Appeal partially allowed on Land Development Expenses & section 80G deduction claim

The ITAT Hyderabad partially allowed the appeal in a case involving disallowance of Land Development Expenses and a deduction claim under section 80G. The disallowance of Land Development Expenses was reduced from 20% to 10% as deemed excessive, and the assessee was directed to provide evidence for a specific donation to SPYM to qualify for the deduction claim under section 80G. The appeal was allowed for statistical purposes, granting the assessee an opportunity to prove the genuineness of the donation.

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Issues:
1. Disallowance of Land Development Expenses
2. Disallowance of deduction claim u/s 80G

Issue 1: Disallowance of Land Development Expenses

The assessee, a real estate company, filed its return for A.Y. 2013-14 declaring total income of &8377; 13,67,710, which was later determined at &8377; 59,67,459 by the AO. The AO disallowed 20% of the Land Development Expenses claimed by the assessee, amounting to &8377; 19,17,251, due to lack of supporting evidence. The CIT(A) upheld this disallowance. The ITAT Hyderabad found that the disallowance at 20% was excessive and reduced it to 10% of the expenses, stating that the interest of justice would be met with this adjustment. The ground of appeal was partly allowed.

Issue 2: Disallowance of Deduction Claim u/s 80G

The AO denied the deduction claim u/s 80G of &8377; 26,82,500 made by the assessee, as supporting evidence for the donations was not produced. The CIT(A) upheld this decision, noting that the approval for the donations had expired. The ITAT Hyderabad considered the specific donation of &8377; 46,00,000 made to SPYM and directed the assessee to produce the necessary evidence before the AO for verification. The ITAT allowed the ground of the assessee for statistical purposes, granting an opportunity for the assessee to prove the genuineness of the donation. The appeal was allowed for statistical purposes.

This judgment by the ITAT Hyderabad involved the disallowance of Land Development Expenses and the deduction claim u/s 80G. The ITAT reduced the disallowance of Land Development Expenses from 20% to 10% as it was deemed excessive, and directed the assessee to produce evidence for the specific donation to SPYM to qualify for the deduction claim u/s 80G.

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