Section 80IB

How to avail Maximum benefit under Section 80IB(10)

Income Tax - Recently, I was approached by a Builder Group seeking a number of clarifications, in respect of the incentive granted U/S 80-IB(10) of the Income-Tax Act to Undertakings engaged in the development and construction of Housing Project(s). Apparently, the provisions of S.80-IB(10) look quite simple, but when one goes into the various conditi...

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Section 80-IBA Affordable Housing Scheme: Analysis of Section, FAQs, Relevant Case Laws and Updated with Finance Act 2020

Income Tax - Whether nearby cities which are in 25 km from municipality are to be considered at par with metro cities for FY 2016-17? Solution: - Yes, because same conditions are there for nearby cities which are within 25km from municipal limits of metro cities. And From FY 2017-18, nearby cities will be considered as non metro cities even though th...

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Private healthcare sector: Income tax incentives, Provisions & Judgments

Income Tax - Private healthcare sector: Income tax incentives, Legal Provisions and Judgments This article covers various sections related to healthcare sector such as Section 10(23C), Section 44A, Section 44AB, Section 11, Section 12, Section 35AD, Section 194I, Section 194h, Section J and many more along with various related case laws. Legal Provisi...

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Deduction Under Section 80IA/80IB – Case Laws – Assessment

Income Tax - Deduction in respect of profits and gains from certain industrial undertakings - Sections 80IA/80IB.The phrase “Derived from” has been a very contentious issue while applying the provisions of Sections 80IA and 80IB of the Act and other similar provisions contain same phrase. The issue revolves around the contention whether deduction ...

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Benefits U/S 80-IA (4)(iii) Of I.T. Act, In Respect of an Industrial Park

Income Tax - Section 80-IA of the I.T. Act, 1961, grants deductions in respect of profits and gains from Industrial Undertaking or enterprises engaged in Infrastructure Development, etc. As per section 80-IA (1), where the gross total income of an assessee includes any profits and gains derived by an undertaking or an enterprise from any business refe...

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CBDT have well-established mechanism to deal with Audit Objections

Income Tax - The office of the Comptroller & Auditor General (C & AG) conducts compliance as well as performance audit relating to specific area of work of the Department. Such an audit on the ssue relating to “Allowance of deduction to the assessees engaged in Infrastructure Development” was conducted by the C & AG in the year 2015 and the report...

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No established mechanism to assess revenue foregone on account of deduction U/s. 80 IA

Income Tax - The CBDT did not have any established mechanism to assess the impact of revenue foregone on account of deduction under section 80 IA on the economic and industrial growth of the country. ...

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Budget 2011-12- Give tax sops on affordable housing

Income Tax - Industry chamber Assocham today asked the government to re-introduce the tax exemption scheme to promote affordable housing in the forthcoming Budget for 2011-12. The chamber also said real estate sector should be accorded infrastructure industry sta...

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Study of recent amendment in deduction for developing and building housing projects – S. 80-IB

Income Tax - Section 80-IB (10) of the Act is aimed at promoting construction of housing projects, so as to address the problem of shortage of dwelling units. The predominant objective of this incentive provision, therefore, is to encourage better availability of the dwelling units for low and middle class segment of the society....

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Hospitality sector want tax holiday to extended to 10 years

Income Tax - Sushanto Roy, CEO, Sahara Prime City, has in a pre-Budget wish list of expectations said: "Given the pent-up demand for affordable housing which was discovered during the recent slowdown there is a need to reintroduce tax holiday under section 80IB for housing projects constructed after March 31, 2008." Tax holiday for hotels, under secti...

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ITAT deletes Addition of sales tax incentive receipt in case of RIL

Reliance Industries Ltd. Vs ACIT (ITAT Mumbai) - Reliance Industries Ltd. Vs ACIT (ITAT Mumbai) The issue under consideration is whether deletion of addition of sales tax incentive/ subsidy as capital in nature is justified in law? In the present case, the assessee in this case is engaged in the business of oil and gas exploration, refining of cru...

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Land owner can claim Section 80-IB(10) despite no expense on Housing Project

CIT Vs Astoria Leathers (Madras High Court) - The issue under consideration is whether Tribunal was correct and justified in directing the AO to allow deduction under section 80-IB(10) to assessee land owner when it had not incurred any expenses towards development or construction of the housing project?...

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Conditions of Rule 18DA(8A) can be Looked into Only by Prescribed Authority & Not by the AO

CIT Vs M/S Quintiles Research (India) Private Limited (Karnataka High Court) - The issue under consideration is whether the Tribunal is right in holding that the conditions of Rule 18DA(8A) can be looked into only by the prescribed authority and not by the Assessing Officer?...

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Assessee can claim proportionate deduction under Section 80IB(10) relating to eligible units

DCIT Vs Shree Venkatesh Associates (ITAT Pune) - DCIT Vs Shree Venkatesh Associates (ITAT Pune) The issue of pro-rata deduction u/s. 80IB(10) for eligible units has been considered by the jurisdictional ITAT, Pune in case of Ramsukh Properties (supra) and M/s D.S. Kulkarni Developers Ltd (supra) and IT AT, Nagpur in case of AIR Developers(supra) a...

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ITAT allows section 80-IB deduction on Pro-rata basis

Vishal Constructions Vs. ITO (ITAT Pune) - Vishal Constructions Vs. ITO (ITAT Pune) We note that in the present appeal the assessee claimed deduction Rs.18,80,000/- u/s. 80IB(10) of the Act. The AO held that the assessee has violated the provisions of section 80IB(10) of the Act as built up area of shops and commercial establishments exceede...

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Deduction U/s 80IB, 80IC eligible on Transport, Power & Interest subsidies

Circulars No. 39/2016 - (29/11/2016) - It is a settled position that revenue subsidies received from the Government towards reimbursement of cost of production/manufacture or for sale of the manufactured goods are part of profits and gains of business derived from the Industrial Undertaking/ eligible business, and are thus, admissible fo...

