TMI Blog2021 (5) TMI 554X X X X Extracts X X X X X X X X Extracts X X X X ..... p area and the assessee has eventually constructed the area far in excess of what was approved and prayed for allowing of this appeal? - HELD THAT:- On close scrutiny of the judgment rendered by this court in Brigade Enterprises Ltd. [ 2020 (10) TMI 1168 - KARNATAKA HIGH COURT] , wherein held has held that accounting Standard 7 was not applicable to the real estate developers. Therefore, he submitted that percentage of completion method cannot be thrashed upon assessee and assessee was right in following the project completion method as per accounting standard 9 and the facts involved in the said case, we are of the considered opinion that the substantial question of law involved in this appeal is squarely answered in the said case. Foll ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f income declaring 'Nil income' after claiming chapter VI(A) deduction of ₹ 7,25,97,346/-. The return of income is processed. This case is selected for scrutiny to examine the correctness of claim made under Section 80IB(10) of the Act. The main issue in this case pertains to claim of deduction under Section 80IB(10) of the Act. The assessment was concluded under Section 143(3) by disallowing the claim u/s.80IB(10) of the Act. It is submitted that there was a deviation from the sanctioned plan. The project was approved with a sanctioned built up area is for 1,53,044 sq.ft. whereas the total built up area is 2,20,220 sq. ft. far in excess of what was approved. By doing so, the assessee has violated the law under which the sanct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submitted that percentage of completion method cannot be thrashed upon assessee and assessee was right in following the project completion method as per accounting standard 9. 5. In Brigade Enterprises supra, the co-ordinate bench of this court, has raised as many as five substantial questions of law and for the purpose of this appeal, substantial question of law Nos.1 2 alone are necessary which reads as under: (i) Whether the tribunal is correct in deleting the disallowance of ₹ 15,27,310/- under Rule 8D(2)(II) while making the disallowance under Section 14A of the Act without appreciating that, when the interest 3 expenses incurred cannot be directly attributed to any particular income or receipt, provision of rule 8D(2)( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orm part of the total income under this Act. (3) The provisions of sub-section (2) shall also apply in relation to a case where an assessee claims that no expenditure has been incurred by him in relation to income which does not form part of the total income under this Act : Provided that nothing contained in this section shall empower the Assessing Officer either to reassess under section 147 or pass an order enhancing the assessment or reducing a refund already made or otherwise increasing the liability of the assessee under section 154, for any assessment year beginning on or before the 1st day of April, 2001. Rule 8D(2) The expenditure in relation to income which does not form part of the total income shall be the aggrega ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ards any interest expenditure can be made. Similar view was taken in CIT VS. HDFC BANK LTD., 366 ITR 505 (Bom). The aforesaid decisions were followed by a bench of this court in 'PRINCIPAL COMMISSINOER OF INCOME TAX AND ANOTHER VS. GOLDMEN SACHS SERVICES P. LTD.', 409 ITR 268 (KARN). In the light of the aforesaid legal position, we may advert to the findings recorded by the Commissioner of Income Tax (Appeals). In para 4.5, the Commissioner of Income Tax (Appeals) has held that there is no material on record to show that overdraft amount has directly been used for tax exempt investments. It has also noted that in fact, tax free investments have come down to ₹ 34,78,31,000/- as on 31.03.2009 from ₹ 405,21,54,000/- as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ilar view has been taken by this court in BRINDAVAN BEVERAGES PVT. LTD. supra . The Commissioner of Income Tax (Appeals) in para 5.6 has held that the subsidiaries of the assessee are special purpose vehicle companies and as the assessee is involved in the real estate business, the advances were paid in the normal course of business. The assessee had to pay advances to the land owner for the purposes of entering into Joint Development Agreement for development of real estate projects, therefore, the advances are business advances and cannot be treated as non business or capital advances. The tribunal in para 10.5.1 has held that reserves and surplus earned by assessee company is approximately to the extent of ₹ 994.92 Crores as again ..... X X X X Extracts X X X X X X X X Extracts X X X X
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