The assessee is following Percentage Completion Method. This method is recognised by the Income-tax Act for disclosing the profit in the case of a builder. The purpose of granting deduction u/s. 80IB(10) is to promote housing projects.
In the instant situation, the revenue is taxing the profit on percentage completion method but suggesting to grant deduction only on completion of the project. If the stand of the revenue is accepted then only on completion of project an assessee would be entitled for deduction under section 80-IB(10), then undisputedly an anomaly shall arise as to how and when the tax should be charged.
In the instant case, the assessee has made several transactions of purchase of shares during the relevant year. If there high volume, frequency and regularly of the activity carried on by the assessee is in a systematic manner, it would partake the character of business activities carried on by the assessee in shares, and it cannot be said that the assessee has merely made investment in shares.
In the instant case, the GPA holder of the assessee received the notice which is evident from the acknowledgement furnished before us. The assessee was having transactions in India and when the notice was serviced through the process server of the department, the notice is deemed to have been served as it can ordinarily be expected that the process server knew the person on whom the service was effected.
GAIL and HPCL deputed their personnel who worked under the control and management of JVC. The employees were carrying out the work of the Assessee as its employees not carrying out the work on behalf of GAIL or HPCL. Salary, cost of these employees are a charge on the profits of the Assessee. Payment by way of salary would not constitute Fees for technical services. Nor can the transaction be viewed as a works contract performed by GAIL and HPCL.
It is thus clear that ‘willingness to perform’ for the purposes of Section 53A is something more than a statement of intent; it is the unqualified and unconditional willingness on the part of the vendee to perform its obligations. Unless the party has performed or is willing to perform its obligations under the contract, and in the same sequence in which these are to be performed,
Reason behind disallowance of claim made by the assessee was that since the assessee had not claimed deduction under section 10A in the return filed under section 139(1), the proviso to section 10A debarred him from making any such claim in revised return. At this stage, it would be relevant to take note of the proviso under section 10A.
Main object clause suggests that the assessee’s main business is to deal in real estate. After forming the company, the assessee started buying of land. The assessee has taken a plea before us that it has earned income by leasing these agricultural lands to other parties to carryon agricultural operations and the land was subjected to agricultural operations by other persons.
Hon’ble Delhi High Court in case of CIT vs. Ravinder Kumar Arora (supra) and also by the ITAT, Madras Bench in 33 TTJ 466 (supra), we hold that the assessee will be entitled for deduction u/s 54F for the flat purchased in the name of his daughter subject to the restrictions under the proviso to section 54F(1) of the Act.
The other ground raised by the revenue that the assessee has not registered under A.P. Charitable & Hindu Religious Institutions and Endowments Act, 1987 and hence the assessee is a non charitable one, is an argument to be admitted only to be rejected. The provisions of Sections 2(15), 11 to 13 are very clear and self contained code in respect of institutions which are considered as charitable in nature and the exemptions that these institutions are eligible for under the Income tax Act.
