TMI Blog2016 (4) TMI 858X X X X Extracts X X X X X X X X Extracts X X X X ..... es that go to enhance its profits and would be eligible for full deduction under section 80 IB(10) of the Act, which provides for deduction from the profits and gains from the eligible business. Thus we hold and direct that the assessee would be entitled to deduction under section 80 IB(10) of the Act to the extent of the assessee’s assessed business income of ₹ 2,64,65,160/-, determined in the order of assessment dated 14/12/2009 for assessment year 2007-08 and which has been enhanced thereto by virtue of the disallowance of compensation of ₹ 8,85,750/-, which would go to enhance the profits of the assessee’s eligible business. - Decided in favour of assessee - ITA No. 1633/MUM/2013 - - - Dated:- 29-2-2016 - SHRI JASON P. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appeal vide order dated 30/11/2010 allowing the assessee partial relief. In this order the CIT(Appeals) allowed the assessee s claim for deduction under section 80IB(10) of the Act to the extent of ₹ 2,55,90,033/-. In the order passed under section 143(3) r.w.s. 250 of the Act by the Assessing Officer on 5/01/2011 to give effect to the aforesaid order of the CIT(Appeals), the Assessing Officer allowed the assessee deduction under section 10B(10) of the Act to the extent of ₹ 2,52,97,456/-. 2.3 Aggrieved by the order dated 5/1/2011 passed by the Assessing Officer in respect of giving effect to the aforesaid order of the CIT(Appeals), the assessee preferred an appeal before the CIT(Appeals)- 26, Mumbai challenging the Assessing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich is a binding precedence on the lower authorities. 3.2 Before us, the Ld. Representative for the assessee was heard in support of the grounds raised. It was contended that the CIT(Appeals) had erred in restricting the assessee s claim for deduction under section 80 IB(10) of the Act to ₹ 2,55,90,033/- instead of the enhanced business income of ₹ 2,64,65,160/- as determined by the Assessing Officer in the order of assessment. It was alleged that the assessee s submissions in this regard, in respect of the issue of enhanced deduction under section 80 IB(10) of the Act and case laws filed, were brushed aside and not addressed in the impugned order and this is amply clear when the same is perused. In support of the assessee s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... profits and gains from the eligible business. In the aforesaid order, the Co-ordinate Bench of this Tribunal has rendered the following finding in this regard at para 5 6 thereof, which are extracted hereunder:- 5. We have carefully considered the rival submissions and gone through the orders of the authorities below and the judgments relied upon by the learned AR. It is undisputed fact that the appellant is an undertaking and is engaged in the manufacturing of article specified in Fourteenth schedule and in a specified category of states for which it is eligible for deduction u/s.80IC. Such an exemption has been allowed in the earlier years by the Assessing Officer himself i.e. for the Assessment Year 2005-06 and 2006-07. Subsection ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een sections 30 to 43D and therefore effect must be given to the same in computing the profits and gains derived from the eligible business, which in this case is a housing project. It follows that if the assessee has not deducted tax from any payment which it was required to or has failed to deposit the tax within the prescribed time-limit, it cannot claim any deduction in respect of the payment while computing the profits derived from the eligible business. The payment has to be disallowed and added back to the profits, thereby swelling the same. The resultant figure of profits, enhanced by the amount of disallowance, would be eligible for the deduction u/s.80-IB(10). The profits and gains of the eligible business, for the purpose of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rofits derived from the housing project or as operational profits . 5.1 Similarly in the case of M/s. Jitsan Enterprises v. ITO (supra), the ITAT after relying on various judgments has held that the assessee would be entitled to deduction u/s.80IB on the amount disallowed u/s.40(a)(ia) while working out the eligible profits of the industrial undertaking. Likewise the other two decisions relied upon by the learned AR also support the case of the appellant. 6. In view of the aforesaid preposition of law and ratio laid down by the various courts, we hold that disallowance of `Rs.7,38,038/- made u/s.40(a)(ia) by the Assessing Officer will go to enhance the profit which would again be eligible for full deduction u/s.80IC as it pro ..... X X X X Extracts X X X X X X X X Extracts X X X X
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