Tribunal upholds deduction under section 80IB(10) for project compliance

The Tribunal upheld the decision of the ld. CIT(A) to allow a proportionate deduction u/s.80IB(10) for assessment years 2012-13 to 2015-16. The issue arose from the violation of selling two flats to one person, resulting in the disallowance of deduction for the specific violation while allowing it for the compliant portion of the project. The Tribunal's decision aligned with a similar case precedent from the jurisdictional High Court, providing clarity on deduction eligibility in such scenarios. Consequently, all appeals related to these assessment years were dismissed.

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Issues:
- Appeal by the Revenue related to assessment years 2012-13 to 2015-16.
- Allowance of proportionate deduction u/s.80IB(10) of the Income-tax Act, 1961.

Analysis:

Assessment Year 2012-13:
The only issue raised in this appeal was regarding the allowance of proportionate deduction u/s.80IB(10) of the Income-tax Act, 1961. The assessee, engaged in the business as Builders and Promoters, claimed deduction on the profit from the sale of flats in a project located at Wakad, Pune. The AO disallowed the entire deduction due to the violation of selling two flats to one person, contrary to section 80IB(10)(f). However, the ld. CIT(A) allowed the deduction on a proportionate basis for the portion of the project not in violation. The Tribunal upheld the CIT(A)'s decision, stating that if there was a violation, only the deduction related to that violation should be disallowed. The Tribunal referenced a judgment by the jurisdictional High Court in a similar case and approved the granting of deduction on a proportionate basis.

Assessment Years 2013-14 to 2015-16:
The facts and circumstances of the appeals for these years were found to be similar to the assessment year 2012-13. Following the decision made for the earlier year, the Tribunal affirmed the impugned order for these subsequent years as well. Consequently, all the appeals were dismissed.

In conclusion, the Tribunal addressed the issue of allowing proportionate deduction u/s.80IB(10) for the assessment years 2012-13 to 2015-16. The decision was based on the violation of selling two flats to one person and the subsequent allowance of deduction on a proportionate basis. The judgment provided clarity on the eligibility for deduction in such cases and upheld the decision of the ld. CIT(A) based on relevant legal precedents.

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