2012 (4) TMI 714 - AT - Income Tax

Summary

Issues Involved:
1. Deduction u/s 80IB(10) for built-up area exceeding 1000 sq. ft.
2. Deduction u/s 80IB(10) for shop area exceeding 2000 sq. ft.
3. Applicability of amended provisions of section 80IB(10)(d) retrospectively.

Summary:

Issue 1: Deduction u/s 80IB(10) for built-up area exceeding 1000 sq. ft.
The AO observed that flats E-104, E-201, and E-501 had a super built-up area of 1092 sq. ft., exceeding the allowable limit of 1000 sq. ft. u/s 80IB(10). The CIT(A) found that the AO mistakenly considered the super built-up area instead of the built-up area. The built-up area, as per agreements, was 913 sq. ft., fulfilling the conditions of section 80IB(10). The Tribunal upheld the CIT(A)'s findings, dismissing the revenue's ground.

Issue 2: Deduction u/s 80IB(10) for shop area exceeding 2000 sq. ft.
The AO disallowed the deduction, stating that the shop area in the housing project exceeded the 2000 sq. ft. limit, violating section 80IB(10)(d). The CIT(A) noted that the housing and shopping complexes were constructed by two separate entities, with separate development agreements and finances. The Tribunal agreed, stating that the housing project should be delinked from the commercial project for deduction purposes, dismissing the revenue's ground.

Issue 3: Applicability of amended provisions of section 80IB(10)(d) retrospectively
The AO applied the amended provisions of section 80IB(10)(d) prospectively, stating they should apply in the year profits are earned. The CIT(A) and Tribunal held that the amended provisions apply only to projects approved after 01/04/2005. Since the assessee's project was approved before this date, the amended provisions were not applicable. The Tribunal upheld the CIT(A)'s decision, dismissing the revenue's ground.

Conclusion:
The Tribunal upheld the CIT(A)'s order allowing the assessee's claim of deduction u/s 80IB(10) of Rs. 4,96,27,406/-, dismissing the revenue's appeal on all grounds.