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2023 (4) TMI 189 - AT - Income TaxAssessment u/s 153A - Addition u/s 14A pertaining to expenditure incurred for earning the exempt income - HELD THAT:- Assessee had suo motu only made disallowance under section 14A of the Act to the extent of Rs.2,501/-. However, the assessee had earned exempt income during the year under consideration to the amount of R.20,19,580/- only. Under the circumstances, after following the decision of Hon’ble Supreme Court in the case of State Bank of Patiala [2018 (11) TMI 1565 - SC ORDER] and CIT vs Joint Investments Pvt Ltd [2015 (3) TMI 155 - DELHI HIGH COURT] It is settled that the disallowance is to be restricted to the extent of exempt income earned by the assessee - we direct the Assessing Officer to restrict the disallowance to the extent of exempt income earned by the assessee, since assessee itself had not made disallowance more than the exempt income earned by it. Therefore, the ground of appeal of the Revenue stands dismissed and the cross objection filed by the assessee is partly allowed. Deduction u/s 80IB(10) - AO observed that assessee has violated the condition for claiming deduction under section 80IB(10) of the Act in respect of the said project since built up area of the flat was exceeding 1000 sq.ft. - CIT(A) has allowed the claim of deduction under section 80IB(10) on prorate basis - HELD THAT:- As perused the decision of Models Construction Pvt Ltd [2020 (12) TMI 88 - BOMBAY HIGH COURT] wherein allowing of deduction under section 80IB(10) on prorate basis was upheld - no infirmity in the decision of Ld.CIT(a). Accordingly, grounds 3 & 4 of the Revenue are dismissed. Disallowance u/s 14A - HELD THAT:- Appeal of the assessee are partly allowed by directing the Assessing Officer to restrict the disallowance to the extent of exempt income earned by the assessee. Disallowance of Work-in- Progress (WIP) - HELD THAT:- As the assessee has failed to provide relevant supporting evidence to substantiate that M/s Jitnat Infrastructure Pvt Ltd has provided project management services during the year. Even during the course of appellate proceedings before us, the assessee has not furnished any supporting evidences to demonstrate that the said party has rendered the project management services to justify the claim of payment. In this regard we further notice that co-ordinate bench of the ITAT in the case of assessee itself [2022 (11) TMI 413 - ITAT MUMBAI] has also sustained the disallowance made by the Ld.CIT(A) for want of relevant supporting evidence for rendering of service to the assessee. Accordingly, this ground of appeal of the assessee stands dismissed. Disallowance u/s 40(a)(ia) - non compliance of TDS provisions in computation of income for A.Y. 2011-12 - HELD THAT:- These facts were disclosed by the assessee in the original return of income. However, inadvertently, the same remained to be claimed in the revised return of income filed for A.Y. 2012-13. After following the decision of Hon’ble Supreme Court in the case of NTPC [1996 (12) TMI 7 - SUPREME COURT] as relied upon by the Ld.Counsel for the assessee, we restore this issue to the file of the Assessing Officer to allow the claim of the assessee after verification of the relevant materials and after affording due opportunity of being heard to the assessee. Therefore, this ground of appeal of the assessee is allowed for statistical purpose. Levying penalty under section 271(1)(c) - invalid notice issued u/s 274 - HELD THAT:- On perusal of the copy of the notice under section 274 read with section 271(1)(c) of the Act it is clear that Assessing Officer has not specified whether the penalty is being levied on account of concealment of income or furnishing of inaccurate particulars of income. As relying in assessee’s own case for A.Y. 2005-06 [2022 (10) TMI 1160 - ITAT MUMBAI] since the issue on hand being squarely covered, following the principle of consistency, we find merit in the submission of the assessee and direct the Assessing Officer to delete the penalty since the notice issued under section 274 read with section 271(1)(c) of the Act was bad in law.
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