Summary: Indra Housing's request for a tax break under Section 80IB (10) was turned down by the court. The main issue was whether a partnership agreement was real and if Indra Housing was truly part of the development project.
Who’s Involved?
The tax office challenged Indra Housing, a company trying to get tax breaks for a housing project. The case was heard by Chief Justice Manindra Mohan Shrivastava and Justice G. Arul Murugan.
What's the Deal?
Indra Housing claimed a tax break based on a partnership agreement dated December 21, 2005. However, the partnership was only officially formed on November 29, 2007. This made people question if the agreement was real.
"The joint venture development agreement entered on 21.12.2005 is not genuine and valid, as there was no partnership firm M/s.Indra Housing as on 21.12.2005."
Why Was It Denied?
The tax office looked closely at Indra Housing's claim for a deduction of Rs. 7,94,98,820. They found problems with how the company reported its profits and questioned what Indra Housing actually did in the project.
What Did the Courts Say?
At first, a tax tribunal agreed with Indra Housing. But the High Court changed this decision, agreeing with the tax office.
What’s the Outcome?
The High Court overturned the tribunal's decision, bringing back the decisions of the tax officer and the tax appeals office. Indra Housing was found not eligible for the tax break under Section 80IB (10).
"The appeal of the Revenue deserves to be allowed and is accordingly allowed."
