Appellate Tribunal emphasizes verification for deductions under section 80-IB(10)

The Appellate Tribunal found the Assessing Officer's failure to verify area-wise calculations unacceptable. Emphasizing the importance of verifying eligibility for deductions under section 80-IB(10), the Tribunal directed the AO to conduct proper verification. It highlighted that survey statements lack evidentiary value. The decision allowed the appeal for statistical purposes, remitting the matter to the AO for compliance with the Tribunal's directions.

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Issues:
- Disallowance of deduction under section 80-IB(10) by AO
- CIT(A) direction to allow deduction on pro-rata basis
- AO's failure to verify area-wise calculation during survey
- Appeal against CIT(A) decision

Issue 1: Disallowance of deduction under section 80-IB(10) by AO
The assessee, engaged in construction and property development, had its claim for deduction under section 80-IB(10) denied by the AO initially. This denial was based on the AO's view that the conditions specified in the section were violated.

Issue 2: CIT(A) direction to allow deduction on pro-rata basis
Upon appeal, the CIT(A) directed the AO to allow the deduction under section 80-IB(10) on a pro-rata basis for eligible flats, citing various judgments supporting a liberal interpretation of the provisions. The directive was for the AO to verify the area-wise calculation during a survey operation.

Issue 3: AO's failure to verify area-wise calculation during survey
The AO, while giving effect to the CIT(A)'s direction, did not verify the area-wise calculation as instructed. Instead, the AO re-computed the deduction based on the assessee's statement during the survey proceedings, leading to a revised total income.

Issue 4: Appeal against CIT(A) decision
The assessee was dissatisfied with the AO's approach and appealed to the CIT(A), arguing that the area-wise calculation was not verified as directed. The CIT(A), despite acknowledging the need for verification, upheld the AO's decision based on the survey operation's declaration. The matter was then brought before the Appellate Tribunal.

The Tribunal, after considering the contentions and the factual matrix, found the AO's failure to verify the area-wise calculation unacceptable. The Tribunal emphasized the importance of verifying the eligibility of flats for deduction under section 80-IB(10) and directed the AO to conduct the necessary verification. The Tribunal highlighted that statements made during survey proceedings hold no evidentiary value and should not be solely relied upon. The decision was to remit the matter back to the AO for proper verification and allowance of deduction on a pro-rata basis for eligible flats.

In conclusion, the appeal was allowed for statistical purposes, and the matter was remitted to the AO for compliance with the Tribunal's directions.

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