2015 (7) TMI 1362 - AT - Income Tax

Disallowing proportionate deduction u/s 80IB - as per AO assessee has constructed some residential units which are more than 2000 sq.ft. and the maximum built up area permissible for residential unit as per sec. 80IB(10) is 1500 sq.ft. therefore AO disallowed the claim for deduction under sec. 80IB(10) - CIT-A directed AO to allow deduction u/s.80 IB(10) to the appellant on proportionate basis.HELD THAT - We find that the CIT(Appeals) has followed the decision of the Hon ble Madras High Court in the case of M/s. Vishwas Promoters Pvt. Ltd. 2012 (11) TMI 1117 - MADRAS HIGH COURT while allowing proportionate deduction under sec. 80IB(10) to the assessee on the housing projects. The Departmental Representative has simply relied on the order of the Assessing Officer and could not cite any contrary decision which was in favour of the Revenue. The Authorized Representative of the assessee also could not cite any decision of the High Court/Supreme Court which was in favour of the assessee for allowing deduction on entire income under sec. 80IB(10) even in case where the units constructed were of more than 1500 sq.ft. Therefore we find no good reason to interfere with the order of the Commissioner of Income Tax (Appeals) which is hereby confirmed and the ground of appeal of the assessee as well as that of the Revenue are dismissed.

Summary

Issues:
- Disallowance of proportionate deduction under sec. 80IB of the Act.
- Disallowance of deduction under sec. 80IB(10) on a proportionate basis.

Analysis:
- The appeals were filed by the assessee and the Revenue against the order of the Commissioner of Income Tax (Appeals) concerning the disallowance of proportionate deduction under sec. 80IB of the Act.
- The Revenue contended that the Commissioner erred in directing the Assessing Officer to allow deduction under sec. 80IB(10) on a proportionate basis.
- The Assessing Officer disallowed the deduction under sec. 80IB(10) in various assessment years due to the construction of residential units exceeding the permissible size of 1500 sq.ft.
- The Commissioner of Income Tax(Appeals) allowed proportionate deduction under sec. 80IB(10) based on the decision of the Hon'ble Madras High Court in a similar case.
- The Departmental Representative supported the Assessing Officer's decision, while the Authorized Representative of the assessee argued compliance with all conditions for deduction under sec. 80IB(10).
- The Commissioner's order was confirmed, citing the lack of contrary decisions in favor of the Revenue or the assessee regarding the deduction under sec. 80IB(10).
- The decision of the Hon'ble Madras High Court in a similar case was crucial in allowing proportionate deduction under sec. 80IB(10) to the assessee.
- Both the appeals of the assessee and the Revenue were dismissed, upholding the Commissioner's order.