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2015 (4) TMI 6 - AT - Income TaxDeduction under section 80-IB(10) - claim of the assessee that profits from both the two housing projects were eligible for deduction under section 80-IB(10) of the Act was rejected by the Assessing Officer - Held that:- In the case before us, the project in question has commenced prior to 01.4.2005 and also stands completed on 31.12.2004 i.e. prior to 31.3.2005, and in this view of the matter, the newly inserted clause (d) to Sec. 80 IB (10) cannot be invoked to disentitle the assessee from the claim of deduction u/s. 80 IB (10) of the Act for the A.Y. 2005-06. Therefore, in so far as the project DSK Vishwa - Phase III is concerned, the objections made out by the Revenue for the A.Ys. 2004-05 and 2005-06 in order to deny the claim of deduction u/s. 80 IB (10) are unfounded and deserve to be negated. We hold so. Area covered by Rule 15.4.2 is not includible in the meaning of ‘ built up area’. The extract of Rule 15.4.2, has been placed in the Paper Book at page 36, and it reflects that a multi storied stilt flooring space constructed under a building is allowed to be used as a parking subject to height restrictions. In terms thereof, it is sought to be made out that the area of car parking is specifically excludible while calculating ‘ built- up area’ as per the Development Control Rules and therefore, the Assessing Officer was wrong in considering such area for the purpose of computing ‘built- up area’ of the residential units. A bare perusal of the Development Control Rules, in our view, supports the assertions put forth by the assessee and therefore, the area of car parking is not to be includible for the purposes of computing ‘built- up area’ of residential units in the facts and circumstances of the present case. Merely because the assessee has violated the condition u/s. 80 IB(10)(c ) in relation to the flats on the 11th floor, the deduction u/s. 80 IB(10) cannot be denied in its entirety, but, the denial shall be limited to the profits in respect of the flats on the 11th floor alone. For the balance of the residential units, the plea of the assessee for deduction u/s. 80 IB(10) of the Act is justified, and the assessee succeeds on this aspect. With regard to the project DSK Frangipani for the A.Y. 2005-06 also, the facts and circumstances are identical. In this year also, in our considered opinion, our decision in the aforesaid paragraph fully applies. Though in A.Y. 2005-06, the definition of ‘built-up area’ as per Section 80 IB (14)(a) was on Statute, but, admittedly, assessee’s project was approved and commenced prior to 1.4.2005, therefore, the calculation of ‘built- up area’ shall not be governed by such definition. Therefore, for the A.Y. 2005-06 also, the project DSK Frangipani is eligible for deduction u/s. 80 IB(10), albeit on a proportionate basis in respect of the flats whose built up area does not succeed 1500 Sq.ft. as prescribed u/s. 80 IB (10)(c ) of the Act. In this view of the matter, the order of the CIT(A) for both the years is set aside and the Assessing Officer is directed to re-compute the deduction allowable to the assessee u/s. 80 IB (10) of the Act in terms of our above discussions. - Decided partly in favour of assessee.
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