2011 (5) TMI 984 - AT - Income Tax

Summary

Issues Involved:
1. Maintainability of the Cross Objection (CO) filed by the assessee.
2. Eligibility for deduction u/s 80IB(10) for two projects, Krishna Park and Prasiddhi.

Summary:

1. Maintainability of the Cross Objection (CO) filed by the assessee:
The CO filed by the assessee was dismissed as it was merely in support of the order passed by the Ld. CIT(Appeals) and thus was deemed infructuous.

2. Eligibility for deduction u/s 80IB(10) for two projects, Krishna Park and Prasiddhi:
The Revenue's appeal contested the Ld. CIT(A)'s decision to allow deductions u/s 80IB(10) for the Krishna Park and Prasiddhi projects. The Assessing Officer (AO) had disallowed these deductions on the grounds that:
- For Krishna Park, the built-up area of certain row houses exceeded the 1500 sq.ft. limit and the commercial area exceeded 2000 sq.ft.
- For Prasiddhi, the commercial area exceeded the permissible limit of 2000 sq.ft.

The Ld. CIT(A) had ruled in favor of the assessee, stating that the AO incorrectly included open areas in the built-up area calculations and that the amended provisions of clause (d) of Section 80IB(10) were not applicable to projects approved before 01-04-2005.

The Tribunal, however, upheld the Revenue's appeal, referencing the Hon'ble Bombay High Court's judgment in the case of CIT v. M/s. Brahma Associates, which clarified that clause (d) of Section 80IB(10) is applicable from assessment year 2005-06, regardless of the project approval date. The Tribunal concluded that the assessee was not eligible for the deduction u/s 80IB(10) as the projects did not comply with the requirements of clause (d) applicable from 01-04-2005.

Conclusion:
The CO filed by the assessee was dismissed, and the Revenue's appeal was allowed, denying the deduction u/s 80IB(10) for both projects.