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2011 (4) TMI 1373 - AT - Income TaxDeduction u/s 80IB - Commercial Area - Assessee was engaged in the construction of two buildings known as ‘Amurt Dham’ and ‘Vidhi Complex’ - As per AO, in Project Vidhi Complex there was commercial area and since it was not a building project in the sense consisting of only buildings for residential purposes, the deduction was not to be allowed - Assessee contended there is no commercial area in vidhi complex but in Amrut Dham project for which deduction is not claimed HELD THAT:- AO will verify the sanctioned plan to find out if the Project Vidhi Complex has any commercial area.The fact that commercial area in the form of shops exist in the buildings Amrut Dham which is part of the same sanctioned layout, but not forming part of the housing project Vidhi Complex, for which deduction u/s.80-IB(10) is claimed will not in any manner vitiate the claim for deduction u/s.80- IB(10). Decision of SAROJ SALES ORGANISATION. VERSUS INCOME-TAX OFFICER. [2008 (1) TMI 420 - ITAT BOMBAY-E] supports the view that the existence of commercial area for the project for which deduction u/s.80-IB(10) is claimed alone should be seen though commercial area is built in the same sanctioned layout but in a different project. On verification, if commercial area is found to exist in the project Vidhi Complex AO will also verify if such area is within the permitted limits as laid down in Sec.80-IB(10).AO is accordingly to directed to verify the facts in this regard and while considering the claim for deduction u/s.80-IB(10) Total area of the plot on which the project was constructed - Condition for allowing deduction u/s.80-IB(10) of the Act is that the project is on the size of a plot of land which has a minimum area of one acre - whether the area given for the purpose of forming DP road has to be excluded or included for the purpose of calculating the size of the plot on which the housing project has been constructed? - CIT(A) held plot is less than one acre, Also, project is not sanctioned by KDMC, thus not eligible for deduction - HELD THAT:- We find that in the case of UMIYA ENTERPRISES VERSUS INCOME TAX OFFICER-WARD-3 (3) , KALYAN (W) [2010 (2) TMI 1187 - ITAT MUMBAI] has considered this issue, wherein it was held that there is no condition in the clause (b) of Section 80IB (10) that recreation area has to be excluded while examining whether the plot is of the size of one acre or less. For the purpose of clause (b) of section 80IB(10), the plot area has been taken at 4189 sq. metres, if not at 4600 sq. metres, even on this basis, the size of the plot is more than one acre. In our opinion, the CIT(A) committed an error in simply excluding 656.75 sq.metres from the area of 4600 sq.metres without appreciating that the exclusion is only for the purpose of D.P. Road which does not reduce the size of the plot as a whole. In view of the decision of the Tribunal referred above we are of the view that the order of the CIT(A) on this issue has to be reversed. We direct accordingly. Assessee would be entitled to deduction under section 10 IB(10) of the Act subject to the verification of the existence of commercial area in the project Vidhi Complex. The fact that the commercial complex exists in the Amurt Dham Project would not be relevant for denying the claiming of the assessee for deduction under section 80IB(10) of the Act for the Project Vidhi Complex.
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