can be seen that the assessee had complied sufficiently the requirement of law as stipulated in section 80IB(10) of the Act and as per the said provision it was bound to complete the building project before 31.03.2012 and it had filed the partial completion certificate in-respect of wing (A & B ) on 12.07.2011 and C wing on 24.12.2011 and thus it is noted that the assessee not only filed the architect certificates of completion of the project Blue Meadow, it also had filed the certificate of structure, the lift certificate as well as NOC of the fire brigade and all these certificates were filed before MCGM by Feb, 2012. And moreover it is noticed that on 27.02.2012 itself possession of the flats were given to the allottees who had made the full and final payment which fact is evident from perusal of the letter given to the allottees of housing units for possession of the flats and that one hundred twenty one (121) flats/units got occupied at Blue Meadow Project (which were regularised later) and therefore according to us, the legislative intent/conditions stipulated for giving deduction/incentive for developers like assessee u/s 80IB(1) have been sufficiently/substantially fulfilled. Therefore the deduction u/s 80IB(10) should not be denied merely because MCGM did not accept/issue occupancy certificate on 05.01.2012 or before 31.03.2012. - Decided against revenue.
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