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TMI Blog2021 (5) TMI 922X X X X Extracts X X X X X X X X Extracts X X X X ..... d by this Court on 5.11.2018 for consideration of the following substantial question of law: "Whether on the facts and circumstances of the case, the Tribunal is right in holding that assessee is entitled for deduction under Section 801B(10) of the Income Tax Act even when the assessee has not satisfied the requirements of the said provision and 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?" 2. Facts leading to filing of this appeal briefly stated are that the assessee is a firm engaged in the business of construction and had filed its return of income for the assessment year 2010-11 by claiming deduction under Section 80IB(10) of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed 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 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. 5. In Brigade Enterprises supra, the co-ordinate bench of this court, has raised as many as five substantial questions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r: 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 to income which does not form 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 towards 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st 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 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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