2011 (7) TMI 1349 - AT - Income Tax

Summary

Issues Involved: Appeal against order denying deduction u/s 80IB for violation of built-up area condition and non-allowance of deduction for units below 1500 sq.ft.

Issue 1 - Violation of Condition u/s 80IB:
The appellant challenged the order of Ld.CIT(A)-XV for holding a violation of the condition u/s 80IB due to the built-up area exceeding 1500 sq.ft. for 10 units. The AO issued a show cause notice based on Development Permission and B.U. Permission indicating the violation. The CIT(A) confirmed the AO's decision, emphasizing the importance of all residential units not exceeding 1500 sq.ft. The DVO's physical verification supported the AO's contention. The CIT(A) referred to the Development Agreement mentioning construction of duplex tenements and row houses with built-up area exceeding the limit, leading to denial of 80-IB deduction.

Issue 2 - Non-Allowance of Deduction for Units Below 1500 sq.ft.:
The appellant also contested the non-allowance of deduction u/s 80IB(10) for units with built-up area below 1500 sq.ft., which was not disputed by the AO. The appellant sought proportionate deduction for such units based on various judicial decisions allowing relief for units within the prescribed limit. The Jurisdictional Tribunal's decision in a similar case supported the appellant's claim for deduction on a proportionate basis. The Tribunal remitted the matter back to the AO for appropriate orders in line with judicial pronouncements.

In conclusion, the Tribunal allowed the appeal for statistical purposes, directing the AO to pass orders considering the proportionate deduction for units meeting the prescribed built-up area limit.