2012 (12) TMI 1064 - AT - Income Tax

Summary

Issues Involved:
1. Deduction u/s 80IB(10) of the I.T. Act.
2. Completion of the project within the specified time.
3. Commercial area limits within the project.

Summary:

1. Deduction u/s 80IB(10) of the I.T. Act:
The assessee HUF, engaged in the business of builders and developers, claimed a deduction of Rs. 76,94,360 u/s 80IB(10) for the project Shiv Amrut Dham. The AO disallowed the claim, arguing that the entire project was not completed within the specified time and included commercial areas exceeding the permissible limits. The CIT (A) allowed the deduction, stating that the project met all conditions under section 80IB(10), including the commencement and completion dates, land area, residential unit size, and commercial area limits.

2. Completion of the Project within the Specified Time:
The AO contended that the project was incomplete as it was part of a larger project of 14 buildings, and only six buildings were completed by the assessee. The CIT (A) and ITAT found that the assessee's project was distinct and independently developed, with completion certificates obtained within the prescribed time. The ITAT referenced the case of Vidhi Builders, where a similar project was deemed complete based on separate approvals and completion certificates.

3. Commercial Area Limits within the Project:
The AO argued that the commercial area in the entire project exceeded the permissible limit of 2000 sq. ft. However, the CIT (A) and ITAT concluded that the commercial area within the assessee's six buildings was less than 2000 sq. ft., complying with section 80IB(10). The ITAT emphasized that the assessee's project should be considered independently from the other developers' projects on the same land.

Conclusion:
The ITAT upheld the CIT (A)'s decision, allowing the deduction u/s 80IB(10) to the assessee. The appeal filed by the Revenue was dismissed, affirming that the assessee's project met all the conditions for the deduction, including timely completion and adherence to commercial area limits. The judgment emphasized a liberal interpretation of section 80IB(10) in favor of the assessee, aligning with the legislative intent and previous judicial precedents.