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TMI Blog2018 (9) TMI 856X X X X Extracts X X X X X X X X Extracts X X X X ..... ting that for the purpose of claiming deduction u/s 80IB(10) of the I.T .Act, the project can be treated as independent of each other based on different commencement certificates, disregarding the fact that the condition of minimum plot area applies independently and not collectively and that the project as a whole was not completed within 4 years, without appreciating the fact that these decisions of the High Courts were not accepted by the department and SLP has been filed. 2. On the facts and in the circumstances of the case and in law, the Ld CIT(A) erred in relying on the order of the Hon'ble Bombay High Court in the case of Vandana Properties no. ITA no. 3633 of 2009 and the ITAT Kolkata in the case of M/s Bengal Ambuja Housing Development Ltd. in holding that deduction u/s 80IB(10) of the I.T .Act is allowable with reference to one tower independently, disregarding the fact that the conditions are not satisfied with reference to the whole project, without appreciating the fact that these decision, s of the High Courts were not accepted by the department and SLP has been filed. 3. On the facts and in the circumstances of the case and in law, the Ld CIT(A) erred in rel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ite of repeated directions. Since the assessee has filed to provide the required details to determine and verify the exact area of flats constructed, it was concluded that the assessee is not eligible for deduction u/s 80IB(10) of the Income-tax Act, 1961. 3. Aggrieved by the assessment order, the assessee preferred appeal before the CIT(A). Before the CIT(A), the assessee has filed various details to justify deduction claimed u/s 80IB(10). Assessee also filed copy of order of ITAT for AY 2010-11 and argued that the ITAT has allowed the claim of assessee in respect of super built up area / carpet area of flats constructed was less than 1500 sq.ft. The sum and substance of the arguments of the assessee before the Ld.CIT(A) are that in view of the decision of Hon'ble Bombay High Court in the case of CIT vs Vandana Properties (2013) 353 ITR 36 (Bom), the assessee is eligible for proportionate deduction towards profit of eligible housing project where the flat size is less than 1500 sq.ft. The CIT(A), after considering relevant submissions of the assessee and also relying upon the decision of Hon'ble Bombay High Court in the case of CIT Vs Vandana Properties (supra) and also the decis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Kapil Malhar Intelligent Homes will be revenue neutral as regular tax liability is less than tax paid on the book profit. Hence, the eligible deduction would be tax neutral and the adjudication of balance amount becomes merely academic in nature. Thus, the A.O. is directed to allow deduction u/s. 80IB of the I.T. Act, 1961 of Rs. 2,11,57,034/- towards Tower T4 for A.Y. 2012-13. In the light of the discussion above, Ground no, 2 is allowed." 4. The Ld.DR submitted that the Ld.CIT(A) erred in allowing proportionate deduction towards Tower T4 by relying upon the decision of Hon'ble Bombay High Court, in the case of CIT Vs Vandana Properties (supra) disregarding the fact that the conditions laid down u/s 80IB(10) are not satisfied with regard to whole project and also without appreciating the fact that this decision of Hon'ble Bombay High Court was not accepted by the department and Special Leave Petition has been filed before the Hon'ble Supreme Court. The Ld.DR further submitted that the Ld.CIT(A) was erred in holding that each project can be treated as independent of each other based on different commencement certificate disregarding the fact that the condition of minimum flat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... size is less than 1500 sq.ft. on the basis of details submitted before the AO. The assessee further contended that a similar disallowance has been made for AY 2010-11 by the AO. However, on appeal before the ITAT, the ITAT has allowed proportionate deduction towards the project wherever the flat size is less than 1500 by relying upon the decision of Hon'ble Bombay High Court in the case of CIT Vs Vandana Properties (supra). 7. Having heard both the sides and considered material on record, we find merit in the arguments of the assessee for the reason that the principle is now well settled with the decision of Hon'ble Bombay High Court in the case of CIT Vs Vandana Properties (supra), wherein the Hon'ble Court has made it clear that the assessee is eligible for proportionate deduction from eligible profit in a housing project in respect of flat which is having super built up area of less than 1500 sq.ft. This view is further supported by the decision of ITAT, Kolkatta in the case of Bengal Ambuja Housing Development Ltd and this decision has been affirmed by the Hon'ble Calcutta High Court in ITA No.453/2006. The CIT(A), after considering relevant facts has rightly directed the AO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... than tax effect on the book profit disregarding the fact that the assessee is eligible to avail MAT credit in subsequent years. The Ld.AR further submitted that the issue of deduction claimed u/s 80IB(10) has to be examined in the light of provisions of section 80IB(10); however, the CIT(A) failed to give findings on the allowability of such deduction, hence, the matter may be set aside to the file of the Ld. CIT(A) or the AO to be decided on merits. The Ld.DR, on the other hand, submitted that the Ld.CIT(A) was erred in accepting that the disallowance of deduction u/s 80IB(10) of the Act, was revenue neutral for the reason that the income was assessable u/s 115JB of the Act is more than the normal profit computed disregarding the fact that the assessee is eligible to avail MAT credit for subsequent years and also the issue to be decided in the light of provisions of section 80IB(10), but not on the basis of section 115JB of the Act. 12. Having heard both the sides and considered material on record, we find merits in the arguments of the assessee as well as the Ld.DR for the reason that the Ld.CIT(A) has not decided the issue of deductibility of eligible profit from Tower T5 & T6 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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