Tribunal allows appeal on deduction under Section 80IB(10) for A.Y. 2010-11

The Tribunal partially allowed the appeal against the CIT(A)'s order for A.Y. 2010-11, regarding deduction U/s 80IB(10). It held that FDR interest was not derived from housing development and thus not eligible for deduction, following a Supreme Court judgment. However, the Tribunal found the forfeited amount and interest from customers directly related to the business, making them eligible for deduction. Miscellaneous income from room rentals was considered incidental and not directly linked to the business, thus not eligible for deduction. The matter was remanded for verification of certain amounts.

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Issues:
Appeal against order of CIT(A) for A.Y. 2010-11 - Deduction U/s 80IB(10) - Treatment of various items in computation of profits.

Analysis:
The assessee, engaged in real estate business, filed a return claiming Nil income after deduction U/s 80IB(10). The AO excluded certain items from profits for deduction calculation. The CIT(A) upheld AO's decision regarding FDR interest, forfeited amount, and miscellaneous income but included interest from customers. Assessee appealed arguing FDR interest was for business needs. Tribunal held FDR interest not derived from housing development, citing Supreme Court judgment. Forfeited amount and interest from customers were considered directly related to business, thus eligible for deduction. Miscellaneous income from room rentals was deemed incidental, not directly linked to business, so not eligible for deduction. Tribunal partly allowed the appeal, remanding the matter for verification of certain amounts. The order was pronounced on 03/08/2016.

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