ITO v. Air Developers - Taxpublishers.in

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The Tax Publishers2009 TaxPub(DT) 0535 (Nag-Trib) : (2009) 030 (II) ITCL 0657 : (2009) 319 ITR 0167 : (2010) 122 ITD 0125 : (2009) 123 TTJ 0959 : (2009) 025 DTR 0287 ITO v. Air Developers INCOME TAX ACT 1961 Deduction under section 80-IB - Income from developing and building housing project -Plots having built up area of 1500 sq.ft -Excluding area of balcony Assessee -firm claimed that it was engaged in development of a housing project and, therefore, profit from such business activity was eligible for deduction under section 80-IB(10) -Assessing Officer disallowed assessees claim on ground that building plans for construction of housing project were sanctioned on piecemeal basis in respect of plot having area of less than one acre; that assessee had sold plots to individual purchasers and not developed a housing project; and that area of residential unit constructed exceeded 1500 sq. ft but it was found that in respect of plot of land, assessee had produced a certificate from local authority entitled to approve said project in which there was only one housing project for which multiple sanctions were granted and total area of plot, on which project was developed, was more than two acres further it was evident that assessee had sold bungalows and not plots and also it was found that Assessing Officer had worked out built-up area after including area of balcony .Assessee contended that area of balcony was not to be included in built-up area for purpose of FSI as per Development Control Regulation, 2000 applicable. *Held :* Since in year under consideration there was no definition of built-up area under Act, definition of same in Development Control Regulation, 2000 would be applicable and also Assessing Officer had not examined relevant facts in light of Development Control Regulation, 2000, he was to be directed to examine whether in view of Development Control Regulation, 2000, area of balcony was to be included in built-up area , thereafter, if it was found that built-up area of any residential unit did not exceed 1500 sq. ft., then entire deduction claimed under section 80-IB(10) would be allowed; however, if area of some of residential units exceeded 1500 sq. ft., then it would be fair and reasonable to allow proportionate deduction. Income Tax Act 1961 Section 80IB(10) Decision : In favour of assessee. A.Y : 2004-05 SUBSCRIBE FOR FULL CONTENT

The Tax Publishers2009 TaxPub(DT) 0535 (Nag-Trib) : (2009) 030 (II) ITCL 0657 : (2009) 319 ITR 0167 : (2010) 122 ITD 0125 : (2009) 123 TTJ 0959 : (2009) 025 DTR 0287

ITO v. Air Developers

INCOME TAX ACT 1961

Deduction under section 80-IB - Income from developing and building housing project -Plots having built up area of 1500 sq.ft -Excluding area of balcony

Assessee -firm claimed that it was engaged in development of a housing project and, therefore, profit from such business activity was eligible for deduction under section 80-IB(10) -Assessing Officer disallowed assessees claim on ground that building plans for construction of housing project were sanctioned on piecemeal basis in respect of plot having area of less than one acre; that assessee had sold plots to individual purchasers and not developed a housing project; and that area of residential unit constructed exceeded 1500 sq. ft but it was found that in respect of plot of land, assessee had produced a certificate from local authority entitled to approve said project in which there was only one housing project for which multiple sanctions were granted and total area of plot, on which project was developed, was more than two acres further it was evident that assessee had sold bungalows and not plots and also it was found that Assessing Officer had worked out built-up area after including area of balcony .Assessee contended that area of balcony was not to be included in built-up area for purpose of FSI as per Development Control Regulation, 2000 applicable. Held : Since in year under consideration there was no definition of built-up area under Act, definition of same in Development Control Regulation, 2000 would be applicable and also Assessing Officer had not examined relevant facts in light of Development Control Regulation, 2000, he was to be directed to examine whether in view of Development Control Regulation, 2000, area of balcony was to be included in built-up area , thereafter, if it was found that built-up area of any residential unit did not exceed 1500 sq. ft., then entire deduction claimed under section 80-IB(10) would be allowed; however, if area of some of residential units exceeded 1500 sq. ft., then it would be fair and reasonable to allow proportionate deduction.

Income Tax Act 1961 Section 80IB(10)

Decision : In favour of assessee.
A.Y : 2004-05