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Section 80-IB of the Income-tax Act, 1961 – Corrigendum to Notification No. S.O. 1898(E), dated 3-8-2010

Notification No. 2/2011 - Income Tax - (05/01/2011) - Notification No. 2/2011 - Income Tax In the notification of the Government of India in the Ministry of Finance, Department of Revenue, (Central Board of Direct Taxes) number S.O. 1898(E), dated the 3rd August, 2010, published in the Gazette of India, Extraordinary, Part-II, section 3, sub-section (...

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Section 80-IB – Scheme for slum redevelopment prepared by Maharashtra Government

Notification No. 01/2011- Income Tax - (05/01/2011) - Notification No. 01/2011- Income Tax In exercise of the powers conferred by clauses (a) and (b) of sub-section (10) of section 80-IB of the Income-tax Act, 1961 (43 of 1961), the Board hereby notifies, the Scheme for slum redevelopment prepared by the Maharashtra Government under sub-section (2) of ...

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Notification No. 67/2010- Notified scheme for purposes of section 80-IB(10)

Notification No. 67/2010 - Income Tax - (03/08/2010) - Notification No. 67/2010 - Income Tax In exercise of the powers conferred by the proviso to Clause (a) and (b) of sub-section (10) of section 80-IB of the Income-tax Act, 1961 (43 of 1961), the Board hereby notifies the Scheme contained in Regulations 33(10) of Development Control Regulation for Gre...

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Clarification regarding deduction under section 80-IB(10) in respect of undertakings developing building and housing projects

Instruction No. 4/2009 - (30/06/2009) - Instruction No. 4/2009, dated 30-6-2009 Under sub-section (10) of section 80-IB an undertaking developing and building housing projects is allowed a deduction of 100% of its profits derived from such projects if it commenced the project on or after 1.10.1998 and completes the construction within fou...

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Recent Posts in "Section 80IB"

ITAT deletes Addition of sales tax incentive receipt in case of RIL

Reliance Industries Ltd. Vs ACIT (ITAT Mumbai)

Reliance Industries Ltd. Vs ACIT (ITAT Mumbai) The issue under consideration is whether deletion of addition of sales tax incentive/ subsidy as capital in nature is justified in law? In the present case, the assessee in this case is engaged in the business of oil and gas exploration, refining of crude oil, manufacturing of and […]...

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Land owner can claim Section 80-IB(10) despite no expense on Housing Project

CIT Vs Astoria Leathers (Madras High Court)

The issue under consideration is whether Tribunal was correct and justified in directing the AO to allow deduction under section 80-IB(10) to assessee land owner when it had not incurred any expenses towards development or construction of the housing project?...

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Conditions of Rule 18DA(8A) can be Looked into Only by Prescribed Authority & Not by the AO

CIT Vs M/S Quintiles Research (India) Private Limited (Karnataka High Court)

The issue under consideration is whether the Tribunal is right in holding that the conditions of Rule 18DA(8A) can be looked into only by the prescribed authority and not by the Assessing Officer?...

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Assessee can claim proportionate deduction under Section 80IB(10) relating to eligible units

DCIT Vs Shree Venkatesh Associates (ITAT Pune)

DCIT Vs Shree Venkatesh Associates (ITAT Pune) The issue of pro-rata deduction u/s. 80IB(10) for eligible units has been considered by the jurisdictional ITAT, Pune in case of Ramsukh Properties (supra) and M/s D.S. Kulkarni Developers Ltd (supra) and IT AT, Nagpur in case of AIR Developers(supra) and allowed such pro-rata deduction. The ...

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ITAT allows section 80-IB deduction on Pro-rata basis

Vishal Constructions Vs. ITO (ITAT Pune)

Vishal Constructions Vs. ITO (ITAT Pune) We note that in the present appeal the assessee claimed deduction Rs.18,80,000/- u/s. 80IB(10) of the Act. The AO held that the assessee has violated the provisions of section 80IB(10) of the Act as built up area of shops and commercial establishments exceeded 5000 sq. ft. For such violation [&hell...

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HC directs AO to verify claim of Section 80IB(10) deduction

DIT Exemptions Vs India Heritage Foundation Gokulam Complex (Karnataka High Court)

DIT Exemptions Vs India Heritage Foundation Gokulam Complex (Karnataka High Court) It is evident that the Assessing Officer has not made any enquiry with regard to the claim of the assessee for deduction under Section 80IB(10) of the Act. The Director of Income Tax (Exemption) in the order passed under Section 263 of the Act […]...

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Depreciation charge must to Claim Section 80IB Deduction

Betts India (P) Ltd. Vs. ACIT (Bombay High Court)

whether depreciation is mandatory to be granted while determining the Appellant's entitlement to the deduction under Section 80IB of the Act, even though the Appellant had not claimed such depreciation?...

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Section 80IE deduction allowable on Substantial expansion/modernization of existing industrial unit despite deduction claim U/s. section 80-IB & 10C in earlier periods

Lakshmi Ram Thakuria Vs ITO (ITAT Guwahati)

Assessee was entitled to claim deduction under section 80-IE from Financial year 2008-09 and onwards due to modernization of its plant & machinery by infusing additional capital investment by more than 25 % of initial investment in plant & machinery as envisaged in clause (iii) of sub-section 7 of section 80-IE....

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How to avail Maximum benefit under Section 80IB(10)

Recently, I was approached by a Builder Group seeking a number of clarifications, in respect of the incentive granted U/S 80-IB(10) of the Income-Tax Act to Undertakings engaged in the development and construction of Housing Project(s). Apparently, the provisions of S.80-IB(10) look quite simple, but when one goes into the various conditi...

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Section 80IB: Tax Holiday cannot be granted on Bogus transactions

S.Gurushankar Vs CIT (Appeals) (Madras High Court)

ITAT states that, it has to be pointed out that any tax holiday can be granted to a person who declares a truthful return. It cannot and should not be granted to the person who claims that he purchased medical equipments in the guise of treating poor persons and it is subsequently found that the entire transaction is bogus....

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Reopening of assessment to deny Section 80IB is without jurisdiction if no failure of Assessee to disclose information during Original Assessment

International Flavours and Fragrances India Private Limited Vs DCIT (Madras High Court)

International Flavours and Fragrances India Private Limited Vs DCIT (Madras High Court) The issue under consideration is whether the notice issued u/s 147 for re-opening the assessment is justified in law? Petitioner is engaged in manufacture of flavour essences, mixed seasoning powders (dry mix) and formulated perfumery compounds etc. Th...

