SYED ALEEMULLAH @ SYED ALLEM vs. DY COMMISSIONER OF INCOME TAX

PDF · subscribers
ITA/677/2017HC KarnatakaKAHC01049160201708 April 2021Bench: ALOK ARADHE,M.G.S. KAMAL6 pages
AI SummaryRemanded

What did the High Court hold?

The High Court, relying on a previous decision, quashed the orders of the lower authorities. The matter was remitted to the Assessing Officer to adjudicate the claim under Section 80-IB(10) afresh.

What were the facts?

The assessee, engaged in developing housing projects, claimed a deduction under Section 80-IB(10) for assessment year 2011-12. The Assessing Officer disallowed the entire claim, stating no provision for proportionate deduction. This was upheld by the CIT(A) and the Tribunal.

What were the issues?

Whether proportionate deduction under Section 80-IB(10) is allowable when flats are sold individually and meet other criteria. Whether the Assessing Officer correctly disallowed the entire claim without considering the merits.

Which sections of the Income-tax Act were involved?

Section 80-IB(10),Section 145

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF KARNATAKA AT BENGALURU

DATED THIS THE 8TH DAY OF APRIL, 2021

PRESENT

THE HON’BLE MR. JUSTICE ALOK ARADHE

AND

THE HON’BLE MR. JUSTICE M.G.S. KAMAL

I.T.A.NO.677/2017

BETWEEN:

SYED ALEEMULLAH @ SYED ALEEM PROP: S.A. DEVELOPERS, NO.950, 27TH "A" MAIN, JAYANAGAR 9TH BLOCK, BENGALURU-560 069.

...APPELLANT (BY SRI M.V.SHESHACHALA, ADVOCATE FOR SRI ARAVIND V CHAVAN, ADVOCATE)

AND:

DY. COMMISSIONER OF INCOME-TAX CIRCLE 4(1), BENGALURU. …RESPONDENT

(BY SRI T.N.C.SRIDHAR, ADVOCATE)

THIS ITA IS FILED UNDER SECTION 260-A OF INCOME TAX APPEAL ACT 1961, ARISING OUT OF ORDER DATED:04/04/2017 PASSED IN ITA NO.389/BANG/2016, FOR THE ASSESSMENT YEAR 2011-2012 PRAYING TO (i) ADMIT THE INSTANT APPEAL TO ANSWER THE SUBSTANTIAL QUESTIONS OF LAW SET OUT IN PARAGRAPH 'M' (ii) SET

ASIDE IMPUGNED ORDER AT ANNEXURE-A PASSED BY THE INCOME TAX APPELLATE TRIBUNAL IN ITA NO.389/BANG/2016 RELATING TO A.Y.2011-12 DATED:04/04/2017 TO THE EXTEND CHALLENGED IN THE PRESENT APPEAL; AND (iii) PASS SUCH FURTHER AND OTHER ORDERS IN FAVOUR OF THE APPELLATE AS THIS HON'BLE COURT DEEMS FIT TO GRANT, IN THE FACTS AND CIRCUMSTANCES OF THE CASE, AND IN THE INTERESTS OF JUSTICE AND EQUITY.

THIS ITA COMING ON FOR ORDERS, THIS DAY, ALOK ARADHE J., DELIVERED THE FOLLOWING:

JUDGMENT

This appeal under Section 260-A of the Income Tax Act, 1961 (hereinafter referred to as 'the Act' for short) has been filed by the assessee against the judgment dated 04.04.2017 passed by the Income Tax Appellate Tribunal.

2.

The subject matter of the appeal pertains to the assessment year 2011-12. The appeal was admitted by a Bench of this Court vide order dated 23.11.2018 on the following substantial question of law:

"Whether the Tribunal was correct in holding that assessee was not entitled to deduction under Section 80-IB(10) of the

Income Tax Act when the assessee has constructed the building in accordance with the original plan and had sold six individual units each measuring below 1500 sq.ft. and each of the sale deed did not fall within the prohibition contained under Section 80- IB(10)(f) of the Income Tax Act?"

3.

Facts giving rise to the filing of this appeal briefly stated are that the assessee is engaged in developing and building housing projects. The appellant had constructed two blocks of 108 residential flats namely, 'Epitone Crown'. The assessee is following "Percentage Completion Method" that is Accounting Standard-7 as prescribed by the Institute of Chartered Accountants in accordance with Section 145 of the Act. The assessee filed return of income on 30.09.2011 for the assessment year 2011-12 and declared the total income of Rs.6,93,890/-. The assessee claimed a deduction of Rs.10,29,94,124/- as exemption under Section 80-IB(10) of the Act by declaring the flats sold

during the year in accordance with the "Percentage Completion Method". The Assessing Officer by an order dated 27.03.2014 inter alia held that there is no provision under Section 80-IB(10) of the Act to allow the proportionate deduction. Therefore, the entire claim made by the assessee was disallowed. The assessee, thereupon, preferred an appeal which was dismissed by an order dated 10.02.2016 by the Commissioner of Income Tax (Appeals). The assessee filed an appeal before the Tribunal which was dismissed by an order dated 04.04.2017. In the aforesaid factual background, this appeal has been filed.

4.

When the matter was taken up today, learned Senior Counsel for the assessee submitted that the issue with regard to proportionate deduction allowable under Section 80-IB(10) of the Act is covered by a decision of this Court in ITA.No.393/2014 decided on 07.01.2021 (CIT vs. M/s. S.N.Builders and Developers).

5.

Learned counsel for the revenue was unable to dispute the aforesaid submissions.

6.

We have considered the submissions made on both sides.

7.

For the reasons assigned by this Court in the judgment dated 07.01.2021 in ITA.No.393/2014 and taking into consideration the fact that the entire claim of the assessee has been disallowed by the Assessing Officer without adverting to the merits of the claim made by the assessee, the orders passed by the Tribunal, Commissioner of Income Tax (Appeals) and the Assessing Officer insofar it pertains to claim of the appellant under Section 80-IB(10) of the Act are hereby quashed and the matter is remitted to the Assessing Officer to adjudicate the claim of the assessee under Section 80-IB(10) of the Act afresh in accordance with law.

8.

In the light of the decision of this Court in CIT vs. M/s. S.N.Builders and Developers (supra), it is, therefore, not necessary to answer the substantial questions of law framed in this appeal.

In the result, the appeal is disposed of.

The pending interlocutory application does not survive for consideration and is accordingly disposed of.

Sd/-

JUDGE

Sd/-

JUDGE

More judgments on Section 80-IB(10)

All 100 judgments and leading authorities on Section 80-IB(10) →

Recent GST High Court judgments

Search GST case law →