COMMISSIONER OF INCOME TAX Vs. BRIGADE ENTERPRISES LTD.

JUDGEMENT

(1.) This appeal under Section 260A of the Income Tax Act, 1961 (hereinafter referred to as the Act for short) has been preferred by the revenue. The subject matter of the appeal pertains to the Assessment year 2009-10. The appeal was admitted by a bench of this Court vide order dated 06.04.2015 on the following substantial questions of law:

(2.) Facts leading to filing of this appeal briefly stated are that the assessee is engaged in the business of real estate development. The assessee filed the original return of income for Assessment Year 2009-10 on 30.09.2009. Thereafter, the assessee filed a revised return on 09.10.2009, in which income was declared as Rs.46,49,19,837/- after claiming deduction under Section 80IB(10) of the Act to the extent of Rs.25,08,21,669/- in respect of profits of two projects viz., Brigade Gateway and Brigade Metropolis. The case of the assessee was taken up for scrutiny and assessment was completed under Section 143(3) of the Act by an order dated 28.12.2011 by which income of the assessee was determined at Rs.73,61,05,941/- as against the income of Rs.46,49,19,837/- declared by the assessee. The Assessing Officer made disallowance of the claims of the assessee under Section 80IB(10) , 14A , 36(1)(iii) and claim towards bad debts, for an amount of Rs.25,08,21,669/-, Rs.1,25,27,272/-, Rs.76,66,638/- and Rs.1,70,525/- respectively.

(3.) The assessee thereupon filed an appeal before the Commissioner of Income Tax (Appeals) who by an order dated 14.11.2012 allowed the claim of the assessee for deduction under Section 80IB(10) of the Act and disallowance of interest under Section 36(1)(iii) for an amount of Rs.76,16,638/- was also deleted. However, the interest disallowed under Section14A read with Rule 8D was sustained to the extent of Rs.1,09,99,962/- as per Section 14A read with Rule8D(2)(iii) and interest disallowed as per Section 41A read with Rule 8D(2)(ii) to the extent of Rs.15,27,310/- was deleted. The disallowance of bad debts was sustained to the extent of Rs.70,525/- and the relief of Rs.1,00,000/- was granted to the assessee. Thus, the appeal preferred by the assessee was partly allowed.