ASST CIT CEN CIR 23, MUMBAI vs. OBEROI REALITY LTD, MUMBAI

O R D E R PER PAWAN SINGH, JM:

1. 1. These two appeals are directed by the Revenue against the order by Commissioner of Income-tax (Appeals) [CIT(A)]-40 Mumbai for Assessment Year (AY) 2006-07 & 2010-11 for two separate orders dated 06.09.2013. The assessee has filed Cross Objection (C.O.) in appeal for AY-2006-07. As facts of the case are common, thus, both the appeal and C.O. were clubbed together, heard and are being decided by a common order to avoid the conflicting decision.

2. In the Revenue has raised the following Grounds of appeal: 1. “On the facts and in the circumstances of the case and in law, the ld.CIT(A) erred in allowing the assessee’s claim of deduction u/s.80-IB(10) of the IT Act 1961, equal to the Gross Total Income of Rs. 35,28,30,264/-; than restricting the same to Rs. 34,24,22,840/-, to the extent of income under the head Business and Profession.” 2. “On the facts and in the circumstances of the case and in law, the ld.CIT(A) erred in allowing excess deduction u/s.80-IB(10) to the assessee than available and allowable to it as per the law.”

3. In cross objection [CO No.05/M/2015] the assessee has raised following grounds of appeal. “Ld AO erred in law and in fact n issuing notice under section 148 of the Income Tax Act by mere change of opinion by relying the same fact and material which had been submitted by the assessee during the course of assessment proceedings under section 153C of the Act.”

4. Brief facts of the case are that the assessee-company is engaged in the Construction and property Development Business and belongs to Oberoi Groups, wherein search & seizure action carried out on 19.07.2007. Consequently, assessment u/s 153C r.w.s 143(3) of the Act was completed on 24.12.2009 determining the income of Rs. 6,00,40,620/-. While framing assessment, the Assessing Officer (AO) disallowed 3 & 6926/M/2013 M/s Oberoi Realty Limited deduction u/s 80-IB (10). However, the addition made by AO were deleted by the ld. CIT(A) in its order dated 08.05.2011. The assessment was again re-opened by issuing notice u/s 148 on 06.07.2012 on the ground that deduction claimed and allowed u/s 80-IB (10) was more than but was permissible and should have been restricted to business income of the assessee. The assessee contested the reopening of reassessment proceedings. The assessee in reply to the notice u/s 148 contended that the return filed on 16/01/2009 may be treated as the return of income filed. The re-opening was also objected. The AO not accepted the contention of the assessee and completed the assessment u/s 143(3) r.w.s. 147 of the Act, wherein deduction was restricted to Rs. 34,24,22,840/- being income from business and profession in its order dated 06.12.2012. On appeal before the ld. CIT(A), the assessee was allowed deduction of Rs. 35,28,30,264/- and directed the AO accordingly. Thus, being aggrieved of the order of ld. CIT(A), the Revenue has filed the present appeal before us. The assessee-company filed C.O. that issuance of notice u/s 148 was mere change of opinion by relying upon the same material which had been submitted by assessee during the assessment u/s 153C.

1. “On the facts and in the circumstances of the case and in law, the ld. CIT(A) erred in allowing the assessee’s claim of deduction u/s.80-IB(10) of the IT Act 1961, of Rs.9,16,96,784/- being income of the assessee from the 5 & 6926/M/2013 M/s Oberoi Realty Limited housing project, than restricting the same to Rs.Nill which is extent of loss under the head Business and Profession.” 3. “On the facts and in the circumstances of the case and in law, the ld.CIT(A) erred in allowing excess deduction u/s.80-IB(10) to the assessee than available and allowable to it as per the law.”

9. The brief facts of the case are that the assessee filed return of income for the relevant assessment year on 12 Oct 2010 declaring total income of Rs.12,42,46,302/-. In the return of income assessee claimed deduction under section 80 IB(10). The assessment was completed under section 143(3) on 17 December 2012 determining the income of assessee at Rs. 21,58,94,012/-. In the assessment the AO disallowed assessee’s claim of deduction under section 80 IB(10) of Rs. 9 696784/-holding that deduction under the section has to be restricted to the income under the head business and profession and as during the year the assessee had a business loss of Rs. 2,08,76,198/- no deduction under section 80 IB(10) is allowable. On appeal the claim of assessee was allowed by ld CIT(A). Thus being aggrieved by the order of Commissioner (Appeals) the revenue has filed present appeal before us.

6 & 6926/M/2013 M/s Oberoi Realty Limited “ 2. The question sought to be raised in this appeal relates to the deduction under section 80-O of the Income Tax Act. The Tribunal has considered this question taking into account the calculations made by the Assessing Officer, wherein he has determined the deduction under section 80-O in the sum of Rs. 1,29,41,830/-being the 50% of the income so received or brought into India. This figure is not disputed by the learned counsel for the Revenue. The only question is sought to be canvassed is that out of these deductions the admissible deduction under section 80-O ought to be limited to the extent of Rs. 69,70,127/- which represents business income. In other words, the income from interest and dividend shall not form part of Gross total income as defined under section 80B(5) of the Act. The submission is misconceived if one turns to the definition of “ Gross total income” under section 80B(5) it reads as under:

“ 80B(5) “ gross total income” means the total income computed in accordance with the provisions of this Act, before making any deduction under this chapter.”