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Section 80IB deduction allowable only on Income having direct nexus with developing a housing project

Satern Griha Nirman Pvt. Limited Vs ITO (ITAT Kolkata)

The issue under consideration is that whether the disallowance made by the Assessing Officer on account of assessee’s claim for deduction under section 80IB(10) of the Income Tax Act, 1961 in respect of interest received amounting to Rs.11,10,810/- and other income amounting to Rs. 6,36,746/- is correct or not?...

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Section 80IB(10) deduction not eligible on Income not having Business Connection

Satern Griha Nirman Pvt. Limited Vs ITO (ITAT Kolkata)

Satern Griha Nirman Pvt. Limited Vs ITO (ITAT Kolkata) Facts of the Case: The assessee in the present case is a Company, which is engaged in the business of Builders and Property Developers. The return of income for the year under consideration was filed by it on 17.09.2011 declaring total income at ‘NIL’. During the […]...

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Section 80-IBA Affordable Housing Scheme: Analysis of Section, FAQs, Relevant Case Laws and Updated with Finance Act 2020

Whether nearby cities which are in 25 km from municipality are to be considered at par with metro cities for FY 2016-17? Solution: - Yes, because same conditions are there for nearby cities which are within 25km from municipal limits of metro cities. And From FY 2017-18, nearby cities will be considered as non metro cities even though th...

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Posted Under: Income Tax |

No reassessment for breach of provisions of section 80IB If disclosed during Original assessment

Anand Developers Vs ACIT (Bombay to Goa High Court)

Anand Developers Vs ACIT (Bombay to Goa High Court) It is the case of the Petitioner that Petitioner, vide letter dated 20th February, 2015, in the course of Original assessment proceedings before the AO had itself submitted that a few flats may have been allotted to persons in violation of clause 10(f) of section 80IB of the […]...

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Private healthcare sector: Income tax incentives, Provisions & Judgments

Private healthcare sector: Income tax incentives, Legal Provisions and Judgments This article covers various sections related to healthcare sector such as Section 10(23C), Section 44A, Section 44AB, Section 11, Section 12, Section 35AD, Section 194I, Section 194h, Section J and many more along with various related case laws. Legal Provisi...

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Posted Under: Income Tax |

Section 80 IB/IC deduction allowable on manufacturing of boxes intrinsically connected with manufacturing of electric meters

Pr. CIT Vs M/s Secure Meters Ltd. (Rajasthan High Court at Jodhpur)

Pr. CIT Vs M/s Secure Meters Ltd. (Rajasthan High Court) As far as the question relating to trading profit is concerned, the record shows that the assessee derived this income from the sale of boxes manufactured by it to house electric meters. It is not disputed that the deduction under section 80 IB/IC was for […]...

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Section 80IB deduction cannot be allowed if not claimed by assessee in return filed by him

EBR Enterprises & Anr. Vs Union of India and Anr. (Bombay High Court)

EBR Enterprises Vs Union of India (Bombay High Court) Sub Section (5) of Section 80A of the Act mandates is that, if the assessee fails to make a claim in his return of income for any deduction under the provisions specified therein, the same would not be granted to the assessee. This condition or restriction […]...

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Section 80IB(10) deduction cannot be denied for delay by Competent authority in issue of completion certificate

Pr. CIT Vs  Dharti Enterprises (Bombay High Court)

Where building/developing project was completed within the time framed provided under section 80-IB(10) and an application for issuance of completion certificate was filed within time, then delay on account of the competent authority in issuing completion certificate would not deprive the assessee, the benefit of section 80-IB(10)....

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Reassessment after 4 years where assessee made true and full disclosure in original assessment was not valid

DCIT Vs Visvas Promoters (P) Ltd. (Madras High Court)

Reassessment after period of four years on the ground that assessee had claimed excess deduction under Section 80IB(10) was not valid where assessee had made true and full disclosure and had consciously made only a proportionate claim under Section 80IB(10), which was rightly allowed by AO at the time of original assessment proceedings un...

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Deduction U/s. 80-IB(10) allowable to both owner & land developer

ITO Vs Ms. Skyline Developers (ITAT Pune)

Assessee who had contributed land and  engaged in the development of housing project with developer for development of the land was eligible for claiming deduction under section 80-IB(10) as both owner as well as developer were eligible for deduction under section 80-IB(10)....

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Deduction U/s. 80-IB(10) eligible on unaccounted receipts 

Pr. CIT Vs Green Associates (Gujarat High Court)

There is nothing on the record to suggest that the assessee had other businesses or that the undisclosed receipts were assessee’s profit out of any other activity other than development of housing project, The Tribunal came to the specific conclusion that the unrecorded consideration was also part of the assessee’s sale transaction of...

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Dehusking of Paddy to obtain Rice is ‘Manufacture’ for sec 80IA/IB deduction

CIT Vs M/s. Muthuramalingam Modern Rice Mill (Madras High Court)

CIT Vs M/s. Muthuramalingam Modern Rice Mill (Madras High Court) Conclusion: Conversion of Paddy into Rice by the process of de-husking would amount to “maufacture” as not only the form underwent a change but also the value addition happened by such process as a different commercial article came into being and therefore, asses...

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Section 80IB(10) deduction cannot be denied merely because land was held by original owner during project execution

PCIT Vs Green Associates (Gujarat High Court)

Where assessee had claimed deduction under section 80-IB in respect to income of housing development project, the same could not be rejected merely because the land was held by original owner when the housing development project was executed, would not be detrimental to assessee’s claim of deduction under section 80-IB(10)....

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Deduction U/s. 80IB(10) cannot be denied merely because Assessee developer being not the owner of land

Pr. CIT Vs Green Associates (Gujarat High Court)

Pr. CIT Vs Green Associates (Gujarat High Court) Assessee had claimed deduction in respect to the income arising out of such activity under section 80IB (10) of the Income Tax Act. The Assessing Officer disallowed the claim mainly on the ground that the assessee was not the owner of the land and the approval of […]...

