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2014 (12) TMI 720 - AT - Income TaxAllowability of deduction u/s 80IB(10) - provision of section 80IB(14)(a) prospective in nature or not - Whether some of the flats exceeded the built up area of 1500 sq.ft. violating the specific provisions u/s.80IB(10)(c) – Held that:- The AO disallowed the claim of deduction u/s 80IB(10) on the ground that some of the units had ‘built up area’ exceeding more than 1500 sq. ft. and therefore the assessee does not fulfil one of the conditions laid down in provisions of section 80IB(10) - CIT(A) allowed the claim of the assessee on the ground that the ‘built up area’ of none of the flats exceed 1500 sq. ft. From the various details filed by the assessee in the paper book, the assessee AOP has commenced the housing project namely “Rolling Hills” at Baner Road, Pune on 30-03-2001 as per copy of the commencement certificate - the project was completed on 27-03-2003 as per the part completion certificate - since the AY is AY 2004-05, therefore, the question of applying the definition of ‘built up area’ which was introduced w.e.f. 01-04-2005 does not arise as it has been already decided in Opel Shelters Pvt. Ltd. And Others Versus ACIT, Circle 3, Pune [2014 (2) TMI 593 - ITAT PUNE] - the ‘built up area’ is to be measured as per the Pune Municipal Corporation Rules - Therefore, the question of including the terrace, balcony etc., in the ‘built up area’ does not arise – once it is excluded from the ‘built up area’, the total area of each of the unit will be less than 1500 sq. ft. as per report of the Departmental Valuer - CIT(A) in our opinion is justified in allowing the claim of the assessee. Inclusion of staircase in built up area – Held that:- As regards the inclusion of staircase area in the ‘built up area’, although the departmental valuer has excluded the same from the ‘built up area’, the AO has considered the same in the ‘built up area’ - The action of the AO is not correct since in a row house there will be a stair case from the ground floor to the first floor and the same cannot increase the ‘built up area’ of the row house - This is within the boundary of the plinth area and therefore it has to be excluded which the Departmental Valuer himself has correctly done - the Departmental Valuer has considered the ‘built up area’ as per the Pune Municipal Corporation’s rules and regulations and therefore the CIT(A) has correctly appreciated the facts and has correctly excluded the same from the total ‘built up area’. Row house No. 18 belonged to Shri Harish Warrier or not – Held that:- The area of the unit was measured by the earlier departmental valuer one Shri Khandangale - he had computed the area at 1855 sq. ft. - he included the terrace area and the parking area - according to the succeeding Departmental Valuer Shri Harshad Ruparel, the area of this row house as per Pune Municipal Corporation rules is only 1081 sq. ft. after excluding the balcony etc. - If the balcony etc. are included, then also the total area comes to 1363.04 sq. ft., i.e., including the balcony - Thus, by both the methods it is less than 1500 sq. ft. - the CIT(A) has correctly appreciated the facts, therefore, there was no infirmity in the same. Certain row houses were combined and the total ‘built up area’ exceeds 1500 sq.ft. after combining or not – Held that :- The Departmental Valuer has evaluated this issue in his report - So far as row house Nos. 3 & 4 belonging to Shri Sharad Varma and Shri Chitravanshi Rajat are concerned, both the units have separate occupation certificate, separate corporation tax assessment, separate electricity meters etc. - The affidavit of the owner Shri Chitravanshi Rajat to the effect that he has combined the row houses later on for the convenience of his parents is also on record - The kitchen and entrance doors are also separate - The report of the valuer appointed by the AO shows that none of the units as per Pune Municipal Corporation rules exceed 1500 sq. ft. – there was no infirmity in the order of the CIT(A) who has allowed the claim of the assessee – revenue could not point out any adverse material so as to take a contrary view than the view taken by the CIT(A) who has followed various decisions while allowing the claim of the assessee –thus, the order of the CIT(A) allowing the claim of deduction of assessee u/s 80IB(10) is upheld – Decided against revenue.
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