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of <h1>High Court grants relief to construction company under Income Tax Act, clarifies Section 80IB(10) application</h1> <h3>Commissioner of Income-tax, Central Circle Versus Anriya Project Management Services (P.) Ltd.</h3> Commissioner of Income-tax, Central Circle Versus Anriya Project Management Services (P.) Ltd. - [2013] 353 ITR 12 Issues:1. Challenge to order granting benefit under Section 80IB(10) of the Income Tax Act, 1961.2. Denial of relief to the assessee under Section 80IB.3. Validity of search for jurisdiction in assessment.4. Disallowance under Section 40A(3) of the Act.5. Levy of interest under Section 234B of the Act.Analysis:Issue 1: Challenge to order granting benefit under Section 80IB(10)The assessee, a private limited company engaged in the construction business, claimed deduction under Section 80IB. A search was conducted, revealing discrepancies in the built-up area of residential units exceeding the prescribed limit of 1,500 sq. ft. The Assessing Officer held that the balcony area could not be excluded, thus denying the benefit under Section 80IB. The Appellate Commissioner and the Tribunal upheld this decision. However, the High Court clarified that the definition of 'built-up area' inserted in 2005 was prospective and did not apply to projects approved before that date. Consequently, the assessee was entitled to the benefit under Section 80IB(10) for the residential units.Issue 2: Denial of relief under Section 80IBThe Tribunal excluded certain flats exceeding 1,500 sq. ft. from the benefit under Section 80IB. The High Court ruled that the assessee should receive the benefit for all flats as the balcony area exclusion was permissible, and the new definition did not apply retroactively. Therefore, the assessee was entitled to the benefit for all residential units constructed.Issue 3: Validity of search for jurisdiction in assessmentThe High Court addressed the question of the assessing officer's jurisdiction in making the assessment post a search under Section 132 and Section 153A of the Act. The Court clarified that the assessing officer had valid jurisdiction for assessment post the search conducted, ensuring proper application of the law in determining the eligibility for deductions under Section 80IB.Issue 4: Disallowance under Section 40A(3) of the ActThe assessing authority disallowed a portion of cash payments under Section 40A(3) due to non-compliance with Rule 6DD. The High Court remitted the matter back to the assessing officer for reconsideration, emphasizing the need to verify whether the disallowance was justified based on the facts presented.Issue 5: Levy of interest under Section 234B of the ActThe High Court did not provide specific details on the levy of interest under Section 234B in the summarized judgment.In conclusion, the High Court allowed some appeals in part and dismissed others, clarifying various legal aspects related to the Income Tax Act and providing relief to the assessee based on the correct interpretation of the law and relevant provisions.
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