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Deduction U/s 80IB not allowable on lease rent of industrial undertaking

Navas M. Meeran Vs ACIT (ITAT Cochin)

Navas M. Meeran Vs ACIT (ITAT Cochin) Conclusion: Lease rent received by assessee by letting out the industrial undertaking was not having any direct connection with the manufacture or production of an article or thing by assessee and the same could not be considered as business income eligible for deduction u/s. 80IB. Held: Assessee had ...

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S. 80IB Each new project for a new film cannot be considered as split up or reconstruction of existing business

DCIT Vs Shri K.T. Kunjumon (ITAT Chennai)

Assessee-producer having film production unit entitled for income tax deduction under section 80IB as assessee was running a production house and each new project for a new film, could not be considered as split up or reconstruction of the business already in existence. ...

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Deduction U/s. 80IB not allowable on non filing of Return within prescribed time U/s. 139(1)

Suolificio Linea Italia (India) (P) Ltd. Vs JCIT (Calcutta High Court)

Suolificio Linea Italia (India) (P) Ltd. Vs JCIT (Calcutta High Court) Conclusion: Deduction under section 80-IB was not allowable in case assessee did not file its return of income for relevant assessment year within period prescribed under section 139(1) as per the condition imposed by section 80AC. Held: When the governing provision i....

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S. 80IB(10) Deduction can’t be denied for mere non furnishing of Project Completion Certificate

Sahara States – Hyderabad Vs Additional CIT (ITAT Hyderabad)

Sahara States – Hyderabad Vs Additional CIT (ITAT Hyderabad) As rightly observed by the Tribunal, though the assessee has completed the project by 31.03.2008 and had requested the local authorities for issuance of completion certificate since there was no provision under the GHMC Act of 1985 for issuance of completion certificate, the s...

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No deduction U/s. 80-IB(10) if Assessee utilises only small part of eligilble FSI

ITO Vs J R construction (Gujarat High Court)

Where assessee utilized only a small part of eligilble FSI remaining part was sold, then assessee was not entitled deduction under section 80IB. In respect profits assessee for sale of unutilized part....

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Deduction U/s. 80IB(10) allowable if capital asset was converted into stock-in-trade, before entering into JDA

Shri. Raja Reddy (HUF) Vs ACIT (ITAT Bangalore)

She has also tried to demonstrate that at the time of JDA, the land which was part of the stock-in-trade was contributed under JDA for the construction of residential apartments. Therefore, the profit earned on sale of flat would be a business profit. ...

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Deduction U/s. 80IB on Manufacturing at Others Factory or under contract manufacturing

Daman Computers Pvt. Ltd., Vs Income Tax Assessing Officer (Bombay High Court)

Daman Computers Pvt. Ltd. Vs ITO (Bombay High Court) Neither before the Assessing Officer nor at the appellate stage, Appellants adduced any convincing evidence to hold that it had retained its control over the manufacture of electronic computers at the factory premises of M/s. Kobian ECS India Pvt. Ltd. in Silvassa. In fact, the obser...

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Deduction Under Section 80IA/80IB – Case Laws – Assessment

Deduction in respect of profits and gains from certain industrial undertakings - Sections 80IA/80IB.The phrase “Derived from” has been a very contentious issue while applying the provisions of Sections 80IA and 80IB of the Act and other similar provisions contain same phrase. The issue revolves around the contention whether deduction ...

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SC on inclusion of years of deduction claimed earlier U/s. 80-IA & 80-IB for calculation of 10 Year period for deduction U/s. 80-IC

Mahabir Industries Vs. PCIT (Supreme High Court)

Mahabir Industries Vs. PCIT (Supreme High Court) The assessee in the instant case has not got deduction under Section 80-IC for a period of ten years as he started claiming deduction under this provision w.e.f. Assessment Year 2006-07. Situation Nos. (b) and (c) mentioned above would not apply to the assessee as it’s undertaking/enterpr...

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Deduction U/s. 80-IB(10) not eligible if return not filed within due date, as prescribed U/s. 139(1)

Dy.CIT Vs M/s.Siroya.Developers (ITAT Mumbai)

This appeal by the Revenue is against the order of the Commissioner of Income-tax (Appeals) dated 03-09-2011 passed against the assessment order passed u/s 143(3) dated 21-12-2010 and is filed on the following grounds...

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Section 80IB(11A): Initial assessment year for an undertaking means year in which it begins its business

Anand Food And Dairy Products Vs. ITO (Gujarat High Court)

An undertaking like the assessee, which derives profits from the business of processing, preservation and packaging of fruits or vegetables would be entitled to deduction under section 80IB(11A) of the Act from the initial assessment year, viz. the assessment year relevant to the previous year in which it begins such business....

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Deduction U/S 80-IB cannot be denied merely for variance of actual construction with approved Plan

The Commissioner of Income Tax Vs. M/s. C. N. Builders & Developers (Bombay High Court)

A two-judge bench of the Bombay High Court, in The Commissioner of Income Tax, Valsad v. M/s. C. N. Builders & Developers held that the deduction under section 80-IB is available to the assessee- Builder, even if the construction is not according to the plan approved by the authorities....

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Deduction U/s. 80-IB(10) not available in case of Delay in filing return

Dy. CIT Vs. Siroya Developers (ITAT Mumbai)

Dy. CIT Vs. Siroya Developers (ITAT Mumbai) Section 139(1) casts an obligation on every assessee to furnish the return of income by the due date. With a view to enforce the compliance in this regard by the assessees who are entitled for deduction under section 10B from their income, a proviso (fourth proviso) to sub-section […]...

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Section 80-IB(10) deduction could not be denied for Genuine delay due to error on Income Tax website

Meera Enterprises Vs. ITO (ITAT Mumbai)

Meera Enterprises Vs. ITO (ITAT Mumbai) The Chartered Accountant had prepared the return along with the necessary annexures on 15-10-2010 but due to heavy pressure on computer server of the Centralized Processing Center (CPC) Income Tax Department, Bangalore, the return filing was slow till 8 p.m. Thereafter the Chartered Accountant tried...

