2017 (2) TMI 1116 - AT - Income Tax

Deduction u/s 80IB(10) denied - non-fulfillment of conditions with respect to built up area - Revenue is in appeal against the order of CIT(A) in allowing prorata deduction under section 80IB(10)where the built up area of two dwelling units exceeded the limits prescribed - Held that - As decided by Tribunal in assessee s own case for assessment year 2009-10 the assessee eligible for pro-rata deduction as any project where some of residential units exceeded the built up area then also proportionate deduction is to be allowed to the eligible units. In view thereof, we find no merit in the grounds of appeal raised by the Revenue against the order of CIT(A) in allowing proportionate deduction. However, since the assessee is held to be entitled to claim the deduction on the two units as projections and open terrace are not to be included in built up area for such projects which were sanctioned before 01.04.2005, the assessee is held to be entitled to claim the deduction on such units also and consequently, where all the units of project are eligible units, the assessee is entitled to the deduction claimed under section 80IB(10) of the Act in respect of whole project. Accordingly, we hold so. The grounds of appeal raised by the Revenue are thus, dismissed and the Cross Objections filed by the assessee are allowed.

Summary

Issues:
- Appeal by Revenue against CIT(A) orders for AY 2010-11 and 2008-09 under section 143(3) and 143(3) r.w.s. 147.
- Assessee's Cross Objections against Revenue's appeals.
- Disallowance of deduction u/s 80IB(10) due to excess built-up area.
- Prorata deduction for eligible units.
- Consideration of projections in built-up area for projects approved pre-01.04.2005.
- Delay in filing Cross Objections condoned.
- Reopening of assessment for AY 2008-09 under section 147.

Analysis:
1. The Revenue appealed against CIT(A) orders for AY 2010-11 and 2008-09, challenging the rejection of deduction u/s 80IB(10) due to excess built-up area in two units. The CIT(A) allowed prorata deduction for eligible units, leading to the Revenue's appeal.

2. The assessee's Cross Objections contested the disallowance of deduction based on excess built-up area, arguing that all units complied with the prescribed limits. The delay in filing Cross Objections was condoned due to valid reasons.

3. The dispute centered on whether projections should be included in the built-up area for projects approved pre-01.04.2005. The Tribunal referred to past judgments and held that for such projects, projections, balconies, and open terraces should not be considered. Consequently, the assessee was entitled to claim the deduction for the entire project.

4. The Tribunal dismissed the Revenue's appeal, upholding the CIT(A)'s decision on prorata deduction. The Cross Objections of the assessee were allowed, emphasizing the eligibility for deduction based on the pre-2005 project approval.

5. The reassessment for AY 2008-09 was initiated following the AY 2009-10 order. The issues and resolutions for AY 2008-09 mirrored those of AY 2010-11, resulting in the dismissal of the Revenue's appeal and the allowance of the assessee's Cross Objections.

6. In conclusion, the Tribunal upheld the CIT(A)'s decisions, allowing the assessee's Cross Objections and dismissing the Revenue's appeals for both AYs. The judgment clarified the treatment of built-up area for pre-2005 projects, ensuring the entitlement to deductions for compliant units.