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2014 (10) TMI 973

project, being the immediate source of the impugned rental income, we find direct nexus of the said income to the housing project on hand. Therefore, the said income is derived from the housing project, making the income eligible for deduction u/s 80IB(10) of the Act. Therefore, the conclusions drawn by the CIT (A) are not sustainable in law. - Decided in favour of assessee - Regarding the miscellaneous income as held by the Revenue Authorities as ineligible income for the purpose of deduction u/s 80IB(10) we find, the Income Tax Authorities has not gone into the facts relating to this income. As per the Ld Counsel, the same constitutes reimbursements of maintenance charges by the flat owners. This is the reimbursement of expenses incur .....

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m leave & license fees of ₹ 49,12,503/- and Miscellaneous Income of ₹ 14,500/-. 2. On the facts and in the circumstances of the case and in law, the Ld CIT (A) erred in confirming the levy of interest by the AO of ₹ 1,89,833/- u/s 234B of the Act. 3. At the outset, Shri Mayur Kisnadwala, Ld Counsel for the assessee mentioned that the assessee is a builder and engaged in the business of development of housing project which is allowable for deduction u/s 80IB of the Act. There is no dispute about the project and the allowability of deduction of profits relatable to the sale proceeds of the flats of the said housing project. The only dispute relates to the allowability of deduction u/s 80IB of the Act in respect of the re .....

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is delivered in the context of deduction u/s 80Q of the Act, wherein it was held that advertisement income constitutes eligible profits. In this case, the income is earned on sale of yellow pages. Drawing parallal to the above instances, Ld Counsel for the assessee submitted that the rental receipts earned out the unsold flats of the housing project should be held eligible for deduction. Further, Ld Counsel for the assessee brought our attention to the judgment of the Hon‟ble Supreme Court in the case of Liberty India vs. CIT [2009] 317 ITR 218 (SC) for the proposition that the income with first degree nexus should be considered as eligible income for the purpose of claim of deduction uj/s 80IB of the Act. 6. On the other hand, Ld DR .....

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m of deduction. In our opinion, this matter should visit the file of the AO for fresh adjudication after analyzing the relevant facts. Accordingly, we remand this part of the ground no.1 raised by the assessee for the AY 2006-07 and allowed for statistical purposes. 9. Ground no.2 relates to the levy of interest u/s 234B of the Act. Considering the consequential nature of this ground, adjudication of the same is an academic exercise. Accordingly, ground no.2 is dismissed. 10. In the result, appeal of the assessee is partly allowed for statistical purposes. ITA No. 2168/M/2009 (AY 2005-2006) ITA No.2693/M/2011 (AY 2007-2008) 11. These appeals are filed by the assessee for the AY 2005-06 and 2007-08. Since, the grounds raised in the present a .....

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