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2010 (2) TMI 791 - AT - Income TaxInclusion / Exclusion in Area of Housing Project u/s 80IB. - Inclusion of boundary walls - held that - Our interpretation of the language of the provisions is that the statute has not only specified the measurement but in a way also specified the boundaries hence the boundaries as also the measurement both should match with the minimum requirement of 1 acre. - Decided against the assessee. Inclusion / Exclusion in Area of Housing Project u/s 80IB. - whether the 15 per cent amenity space be held as part of the total project development on 1 acre land. - held that - though the section does not specifically provide for the development plan roads or grant of other facilities etc., in a housing project but the same should conform to the project plan approved by the local authority. - When there is no doubt more so it is not in dispute that a portion of the land, in the present case it is 15 per cent. to be earmarked or set-apart or reserved or segregated out of the total land in question, minimum 1 acre, meant for the purpose of project in terms of rules/regulation of a local body, i.e., Pune Municipal Corporation, and without that segregation the project could not be sanctioned then that portion being mandatory for amenity purposes has to be taken as a part and parcel of the land available for the project. - Decided in favor of assessee.
Issues Involved:
1. Exemption under Section 80-IB(10) of the IT Act, 1961. 2. Inclusion of amenity space in the calculation of the area of the plot for exemption. 3. Admission of new evidence by the CIT(A). 4. Determination of the actual area of the plot for the housing project. 5. Consideration of the demarcation certificate for calculating the area of the plot. Detailed Analysis: Issue 1: Exemption under Section 80-IB(10) of the IT Act, 1961 The primary issue was whether the entire income of Rs. 1,03,92,788 earned by the appellant from the housing project was exempt under Section 80-IB(10) of the IT Act, 1961. The appellant claimed a deduction under this section, arguing that the project was developed on a plot exceeding one acre. However, the AO and CIT(A) held that the net area available for the project was less than one acre, thus disqualifying the project from the exemption. Issue 2: Inclusion of Amenity Space in the Calculation The appellant contended that the area of amenity space, which was compulsory to be handed over to the Pune Municipal Corporation (PMC), should be included in the total area of the plot for calculating the exemption under Section 80-IB(10). The AO and CIT(A) disagreed, stating that the net area available for the project, after excluding the amenity space, was less than one acre. The Tribunal, however, concluded that the amenity space should be considered part of the total project area, as it was mandatory for the project approval and the builder was compensated by additional FSI. Issue 3: Admission of New Evidence by CIT(A) The appellant argued that a letter from the Assistant City Engineer (Planning and Development) of PMC, dated 14th September 2005, should be admitted as evidence to support the claim that the amenity space was part of the housing project. The CIT(A) rejected this letter as fresh evidence. The Tribunal did not explicitly address this issue in its final decision. Issue 4: Determination of the Actual Area of the Plot The appellant claimed that the plot area was 5,048.48 sq. mtrs. based on a demarcation certificate, whereas the AO and CIT(A) considered the area as 4,600 sq. mtrs. as per the 7/12 extract. The Tribunal emphasized that the project should be developed on a plot with a minimum area of one acre, and the demarcation certificate alone could not be used to establish the plot size. The Tribunal concluded that the area as per the 7/12 extract should be considered. Issue 5: Consideration of the Demarcation Certificate The appellant argued that the demarcation certificate, which showed an area of 5,048.48 sq. mtrs., should be given due importance. The Tribunal held that the demarcation certificate could not override the area specified in the 7/12 extract, which was used by the authorities for all calculations related to the project. The Tribunal noted that the project was not on the excessive land and that the area of 4,600 sq. mtrs. should be the basis for determining the eligibility for exemption under Section 80-IB(10). Conclusion: The Tribunal partially allowed the appeal, holding that the area reserved for amenity space should be included in the total area of the plot for calculating the exemption under Section 80-IB(10). Consequently, the appellant was entitled to the exemption, as the total area, including the amenity space, exceeded one acre. The Tribunal dismissed the appellant's argument regarding the demarcation certificate, affirming that the area as per the 7/12 extract should be considered.
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