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Shri Praiyavadan P. Shah Versus ITO (OSD) -II, Range-9, Ahmedabad

2016 (4) TMI 645 - ITAT AHMEDABAD

Disallowance of deduction u/s 80IB(10) - audit report required u/s 44AB - Held that:- In section 80IB(13) of the Act it has been provided that the provisions of section 80IA(5) and 80IA (7) to (12) shall apply to the eligible business mentioned in section 80IB(10) of the Act. Now further going through the section 80IA(7) of the Act we find that the deduction for profits and gains arrived from such eligible business shall not be admissible unless the account of the undertaking for the previous ye .....

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lly we find that report in form no.10CCB which was mandatorily required has not been furnished along with the return of income and this is further supported by the report of auditors in form no.3CD relating to audit report required u/s 44AB wherein the auditor has made a remark that “as advised to us by assessee claim u/s 80IB(10) is available and we have been disclosing the same as a reply to point 26 of the form 3CD. The assessee has requested us to continue with the same disclosure till to th .....

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CIT(A). - Decided against assessee. - ITA No.1200/Ahd/2015 - Dated:- 2-3-2016 - Shri Rajpal Yadav, JM, & Manish Borad, AM. For The Appellant by Shri S. N. Divetia, AR For The Respondent by Shri Vilas V. Shinde, DR ORDER PER Manish Borad, Accountant Member. This appeal of the assessee is directed against the order of CIT(A)-V, Ahmedabad, dated 12.03.2015. Assessment was framed on 20/12/2010 u/s 143(3) of the I.T. Act, 1961 (in short the Act) for Asst. Year 2008-09 by ITO(OSD)-II, Range-9, Ahm .....

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law and or on facts in confirming the disallowance of the deduction claimed u/s.80-16(10) of ₹ 2,66,002. 2.2 That in the facts and circumstances of the case, the Ld.CIT(A) ought not to have confirmed disallowance of deduction u/s.80-IB(10) especially when the very issue has been decided in favour of the appellant for A.Y.2001-02 by ITAT and for A.Y. 2006-07 by CIT(A) . 2.3 The Ld. CIT(A) has failed to appreciate that the filing report in Form No. 10CCB was not mandatory for claiming deduct .....

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gaged in the business of organizer cum project consultant and has been assigned the work as per the project consultation agreement entered with Priyavadan Co-op. Housing society in which the assessee is also a founder member. This agreement was notarized on 20.09.2000. The assessee has been regularly claiming deduction u/s 80IB(10) of the Act for Asst. Year 2001-02 being the first year of claim u/s 80IB(10) of the Act, as per Tribunal s order passed in ITA No.1576/Ahd/2005 dated 12.4.2007. Retur .....

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ns namely -(i) assessee had been denied deduction u/s 80IB(10) in earlier years and matter being still sub-judice and (ii) nonfiling of audit report in form no.10CCB of the Act for claiming deduction u/s 80IB(10) of the Act along with return of income. Accordingly, income of the assessee was assessed at ₹ 2,72,913/-. 4. Aggrieved, assessee went in appeal before ld. CIT(A). However, ld. CIT(A) dismissed the appeal of assessee by observing as under :- 4.3. I have considered the facts of the .....

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in ITA No.l576/A/05 have granted the deduction u/s.80IB(10) of the Act to the appellant. Further it was also claimed that in A.Y. 2006-07 the Id. CIT(A) vide his order dtd. 13.4.2010 has allowed the appeal. Along-with the submission the appellant had enclosed the copy of the order of Hon'ble ITAT, Ahmedabad for A.Y. 2005- 06 and 2006-07 in ITA No.862/Ahd/2009 and ITA No.2051/Ahd/2010 dtd. 12.10.2012 whereby the claim of deduction u/s.80IB(10) has been restored back to the file of the CIT(A) .....

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tained and filed till date. Instead of giving a separate report in form No.lOCCB, the auditor in 3CD report at column No.26 remarked "as advised to us by the assessee claim u/s.80IB(10) was admissible." Further the notes of accounts was also made by the auditor as under- (2) As advised to us by the assessee claim u/s.80IB(10) is available and 23 have been disclosing the same as a reply to point 26 of the form 3CD. The assessee has requested us. to continue with the same disclosure till .....

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quirement for the appellant to file the audit report in Form No.l0CCB as per Rule-18BBB read with Section. 80IB(13) r.w.s. 80IA(7). The audit report for eligibility of the deduction u/s.80IB has to be submitted along with the return of income so filed by the appellant but in the instant case the appellant has not enclosed the said report in Form No.l0CCB besides the audit report in Form No.3CB and 3CD. Even in the assessment proceedings and also in the appellate proceedings the appellant has not .....

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plied the statutory conditions of submission of the audit report in Form No.3CCB. 4.8. It is needless to mention that in the audit report 3CD column No26 and from the notes to the accounts the auditor has not given his own observations about the eligibility of the deduction u/s.80IB. Rather the advice of the appellant about the eligibility of the claim has been simply depicted. So it was not the observations of the auditor on merit but was the advice of the appellant. Further in the notes on acc .....

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ar also. Ld. AR further submitted that the assessee should have been given a reasonable opportunity to furnish the audit report in form no.10CCB of the Act for claiming deduction u/s 80IB(10) of the Act as the same was not mandatory to be filed along with the return. 7. On the other hand, ld. DR supported the orders of lower authorities. 8. We have heard the rival contentions and perused the material on record. The only issue for our adjudication is eligibility of assessee for claiming deduction .....

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IB of the Act that for deduction u/s 80IB(10) assessee is required to furnish audit report in form no.10CCB of the Act along with the return of income as referred under Rule 18BBB of the IT Rules, 1963 which can be inferred from following provisions of sections of the Act - Sec.80IB(13) The provisions contained in sub-section (5) and sub-sections (7) to (12) of section 80-IA shall, so far as may be, apply to the eligible business under this section. Sec. 80IA (7) [The deduction] under sub-sectio .....

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the audit of the accounts of an assessee, which is required to be furnished under sub-section (7) of section 80-IA or sub-section (7) of section 80-I, except in the cases of multiplex theatres as defined in sub-section (7A) of section 80-IB or convention centres as defined in sub-section (7B) of section 80-IB 1[or hospitals in rural areas as defined in sub-section (11B) of section 80-IB], shall be in Form No. 10CCB. (2) A separate report is to be furnished by each undertaking or enterprise of t .....

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the Central Government or the State Government or the local authority for carrying on the business of developing or operating and maintaining or developing, operating and maintaining the infrastructure facility. (4) In any other case, the form shall be accompanied by a copy of the agreement, approval or permission, as the case may be, to carry on the activity signed or issued by the Central Government or the State Government or the local authority for carrying on the eligible business.] 8.1 Fro .....

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