TMI Blog2017 (8) TMI 525X X X X Extracts X X X X X X X X Extracts X X X X ..... the donation there is no question of addition of ₹ 2,12,000/-. Therefore, we allow the same. Ground No. 1 is allowed. Disallowance of interest expenditure - proof of investments made out of own funds and borrowed funds were utilized for the purpose of business - Held that:- We find that the AO and the CIT(A) has not considered whether the assessee has given these advances towards purchase of property or loans have been given for the Bhoomi Acres project or not. Therefore, we restore this matter back to the file of the AO and the AO is directed to verify all the facts whether these loans are given for business purposes or not and decide the matter according to law. - ITA No.4912 /Mum/2015 And ITA No.5014 /Mum/2015 - - - Dated:- 10-7-2017 - Shri P K Bansal, Vice President And Shri D.T. Garasia, Judicial Member For The Appellant : Shri Mahaveer Jain Shri Prateek Jain For The Respondent : Shri T.A. Khan ORDER Per Bench These are cross appeals filed by the assessee and Revenue against the order of the CIT(A) 18, Mumbai dated 06.07.2015 for A.Y. 2011-12. 2. First we will take up Revenue s appeal in ITA No. 5014/Mum/2015. The grounds of appea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 46,42,841/- C TOTAL Business Profit 4,88,01,826/- During the course of assessment proceedings and in reply to the specific query of the AO the assessee submitted as under: - (a) Each residential unit of 2BHK in A to D Wing are of less than 1000 sq.ft. area (b) It is not an SRA project. (c) Assessee have claimed 80IB deduction only on building in which flats which are of less than 1000 sq.ft. area and not claimed deduction in respect of 3 BHK flats of D Wing. Various courts including Mumbai ITAT had already taken a view that in the case the residential building consists of flats of more than 1000 sq.ft and less than 1000 sq.ft., the deduction under section 80IB(10) should be allowed to the assessee on proportionate basis. In support of its contention that it is entitled to claim proportionate deduction in respect of units not exceeding 1000 sq.ft. built-up area, the assessee has placed reliance on various decisions of the ITAT. The AO did not agree with the contentions of the assessee and had disallowed the deduction under section 80IB(10) on the ground that some flats exceed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cted under section 80-IB(10). Thus, going by the definition of 'housing project' under Explanation to section 80HHBA as to the construction of 'any building' and the wordings in section 80-IB(10), the question of rejection in entirety of the project on account of any one of the blocks not complying with the conditions, does not arise. Even in the case of each one of the blocks, wherever there are flats which satisfied the conditions particularly of the nature stated under section 80-IB(10)(c), the assessee would be eligible for grant of relief under section 80-IB(10) on a proportionate basis. Thus it is held that the assessee is entitled to succeed both on the principle of proportionality as well as by reason of the construction on the meaning of the expression 'housing project' as referring to construction of any building and the wordings in section 80-IB(10). In the circumstances, it is held that the mere fact that one of the blocks have units exceeding built-up area of 1500 sq.ft. per se, would not result in nullifying the claim of the assessee for the entire projects Consequently, in respect of each of the blocks, the assessee is entitled to have the ben ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it cannot be allowable in A.Y. 2011-12 or 2008-09. The learned D.R. relied upon the order of the Revenue. 11. We have heard the rival contentions. We find that during the course of hearing the learned A.R. submitted the assessee has never claimed donation in its return of income in A.Y. 2011-12 or 2008-09. Therefore, when the assessee did not claim the donation there is no question of addition of ₹ 2,12,000/-. Therefore, we allow the same. Ground No. 1 is allowed. 12. Ground No. 2 is with regard to confirmation of the disallowance made by the AO of interest expenditure amounting to ₹ 32,18,400/- without appreciating the fact that investments were made out of own funds and borrowed funds were utilized for the purpose of business. 13. During the assessment proceedings the AO has verified the details of loans and advances. It was noted that the assessee has not charged interest on advance of ₹ 5 crores to Avaita Estates and Development P. Ltd. and ₹ 50,00,000/- to Parekh Enterprises. During the assessment proceedings the assessee was asked to show cause as to why the interest attributable to this interest free advance should not be disallowed. The asse ..... X X X X Extracts X X X X X X X X Extracts X X X X
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