INCOME TAX ACT, 1961

Section 80-IB(10)

Deduction under section 80-IB(10) - Income from building and developing housing project - CIT (A) accepted assessee's claim of deduction without attending various discrepancies - Remand

Assessee was engaged in business of promoters and builders executing various construction schemes for commercial/residential complex. The relevant year under consideration was the third year of the project and it was close to completion. AO noticed that the assessee did not offer any income on account of the said project in earlier assessment years. It was also noticed that the assessee followed 'project completion method' till the last year, but during the year it changed his method of accounting qua recognition of income from earlier completion method to the percentage completion method. Further, it was noticed that during the year under consideration, the assessee recognized income and did not claim deduction under section 80-IB(10), however, in the revised return of income, it claimed such deduction. AO disallowed the same; however, CIT (A) allowed such deduction to the assessee. Held: It was found that CIT (A) granted relief to assessee appreciating the assessee's explanation relating to some glitches in software, however, the order of the CIT (A) did not provide any reasons for accepting patent discrepancies appeared in Profit and Loss Account and statement of accounts, dates in the audit reports, etc. Further, no details were given for justifying differences in sales figure and for accepting change in method of accounting. Accordingly, such an order of the CIT (A) was not in tune with the provisions of section 250(6) and thus was unacceptable. Therefore, the matter was remanded to the CIT (A) for re-adjudication and the CIT (A) was directed to pass a speaking order attending to the said discrepancies with reference to the claim of deduction under section 80-IB(10).

REFERRED :

FAVOUR : Matter remanded

A.Y. :

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