2011 (6) TMI 800 - AT - Income Tax

Summary

Issues Involved:
1. Eligibility for deduction u/s 80IB(10) of the Income Tax Act.
2. Definition and measurement of built-up area.
3. Requirement of completion certificate for housing projects.

Summary:

1. Eligibility for deduction u/s 80IB(10):
The primary issue was whether the assessee was eligible for deduction u/s 80IB(10) of the Income Tax Act. The assessee argued that they had applied for a completion certificate from the Municipal Corporation, handed over possession to customers, and executed registered sale deeds. They contended that the law applicable at the time of the map sanction in 2004 should apply. The Revenue, however, argued that the completion certificate had not been issued, and the built-up area exceeded the prescribed limit, thus disqualifying the assessee from the deduction.

2. Definition and measurement of built-up area:
The Revenue's verification found the built-up area of a sample house to be 1811.23 sq. ft., including balconies and mumties, exceeding the 1500 sq. ft. limit specified in section 80IB(10). The assessee claimed that excluding balconies and mumties, the area was within the limit. However, the Tribunal noted that the definition of "built-up area" u/s 80IB(14) includes projections and balconies, and since the assessee built independent bungalows, there were no common areas to exclude. Thus, the built-up area exceeded the prescribed limit.

3. Requirement of completion certificate:
The Tribunal emphasized that u/s 80IB(10), the completion certificate issued by the local authority is essential to claim the deduction. The assessee had not obtained this certificate, which was a critical requirement. The Tribunal referenced various judicial precedents but found them inapplicable as the completion certificate was not issued in this case.

Conclusion:
The Tribunal concluded that the assessee did not meet the conditions for deduction u/s 80IB(10) due to the built-up area exceeding the limit and the absence of a completion certificate. The appeal was dismissed, affirming the decision of the CIT(A).

Order:
The appeal of the assessee is dismissed. Order pronounced in the open Court on 23rd June, 2011.