2021 (9) TMI 1196 - AT - Income Tax

Proportionate deduction u/s. 80IB - deduction proportionately on all flats except these 7 flats where 1500 s.ft. exceeded - HELD THAT - Before giving direction to AO to allow proportionate deduction u/s. 80IB, the CIT(A) relied on the decision of the coordinate bench in the case of M/s. Kura Homes Pvt. Ltd. 2012 (11) TMI 466 - ITAT HYDERABAD - Therefore, the decision of the CIT(A) is in consonance with the decision of the coordinate bench, hence, we do not find any error in the order of the CIT(A) and upholding the same, we dismiss the grounds raised by both the assessee and revenue on this issue.

Summary

Issues:
1. Disallowance of deduction u/s. 80IB(10) for a construction firm.
2. Appeal against CIT(A) order regarding deduction eligibility based on flat sizes exceeding limits.
3. Appellant's claim for deduction u/s. 80IB(10) for the assessment year 2011-12.
4. Dispute over the completion status of housing project for deduction eligibility.
5. Interpretation of relevant case laws for proportionate deduction under section 80IB(10).
6. Appellant and revenue's grounds of appeal before ITAT.
7. Consideration of CIT(A) decision by ITAT based on previous bench rulings.

Analysis:
1. The case involved appeals by the assessee and revenue against the CIT(A) order disallowing deduction u/s. 80IB(10) for the assessment year 2011-12 under proceedings u/s. 143(3) of the Income-Tax Act, 1961.
2. The appellant firm, engaged in construction, claimed a deduction under section 80IB(10) for a housing project named "Girdhari Hari Executive Park," but the claim was disallowed by the Assessing Officer based on incomplete construction and flat sizes exceeding the prescribed limits.
3. The CIT(A) directed the AO to allow the deduction proportionately on all flats except those exceeding 1500 sq.ft., citing case laws supporting pro-rata deduction for eligible units within a larger housing project.
4. Both the assessee and revenue appealed before the ITAT, with the assessee challenging the partial disallowance of deduction and the revenue questioning the eligibility criteria for claiming deduction u/s. 80IB(10).
5. The ITAT upheld the CIT(A) decision, noting that it was in line with a previous bench ruling involving a similar issue, thereby dismissing the appeals of both the assessee and revenue on this matter.
6. The ITAT acknowledged the delay in deciding the appeals but cited exceptions due to the COVID lockdown situation as per recent directions from the apex court, ensuring exclusion of the limitation period during the specified period.

This detailed analysis highlights the key issues, arguments, and decisions made in the legal judgment regarding the disallowance of deduction u/s. 80IB(10) for the construction firm's housing project.