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Section 80-IB(10): Open terrace area excluded by Local Authority from working of built-up area cannot be included by revenue

The Deputy Commissioner of Income Tax Vs. M/s. Acestar Properties Pvt. Ltd (ITAT Chennai)

The Income Tax Appellate Tribunal (ITAT) Chennai, on Wednesday, brought in further clarity to one of its previous orders regarding the inclusiveness of private open terrace in build-up area of a flat, for the purpose of deductions as per Section 80-IB(10) of the Income Tax Act. ...

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SSI benefit cannot be availed by an undertakings which do not continue as SSI: SC

Deputy Commissioner Of Income-Tax Vs. M/s. Ace Multi Axes Systems Ltd. (Supreme Court of India)

Incentive meant for small scale industrial undertakings cannot be availed by industrial undertakings which do not continue as small scale industrial undertakings during the relevant period, the bench held. ...

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Gold converted in jewelery/ ornament eligible for deduction U/s. 80-IB

Pr. CIT Vs Lakesh Handa (Jammu and Kashmir High Court)

Whether the Income Tax Appellate Tribunal was justified in deleting the addition made by the assessing officer by dis-allowing the deduction claimed under section 80-IB of the Income Tax Act, 1961...

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Bottling of Gas Into Cylinder Amounts to Production for Section 80HH, 80I and 80IA: SC

CIT Vs. Hindustan Petroleum Corporation Ltd. (Supreme Court)

Whether Bottling Of Gas Into Cylinder Amounts To Production For Claiming Of Deduction Under Sections 80HH, 80-I And 80-IA Of The Income Tax Act, 1961. Whether an activity constitutes production or manufacture for the purposes of sections 80HH, 80-I and 80-IA of the Income Tax Act, 1961 (hereinafter referred to as the 'Act') has remained p...

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Deduction U/s. 80IB(10) cannot be denied merely for approval of Housing Project in Land Owner Name

ITO Vs Shree Narayan Associates (ITAT Ahemdabad)

The short reason for which deduction under section 80IB(10) has been declined to the assessee is that the assessee did not own the land on which the housing project, by the name of ‘Narayan Bungalows’, is built....

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Section 80IB Security guards to be counted in list of workers

ACIT, Vs Tripti Menthol Industries (ITAT Ahmedabad)

In ACIT v. Tripti Menthol Industries, the ITAT, Ahmedabad bench held that Security Guards employed by the assessee-unit must be considered as part of the workers engaged in the manufacturing process for the purpose of giving benefit under Section 80IB(2)(iv) of the Income Tax Act....

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Section 80-IB(10) If Authority excluded open terrace from working of built-up area than revenue cannot review the same

The Deputy Commissioner of Income Tax Vs M/s Ace Star Properties Pvt. Ltd. (ITAT Chennai)

In a significant ruling, the ITAT Chennai held that the private open terrace attached with residential unit would form part of built- up area for the purpose of computing deduction under section 80-IB(10) of the Income Tax Act if the same was included in the house project approved by the local authority....

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Filing of Audit Report along with Income Tax Return is not Mandatory

Commissioner of Income Tax Vs M/S Fortuna Foundation Engineers & Consultants Pvt. Ltd. (Allahabad High Court)

This question is regarding filing of audit report in form 10CCB. If it is not filed alongwith return but filed before assessment, will it amount to non-compliance of Section 80IB (13) read with Section 80IA (7)....

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Deduction U/s. 80IA(4) eligible on lease rental income from open yard

The DCIT, Circle-1(2) Vs Belair Logistics Limited, (ITAT Hyderabad)

The assessee claimed deduction under section 80IA(4) on total income including the income received from lease rental on open yard. The A.O. observed that since open yard is not an infrastructure facility within the meaning of Section 80IA(4) of the Act, ...

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No deduction denial for mere non approval from Prescribed Authority: HC

M/S Shrikar Hotels Pvt. Ltd. Vs CIT (Allahabad High Court)

HC held that that it was inappropriate and illegal on the part of Director General, Income Tax (Exemptions) not to take a decision on Assessee's application filed for seeking approval as required under Section 80IB(7)(c). ...

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Deduction U/s. 80IB cannot be denied for low electricity Consumption when majority of work is Manual

ITO Vs M/s.Padmavati Arts (ITAT Ahmedabad)

First ground of the assessee for claiming the deduction under section 80IB was that it had started production in Asstt.Year 2004-05. Asstt.Year 2006-07 is the third year. Deduction under section 80IB was granted in Asstt.Year 2005-06 in a scrutiny assessment. ...

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Allowability of Deduction U/s. 80-IB(10) on income from sale of Floor Space Index (FSI)

M/s Aarti Projects and Constructions Vs. DCIT (ITAT Mumbai)

AO declined assessee's claim of deduction on the plea that the profit claimed as deduction u/s 80-IB(10) of the Act was not derived from the housing project but from sale of unutilized FSI. ...

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CBDT have well-established mechanism to deal with Audit Objections

The office of the Comptroller & Auditor General (C & AG) conducts compliance as well as performance audit relating to specific area of work of the Department. Such an audit on the ssue relating to “Allowance of deduction to the assessees engaged in Infrastructure Development” was conducted by the C & AG in the year 2015 and the report...

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Posted Under: Income Tax |

S. 80IB deduction conditions to be fulfilled in all years of deduction claim

CIT Vs M/s Micro Instruments Company (Punjab & Haryana High Court)

Deduction U/s. 80IB is allowable over a period of 6 years which follows that conditions for claiming deduction must remain fulfilled in all years for which deduction being claimed...

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Deduction U/s 80IB, 80IC eligible on Transport, Power & Interest subsidies

Circulars No. 39/2016 (29/11/2016)

It is a settled position that revenue subsidies received from the Government towards reimbursement of cost of production/manufacture or for sale of the manufactured goods are part of profits and gains of business derived from the Industrial Undertaking/ eligible business, and are thus, admissible for applicable deduction under Chapter VI-...

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No established mechanism to assess revenue foregone on account of deduction U/s. 80 IA

The CBDT did not have any established mechanism to assess the impact of revenue foregone on account of deduction under section 80 IA on the economic and industrial growth of the country. ...

