2013 (4) TMI 916 - AT - Income Tax

Summary

Issues involved: Interpretation of the area of the plot for claiming deduction u/s 80IB(10) of the Income Tax Act, 1961.

Summary:
The Appellate Tribunal ITAT Pune heard an appeal filed by the revenue against the orders of CIT(A)-V, Pune. The Assessing Officer disallowed the claim of deduction u/s 80IB(10) as the project was deemed to be on less than 1 acre of land. The CIT(A) allowed relief to the assessee, considering the road acquisition area as part of the plot for calculation of the minimum required area. The Tribunal upheld the CIT(A)'s decision based on a similar precedent and the CBDT Circular No. 5 of 2005. The Tribunal held that the assessee was entitled to the deduction u/s 80IB(10) based on the total plot area, including the road acquisition area. The revenue's appeal was dismissed.

The main contention was whether the road acquisition area should be included in the calculation of the minimum 1 acre plot size required for claiming deduction u/s 80IB(10). The Assessing Officer did not consider the road acquisition area of 513.80 sq.mtrs, leading to the rejection of the deduction claim. The assessee argued that the road acquisition area should not be excluded as it was part of the total plot area mentioned in the development agreement and approved building plan. The Tribunal agreed with the assessee, stating that the road acquisition area was still in possession of the assessee and entitled to FSI, thus justifying its inclusion in the plot size calculation.

In conclusion, the Tribunal upheld the CIT(A)'s decision that the assessee was entitled to the deduction u/s 80IB(10) based on the total plot area, including the road acquisition area. The revenue's appeal was dismissed, affirming the allowance of the deduction to the assessee.