2015 (3) TMI 452 - HC - Income Tax

Entitlement for deduction under Section 80IB - ITAT allowed the claim - Held that - As the assessee started one single housing project with different blocks and each building block was not separated by metes from the other blocks and the flat owners of the different blocks enjoy the common recreational facilities and amenities. In the circumstances, the Tribunal correctly agreed with the assessee. See CIT v VANDANA PROPERTIES 2012 (4) TMI 54 - BOMBAY HIGH COURT - Decided in favour of assessee.

Summary

Issues:
- Appeal against the order of the Income Tax Appellate Tribunal relating to assessment years 2003-04 and 2004-05.
- Question of law raised: Whether the assessee is entitled to deduction under Section 80IB?

Analysis:
1. The case involves an appeal by the Revenue against the order of the Income Tax Appellate Tribunal regarding assessment years 2003-04 and 2004-05. The main issue raised for consideration is whether the assessee is entitled to deduction under Section 80IB. The assessee, a company engaged in promoting, developing, and constructing residential flats, entered into an agreement for a group housing residential complex. The Assessing Officer rejected the deduction claim under Section 80-IB(1)(a) as each project did not meet the minimum area requirement of one acre stipulated by the provision. The Commissioner of Income Tax (Appeals) allowed the assessee's appeal, and the Income Tax Appellate Tribunal upheld this decision. The Tribunal noted that the projects were interconnected, sharing common facilities, and thus considered them as one single housing project. The Revenue appealed to the High Court challenging the Tribunal's decision.

2. The High Court referred to a decision of the Bombay High Court and its own previous judgments in similar cases. The Court highlighted that in the present case, the assessee's situation was more favorable than the case decided by the Bombay High Court. The Court had previously allowed appeals where multiple blocks were constructed in a larger area exceeding the required minimum area specified in Section 80-IB. Citing its earlier decisions, the High Court rejected the Revenue's appeal and confirmed the Tribunal's order in favor of the assessee. The Court emphasized that the projects were developed in a larger area exceeding the minimum requirement, aligning with the interpretation of Section 80-IB.

3. In conclusion, the High Court dismissed the Tax Case (Appeals) and awarded no costs. The judgment upheld the assessee's entitlement to deduction under Section 80IB based on the interpretation of the law and the specific circumstances of the case. The decision relied on the precedent set by previous judgments and the application of relevant legal provisions to determine the eligibility for the deduction claimed by the assessee.