Claim of deduction made u/s.80 IB (10) of the Income Tax Act, 1961

The Income Tax Appellate Tribunal (ITAT) in Mumbai has allowed an appeal by an individual engaged in building redevelopment. The assessee had claimed a deduction under Section 80IB(10) of the Income Tax Act, 1961, for a completed project. Despite the Assessing Officer and CIT(A) disallowing the deduction, the ITAT found that the assessee's appeal should be allowed, overturning the previous decisions.

IN THE INCOME TAX APPELLATE TRIBUNAL
“H” Bench, Mumbai
Before Shri Shamim Yahya (AM) & Shri Ravish Sood (JM)
I.T.A. No. 6993/Mum/2019 (Assessment Year 2010-11)

Shakeel Ahmed Mohamed
Yuns Ansari
101/1, Hari Jairam
Chawl , Maulana Azad
Road
Madanpura
Mumbai-400 011
PAN : AGUPA3796R

vs

ITO-21(3) (3)
Mumbai

Assessee by None
Department by Shri Pavan Beerla
Date of Hearing 30.08.2021
Date of Pronouncement 02.09.2021

O R D E R

This appeal by the Assessee is directed against the order of learned CIT(A)-33 dated 16.08.2019 and pertains to Assessment Year 2010-11.

2. The assessee is an individual engaged in the business of redevelopment of residential building under the name & style of Raj Constructions. The return of income for the year 2010-11 was filed on 14/10/2010 declaring total income of Rs 9,92,510/- after availing deduction of Rs 31.26.206/- u/s 80IB(10) of I.T.Act.1961. The assessee has constructed a building and the project has been completed during the year and income from the same of Rs. 31,26,206/- was claimed as deduction u/s 80IB(10). The area of the plot on which the building project was completed during the year is 18,215 sq. ft. i.e. less than 1 acre. The case was selected for scrutiny wherein the AO disallowed deduction claimed u/s.80IB(10) on the ground that the project developed by the assessee was not covered by Board Notification and the said finding was confirmed by the CIT(A) vide order dated 23/09/2013 wherein the disallowance of Rs 31,26,206/- was confirmed.

3. From the above, it is clear that in the aforesaid case there was a finding of the fact that no details supplied by the assessee in its return of income was found to be incorrect or erroneous or false by the Revenue. However, in the instant case, the AO has clearly given the findings that the claim of the deduction u/s 80IB made in the return of income was incorrect or false. The focus of the AR of the appellant on the phrase used by the Hon'ble Supreme Court - "A mere making of the claim, which is not sustainable in law, by itself, will not amount to furnishing inaccurate particulars regarding the income of the assesses".- cannot be read in isolation. In the instant case, during the assessment as well as the penalty proceedings, it was brought on record that the appellant had made the false claim which was not admissible in law. Hence, it will tantamount to furnishing of inaccurate particulars of income in the return of income filed by the appellant during A.Y. 2010-11.

4. In the result, assessee’s appeal stands allowed.
Pronounced in the open court on 02.09.2021

Please find attached the enclosed file for the full judgement