2017 (1) TMI 1648

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....re clubbed, heard and disposed off by this common order for the sake of convenience. 3. The first ground of appeal in ITR No.2194/Mds/2016 for the assessment year 2010-11 is with regard to reopening of the assessment. The Assessing Officer passed the order for the assessment year 2010-11 under Section 143(3) of the Income Tax Act, 1961 (in short 'the Act') on 13.02.2013, accepting the return of income. Subsequently, it came to the notice of the Assessing Officer, that the assessee has violated the conditions laid down in the recently inserted clause (e) of Section 80IB(10) of the Act which is applicable with effect from 01.04.2010. Since, the assessee has sold 20 flats to M/s. Indian Overseas Bank, which is not an individual, on that bas....

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....e was rejected by the lower authorities on the reason that the assessee violated the provisions of clause (e) of Section 80IB(10) of the Act, as the assessee sold 20 flats to one assessee namely M/s. Indian Overseas Bank, which is not an individual, on the other hand it is a public sector undertaking. 7. Before us, the Ld. counsel for the assessee submitted that the bank has purchased the 20 independent flats for residential usage of 20 individuals who are low or middle income group and the bank is owned and controlled by the Government. There is no bar in selling the flats to public sector undertaking more so for the assessment year 2010-11, that provision cannot be applied. On the other hand, the Ld. counsel for the assessee submitted ....

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....refers the residential unit. In other words, this expression does not bar a deduction claim altogether if some of the units sold exceed the specified dimensions. We observe that in such a case, the consequential disallowance has to be proportionate only. It has to be restricted to profits derived from the residential units violating section 80IB(10)(c). Case law CIT vs. ARUN EXCELLO FOUNDATIONS (P) LTD (2013) 212 TAXMANN 342 (Mad) is also quoted in support. The assessing authority is accordingly directed to make proportionate disallowance and pass its consequential order." 7.1 He also relied on the decisions of the Income Tax Appellate Tribunal Chennai in the cases of Arun Excello Foundations Pvt. Ltd., 108 TTJ 71 and Sanghvi & Doshi Ent....