TMI Blog2015 (2) TMI 257X X X X Extracts X X X X X X X X Extracts X X X X ..... e and in favour of the assessee.- Decided in favour of assessee. - Tax Case (Appeal) No.139 of 2009 - - - Dated:- 27-1-2015 - Mr. R.SUDHAKAR AND Mr. R.KARUPPIAH, JJ. For the Appellant : Mr. T. Ravikumar Standing Counsel for Income Tax For the Respondent : Mr. S. Sridhar JUDGEMENT (Judgment of the Court was delivered by R.SUDHAKAR,J.) This Tax Case (Appeal) has been filed by the Revenue as against the order of the Income Tax Appellate Tribunal relating to the assessment year 2004-05. At the time of admission, the following substantial questions of law were admitted by this Court for consideration: 1. Whether on the facts and circumstances of the case, the Tribunal was right in holding that as the provision is violated only on the 7th floor of the building, proportionate deduction under Section 80-IB(10) is to be allowed? 2. Whether on the facts and circumstances of the case, the Tribunal was right in granting partial exemption where one of the conditions of granting exemption is that the residential units should be less than 1500 sq.ft.? 2. In the course of the hearing before this Court, learned Standing Counsel appearin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cales to judge the eligibility of the project for the deduction. When the assessee fails the test the whole of the project looses its eligibility. There is no scope for proportionate allowance of deduction. 4. On appeal by the assessee, the Commissioner of Income Tax (Appeals) following the earlier order dated 21.2.2007 in ITA No.115/06-07 allowed deduction under Section 80IB(10) holding that provisions of Section 80IB(10) do not warrant the ownership of land. With regard to the issue on car park area, the Commissioner of Income Tax (Appeals) held that there is no definition for the term 'common area' in the Income Tax Act. Further, relying on the definition found in TN Apartment Ownership Act, which states that 'car park area' has to be treated as common area, the Commissioner of Income Tax (Appeals) held that car park area should not be held as private area. Accordingly, the Commissioner of Income Tax (Appeals) held that the assessee had not come under any of the disqualification prescribed under Section 80IB(10) of the Income Tax Act and allowed deduction under Section 80IB(10) of the Income Tax Act. 5. On the appeal filed by the Revenue before the Tribu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r of Income Tax (Appeals) relied on the definition for the term 'common area and facilities' defined in the Tamil Nadu Apartment Ownership Act, 1994. The said Act was notified in the Tamil Nadu Government Gazette (Extraordinary) dated 24th April, 1995. He further submitted that even though Section 80IB(14)(a) of the Income Tax Act defining the term 'built-up area' is not available for the assessment year in question, when at the time of deciding the issue the definition is available, the Tribunal is justified in relying on the definition of the term 'built-up area' provided under Section 80IB(14)(a) of the Income Tax Act. 10. Heard learned Standing Counsel appearing for the Revenue and the learned counsel appearing for the assessee and perused the materials placed before this Court. 11. Before going into the merits of the case, it is necessary to look into the relevant provisions, viz., 80IB(10) and the definition for the term 'built - up area' under Section 80IB(14)(a) of the Income Tax Act, which read as follows: Deduction in respect of profits and gains from certain industrial undertakings other than infrastructure develop ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ject or two thousand square feet, whichever is less. ........... .......... 80 IB (14) For the purposes of this section, (a) built-up area means the inner measurements of the residential unit at the floor level, including the projections and balconies, as increased by the thickness of the walls but does not include the common areas shared with other residential units 12. It is seen that car park has been separately shown in the agreement and according to the assessee, the same does not form part of the residential unit for the purpose of determining the maximum built-up area, in view of the definition for the term 'built-up area' came into effect from 01.04.2005. The Commissioner of Income Tax (Appeals) relied upon the provisions of the Tamil Nadu Apartment Ownership Act, 1994 , wherein Section 3(h) defines the term 'common areas and facilities' in which clause 3 states that the basements, cellars, yards, gardens, parking areas and storage spaces are common areas. Hence, following the said provision, the Commissioner of Income Tax (Appeals) allowed deduction. 13. In the absence of any specific definition for the term 'built-up area' during the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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