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Posted Under: Income Tax |

S.80IB-Subsidies for reimbursement of production cost are business income

CIT Vs M/s Meghalaya Steels Ltd. (Supreme Court of India)

The Supreme Court held In the case of CIT vs. M/s Meghalaya Steels Ltd. that the Calcutta High Court in Merino Ply & Chemicals Ltd. v. CIT, 209 ITR 508 [1994], held that transport subsidies were inseparably connected with the business carried on by the assessee....

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Govt subsidy to reduce production cost eligible for 80IB deduction: SC

CIT Vs M/s. Meghalaya Steels Ltd. (Supreme Court of India)

Exemption available under Chapter VI-A in respect of profits of industrial undertakings is available only in respect of income qualifying the litmus test of “profits or gain derived from undertaking”. The revenue and assessees have been locking their horns over the issue of Subsidies...

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S. 80IB(10) Deduction allowed on additional business income declared post search

Madhav Corporation Vs ACIT (ITAT Ahmedabad)

ITAT Ahmedabad held in the case Madhav Corporation vs. ACIT that the assessee has earned additional income which amount is disclosed consequence upon the search, hence it partakes the character of business income....

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S. 80IB(10) Mere Common Commercial & Residential Layout?

M/s. D.S. Kulkarni Developers Ltd. Vs ACIT (ITAT Pune)

M/s. D.S. Kulkarni Developers Ltd. vs. ACIT (ITAT Pune)- Tribunal held that the building plans for the residential and amenities space were sanctioned independently and merely because a common lay out plan was passed by the authorities, does not disentitle the assessee to the claim of deduction under section 80IB (10)....

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Benefits U/S 80-IA (4)(iii) Of I.T. Act, In Respect of an Industrial Park

Section 80-IA of the I.T. Act, 1961, grants deductions in respect of profits and gains from Industrial Undertaking or enterprises engaged in Infrastructure Development, etc. As per section 80-IA (1), where the gross total income of an assessee includes any profits and gains derived by an undertaking or an enterprise from any business refe...

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Posted Under: Income Tax |

S. 80IB(10) -Canopy/ Porch cannot be treated as part of Built up Area as it is not habitable

DCIT Vs Smt. Suman Jagannath Pharande (ITAT Pune)

DCIT vs. Smt. Suman Jagannath Pharande (ITAT Pune) For the contention of inclusion of Canopy area in total built area, the ITAT held that built up area means the inner measurement of the residential unit at the floor level, including the projection and balconies, as increased by the thickness of the walls but does not include the common a...

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Deduction u/s. 80IB(10) cannot be denied even if area of housing project is less than 1 acre or for non ownership of land

Bhujbal Brothers Construction Company Vs DCIT (ITAT Pune)

Bhujbal Brothers Construction Company V/s. DCIT (ITAT Pune) Deduction u/s. 80I1B(10) on housing project at Damodar Residency has been denied primarily on two counts­(i) the area of the housing project is less than 1 acre, and (ii) the land on which the housing project has been developed does not belong to the assessee....

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ITAT empowered to allow deduction u/s 80IB (10) even if requirement u/s 80AC is not complied with, in case of conflict of opinions: HC

CIT Vs M/s Unitech Ltd. (Delhi High Court)

Delhi High Court held In the case of CIT vs. M/s Unitech Ltd. that where there are conflicts of opinions of the various benches of the ITAT on the provision u/s 80AC of requirement of return filing before due date to claim deduction u/s 80IB (10)...

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Sec 80IB- Workers need to be employed for substantial period of time to satisfy minimum workers criteria

CIT Vs M/s Indus Cosmeceuticals (Himachal Pradesh High Court)

Himachal Pradesh High Court in the case of CIT vs. M/s Indus Cosmeceuticals held that the condition of employing atleast 10 workers as required to be complied with for claiming deduction u/s 80IB cannot be deemed to have complied by employing workers for a small part of year. ...

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Deduction u/s 80IB(10) cannot be denied to developer for mere P&L presentation without appreciation of facts

Megha Developers Vs ITO(Ahmedabad) (ITAT Ahmedabad)

ITAT Ahmedabad held in Megha Developers Vs ITO that as the assessee had entered into an agreement in which he had to bear all the costs related with the building of the project and also he was having the rights to receive all the payments from the members of the society...

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Sec 80IB(10) 5% Commercial Area Restriction applicable from 01-04-2005

M/s Sun Enterprise Vs ACIT (ITAT Ahmedabad)

ITAT Ahmedabad held in M/s Sun Rise enterprise Vs ACIT that the insertion of clause d to sec 80IB(10) would be applicable from 01-04-2005 i.e the amendment related with built up area of commercial establishments not to exceed more than 5% of total built up area of housing project would have prospective effect not retrospective effect....

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Deduction u/s 80IB(11A) allowable from A.Y in which business commences

M/s Anand Food Dairy & products Vs ITO (ITAT Ahmedabad)

ITAT Ahmedabad held in M/s Anand Food Dairy & products Vs ITO that the deduction u/s 80IB(11A) would be allowed from the initial assessment year i.e A.Y relevant to the previous year in which the business was commenced but not from the A.Y of the incorporation of this provision in the I.T Act i. e not from -01-04-2005....

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Ownership of land is required for claiming deduction u/s 80IB(10)

M/s Nirmala Developers C/o Manish Shah & Asso. Vs ITO (ITAT Ahmedabad)

ITAT Ahmedabad held in M/s Nirmala Developers Vs ITO that it was not necessary to be the owner of the land to claim the deduction u/s 80IB(10). But the necessary condition to claim the deduction u/s 80(IB)10 was that the assessee had borne the all expenses and took all the risk involved in the project....

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Conditions to avail deduction u/s 80IB should be fulfilled only in initial A.Y not in every 10 years of deduction

CIT Vs M/s Sunder Forging (Punjab & Haryana High Court)

Punjab & Haryana High Court held in CIT Vs M/s Sunder Forging that to claim the deduction u/s 80IB for consecutive 10 years all the relevant conditions should be required to be fulfilled only in the initial assessment year...

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High Courts, being Courts of Record, have the inherent power of review

Commissioner of Income Tax Vs M/s.Meghalaya Steels Ltd. (Supreme Court of India)

In the case of CIT vs M/s.Meghalaya Steels Ltd. the Supreme Court held that High Courts being Courts of Record under Article 215 of the Constitution of India, the power of review would in fact inhere in them....

