2012 (4) TMI 681 - AT - Income Tax

Summary

Issues Involved: Denial of deduction u/s 80-IB(10) of the Income Tax Act due to the area of the plot being less than one acre.

Facts and Arguments:
1. The appellant, a firm engaged in construction, developed residential units on a plot in Pune. Discrepancies in the area of the plot were noted during assessment, leading to denial of deduction u/s 80-IB(10).
2. Assessee contended variations in plot area due to different measurement methods and argued for adoption of the highest area determined by a Government Approved Authority.
3. The AO and CIT (A) relied on Pune Municipal Corporation's certification of the plot area as 3,945 sq. mtrs., below the required one acre for the deduction.

Decision and Reasoning:
1. The CIT (A) rejected the assessee's arguments, emphasizing the need for the plot area to meet the one-acre requirement for the deduction u/s 80-IB(10).
2. The Tribunal considered fresh evidence presented by the assessee showing the plot area as 4,123 sq. mtrs., exceeding one acre. It was noted that the actual measurement by revenue authorities should be the basis for determining plot area.
3. Citing a CBDT Circular, the Tribunal emphasized that the plot area for the deduction should be based on the site of the housing project, not demarcation by land authorities.
4. The case was remanded to the AO for verification of the actual plot measurement to decide the allowance of deduction u/s 80-IB(10) in accordance with law and after providing a hearing to the assessee.

Conclusion:
The appeal was allowed for statistical purposes, with the issue of plot measurement remanded to the AO for a fresh decision based on actual measurements and in compliance with the law.