Revenue appeals dismissed, assessee's cross objection partly allowed. Tribunal limits disallowance, allows deduction, upholds Work-in-Progress disallowance.

The appeals filed by the Revenue were dismissed, and the cross objection by the assessee was partly allowed. The Tribunal directed the Assessing Officer to restrict disallowance under section 14A to the extent of exempt income and allowed the pro-rata deduction under section 80IB(10). The disallowance of Work-in-Progress was upheld, and the issue under section 40(a)(ia) was remanded for verification. The penalty under section 271(1)(c) was quashed due to a defective notice.

---

---

Issues Involved:
1. Delay in filing cross objections by the assessee.
2. Disallowance under section 14A.
3. Deduction under section 80IB(10).
4. Disallowance of Work-in-Progress (WIP).
5. Disallowance under section 40(a)(ia).
6. Levying penalty under section 271(1)(c).

Summary:

1. Delay in Filing Cross Objections by the Assessee:
The assessee reported a delay of 843 days in filing cross objections due to wrong advice by the tax advisor. The Tribunal condoned the delay, referencing the Supreme Court judgment in Collector, Land Acquisition vs MST Kattiji & Others, which emphasized interpreting "sufficient cause" to ensure justice on merits.

2. Disallowance under Section 14A:
The Assessing Officer disallowed Rs.40,25,86,078/- under section 14A, which was reduced to Rs.4,23,20,580/- by the Ld.CIT(A). The Tribunal, following the Supreme Court's decision in State Bank of Patiala and Delhi High Court's decision in CIT vs Joint Investments Pvt Ltd, directed the disallowance to be restricted to the extent of exempt income earned by the assessee, i.e., Rs.20,19,580/-.

3. Deduction under Section 80IB(10):
The Assessing Officer disallowed the deduction of Rs.24,11,13,795/- under section 80IB(10) due to the built-up area exceeding 1000 sq.ft. for some flats. The Ld.CIT(A) allowed the deduction on a pro-rata basis for eligible units whose area was less than 1000 sq.ft., following judicial precedents like Viswas Promoters P Ltd vs ACIT and CIT vs Arun Excello Foundations P Ltd. The Tribunal upheld this decision, referencing the jurisdictional High Court's decision in Models Construction Pvt Ltd vs DCIT.

4. Disallowance of Work-in-Progress (WIP):
The Assessing Officer disallowed Rs.5,51,637/- claimed as WIP due to lack of supporting evidence for services rendered by M/s Jitnat Infrastructure Pvt Ltd. The Tribunal upheld the disallowance as the assessee failed to provide relevant supporting evidence.

5. Disallowance under Section 40(a)(ia):
The assessee claimed that the amount disallowed under section 40(a)(ia) for non-compliance with TDS provisions in A.Y. 2011-12 should be allowed in A.Y. 2012-13. The Tribunal restored the issue to the Assessing Officer for verification, following the Supreme Court's decision in National Thermal Power Corporation Ltd.

6. Levying Penalty under Section 271(1)(c):
The Assessing Officer levied a penalty of Rs.1,62,50,600/- for concealment of income and furnishing inaccurate particulars. The Ld.CIT(A) restricted the penalty to Rs.27,68,349/- for sale of scrap. The Tribunal quashed the penalty, referencing the jurisdictional High Court's decision in Mohd Farhan A Shaikh vs DCIT, which held that a defect in the notice by not specifying the charge vitiates the penalty proceedings.

Conclusion:
The appeals filed by the Revenue were dismissed, and the cross objection filed by the assessee was partly allowed. The Tribunal directed the Assessing Officer to restrict disallowance under section 14A to the extent of exempt income and allowed the pro-rata deduction under section 80IB(10). The disallowance of WIP was upheld, and the issue under section 40(a)(ia) was remanded for verification. The penalty under section 271(1)(c) was quashed due to a defective notice.

---