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Interest, Transport and Power Subsidies are eligible Deductions u/s 80IB

DCIT Vs M/s. Maithan Smelters Ltd. (ITAT Kolkata)

In the case DCIT Vs. Maithan Smelters Ltd. the Hon’ble Kolkata ITAT held that the interest subsidy, transport subsidy and power subsidy received by the assessee are eligible for deduction u/s 80IB of the Act....

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No deduction U/s. Section 80IB(10) if completion certificate issued after cut off date

CIT Vs M/s Global Reality (Madhya Pradesh High Court)

CIT Vs M/s Global Reality (Madhya Pradesh High Court) The next question that needs to be answered, is, whether the stipulation in Section 80IB(10)(a) can be said to be directory. Considering the prodigious benefit offered in terms of Section 80IB to the assessee (hundred per cent of the profits derived in any previous year relevant [&hell...

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Claim of deduction u/s 80IB cannot be withdrawn in proceedings u/s 154

Vinod Kumar Surana Vs I.T.O Ward 56(2) (ITAT Kolkata)

In the case Vinod Kumar Surana Vs. ITO the Hon’ble Kolkata ITAT held that the fact of withdrawal of deduction u/ 80IB of the Act in the subsequent years when the same were duly granted by the ld. AO in the initial assessment years per se becomes a debatable issue and hence same cannot be dealt in the proceedings u/s 154 ...

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S. 80IB(10) Restriction on extent of commercial area not applies to projects approved before 1.4.2005

CIT Vs Sarkar Builders (Supreme Court of India)

CIT vs. Sarkar Builders (Supreme Court of India)- Restriction on extent of commercial area in 'housing project' imposed w.e.f. 1.4.2005 does not apply to housing projects approved before 1.4.2005 even though completed after 1.4.2005 – Section 80-IB(10)....

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Non-compliance in respect of hived off part of project does not dis-entitle deduction under Section 80IB(10)

Smt. Swapna Cherukuri Vs DCIT, Hyderabad (ITAT Hyderabad)

ITAT Hyderabad in the case of Smt. Cherkuri vs. DCIT concluded that development of commercial complex by the buyer of plot area even if it is approved by the concerned authorities as the part of the project, could not be said to have been developed by the assessee as a part & parcel of the project....

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Ownership of land is not a pre-condition for deduction u/s 80 IB (10)

Shri Umeya Corporation Vs ITO (ITAT Ahmedabad)

Sec. 80-IB(10) of the Act thus provides for deductions to an undertaking engaged in the business of developing and constructing housing projects under certain circumstances noted above. It does not provide that the land must be owned by the assessee seeking such deductions...

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Deduction u/s 80-IB(10) Would be Allowed to Developer working on behalf of Government

CIT Vs M/s. VRM India Ltd. (Delhi High Court)

The Hon’ble High court in the present case held that the assessee developed an infrastructure facility/project and was not required to maintain or operate, it was entitled to cost, plus the margin of income or profit. Assesee would be entitled to deduction under section 80-IB (10)....

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Reopening of Assessment u/s 147 cannot be allowed if there is any subsequent change in Law

ACIT Vs Sahara States (ITAT Hyderabad)

Revenue submitted that there was no change of opinion as contended by assessee and accepted by the Ld.CIT(A) as assessee has not furnished 'Project Completion Certificate' nor furnished the complete details of AOP as pointed out by the AO. It was the submission that the original project has started way back in 1996 and therefore...

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CIT(A) has to follow directions given by the Tribunal, violation of directions can be treated as contempt of Court

DCIT Vs.Sh. Sham Sundar Sharma (ITAT Chandigarh)

The orders passed by the Tribunal are binding on all the revenue authorities functioning under the jurisdiction of the Tribunal. The principles of judicial discipline require that the orders of the higher appellate authorities should be followed unreservedly by the subordinate authorities. ...

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Allowability of deduction U/s. 80IB(10) on construction of units more than the permitted

ITO Vs M/s. Nirman Enterprise (ITAT Ahmedabad)

The assessee has filed its return of income on 31-12-2006 declaring total income at Rs. Nil. The assessee had claimed deduction at Rs. 1,91,400/- u/s. 80IB(10) of the income tax act. The Point of issue was the assessee has carried out the construction in violation of the original plan passed by AUDA and therefore violated the condition of...

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S. 80IB(10) allowable on Projects approved as housing project: SC

CIT Vs M/s Veena Developers (Supreme Court of India)

Upto 31/3/2005 (subject to fulfilling other conditions), deduction under Section 80IB(10) is allowable to housing projects approved by the local authority having residential units with commercial user to the extent permitted under DC Rules/ Regulations framed by the respective local authority....

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Explanation to Sec. 80-IB(9) inserted by FA 2009 w.e.f. 1.4.2000 is ultra vires to Article 14 of Constitution of India

Niko Resources Limited Vs UOI (Gujarat High Court)

Issue- Whether the insertion of sub clause (iv) in Section 80-IB(9) of the Income Tax Act, 1961, by Finance (No.2) Act, 2009 conferring the benefit of the deduction under this Section to undertakings engaged in commercial production of natural gas in blocks licensed under VIIIth round of bidding provided...

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Projected terrace area i.e. open to sky is not to be included in calculation of 'built-up area' for Sec. 80IB(10)(c)

Naresh T. Wadhwani Vs DCIT (ITAT Pune)

The first and foremost issue to be decided is as to whether the area of projected terrace (open to sky) is liable to be included within the meaning of expression built-up area contained in clause (c) of section 80IB(10) of the Act....

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Furnishing of audit report is directory and not mandatory

DCIT Vs M/s Surya Merchants Ltd. (ITAT Delhi)

Finding of the AO that in the absence of audit report, the enhanced claim is not maintainable over looks this factual position. It is undisputed that audit report for the enhanced claim had been furnished during the impugned 153A assessment proceedings along with Profit and Loss account and Balance sheet duly certified by the Accountant....

