TMI Blog2013 (7) TMI 210X X X X Extracts X X X X X X X X Extracts X X X X ..... to the scheme of law to proceed on the basis that wherever adjacent residential units are sold to family members, all these residential units are to be considered as one unit. If law permitted so, there was no need of the insertion of clause (f) to section u/s 80IB(10). It will be unreasonable to proceed on the basis that legislative amendment was infructuous or uncalled for – particularly as the amendment is not even stated to be ‘for removal of doubts’. On the contrary, this amendment shows that no such eligibility conditions could be read into pre-amendment legal position. - Deduction u/s 80IB allowed - Decided in favor of assessee. Regarding statement recorded u/s 133A - evidentiary value - AO stated that assessee himself has off ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... u/s.80IB(10) of the I.T.Act in respect of the profits derived from the housing project ignoring the fact that such housing project failed to satisfy the conditions stipulated in clause (c) below the provisions of section 80IB(10) of the I.T.Act, 1961 which require that the built up area of individual flat of the housing project should not exceed 1000 square feet and in case of the assessee, the flats were found of built up area admeasuring more than 1000 sq.ft as the assessee had combined smaller dwelling units and sold the same as one large units to many a flat buyers. 3. Whether on the facts and in the circumstances of the case, the ld CIT(A) erred in law in allowing the claim of deduction u/s.80IB(10) of the I.T.Act in respect of the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lat by two separate agreements to the members of the same family, though, as such, such pairs of flats sold separately would be viewed only as one unit. On the basis of these findings, as also the admission made by the assessee in survey proceedings, the stand taken by the Assessing Officer was that in order to be eligible for deduction under section 80IB(10), the total area of residential unit should not exceed 1,000 sq.ft but as these pairs of flats could be viewed only as one unit and the area of such units exceeds 1,000 sq.ft, the assessee was not eligible for deduction u/s.80IB(10). Accordingly, the assessee was declined the deduction u/s.80IB(10). Aggrieved, assessee carried the matter in appeal before the first appellate authority. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not even revenue s case that each of flat on standalone basis was not a residential unit. Even if flats were constructed or planned in such a way that two flats could indeed be merged into one larger unit, as long each flat was an independent residential unit, deduction u/s.80IB(10) could not be declined. It is important to bear in mind the fact that what section 80IB(10) refers to is residential unit and, in the absence of anything to the contrary in the Income tax Act, the expression residential units must have the same connotations as assigned to it by local authorities granting approval to the project. The local authority has approved the building plan with residential units of less than 1,000 sq.ft, and granted completion certifica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ildren of such individual, (ii) the HUF in which such individual is a karta (iii) any person representing such individual, the spouse or minor children of such individual, or the HUF in which such individual is a karta. The explanation memorandum explained the legislative amendment as follows: (314 ITR(St) 203) Further, the object of the tax benefit for housing projects is to build housing stock for low and middle income households. This has been ensured by limiting the size of the residential unit. However, this is being circumvented by the developer by entering into agreement to sell multiple adjacent units to a single buyers. Accordingly, it is proposed to insert new clauses in the said sub-section to provide that the undertaking whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ause (f) to section u/s 80IB(10). It will be unreasonable to proceed on the basis that legislative amendment was infructuous or uncalled for particularly as the amendment is not even stated to be for removal of doubts . On the contrary, this amendment shows that no such eligibility conditions could be read into pre-amendment legal position. 9. As regards the AO s stand that the assessee himself has offered the deduction u/s.80IB(10) in respect of these units during the course of survey proceedings, it is only elementary that neither statement recorded u/s.133A has an evidentiary value, nor a legal claim can be declined only because assessee, at some stage, decided to give up the same. In view of these discussions, and bearing in mind en ..... X X X X Extracts X X X X X X X X Extracts X X X X
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