INCOME TAX ACT, 1961

Section 80-IAB

Deduction under section 80-IAB - Share income received from Society - Assessee relinquished the claim of deduction under section 80-IAB -

Assessee was deriving income from interest, development and operation of SEZ as co-developer. It claimed the deduction under Chapter VIA relating to the share income received from the Society which was claimed as exemption under section 80-IAB. During the assessment proceedings, AO found that assessee was not entitled for deduction under section 80-IAB, hence called for information from assessee as to why the same should not be disallowed and added back to the income. However, AO did not find any justification in submission made by assessee and accordingly disallowed the same. Held: In the instant case, what was received by assessee was only share of income from the society. The income of society was taxed separately in the hands of society. CIT(A) had also given a finding that the income should be taxed in the hands of the society only but not in the hands of individual members. Because of the reason that assessee as well as the society have not filed the returns of income, thereby held that assessee had relinquished the claim for deduction under section 80-IAB which was disallowed by the AO. Since the income of the society was taxed separately as rightly observed by CIT(A), individual members of the society were not liable to be tax the same income. Taxing the income again in the hands of assessee would amount double taxation of the same income which is not permissible, therefore, deduction could not be disallowed to assessee.

Relied:Asstt. CIT v. M/s. Avinash Hitech [ITA No.726/Hyd/2017, dt. 29-12-2017] M/s. Vanshee Builders & Developers (P.) Ltd. v. ITO 2014 TaxPub(DT) 4854 (Bang-Trib)

REFERRED :

FAVOUR : In assessee's favour

A.Y. : 2012-13

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