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2016 (4) TMI 858 - ITAT MUMBAI

2016 (4) TMI 858 - ITAT MUMBAI - TMI - Disallowance of deduction u/s.80IB(10) - Held that:- From the details on record it is not disputed that the assessee is entitled to be allowed deduction under section 80 IB(10) in respect of its business income derived from its building, construction and development activities from the earlier assessment year 2006-07 itself. We find from a perusal of the decision of the Co-ordinate Bench in the case of M/s. Meha Medicure [2012 (3) TMI 517 - ITAT MUMBAI] tha .....

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o 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. BOAZ ACCOUNTANT MEMBER AND SHRI SANDEEP GOSAIN, JUDICIAL MEMBER .....

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laiming deduction of ₹ 2,52,97,456/- under section 80IB(10) of the Income Tax Act, 1961( in short the Act ). The return was processed under section 143(3) of the Act and the case was taken up for scrutiny. The assessment was completed under section 143(3) of the Act vide order dated 14/12/2009, wherein the income of the assessee was determined at ₹ 2,64,05,160/- in view of the following additions/disallowances:- (i) Disallowance of deduction u/s.80IB(10) - Rs.2,52,97,456/- (ii) Disal .....

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on 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 Offi .....

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,90,033/- as determined by the earlier order of the CIT(Appeals) dated 30/11/2011 and not to the extent of the assessee s claim that it be allowed to the extent of business income which was determined at ₹ 2,64,65,160/- by the Assessing Officer s order dated 5/01/2011. 3.1 Aggrieved by the order of the CIT(Appeals)-26, Mumbai dated 30/01/2013 for assessment year 2007-08, the assessee has preferred this appeal raising the following grounds:- 1. BECAUSE, the ld. CIT(A) has erred in law and o .....

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nce 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 .....

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dated 2/3/2012. (ii) S.B. Builders & Developers (2011) 50 DTR (Mumbai) (Tribunal) 299. (iii)Jitsan Enterprises in ITA No.1652/Ahd/2009 dated 13/04/2010 (iv) Rajkumar Exports (P) Ltd.(2009) 30(II) ITCL 474 (Chen- Tribunal) 3.3 The Ld. Departmental Representative supported the impugned order of the CIT(Appeals). 3.4.1 We have heard the rival contentions and perused the material on record including the judicial pronouncements cited and placed reliance. From the details on record it is not dispu .....

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income of the assessee is enhanced by virtue of disallowances 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. 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 .....

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hat the deduction would be available for 100% of such profits and gains for 10 assessment years if the profits and gains have been derived from such business activities. In this case, the disallowance have been made on account of non deduction of TDS on the items which are directly attributable/related to the business of the appellant, which is apparent from the heads of expenses under which these disallowances have been made. Income derived from such eligible business must be computed in accord .....

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ved and held as under : Held : Under section 80AB the income that is derived from the eligible business must be computed in accordance with the provisions of sections 30 to 43D, as provided in section 29. Section 29 provides that the income chargeable to tax under the head profits and gains of business shall be computed in accordance with the provisions contained in sections 30 to 43D . Unquestionably, section 40(a)(ia) is a section falling between sections 30 to 43D and therefore effect must be .....

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me. 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 sections falling under the heading CDeductions in respect of certain incomes , have to be computed in accordance with the computation provisions of ss. 30 to 43D as mandated by s.29. Therefore, it hardly matters whether while computing the profits in accordance with the above sections, an amount is a .....

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with the provisions of this Act…. . The section would have been differently worded if the contention of the Revenue is to be accepted. One would be ignoring the mandate of s.80AB r/w s. 29 it one accepts the stand of the Revenue. There is no authority given by these sections to ignore the effect of s.40(a)(ia). Those sections do not say that the assessee will be allowed all the deductions from the profits, but when it comes to disallowing certain claims to expenditure somehow, those provi .....

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