Appellate Tribunal Upholds Deduction for Eligible Units under Income Tax Act

The Appellate Tribunal upheld the order of the CIT(A) and dismissed the Revenue's appeal regarding the entitlement to a proportionate deduction under section 80IB(10) of the Income Tax Act, 1961. Citing a previous decision in the assessee's favor for a similar issue, the Tribunal concluded that the assessee was entitled to the deduction for eligible units. The Tribunal noted consistency in decisions favoring the assessee and maintained that parity of reasoning applied in this case, leading to the dismissal of the Revenue's appeal and the grant of the proportionate deduction to the assessee on July 6, 2021.

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Issues involved:
1. Entitlement to proportionate deduction under section 80IB(10) of the Income Tax Act, 1961.

Analysis:
The appeal before the Appellate Tribunal ITAT Pune revolved around the entitlement of the assessee to a proportionate deduction on the profits of eligible units in compliance with section 80IB(10) of the Income Tax Act, 1961. The assessee, a firm engaged in real estate business, had claimed a deduction under this section, which was disallowed by the Assessing Officer due to non-compliance with the specified conditions. The Ld. AR for the assessee contended that a similar issue had been decided in favor of the assessee in a previous case before the Pune Bench of the Tribunal for the assessment year 2012-13, where proportionate deduction was allowed. The Ld. DR representing the Revenue conceded to this submission.

Upon considering the previous decision of the Tribunal in the assessee's own case for the assessment year 2012-13, the Appellate Tribunal noted that the issue was similar and that the assessee was entitled to a proportionate deduction in respect of the eligible units. The Tribunal upheld the order of the CIT(A) and dismissed the appeal raised by the Revenue. The Ld. CIT(Appeals) had also acknowledged that the issue had been consistently decided in favor of the assessee in various Tribunal decisions, establishing that the assessee was entitled to the proportionate deduction under section 80IB(10) of the Act.

Both parties agreed that the facts and circumstances of the current appeal were identical to the previous case, and therefore, the Tribunal, based on the principle of same parity of reasoning, upheld the findings of the Ld. CIT(Appeals) and sustained the relief provided to the assessee. Consequently, the appeal of the Revenue was dismissed, and the order to grant the proportionate deduction to the assessee was pronounced on July 6, 2021.

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