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2015 (1) TMI 690 - AT - Income TaxDeduction u/s 80IB(10) - as per the AO, 1 BHK flats do not conform to the conditions for the claim of deduction u/s 80IB(10), as the majority of the flats have been joined together and exceeded the limit of 1000 sq.ft. - Held that:- It is not case of the revenue that the developer constructed the duplex flats by merger of two 1-BHK flats with it own money and then sold as such to the buyers. It is on the records that the owners of duplex have merged the flats after taking possession of their flats using the design provisions supplied by the assessee in the brochure. There is evidence contrary to the same. Thus set aside the order of the CIT(A) on the impugned issue and direct the AO to allow the deduction u/s 80IB(10) as claimed by it. - Decided in favour of assessee.the merger of flats if any taken place after the sale of the said 1-BHK flats by the flat buyers and, may be using the design made available by the developer, the assessee cannot be penalized and denied the claim of deduction. As such, the relevant legal provisions do not authorize the AO to deny deduction based on the intention. What is required to be seen is if the 1-BHK flats are planned, designed, approved for construction, constructed and finally obtained the ‘completion certificate’ or not. If the answer is affirmative, the claims cannot be denied based on the intention of the assessee.the revenue authorities have decided the issue against the assessee prejudicially and ignored the evidences that are given against the revenue. In such case, the orders of the revenue cannot be held judicious ones. It is undisputed fact that few 1-BHK flats remain so without any merger despite the provision of ‘hole’ left and others are merged into duplex during the post sale using such provision. In our opinion, the developer cannot be penalized by denying the deduction. As such claim of deduction was found allowable by the then CIT(A) who decided the issues in earlier asst years. Of course, these orders are not relevant now considering the order of the Tribunal. Mere making a provision of a hole for future use by the flat buyers for erecting the stair case or so, should not come on the way of the assessee to claim deduction. Thus set aside the order of the CIT(A) on the impugned issue and direct the AO to allow the deduction u/s 80IB(10) as claimed by it. - Decided in favour of assessee.
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