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2016 (9) TMI 1260 - AT - Income TaxDisallowance of claim of deduction u/s 80IB(10) -‘built up area’ of the Villas constructed by the assessee is 1772.81 sq. ft. that exceeds the limit of 1500 sq. ft. - inclusion of terrace area - Held that:- There is no dispute with regard to the fact that the AO rejected the claim of deduction under section 80IB(10) only on the ground that a terrace is an entirely open and large space on the top most level of a building, whereas balconies are relatively smaller areas affixed to a room of the house. He further observed that balconies are accessible only through the room that they are attached with and terraces will usually have independent entrances. The assessee has demonstrated from the pictures of the building that the area is a terrace as it is completely open and is a roof of a room underneath. Merely because the first floor rooms of villa has an opening on the terrace, in our considered view would not make the terrace as a balcony as the balcony normally is attached with the rooms and covered by enclosure but it is not supported by the walls of the room underneath. When a Local Authority, endowed with the jurisdiction to grant the approval is guided in its approval by Regulation as to what constitutes the plinth area, which is the built-up area, it is difficult for us to agree with the contention of the Revenue as well as the reasoning of the Tribunal that for the purpose of considering the claim under section 80-IB, the built-up area would be different from what has been given approval by the Local Authority, on a building project. Given the fact that during 2003-04 there was no definition at all on what a built-up area is, the understanding of the Revenue, which is evidently contrary to the approval of the Local Authority based on the Rules and Regulations could not be sustained. Consequently, we have no hesitation in agreeing with the assessee's contention that open terrace area, even if be private terrace cannot form part of the built-up area. See M/s. Ashina Amar Developers vs. ITO [2016 (3) TMI 84 - ITAT KOLKATA] - Decided in favour of assessee
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