2013 (4) TMI 960 - AT - Income Tax

Summary

Issues involved: Appeal against denial of deduction u/s 80-IB(10) based on built-up area exceeding 1500 sq.ft.

Issue 1: Denial of deduction u/s 80-IB(10) by Assessing Officer

The Assessing Officer denied the assessee's claim for deduction under Section 80-IB(10) due to certain units in the project "Vignesh Paradise" having built-up area exceeding 1500 sq.ft. The assessee requested for proportional deduction, but the Assessing Officer refused to grant it.

Issue 2: CIT(Appeals) decision

The CIT(Appeals) allowed the appeal of the assessee, noting that the project had three distinct phases and the violation of built-up area was limited to two individual houses. The CIT(Appeals) held that deduction was available to each unit and directed the Assessing Officer to grant the deduction claimed under Section 80-IB(10) except for the units exceeding 1500 sq.ft.

Issue 3: Resolution in favor of assessee

During the appeal, it was argued that the issue had been resolved in favor of the assessee based on a decision of the Hon'ble jurisdictional High Court in a specific case. It was acknowledged that the issue of pro rata deduction under Section 80-IB(10) was decided in favor of the assessee.

Judgment:

Upon reviewing the orders and submissions, it was found that the CIT(Appeals) was justified in directing the Assessing Officer to grant the deduction to the assessee except for the units exceeding 1500 sq.ft. The Hon'ble jurisdictional High Court had previously ruled that proportionate deduction must be allowed in cases where some units exceeded the specified built-up area limit. Therefore, the appeal of the Revenue was dismissed, and no interference was deemed necessary.

This judgment highlights the dispute over the denial of deduction under Section 80-IB(10) due to built-up area exceeding the prescribed limit, the successful appeal by the assessee before the CIT(Appeals), and the final decision in favor of the assessee based on relevant legal precedents.