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TMI Blog2021 (5) TMI 554X X X X Extracts X X X X X X X X Extracts X X X X ..... l was admitted by this Court on 5.11.2018 for consideration of the following substantial questions of law: (i) Whether on the facts and circumstances of the case, the Tribunal is correct in law in allowing the deduction under section 80IB to the assessee when the project was approved with a sanctioned built-up area and the assessee has eventually constructed the area far in excess of what was approved? (ii) Whether on the facts and circumstances of the case, the assessee is eligible to claim deduction under section 80IB that the assessee has violated the plan approved and that the assessee did not get any further approval for "Floor Area Ratio" (FAR) by the authorities?" 2. Facts leading to filing of this appeal briefly stated a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... approved plan and conditions set out in Section 80IB(10) are not satisfied by assessee. Therefore, the Tribunal is erred in allowing deduction under Section 80IB(10) of the Act when the project was approved with a sanctioned built up area and the assessee has eventually constructed the area far in excess of what was approved and prayed for allowing of this appeal. 4. On the other hand, learned Senior counsel for the assessee submitted that this Court in 'CIT Vs. BRIGADE ENTERPRISES LTD.' (2020) 120 TAXMANN.COM 346 (KAR) and 'CIT Vs. SJR BUILDERS', supra and the decision of Madras High Court in 'CIT Vs. ARUN EXCELLO FOUNDATIONS (P) LTD.' (2013) 259 CTR 362, has held that accounting Standard 7 was not applicabl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 13 as under: "10. Before dealing with first substantial question of law, it is apposite to take note of Section 14A(2) and Rule 8D(2) as it existed prior to its substitution by income tax 14th amendment Rules, 2016 with effect from 02.06.2016, which will apply to the facts of the case as the Assessment Year is 2009-10, which read as under: 14A.(2) The Assessing Officer shall determine the amount of expenditure incurred in relation to such income which does not form part of the total income under this Act in accordance with such method as may be prescribed, if the Assessing Officer, having regard to the accounts of the assessee, is not satisfied with the correctness of the claim of the assessee in respect of such expenditure in relation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... last day of the Previous Year; C = the average of total assets as appearing in the balance sheet of the assessee, on the first day and the last day of the Previous Year. (iii) an amount equal to one-half percent of the average of the value of investment, income from which does not or shall not form part of the total income, as appearing in the balance sheet of the assessee, on the first day and the last day of the Previous Year. 11. The 'CIT VS. RELIANCE UTILITIES AND POWER LTD.', 313 ITR 340 (Bom), the Bombay High Court has held that where interest free funds exceed the value of investments, it can safely be inferred that investments have been made out of interest free funds and no disallowance under Section 14A toward ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed with the aforesaid concurrent findings of fact in this appeal under Section 260A of the Act. [SEE: SYEDA RAHIMUNNISA VS. MALAN BI BY L.RS. AND ORS. (2016)10 SCC 315 and PRINCIPAL COMMISSIONER OF INCOME TAX, BANGALORE & ORS. VS. SOFTBRANDS INDIA P. LTD., (2018) 406 ITR 513]. 12. Thus, the first substantial question of law is also answered against the revenue and in favour of the assessee. 13. This takes us to the second substantial question of law. The Supreme Court in MUNJAL SALES Corpn. VS. COMMISSIONER OF INCOME-TAX, LUDHIANA, has held that where the assessee had sufficient funds and has given loan to sister concern out of its own funds, the assessee is entitled to deduction of interest on loan. Similar view has been taken by this ..... X X X X Extracts X X X X X X X X Extracts X X X X
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