2020 (9) TMI 725 - AT - Income Tax

Assessee granted deduction under section 80IB(10) for shops & commercial establishments.

The Tribunal allowed the assessee's appeal, granting deduction u/s. 80IB(10) on a pro-rata basis for shops and commercial establishments for the ... Deduction u/s. 80IB(10) on pro-rata basis in respect of shops and commercial buildings - allowability of deduction on pro-rata basis - HELD THAT:- This Tribunal in assessee‟s own case for A.Y. 2013-14 [2020 (9) TMI 691 - ITAT PUNE] observed that the respondent revenue granting the deduction consistently on pro-rata basis from A.Y. 2009-10 onwards up to 2012-13 but, however, without there being any change in the facts relating to deduction u/s. 80IB(10), the respondent revenue denied the said deduction for A.Y. 2013-14. This Tribunal on the rule of consistency by placing reliance in the case of Commissioner of Income Tax Vs. Paul Brothers [1992 (10) TMI 5 - BOMBAY HIGH COURT] held that the assessee is entitled to claim pro-rata deduction in respect of shops and commercial establishments having no change in the facts of the case. We hold that the assessee is entitled to claim pro-rata deduction on shops and commercial establishments for A.Y. 2014-15 - Decided in favour of assessee. Issues:1. Denial of deduction u/s. 80IB(10) by CIT(A)2. Allowability of deduction on pro-rata basisIssue 1: Denial of deduction u/s. 80IB(10) by CIT(A)The appeal was against the CIT(A)'s order confirming the AO's denial of deduction u/s. 80IB(10) for the assessment year 2014-15. The assessee raised grounds questioning this denial. The Tribunal noted that in a previous case for A.Y. 2013-14, the Tribunal allowed deduction on a pro-rata basis for shops and commercial buildings. This decision was based on consistency in granting deductions from earlier years. The Tribunal cited the decision of the Hon’ble High Court of Bombay in the case of Paul Brothers, emphasizing that if there is no change in the facts from the initial assessment year, the exemption cannot be withdrawn. Similarly, the Tribunal referred to a case involving M/s. Messung Systems, where it was held that unless the deduction is withdrawn in the first year, it cannot be denied in subsequent years. Thus, the Tribunal allowed the deduction u/s. 80IB(10) on a pro-rata basis for the current assessment year.Issue 2: Allowability of deduction on pro-rata basisThe assessee claimed a deduction of &8377;18,80,000/- u/s. 80IB(10) of the Act, which was denied by the AO due to the violation of the built-up area limit. The Tribunal observed that the assessee sought pro-rata deduction in respect of shops and commercial establishments. Referring to the previous case for A.Y. 2013-14, the Tribunal noted that the deduction was consistently granted on a pro-rata basis from A.Y. 2009-10 onwards up to 2012-13. However, for A.Y. 2013-14, the deduction was denied without any change in the facts. Relying on the rule of consistency and the decision in the case of Commissioner of Income Tax Vs. Paul Brothers, the Tribunal held that the assessee is entitled to claim pro-rata deduction for the current assessment year. Consequently, the order of the CIT(A) was set aside, and the deduction on a pro-rata basis was allowed for the current assessment year.In conclusion, the Tribunal allowed the assessee's appeal, holding that the deduction u/s. 80IB(10) on a pro-rata basis for shops and commercial establishments should be granted based on the principle of consistency and the absence of any change in facts from previous years. The main grounds of appeal became academic due to the decision on the additional ground, and no further adjudication was required.