Deduction under Section 80IB(10) eligible for a Partly owned individuals
Facts and Issue of the case
The facts of the case are that assessee is an individual and engaged in the business of travel agent under the name & style of proprietary concern “M/s Govindji Patel & Co.” and also in development & building of housing project. The assessee filed his return of income for AY 2013-14 declaring total income of Rs,.6,75,629/-. During the year, the assessee undertook a development of housing project and claimed deduction under section 80IB(10) of the Income Tax Act 1961. The assessee developed housing project in the name of “Hampton Park” alongwith his mother. The assessee and his mother were having 50% shareholding in housing project. The assessee in his computation of income claimed deduction under section 80IB(10) of Rs.59,80,995/-. During the assessment, Assessing Officer issued show cause notice that the assessee has not shown development activities in his books of account. In response to show cause notice, the assessee contended that he has undertook to development of housing project alongwith his mother in the name of “Hampton Park”. It was further explained that the project development work was undertaken by in the individual name and accordingly deduction under section 80IB(10) of the Act claimed in the individual capacity. The books of account of assessee as well as other commission-owner (mother) are separate for housing project which are duly audited under section 44AB and 80IB of the Act. The Assessing Officer did not accept the contention of assessee. The Assessing Officer held that return of income is not filed by Association of Person (AOP) and that income of housing project “Hampton Park” earned by AOP and not in the status of co-ownership. Accordingly, the Assessing Officer disallowed the entire deduction under section 80IB(10).
On appeal before the Ld. (CIT(A) assessee filed detailed written statement and contended that similar disallowance was claimed other co-owner of the housing project (mother of assessee Jayaben G Patel) the similar disallowance was disallowed by assessing officer and on first appeal the order was maintained. However, on further appeal before Tribunal the disallowance was allowed to his co-owner in ITA No.2476/Ahd/2014 dated 24.10.2019 in Smt. Jayaben Govindji Patel vs. Income Tax Officer. The Ld. CIT(A) recorded the relevant part of order of Tribunal. However, the Ld. CIT(A) concurred with the decision of Assessing Officer. Further aggrieved the assessee is in appeal before the Tribunal.
Observation by the court
The court had heard the submission of the Ld. Authorized Representative (AR) of the assessee and Ld. Sr. Departmental Representative represent for the Revenue (DR) and have gone through the order of authorities below. The Ld.AR of the assessee submits that the ground of appeal raised by assessee is squarely covered by the decision of Tribunal in assessee’s co-owner , wherein the lower authorities disallowed the similar deduction, by raising objection that project was developed by AOP. The Tribunal after considering the similar objection allowed deduction in favour of co-owner .The Ld. AR of the assessee further submits that by following the decision of co-owner’s case in assessment year2011-12 for similar deduction was allowed to the co-owner in assessment year 2012-13 and again in assessment year 2013-14 in assessment year 2012-13 and 2013-14 respectively. The Ld. AR of the assessee placed on record copy of decisions of Tribunal.
The court had considered the rival submission of both the parties and have gone through the order of authorities below.The court have also deliberated on the decision of Tribunal in assessee’s co- owner’s case wherein on identical set of fact in assessment year 2013-14. Considering the decision of Tribunal on similar set of fact in assessee’s co-owner’s case and wherein no variation, in fact, is brought to our notice nor any contrary view is brought to our notice.
The appeal of the assessee is allowed by the court.Ashok-G-Patel-Vs-DCIT-ITAT-Surat