Case Law Details
The appellant is a partnership firm engaged in construction business which was subject to a search action u/s 132(1) of the Act on 06.10.2009. In the course of search, Shri Rajesh Malpani, partner of the assessee firm in a statement recorded u/s 132(4) of the Act on 03.12.2009 admitted certain undisclosed income in relation to housing project undertaken by the firm i.e. ‘The Crest’ at Pimple Saudagar, Pune. The assessee duly reflected such additional income in the returns of income filed for the captioned assessment years as the profits from its housing project, and since the said housing project was eligible for deduction u/s 80IB(10) of the Act, it claimed deduction u/s 80IB(10) of the Act even in relation to such additional income. Such claim of the assessee has been denied, which is the subject-matter of dispute before us.
Hon’ble Bombay High Court in the case of Sheth Developers (P) Ltd. (supra) was considering the claim of deduction u/s 80IB(10) of the Act in relation to the undisclosed income declared consequent to the search action. In the case before the Hon’ble High Court, it was factually emerging that undisclosed income was earned by the assessee in the course of carrying on his business activity of a ‘builder’ and the same was accepted by the Department, but the claim of the deduction u/s 80IB(10) was denied in relation to such income. However, the claim was upheld by the Hon’ble Bombay High Court. In the present case, factually, there is no material to negate the assertion of the assessee, which are borne out of the material on record, that the additional income in question has been received in the course of carrying on its business activity of developing the housing project, ‘The Crest’ at Pimple Saudagar, Pune, which is eligible for section 80IB(1 0) benefits. Therefore, in terms of the parity of reasoning laid down by the Hon’ble Bombay High Court in the case of Sheth Developers (P) Ltd. (supra), the claim of the assessee is justified.
In-fact, once it is factually explicit that the additional income in question is derived from the housing project, ‘The Crest’ at Pimple Saudagar, Pune, which is eligible for section 80IB(10) benefits, such an income merely goes to enhance the ‘business income’ derived from the eligible housing project and shall be entitled for section 80IB(10) benefits, even as per the ratio of the judgment of the Hon’ble Bombay High Court in the case of Gem Plus Jewellery India Ltd. (supra).
In the result, on the basis of the aforesaid legal position and the material and evidence on record, assessee is eligible for deduction u/s 80IB(10) of the Act in relation to impugned additional income offered in a statement u/s 132(4) of the Act in the course of search and subsequently declared in the return filed in response to notice u/s 153A(1)(a) of the Act. In the result, appeal of the assessee for assessment year 2008-09 is allowed.
Deduction under section 80IB (10) allowable in the case of return filed under section 139(1) & assessee has claimed deduction