INCOME TAX ACT, 1961

Section 80-IB

Deduction under section 80-IB - Profits of housing project - Assessee fulfilled all conditions -

The AO issued notice calling upon the assessee to explain as to why the deduction should not be disallowed on the ground that the assessee did not give the breakup details of the size of the land in which the apartment complex was developed. The assessee did not furnish the details of survey number and filed few details without the purchasers address and copy of some documents. On perusal of the same, the AO was of the view that the built up area of a flat sold to one Mr. Sivaramakrishnan Natarajan was about 1570 sq.ft and as it exceeded 1500 sq. ft as mentioned in clause (c) of proviso under section 80IB (10), the AO proposed to disallow the claim for deduction. The assessee by letter, dated 26-3-2015 stated that they had developed a housing project at Selaiyur, Tambaram for an area more than one acre, after obtaining approval from CMDA on 29-3-2007. The project was completed during the financial year 2011-12 relevant to the assessment year 2012-13 and upon completion, they obtained the Completion Certificate from the CMDA on 20-4-2011 and they were eligible for claiming deduction under section 80IB(10), as all conditions have been fulfilled. Further the assessee stated that they have consistently followed the completed contract method, since incorporation which has been accepted by the AO' s for the earlier assessment years. Held: The condition to be fulfilled by the assessee to sustain his claim for deduction under section 80IB(10) is to establish that the residential unit has a maximum built-up area of 1500 sq. ft as it is in a place which is not more than 25 km from the municipal limits of the cities. The AO appears to have examined one document and stated that the built-up area is more than 1500 sq.ft. The word used in clause (c) in the proviso to section 80IB(10) is ''Maximum Built-up area'' and not 'Carpet area' or 'super built-up area'. The undisputed fact is that the land on which the project was developed, measured an extent of 3.46 acres in which the assessee has constructed two blocks and made a claim for deduction. It is an admitted case that the development has taken place in an extent of 1.65 acres. The AO has failed to note the effect of a Completion Certificate which certifies that the developer has completed the project in accordance with the approved Building Plan as approved by the CMDA. The assessee also specifically stated that the built-up area is 'maximum built-up area' and not 'carpet area' or 'super built-up area' and this fact has been considered by the CIT(A) as well as by the Tribunal and the assessee has been granted relief.

REFERRED : Pace Builders (Madras) Pvt. Ltd. v. DCIT [I.T.A. No. 270/CHNY/2017, I.T.A. No. 280/CHNY/2017, dt. 16-3-2018]

FAVOUR : In assessee's favour

A.Y. : 2012-13

SUBSCRIBE FOR FULL CONTENT

OR Try Reload the Page