INCOME TAX ACT, 1961

Section 80-IB(10)

Deduction under section 80-IB(10) - Income from building and developing housing project - Allowability of claim - Project approved prior to amendment made in law w.e.f. 1-4-2005

A search and seizure action under section 132 was conducted in assessee's case. A return under section 153A was filed, wherein the assessee claimed deduction under section 80-IB(10). AO observed that the assessee was not eligible for deduction under section 80-IB(10) and also that the said claim was not made by the assessee in its original return of income. However, the said claim was allowed by the CIT(A). Held: CIT(A) observed that the assessee did not make claim of deduction under section 80-IB(10) in the return of income, because the assessee was under mistaken understanding of the law that since it constructed commercial units, it could not claim benefit under section 80-IB(10). Further, the CIT(A) noticed that the assessee's project was approved on 16-4-2004, therefore, the project was eligible for deduction under section 80-IB as it is settled that the claim of deduction under section 80-IB is fully allowable in case the project was approved prior to amendment made in law w.e.f. 1-4-2005. Further, the Co-ordinate Bench allowed such claim of the assessee for subsequent assessment years, even though those claims were also made first time before the AO. Therefore, the CIT (A) was justified in holding that the assessee was eligible for claiming deduction under section 80-IB(10).

REFERRED : CIT v. Brahma Associates (2011) 51 DTR 298 (Bom.) : 2011 TaxPub(DT) 0943 (Bom-HC).

FAVOUR : In assessee's favour

A.Y. : 2009-10

INCOME TAX ACT, 1961

Section 271(1)(c)

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