Ved Prakash Gupta, Uttrakhand vs Department Of Income Tax

1. This is an appeal by the department against the order dated

29/07/2013 of CIT(A)- II, Dehradun.

2. Following grounds have been raised in this appeal :-

"1. That the Ld. CIT(A) - II, Dehradun has erred in law and on fact in allowing proportionate deduction u/s 80IB of 2 ITA No. 5531/ Del/2013

the I.T.Act 1961 without appreciating the fact that the assessee has violated the conditions laid down in 80IB (10) (C) & 80IB(10) (f) of the I.T.Act, 1961 and there is nothing in the section to say that the preconditions lay down in statute satisfied in portion will make assessee eligible for claiming proportionate deduction.

1. That the order of the Ld. CIT(A)-II, Dehradun is against the spirit of legislature and the order of the AO is liable to be restore.

2. That the appellant craves, leave to add, alter, amend or vary from the above grounds of appeal."

3. The only grievance of the department in this appeal relates to

the deduction u/s 80IB of the Income Tax Act, 1961 (hereinafter

referred as the Act).

4. The facts of the case in brief are that the assessee E-filed its

return of income declaring total income of Rs. 15,71,410/- on

15.10.2010 later on the case was selected for scrutiny. During the

course of assessment proceedings, the AO noticed that the assessee

claimed deduction of Rs. 21,35,110/- u/s 80 IB of the Act. The AO did

not allow the claim of the assessee by observing that there was

nothing in the Section 80IB to say that the pre-condition laid down in

statute satisfied in portion and assessee get proportionate deduction.

The AO held that the assessee violated the conditions laid down in

Section 80 IB(10) (c) and (f) of the Act. He therefore, disallowed the

claim of Rs. 21,31,110/- u/s 80IB of the Act.

3 ITA No. 5531/ Del/2013

5. Being aggrieved the assessee carried the matter to the Ld.

CIT(A) and submitted that the units confirming to the dimension

should be allowed for deduction u/s 80IB of the Act, however, the

assessee did not challenge the denial of relief on the units exceeding

the stipulated dimensions. The reliance was placed on the following

case laws :-

(i) SJR Builders vs. ACIT [ITA no. 1192/Bang./2008]; and

(ii) Viswas Promoters (P) Ltd. vs. ACIT [TC (Appeal) Nos. 1014 of 2009, 857 of 2010 and 190 to 192 of 2012, W.A. No. 471 of 2010}

6. The Ld. CIT allowed the claim of the assessee by observing

as under :-

"3.1. The finding of Ld. AO and the case laws cited by the Ld. AR have been perused. The 2 cases cited are squarely on the issue of allowing relief on pro rata basis with respect to units fulfilling norms. In view of this the Ld. AO is directed to allow relief u/s 80IB of the Act for those units which fulfill the stipulated norms."

Now the department is in appeal.

7. The Ld. DR reiterated the observations made by the AO in

the assessment order dated 07.03.2013 and further submitted that

the deduction u/s 80IB is not allowable on pro rata basis, therefore,

the Ld. CIT(A) was not justified in allowing the claim of the assessee.

8. In his rival submissions, The Ld. Counsel for the assessee

strongly supported the order of the Ld. CIT(A) and further submitted 4 ITA No. 5531/ Del/2013

that the deduction u/s 80IB is allowable on pro rata basis for those

dwelling untis which had build up area less than 1,500 sq. ft. The

reliance was placed on the following case laws :-

(i) "Viswas Promoters (P) Ltd. v. ACIT 255 CTR 149 {2013} (Mad HC)

(ii) CIT vs. Arun Excello Foundations (P.) Ltd. 259 CTR 362 (Mad)

(iii) ACIT v. Bengal Ambuja Housing Development Limited-ITAT-C Bench, Kolkata, in I.T.A. No. 1595/Kol/2005 for the A.Y. 2002-03, order dated 24.03.2006.

(iv) Dy. CIT vs. Brigade Enterprises (P) Ltd. 14 DTR 371 (Bang)

(v) ITO vs. AIR Developers 25 DTR 287 (Nag)

(vi) Sreevastsa Real Estates (P) Ltd. vs. ITO 41 DTR 497 (Chennai 'D')

(vii) Sanghvi & Doshi Enterprises vs. ITO 60 DTR 306 (Chennai 'A' (ATM)

(viii) Dy. CIT vs. Mangarpatta Township Development & Construction Co. 79 DTR 150 (Pune 'B')

(ix) Dy. Commissioner of IT V. M/s Ekta Housing P. Ltd.in I.T.A. No. 3649/Mum/2009, order dated 20.05.2011

(x) ACIT vs. Jain Housing & Constructions Ltd. in I.T.A. No. 1369/Mds./2009, order dated 05.02.2010

(xi) ACIT v. Sheth Developers P. Ltd. 33 SOT 277 (Mum.)

(xii) SJR Builders v. ACIT", 3 ITR (Trib.) 569 (Mum)

9. We have considered the submissions of both the parties and carefully

gone through the material available on the record. In the present case

it appears that the AO disallowed the claim of the assessee for the

reason that few of the units exceeded stipulated dimensions of 1,500

Sq. ft. He did not allow the claim of the assessee for deduction u/s

80IB on those units also which were having the built up area of less 5 ITA No. 5531/ Del/2013

than 1500 sq. ft. This issue is squarely covered by the aforesaid

referred to decisions of the various benches of the ITAT.

10. The Hon'ble Madras High Court in the case of Viswas

Promoters P. Ltd. vs. ACIT 255 CTR 149 (Supra) on a similar issue

held that the assessee was entitled to have benefit of deduction u/s

80IB (10) for residential flats satisfying less than 1500 sq. ft. condition.

11. We, therefore, considering the totality of the facts do not

see any infirmity in the order of the Ld. CIT(A) who directed the AO to

allow the relief u/s 80IB of the Act on those units which fulfil the

stipulated norms. Accordingly, we do not see any merit in this appeal

of the department.

12. In the result, appeal of the department is dismissed.

(Order pronounced in open court on 03June, 2015.)

Sd/- Sd/-

(George George K) (N.K.Saini) Judicial Member Accountant Member

Dated 03June, 2015 Binita Copy forwarded to 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. CIT (ITAT), New Delhi. 6 ITA No. 5531/ Del/2013

AR, ITAT

N. Delhi