TaxTMI Login
Just a moment...
Press 'Enter' to add multiple search terms. Rules for Better Search
When case Id is present, search is done only for this
of 
of 
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of of 
All Case Laws
of of All Case Laws
Note
Bookmark
Share
Don't have an account? Register Here
of <h1>Tribunal directs deduction under Section 80IB, deletes Rs. 26,75,338 addition based on AS-7 estimation.</h1> <h3>Shree Niladree Udyog Versus Income-tax Officer, Ward 2(3), Bhubaneswar.</h3> Shree Niladree Udyog Versus Income-tax Officer, Ward 2(3), Bhubaneswar. - TMI Issues:1. Denial of deduction claimed u/s.80IB2. Adoption of AS-7 by the Assessing OfficerIssue 1: Denial of deduction claimed u/s.80IBThe appellant contested the denial of deduction u/s.80IB amounting to Rs.45,92,548 by the Assessing Officer. The appellant, engaged in real estate business, followed a consistent revenue recognition method as per AS-9 and Guidance Note for Recognition of revenue by Real Estate Developers. The Assessing Officer disallowed the claimed deduction and added the estimated income from work-in-progress to the total income. The CIT(A) upheld the disallowance based on the completion certificate issuance date for the housing project. The appellant argued that the completion certificate delay should not deny the deduction and requested allowance upon certificate receipt. The CIT-DR suggested restoring the issue to the Assessing Officer for deduction allowance upon project completion approval within four years. The Tribunal directed the Assessing Officer to allow the deduction upon obtaining the completion certificate from local authorities, aligning with Section 80IB provisions.Issue 2: Adoption of AS-7 by the Assessing OfficerThe second issue revolved around the Assessing Officer adopting AS-7 for estimating income from incomplete projects, leading to an addition of Rs.26,75,338. The appellant contended that AS-7 was inapplicable to their case, and the estimation method was arbitrary and unjustified. They argued that the Assessing Officer changing the accounting method should allow adjustments in subsequent years. The Tribunal found the estimation method erroneous and directed deletion of the Rs.26,75,338 addition. The Tribunal emphasized that the income already taxed on project completion should not be re-taxed based on work-in-progress percentage. The Tribunal concluded that the Assessing Officer's approach was incorrect, and the CIT(A) erred in confirming the addition, leading to the deletion of the Rs.26,75,338 addition.In conclusion, the Tribunal partly allowed the appeal, directing the Assessing Officer to allow the deduction u/s.80IB upon obtaining the completion certificate. Additionally, the Tribunal ordered the deletion of the Rs.26,75,338 addition based on AS-7 estimation, emphasizing the incorrectness of re-taxing income already accounted for in previous years.
TaxTMI 