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Deduction U/s. 80IB(10) cannot be denied for mere delay in issue of completion certificate by Municipality

Gera Developments Pvt. Ltd Vs JCIT (ITAT Pune)

Entire case of the Assessing Officer rests on Explanation (ii) to section 80IB(10)(a) of the Act which prescribes that the date of completion of construction of the housing project shall be taken to be the date on which the completion certificate in respect of such housing project is issued by the local authority. ...

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Depreciation optional- Assessee can claim Depreciation partly in respect of certain block of assets & not in respect of other

DCIT Vs Sun Pharmaceuticals Ltd (Gujarat High Court)

Tribunal is right in law and on facts in holding that depreciation not claimed for by the assessee, cannot be allowed as a deduction despite the introduction of the concept of block assets. Depreciation is optional to the assessee and once he chooses not to claim it, the Assessing Officer cannot allow it while computing the income....

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Date of Completion U/s. 80IB(10) when Municipality do not issue Completion Certificate

M/s. Satish Bora and Associates Vs ACIT (ITAT Pune)

The learned Assessing Officer has failed to appreciate the Development Control Rules of Pune Municipal Corporation and the provisions of The Bombay Provincial Municipal Corporation Act 1949 and has further erred in holding that the authority to issue the completion Certificate to the building vests with the PMC....

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Deduction U/s. 80-IB(10) available on additional income offered u/s 132(4) in return filed u/s 153A

Malpani Estates Vs ACIT (ITAT Pune)

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...

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Leased Assets qualify for Industrial Undertaking Purposes- holds Bombay HC

Whether the film production companies are Industrial Undertaking for the purpose of Section 80IB of the Income Tax Act, 1961? Whether a film production company can be considered as Industrial Undertaking under the provision of Section 80 IB of the Income tax Act, when the plant or machinery of such company is not owned by the assessee and...

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Posted Under: Income Tax |

Not necessary for assessee to own Plant and Machinery to Claim deduction U/s. 80IB

The Commissioner of Income Tax Vs Shri Jyoti Prakash Dutta (Bombay High Court)

This is one more instance of the Revenue urging before this Court that firstly a film production unit or a Company is not an industrial undertaking within the meaning of section 80IB of the Income Tax Act 1961 (for short the said Act)....

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Production of cinematograph film amounts to manufacture by industrial undertaking

Commissioner Of Income-Tax Vs D.K. Kondke (Bombay High Court)

If the production of cinematograph film amounts to manufacture of an article or goods within the meaning of section 104(4)(a) as it then stood, it follows that the said activity must be treated as an industrial undertaking within the purview of section 80J of the Income-tax Act, 1961. Apart from the circular, we are satisfied that, even ...

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S. 80-IB(10) – Limit on extent of commercial area applies only to projects approved after 01.04.2005

Income Tax Officer Vs M/s Yash Developers (ITAT Mumbai)

Condition of limiting commercial establishment/shops to 2000 sq.ft, which has come into force w.e.f. 1.4.2005 would be applicable for the project approved on or after 1.4.2005 and where the approval of the project was prior to 31.3.2005, the amended provision would have no application for those projects. ...

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Deduction U/s. 80IB cannot be denied for mere non-filing of Audit Report alongwith return of income

DCIT  Vs Anoli Holdings Pvt. Ltd. (ITAT Ahmdabad)

Requirement of filing audit report alongwith return of income is procedural in nature and audit report filed at the assessment stage shall be construed as sufficient compliance of the same for claiming deduction u/s 80IB....

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S. 80IA Option of choosing initial assessment year – ITAT distinguishes special bench judgment in case of Gold Mine Shares

Sadbhav Engineering Ltd. Vs Dy. CIT (ITAT Ahemdabad)

Sadbhav Engineering Ltd. vs. Dy. CIT (ITAT Ahemdabad)- In the instant case, the assessee claimed deduction u/s.80IA(4) of the Act for all the years which were disallowed by the AO on the ground that as per provisions of section 80IA(5) of the Act the computation of deduction has to be done by setting off of brought forward losses and dep...

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Subsidy given for operating an industry more profitably is revenue receipt & eligible for deduction u/s. 80-IB/80-IC

CIT Vs Meghalaya Steels Ltd (Gauhati High Court)

Liberty India (supra) was a case of non-operational subsidy inasmuch as the subsidy, provided in Liberty India (supra), did not relate to production; whereas the subsidies, in the present set of cases, are operational in nature inasmuch as the subsidies are related to the production...

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Deduction u/s 80-IB(10) can’t be denied merely because Assessee uses “Project completion method”

Commissioner of Income Tax Vs Satadhar Enterprises (Gujarat High Court at Ahmedabad)

AO denied deduction u/s 80-IB(10) only on the ground that assessee engaged in business of construction had adopted 'Project completion method' instead of 'Percentage completion method' as prescribed under AS-7 (Revised). The Hon’ble High Court observed that there was no allegation to the effect that on account of “Project completion m...

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S. 80IB Expenditure incurred by a unit cannot be reallocated to another unit merely because the profits were significantly higher

CIT Vs M/s Delhi Press Patra Prakashan (Delhi High Court)

Whether the expenditure incurred by a unit can be reallocated to another unit engaged in job work and claiming deduction u/s 80IA and 80IB, as the case may be, merely because the profits were significantly higher than profits earned by the assessee from other units....

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Ownership of land not must to be eligible for deduction u/s. 80-IB(10)

Commissioner of Income Tax 1 Vs Prathama Developers (Gujarat High Court)

Tribunal relying on its decision in case of Radhe Developers v. ITO [2008] 23 SOT 420 (Ahd.) held that respondent assessee would be eligible for deduction under section 80-IB(10) of the Act on the housing project development though the assessee may not be the owner of the land. ...

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Deduction U/s. 80IB(10) allowable to Assessee on development of a housing project even if the land is not owned by him

Commissioner of Income Tax, Ahmedabad- IV Vs Mahadev Developers (Gujarat High Court)

Issue pertains to deduction claim by the assessee under section 80IB(10) of the Act on development of a housing project. Revenue, however, holds a belief that the respondent-assessee had not developed the housing project on the ground that the land was not owned by the assessee. The Tribunal, however, held that as per the development agre...

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