2012 (9) TMI 972 - AT - Income Tax

Summary

Issues involved: Cross appeals filed by the assessee and the department against the order of CIT(A)-I, Thane, dated 15.11.2009 regarding denial of deduction u/s 80IB(10).

Issue 1 - Denial of deduction u/s 80IB(10):
- The AO denied deduction due to project being approved as commercial-cum-residential, lack of Occupation Certificate, existence of commercial space, and built-up area exceeding 1000 sq. ft.
- Assessee argued project was approved as a housing project, completion certificate not necessary, and project approved before 31.03.2004.
- AR cited various decisions supporting non-requirement of completion certificate for projects approved before 31.03.2005.
- ITAT held that denial based on lack of completion certificate was not valid as per Third Member decision relating OC back to application date.
- Directed AO to allow deduction as claimed, setting aside CIT(A) order.

Issue 2 - Flats exceeding 1000 sq. ft.:
- Department raised issue of some flats exceeding 1000 sq. ft., including balcony measurements.
- Citing precedents, ITAT dismissed department's appeal as old law applied for projects approved before 01.04.2005.
- Decision based on exclusion of balcony measurements for determining flat size.
- Department's appeal dismissed accordingly.

In conclusion, the ITAT allowed the assessee's appeal regarding denial of deduction u/s 80IB(10) due to lack of completion certificate, directing the AO to allow the deduction. The department's appeal on flats exceeding 1000 sq. ft. was dismissed based on exclusion of balcony measurements. The appeals were decided in favor of the assessee and against the department.