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2015 (12) TMI 360 - ITAT BANGALORE

2015 (12) TMI 360 - ITAT BANGALORE - TMI - Deduction u/s.80IB(10) disallowed - according to revenue DVO’s report clearly mentioned that assessee had deviated from the original approved plan - Held that:- Once a plot of land has more than one acre, the number of housing projects therein would not matter. There is no case for the Revenue that assessee had violated any conditions or not satisfied any other conditions set out u/s.80IB(10) of the Act. Though DVO has pointed out deviation from the app .....

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was less than one acre. Though we hold that assessee is eligible for deduction u/s.80IB(10) of the Act, for quantification of such claim, we remand the issue back to the file of the AO. - Decided in favour of assessee for statistical purpose.

Disallowance of 30% of labour charges - Held that:- Disallowance of 30% of labour charges was made for a reason that selfmade vouchers did not carry the addresses of the payees. May be it is true that only self-made vouchers can be maintained in .....

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t, 2010 had to be construed retrospectively - Held that:- There is no dispute that tax was deducted by the assessee and remitted by it before the due date of filing the return of income. We find that this issue had come up before the Hon’ble jurisdictional High Court in the case of Anil Kumar & Co (2013 (7) TMI 231 - KARNATAKA HIGH COURT ) as held by the Finance Act, 2008, which is given retrospective effect from April 1, 2005, the benefit of that provision had been extended to the assessee, tho .....

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Shri. Sanjay Kumar, CIT -III ORDER Per Abraham P. George, Accountant Member These are cross appeals filed by assessee and Revenue respectively directed against an order dt.21.02.2014 of CIT (A)-III, Bengaluru. 02. Assessee s appeal is taken up first for disposal. Assessee has altogether raised 18 grounds of which grounds 1, 2, 3, 16, 17 and 18 are general needing no specific adjudication. Ground.15 is on levy of interest u/s.234B and C of the Income-tax Act, 1961 ( the Act in short), which is c .....

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onstructed in Survey No.50/11, Santhamarenahalli, K R Puram, Bangalore. For verifying the claim of assessee, AO made a reference to the District Valuation Officer (DVO in short). DVO recommended disallowance of the claim made by the assessee u/s.80IB(10) of the Act noting that out of the four blocks in the land area of 3 acres and 36guntas, the three blocks which were referred to him by the AO were situated in a land area which was below one acre. Further as per the DVO, some portion of the land .....

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h apartment was only for easy market and did not in any way effect the claim made u/s.80IB(10) of the Act. However, AO was of the opinion that assessee was unable to explain as to how it was eligible for the claim u/s.80IB(10) of the Act. He denied the claim. 04. Aggrieved assessee moved in appeal before the CIT (A). Argument of the assessee was that each project was considered as different one by the AO erroneously. According to the assessee, approved plan sanctioned by the Town Municipality of .....

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was less than 1 acre and there was deviation from the sanctioned plan. As per the CIT (A) assessee could not rebut the findings of AO and DVO. He upheld the disallowance. 05. Now before us, Ld. AR strongly assailing the orders of lower authorities submitted that the permission for construction was issued by the Town Municipality of K. R. Puram on 19.01.2006. According to him, copy of the permission is placed at pages 35 and 36 of the paper book clearly showed that the plan included therein Lake .....

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the area of 3.36 acres as independent was incorrect. Relying on the judgment of Hon ble Bombay High Court in the case of CIT v. Vandana properties (254 ITR 258), Ld. AR submitted that what was relevant was the area of plot of land. According to him there could be any number of housing projects in a given area of land and if the projects were approved by the local authority then 80IB(10) of the Act could be availed provided other conditions set out therein were satisfied. According to him there .....

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al to construct 204 units with the land area of 3 acres and 36 guntas i.e.15782.22 sqm with the single unit whereas as per site condition there are four apartments viz., Lake city Residency, Lake beauty, Lake Glacier and Lake Enclave. However only three apartments are referred to this office viz., Lake Beauty, Lake Glacier and Lake Enclave. The land utilized for the above three apartments are as follows : 1 Lake Enclave 17 .90x22 80 = 408.12 Sqm or 4393 sft which is less thai 2 Lake Glacer and L .....

