2017 (1) TMI 1663 - AT - Income Tax

Deduction claimed u/s 80IB(10) in respect of projects Kumar Kruti and Kumar Shantiniketan - prorata claim of deduction in respect of project Kumar Shantiniketan - HELD THAT - Two of the flat bearing Nos.3 and 4 in building D had covered area exceeding 1500 sq.ft. and on that basis, the deduction claimed under section 80IB(10) of the Act was denied to the assessee. Tribunal had in the earlier years relating to assessment years 2008-09 and 2009-10, allowed the claim of assessee with directions to the Assessing Officer to allow prorata deduction under section 80IB(10) of the Act and denied the said deduction in respect of two flats i.e. flat Nos.3 and 4 in building D , which had covered area of more than prescribed limit. The relevant findings of the Tribunal are reproduced under which are being referred to, but not being reproduced for the sake of brevity. In the entirety of the above said facts and circumstances, where the issue is identical to the issue before the Tribunal in the earlier years, following the same parity of reasoning, we direct the Assessing Officer to re-work prorata deduction under section 80IB(10) Deduction u/s 80IB(10) in respect of project Kumar Kruti - prorata deduction under section 80IB(10) of the Act in respect of eligible units - said deduction was denied to the assessee on account of two accounts i.e. where the project Kumar Kruti was part of larger project named Kumar City, and where the assessee had not completed the project by 31.03.2008, deduction was not allowed to the assessee - HELD THAT - The Pune Bench of Tribunal further in assessee s own case relating to assessment year 2010-11 2015 (10) TMI 2755 - ITAT PUNE had directed the Assessing Officer to work out the prorata deduction in respect of units sold in Kumar Kruti project and re-work prorata deduction under section 80IB(10) of the Act in respect of Kumar Shantiniketan . We uphold the order of CIT(A) in directing the Assessing Officer to work out the prorata deduction in respect of units sold in Kumar Kruti project and Kumar Shantiniketan . In the entirety of the above said facts and circumstances, we uphold the order of CIT(A) and dismiss the grounds of appeal raised by the Revenue.

Summary

Issues:
1. Allowance of deduction under section 80IB(10) for projects Kumar Kruti and Kumar Shantiniketan.

Analysis:
The appeal filed by the Revenue challenged the order of CIT(A) allowing the assessee's claim of deduction under section 80IB(10) for projects Kumar Kruti and Kumar Shantiniketan for the assessment year 2011-12. The Revenue contended that the CIT(A) erred in interpreting the provisions of Section 80IB(10) and in not considering the completion status of the projects in accordance with the Act. The Revenue argued that the projects did not meet the conditions specified in the Act, particularly in terms of project completion timelines and maximum permissible built-up area.

The first issue addressed the deduction claim for project Kumar Shantiniketan, where the Assessing Officer disallowed the deduction due to certain flats exceeding the prescribed area limit of 1500 sq. ft. However, the CIT(A) allowed a pro-rata deduction under section 80IB(10) for eligible units within the covered area limit. The Tribunal, following previous rulings, directed the Assessing Officer to re-calculate the deduction, maintaining consistency with earlier decisions.

The second issue focused on the deduction claim for project Kumar Kruti, which was initially denied due to being part of a larger project and not meeting the completion deadline. The Tribunal, after examining the facts, determined that Kumar Kruti was an independent project with a separate building plan approval. Consequently, the Tribunal upheld the assessee's entitlement to a pro-rata deduction under section 80IB(10) for eligible units within the specified area limit, while disallowing the deduction for units exceeding the limit.

The Tribunal's decisions in the earlier years and the consistency in interpreting the provisions of Section 80IB(10) guided the resolution of both issues. The Tribunal upheld the CIT(A)'s orders directing the Assessing Officer to re-calculate the deductions for both projects, Kumar Kruti and Kumar Shantiniketan. Ultimately, the Tribunal dismissed the Revenue's appeal, affirming the CIT(A)'s decisions in allowing the deduction claims under section 80IB(10) for the mentioned projects.