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2022 (2) TMI 877 - AT - Income TaxAddition u/s.80IB(10) - proportionate deduction - assessment was completed by the AO on the ground that one of the unit sold by the assessee is above 1500 square feet and therefore the entire claim of deduction under section 80IB was rejected by the AO - HELD THAT - As rightly pointed out by the ld.DR only one unit in the project i.e. A/57-58 which is admeasuring 1508.41 square feet. This fact has also been confirmed by the Department Valuation Officer. The assessee cannot be denied of entire remaining housing projects under this provision just because one unit is in excess of 1500 square feet. Judgment in the case of Viswas Promoters P.Ltd 2012 (11) TMI 1117 - MADRAS HIGH COURT Ltd (supra) supports the case of the assessee. Also see M/S SHREENATH BUILDCON 2018 (12) TMI 1723 - SC ORDER er allowing assessee's claim for deduction under section 80-IB by taking a view that simply because out of several units included in housing project, only in one of them, constructed area exceeded upper limit; that too, by a small margin, deduction claimed could not be denied in respect of entire housing project. - Decided in favour of assessee.
Issues:
- Interpretation of Section 80IB(10) of the Income Tax Act, 1961 regarding deduction eligibility. - Discrepancy in built area of housing units leading to deduction restriction. - Application of natural justice in considering additional evidence. Analysis: 1. Interpretation of Section 80IB(10): The appeal involved a dispute over the interpretation of Section 80IB(10) of the Income Tax Act, 1961. The Revenue contended that the assessee did not fully comply with the provisions of this section, leading to a restriction on the deduction claimed. The key issue was whether the assessee was entitled to the deduction under this section for the assessment year 2012-13. 2. Discrepancy in Built Area: The core contention revolved around the discrepancy in the built area of housing units sold by the assessee. The Assessing Officer (AO) rejected the deduction claim under Section 80IB(10) as one unit sold exceeded 1500 square feet. The dispute centered on whether this discrepancy should lead to the denial of the deduction for the entire project or only for the specific unit in question. 3. Application of Natural Justice: The Tribunal examined the application of natural justice in considering additional evidence, specifically the Departmental Valuation Officer's report. The report confirmed that all units, except one, were below 1500 square feet. The Tribunal emphasized the importance of natural justice in considering this additional evidence and ensuring that the assessee was not deprived of its legitimate rights. 4. Judicial Precedents: The Tribunal referred to judicial precedents to support its decision. It cited cases where deductions under Section 80IB(10) were allowed proportionately, even when certain units exceeded the specified limit. The Tribunal relied on judgments emphasizing that the denial of the deduction for the entire project based on one unit's non-compliance was not warranted. 5. Decision: Ultimately, the Tribunal dismissed the Revenue's appeal and confirmed the order of the Commissioner of Income Tax (Appeals) allowing a proportionate deduction of ?1,69,74,792 under Section 80IB(10) for the assessee. The Tribunal's decision was based on the principles of proportionality and natural justice, as well as consistent judicial interpretations supporting the assessee's claim. In conclusion, the judgment delved into the intricate details of deduction eligibility under Section 80IB(10), addressing discrepancies in built areas, the importance of natural justice, and the application of judicial precedents to arrive at a fair and just decision in the case.
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