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that area of land where assessee was having the projects measured 3 acres and 36 guntas. Financial statements of the assessee for the relevant previous year placed at paper book pages 3 to 34 at schedule 14, has shown income from sale of flats at Lake City Residency. Obviously assessee was having income from each of the project coming in the Lake City Residency. Approval letter mentions that the plan was sanctioned for Lake City Residency with separate blocks therein. Hon ble Bombay High Court i .....

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e argument of the Revenue does not stand to reason because, in the city of Mumbai where there is acute space crunch, it is difficult to find a vacant plot having minimum area of one acre and even if few such plots are existing it cannot be said that Section 80IB (10) deduction was intended to give benefit only to the undertakings who construct housing projects on those few plots. Therefore, it is clear that on a plot of land having minimum area of one acre, there can be any number of housing pro .....

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assessee subject to fulfilling other conditions becomes entitled to Section 80IB (10) deduction on construction of a housing project on a plot having area of one acre, irrespective of the fact that there exist other housing projects or not. In these circumstances, the decision of the Tribunal in rejecting the contention of the Revenue regarding the size of the plot cannot be faulted. 09. Thus once a plot of land has more than one acre, the number of housing projects therein would not matter. Th .....

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ies that no verification has been done with regard to the quantum of the claim. Denial of the claim has been made for the sole reason that area of the land where the project was being executed was less than one acre. Though we hold that assessee is eligible for deduction u/s.80IB(10) of the Act, for quantification of such claim, we remand the issue back to the file of the AO. Orders of the lower authorities are set aside and the issue is remitted back to the AO for correctly quantifying the clai .....

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g to AO, genuineness of the expenditure could not be proved by the assessee in full. He made an ad hoc disallowance of 30% of the claim. Such disallowance came to ₹ 2,34,414/-. 11. Assessee s appeal before the CIT (A) on this issue was not successful. According to CIT (A), assessee could not show that the expenditure on labour claimed by it was supported by proper vouchers. 12. Now before us, Ld. AR strongly assailing the order of lower authorities submitted that labour charges could be su .....

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can stop the assessee from giving full address of the recipients. Having failed to do we cannot say that assessee had discharged its onus for supporting its claim. We are of the opinion that lower authorities were justified in making a disallowance of 30%. No interference is required. Grounds 12 to 14 of the assessee are dismissed. 15. Now we take up the appeal of Revenue. Sole issue raised by the Revenue is that CIT (A) deleted the disallowance u/s.40(a)(ia) of the Act, considering that Financ .....

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placed on judgment of Hon ble jurisdictional High Court in Anil Kumar & Co., V. ITO (354 ITR 170). 18. We have perused the orders and heard the rival contentions. There is no dispute that tax was deducted by the assessee and remitted by it before the due date of filing the return of income. As per the AO, amendment to Section 40(a)(ia) made through Finance Act, 2010, was applicable only prospectively. We find that this issue had come up before the Hon ble jurisdictional High Court in the ca .....

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ate authority and granted relief to the assessee. Aggrieved by the said order, the present appeal is filed. At the time of admission, this court has framed the following substantial questions of law : "(i) Whether the amendment to section 40(a)(ia), as amended by the Finance Act, 2010, with effect from April 1, 2010, is retrospectively applicable to the assessment year 2005-06 as held by the Income-tax Appellate Tribunal in the present case ? (ii) Whether the assessee who has credited the p .....

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rise for consideration. 5. The substantial question of law which arises for consideration is : "Whether the assessee by virtue of the amendment to the Finance Act, 2008, is entitled to the benefit of the same ?" 6. It is not in dispute that on the date the assessee deducted the tax, he had to pay/remit the money within seven days from that date and if the amount is actually paid when the credit is given, then the tax is payable within two months. Admittedly, in the instant case, the as .....

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