TaxTMI 
TaxTMI 
2021 (10) TMI 409
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....e has assailed the impugned order on the following grounds before us: "1. The ld. CIT(Appeals) has erred in confirming the disallowance of provisions for expenses amounting to Rs. 4,17,500/- and not considering the disallowances as a part of the business income and hence eligible for deduction u/s 80P(2)(a)(i) on enhanced income. 2. The ld. CIT(Appeals) has erred in confirming the disallowance of donations amounting to Rs. 60,005/- and not considering the disallowances as part of business income and hence eligible for deduction u/s 80P(2)(a)(i) on enhanced income. 4. The ld. CIT(Appeals) has erred in not considering deduction u/s 80P(2)(c) amounting to Rs. 50,000/-. 5. Your appellant further reserve the r....
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....observations, the A.O vide his order passed u/s 143(3), dated 10.12.2016 assessed the income of the assessee society at Rs. 63,77,260/-. 4. Aggrieved, the assessee carried the matter in appeal before the CIT(A). Although, the CIT(A) held that the assessee was entitled for claim of deduction u/s 80P(2)(a)(i) of the Act, however, he upheld the disallowance of provisions of Rs. 4,17,500/- and the disallowance of donation of Rs. 60,005/-. Accordingly, the CIT(A) partly allowed the appeal of the assessee. 5. The assessee being aggrieved with the order of the CIT(A) has carried the matter in appeal before us. It was submitted by the ld. Authorized Representative (for short "A.R‟) for the assessee that the CIT(A) while upholding the di....
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....us, it was the claim of the ld. A.R that as the disallowance of the aforesaid provision for expenses had enhanced the business income of the assessee, therefore, pursuant thereto the assessee‟s entitlement for claim of deduction u/s 80P(2)(a)(i) was accordingly required to be reworked out. In sum and substance, it was the claim of the ld. A.R that as the aforesaid disallowance had resulted to an enhancement of its business income, therefore, it was entitled for deduction u/s 80P(2)(a)(i) on the amount of the enhanced income. In support of his aforesaid contention the ld. A.R had relied on the CBDT Circular No. 37/2016, dated 02.11.2016. Also, support was drawn by him from the judgments of the Hon‟ble High Court of Bombay in the ....
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....sing project. The ultimate profits of assessee after adjusting disallowance under section 40(a)(ia) of the Act would qualify for deduction under section 80-IB of the Act. This view was taken by the courts in the following cases: • Income-tax Officer - Ward 5(1) vs. Keval Construction, Tax Appeal No. 443 of 2012, December 10, 2012, Gujarat High Court. • Commissioner of Income-tax-IV, Nagpur vs. Sunil Vishwambharnath Tiwari, IT Appeal No, 2 of 2011, September 11, 2015, Bombay High Court. (ii) If deduction tinder section 40A(3) of the Act is not allowed, the same would have to be added to the profits of the undertaking on which the assessee would be entitled for deduction under section 80-IB of the Act. This ....
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....ment of its profits of the eligible business, then, deduction under Chapter VI-A would be admissible on the profits so enhanced pursuant to the said disallowance. Also, we are of the considered view that support for the aforesaid view can safely be drawn from the judgment of the Hon‟ble High Court of Bombay in the case of CIT Vs. Sheth Developers (P) Ltd. (2012) 254 CTR 127 (Bom). In the aforesaid case, the assessee who was engaged in the business of a builder was subjected to search proceedings u/s 132 of the Act. During the course of the search proceedings the assesee had came forth with a disclosure of undisclosed income of Rs. 7 crores. However, in its return of income the assessee had reflected its undisclosed income at Rs. 3.50 ....