TMI Blog2014 (1) TMI 701X X X X Extracts X X X X X X X X Extracts X X X X ..... ny stretch of imagination, it cannot be a hurdle in allowing the deduction u/s. 80IB(10) of the Act. If the AO was not satisfied with the computation of the profit made by the assessee than nothing prevented him to give his own computation of income - on the contrary the AO has accepted the entire working of the assessee and yet denied exemption - It would not be out of place to mention here that in the case of joint venture partner, DPMC, the claim of deduction u/s 80IB(10) has been accepted by the AO by virtue of assessment order passed u/s. 143(3) of the Act - there is no reason for disallowing the claim of the assessee u/s 80IB(10) of the Act – Decided in favour of Assessee. - ITA No.6363/Mum/2012 - - - Dated:- 5-6-2013 - H L Kar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id, assist and provide finance to DPMC for development of the said property accepted the representations made by the assessee, Rajkotia Securities Ltd (RSL.) Thereafter, the assessee and DPMC entered into a joint venture for the development of the said property as per joint venture agreement dt. 26.5.1996. It was expressly agreed that RSL shall initially arrange and pay all costs, charges and expenses that may be required for execution and implementation of the said project which included architects fees, scrutiny fees for sanctioning of FSI, administrative expenses and advertisement cost. It was further agreed that expenses so incurred by RSL upto a maximum of Rs. 25 lakhs shall be reimbursed to RSL. Thereafter M/s. DPM RSL, the joint ven ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... int venture as exhibited at page-5 of the assessment order, the AO noticed that the profit in joint venture is arrived after deducting the cost of land paid to DPMC whereas the expenses claimed to have been incurred by the assessee are not deducted. The AO concluded that the assessee has neither fulfilled the conditions of the joint venture agreement nor has submitted proper accounts and bank statements to verify the genuineness of the claim u/s. 80IB(10) and went on to reject the claim of the assessee for deduction u/s. 80IB(10) of the Act. 5. The assessee strongly agitated this issued before the Ld. CIT(A) but failed to convince him on its claim of deduction u/s. 80IB(10) of the Act. 6. Before us, the Ld. Counsel for the assessee reit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ought on record. Before proceeding further let us see the provisions of Sec. 80IB(10) of the Act: 80IB(10) ..The amount of deduction in the case of an undertaking developing and building housing projects approved before the 31st day of March [2008] by a local authority shall be hundred per cent of the profits derived in the previous year relevant to any assessment year from such housing project if,- (a) such undertaking has commenced or commences development and construction of the housing project on or after the 1st day of October, 1998 and completes such construction,- (i) in a case where a housing project has been approved by the local authority before the 1st day of April, 2004, on or before the 31st day of March, 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies and one thousand and five hundred square feet at any other place; [and] (d) the built-up area of the shops and other commercial establishments included in the housing project does not exceed five per cent of the aggregate built-up area of the housing project or two thousand square feet, whichever is less.] The following clauses (e) and (f) shall be inserted after clause (d) of sub-section (10) of section 80-IB by the Finance (No. 2) Act, 2009, w.e.f. 1-4-2010 : (e) not more than one residential unit in the housing project is allotted to any person not being an individual; and (f) in a case where a residential unit in the housing project is allotted to a person being an individual, no other residential unit in such ho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he agreement to decide whether to go forward with the project or not, by any stretch of imagination, it cannot be a hurdle in allowing the deduction u/s. 80IB(10) of the Act. 10. Coming to the second reason, according to the AO, it is not possible to verify the claim of profit sharing made by the assessee and its joint venture partner. However, at the same time we find that the AO has accepted principally the sharing of profit as exhibited by himself in his assessment order at page-5. While computing the assessed income, the AO has taken the figures of profit identically the same as declared by the assessee which means that the AO has accepted the computation of the assessee although at the end denied exemption u/s. 80IB(10) of the Act. I ..... X X X X Extracts X X X X X X X X Extracts X X X X
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