Appeal success on deduction under Income Tax Act, but failure on car depreciation claim.

The Tribunal partly allowed the appellant's appeal regarding the disallowance of deduction under section 80 IB (10) of the Income Tax Act, holding that the deduction was allowable as the flats were allotted and registered before the relevant amendment. However, the appeal concerning the disallowance of depreciation on a new motor car was dismissed due to the appellant's failure to provide evidence supporting the claim. The judgment was delivered on 22nd March 2017 in Chennai.

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Issues:
1. Disallowance of deduction u/s.80 IB (10) of the Income Tax Act.
2. Disallowance of depreciation on a new motor car.

Analysis:

Issue 1: Disallowance of deduction u/s.80 IB (10) of the Income Tax Act:
The appellant appealed against the Commissioner of Income Tax (Appeals)'s order disallowing a deduction claimed under section 80 IB (10) of the Act. The appellant sold two flats to individuals, leading to the disallowance based on sub-clause (f) of the explanation to Sec.80 IB (10). The AO disallowed the deduction, which was confirmed by the CIT(A). The appellant contended that the flats were sold before the amendment came into effect, making the sub-clauses inapplicable. The Tribunal found in favor of the appellant, citing a similar case precedent where the amendment was held to apply prospectively. As the flats were allotted and registered before the amendment, the Tribunal allowed the deduction, overturning the lower authorities' decision.

Issue 2: Disallowance of depreciation on a new motor car:
The AO disallowed depreciation claimed on a new motor car by the appellant, restricting it to 15% due to lack of evidence for running the vehicles on hire. The appellant failed to provide necessary details during assessment proceedings, leading to the disallowance. The CIT(A) upheld the AO's decision, and the Tribunal found no error in their findings. As the appellant did not present any evidence to refute the AO's conclusions, the disallowance of depreciation on the motor car was confirmed. The Tribunal dismissed the appellant's appeal on this issue.

In conclusion, the Tribunal partly allowed the appellant's appeal concerning the disallowance of deduction u/s.80 IB (10) but dismissed the appeal regarding the disallowance of depreciation on the new motor car. The judgment was pronounced on 22nd March 2017 in Chennai.

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