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2017 (1) TMI 507 - ITAT PUNE

2017 (1) TMI 507 - ITAT PUNE - [2017] 54 ITR (Trib) 465 - Allowance of deduction under section 80IB(10) - Interest received - treated as “Income from Other sources” OR "business receipts" - Held that:- The issue of assessability of interest income is decided against the assessee by the Tribunal in assessee’s own case in the appeals relating to assessment years 2008-09 and 2009-10 wherein it has been held that the assessee was unable to demonstrate that the receipt of income was derived from and .....

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filed by the assessee and the Revenue are against order of CIT(A)-II, Pune, dated 28.05.2014 relating to assessment year 2010-11 against the order passed under section 143(3) of the Income Tax Act, 1961 (in short the Act ). 2. The cross appeals filed by the Revenue and the assessee were heard together and are being disposed of by this consolidated order for the sake of convenience. 3. The assessee in ITA No.1835/PN/2014 has raised the following grounds of appeal :- 1. The Learned CIT(A) and AO .....

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#39;s claim of deduction u/s.80IB(10) of the I.T. Act, 1961 in respect of profit from the project 'Brahma Majestic' by relying on the decision of SB, Pune ITAT in the case of Bra mha Associates and also Pune ITAT's decision in the assessee's own case for A.Ys.2006-07 & 2007 -08. 2. The learned Commissioner of Income-tax (Appeals) erred in holding that the amended section 80IB(10)(d) would apply only to the projects started after 01.04.2005. 3. The learned Commissioner of Inco .....

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ssioner of Income-tax (Appeals) erred in failing to appreciate that the ITAT, Special Bench, Pune in its decision in the case of Brahma Associates for the A.Y.2003 -04 had held beyond any confusion that the position with effect from assessment year 2005-06 would be different in view of the specific restriction brought into effect by Section 80IB(10)(d) which provides that the commercial use of built up area shall not exceed 2000 sq.ft or 5% of the aggregate built up area, whichever is less. 5. T .....

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er of Income-tax (Appeals) erred in allowing the assessee's claim of deduction u/s.80IB(10) of the l.T. A ct, 1961 in respect of profit from the project 'Brahma Avenue' by relying on decisions for A.Ys.2006-07,2007-08,2008-09 & 2009-10. 7. The learned Commissioner of Income-tax (Appeals) erred in holding that the project 'Brahma Avenue' is a separate project distinguishable from the project 'Brahma Estate' and that the project 'Brahma Avenue' commenced on .....

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eciate that in the commencement certificate in respect of project 'Brahma Avenue' it was clearly stated that it was a revised layout and, moreover, there was no separate layout plan or building plan approved by the Pune Municipal Corporation for the project 'Brahma Avenue'. 10. The learned Commissioner of Income-tax (Appeals) erred in failing to appreciate that as the Brahma Avenue project is merely an extension of Brahma Estate project, which had been given approval on 06.10.200 .....

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it from the project "Brahma Suncity" ignoring the fact that each flat and its so called next flat called A providing only living room and toilet were always conceptualized, considered, marketed and sold as one flat with one electric meter. 12. The learned Commissioner of Income-tax (Appeals) erred in allowing the above deduction ignoring the fact that the wall between the above two units was never built and therefore area of all the flats in those buildings was always more than 1500 sq .....

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issioner of Income-tax (Appeals) erred in arriving at the above decision on the basis of the remand report of the Assessing Officer without taking into cognizance that 10 out of 13 statements recorded by the A.O at the time of assessment proceedings could not be considered in the remand proceedings by the Assessing Officer and consequently the decision of the CIT(A) based on such inconclusive evidence was incorrect. 15. The learned Commissioner of Income-tax (Appeals) erred in allowing assessee& .....

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the order of Tribunal in assessee s own case in earlier years. It was also pointed out by the learned Authorized Representative for the assessee that the name of assessee changed from M/s. Bramha Builders to M/s.Bramha Corp Ltd. and the partnership concern was converted into a Limited Company. 6. The issue arising in the appeal filed by the assessee is as to assessability of interest income and whether the same is to be assessed as Income from other sources or as Business income . 7. Briefly, i .....

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s of its project namely, Brahma Majestic , Brahma Exuberance , Brahma Avenue , Brahma Suncity and Brahma Emerald County , at Kondhwa, Pune. The Assessing Officer in the first instance considered the claim of deduction under section 80IB(10) of the Act in respect of each of the projects. The Assessing Officer noted that some of units in different projects exceeded the built up area of 1500 sq.ft. and also there was commercial built up area in the project, which was exceeding the limit allowed und .....

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tion 80IB(10) of the Act in respect of all the projects. The independent findings of Assessing Officer in respect of each of the project and the same are discussed in the assessment order. Further, the Assessing Officer noted that the assessee had received interest income of ₹ 68,13,244/- which was not offered to tax by the assessee clubbing it with the business receipts and claimed the deduction under section 80IB(10) of the Act. The Assessing Officer also noted that in the preceding year .....

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reat the same as Business income and claim deduction under section 80IB(10) of the Act. 9. The assessee is in appeal against the treatment of interest income as business income in the hands of assessee. 10. The Revenue has filed the grounds of appeal in respect of allowance of deduction under section 80IB(10) of the Act in respect of each of the project. 11. The learned Authorized Representative for the assessee fairly pointed out that the issue of assessability of interest income is decided aga .....

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rival contentions and perused the record. The issue arising in the present appeal is squarely covered by the order of Tribunal vide para 8.1 at page 40, wherein it has been held that the assessee was unable to demonstrate that the receipt of income was derived from and was part of business receipts in order to enable it to claim deduction under section 80IB(10) of the Act. Following the same parity of reasoning and in view of the concession of the learned Authorized Representative for the assess .....

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