THE COMMISSIONER OF INCOME TAX vs. M/S. MAHAVEER TUSCAN

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ITA/228/2014HC KarnatakaKAHC01023259201402 September 2020Bench: ALOK ARADHE,H.T. NARENDRA PRASAD3 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that the appellate authorities were not correct in allowing the deduction under Section 80IB(10) despite large-scale violations and deviations to the sanctioned plan. The court found that these deviations were not sufficient to claim the deduction.

What were the facts?

The revenue appealed against an ITAT order that allowed the assessee firm to claim deduction under Section 80IB(10) of the Income-Tax Act. The assessee had undertaken a housing project with alleged violations of the sanctioned plan.

What were the issues?

Whether deviations and violations in a housing project disqualify an assessee from claiming deduction under Section 80IB(10) of the Income-Tax Act.

Which sections of the Income-tax Act were involved?

Section 80IB(10)

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF KARNATAKA AT BENGALURU

DATED THIS THE 2ND DAY OF SEPTEMBER 2020

PRESENT

THE HON’BLE MR. JUSTICE ALOK ARADHE

AND

THE HON’BLE MR. JUSTICE H.T.NARENDRA PRASAD

I.T.A. NO.228 OF 2014 BETWEEN:

1.

THE COMMISSIONER OF INCOME-TAX C.R. BUILDING, QUEENS ROAD BANGALORE.

2.

THE INCOME-TAX OFFICER WARD-4(3), C.R. BUILDING QUEENS ROAD, BANGALORE.

... APPELLANTS (BY SRI.K.V.ARAVIND, ADV.,)

AND:

M/S. MAHAVEER TUSCAN NO.1, 24TH MAIN MAHAVEER TOWERS J P NAGAR, 6TH PHASE BANGALORE-560078. ... RESPONDENT (BY SRI.A.SHANKAR SR. ADV. A/W SRI.M.LAVA, ADV.) - - -

THIS ITA IS FILED UNDER SECTION 260-A OF I.T. ACT, 1961 ARISING OUT OF ORDER DATED 20.12.2013 PASSED IN ITA NO.67/BANG/2013 FOR THE ASSESSMENT YEAR 2009-10, PRAYING THAT THIS HON’BLE COURT MAY BE PLEASED TO:

(I) FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW STATED THEREIN. (I) ALLOW THE APPEAL AND SET ASIDE THE ORDERS PASSED BY THE ITAT, BANGALORE IN ITA NO.67/BANG/2013 CONFIRMING THE ORDER OF THE APPELLATE COMMISSIONER AND CONFIRM THE ORDER PASSED BY THE INCOME TAX OFFICER, WARD-4(3), BANGALORE.

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

JUDGMENT

This appeal under Section 260A of the Income Tax Act, 1961 (hereinafter referred to as the Act for short) has been preferred by the revenue. The subject matter of the appeal pertains to the Assessment year 2009-10. The appeal was admitted by a bench of this Court vide order dated 02.09.2014 on the following substantial questions of law: (i) Whether the appellate authorities were correct in holding that the assessee firm is eligible for deduction under Section 80IB(10) of the Income-Tax Act despite the fact that there was large scale violations and deviations to the sanctioned plan of the local authority by the assessee firm in carrying out the “Housing Project” without appreciating the fundamental nature of the legislature for providing such relief?

(ii) Whether the appellate authorities were correct in construing that deviations and violations committed by the assessee while undertaking the housing project and yet to be paid compounding fee for regularizing the default is fairly enough to claim the deduction under Section 80IB(10) without appreciating the intended structure of the legislative provisions of Section 80IB?

2.

For the reasons assigned by us in the order passed today in ITA No.13/2013, the substantial questions of law are answered against the revenue and in favour of the assessee.

In the result, the appeal fails and is hereby dismissed.

Sd/- JUDGE

Sd/- JUDGE ss

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