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2016 (5) TMI 249 - ITAT AHMEDABAD

2016 (5) TMI 249 - ITAT AHMEDABAD - TMI - Eligibility of deduction u/s.80IB(10) - CIT(A) had denied the claim of deduction for the reason that assessee had not complied with the conditions stipulated under clause (a), (b) & (c) of Section 80IB(10) of the Act and the basis such conclusion was DVO's report - It is CIT(A)’s observation that assessee has constructed only on 5686.74 sq.mtrs., but on the other hand, it is assessee’s contention that it has developed on the area of 8838.74 sq. mtrs. of .....

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ve the benefit of the aforesaid certificate. Further on perusal of the certificate, it is seen that it gives details about the area of land, permission number, approved built up area, date of approval etc. which are important factors which would go in determining the eligibility of assessee for deduction u/s.80IB(10) of the Act. In such a situation, in the larger interest of justice, we are of the view that the issue about deduction u/s.80IB(10) of the Act needs to be re-examined in the light of .....

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October, 2010 for the assessment years 2006-07 & 2007-08 respectively. 2. Before us, at the outset, ld. A.R. submitted that though the two appeals of the assessee pertain to different assessment years, but solitary issue in both the years is with respect to deduction u/s.80IB(10) of the Act and therefore the submission made by him would be applicable to both the assessment years. Ld. D.R. did not object to the aforesaid submission of ld. A.R. We therefore, for the sake of convenience, procee .....

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ereafter assessment was framed u/s.143(3) of the Act vide order dated 26.12.2008 and the total income was determined at ₹ 46,40,940/- inter alia by denying the claim of deduction u/s.80IB(10) of the Act. Aggrieved by the order of A.O., assessee carried the matter before the ld. CIT(A) who vide order dated 04.06.2010 (in Appeal No. CIT(A)-XV/ITO.9(1)/324/2008-09) dismissed the appeal of the assessee. Aggrieved by the order of ld. CIT(A), assessee is now in appeal before us and has raised th .....

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) The learned CIT(A) erred in confirming the addition on account of violation of the conditions mentioned in sub clauses (a), (b) and (c) of section 80IB(10) instead of the ground of ownership of land not in the appellants name as stand taken by learned AO. (iii) That the learned Commissioner of Income-tax (Appeals) XV, Ahmedabad has grievously erred in law and on facts in holding that the appellant is not entitled to deduction u/s.80IB(10) of the Act. 4.1 During the course of assessment proceed .....

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r in the construction of housing project. He was therefore of the view that the necessary conditions required u/s.80IB(10) of the Act have not been complied by assessee and therefore, the assessee was not eligible for deduction u/s.80IB(10) of the Act. He accordingly denied the claim of deduction amounting to ₹ 46,40,938/-. 5. Aggrieved by the order of Assessing Officer, Assessee carried the matter before the ld. CIT(A) who confirmed the action of A.O. of denying the deduction but for diff .....

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ad the built up area in excess of what was stipulated in the Act (i.e. the area of the flats constructed were in excess of 1500 sq. ft.). He accordingly denied the claim of deduction. 6. Aggrieved by the order of ld. CIT(A), assessee is now in appeal before us. 6.1 Before us, ld. A.R. reiterated the submissions made before the A.O. and ld. CIT(A) and further submitted that ld. A.O. had rejected the claim of deduction of the assessee on the ground that ownership of the land was not with the asses .....

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y the decision of Hon ble Gujarat High Court in case of Radhe Developers reported in 341 ITR 483 (Guj) and many other decisions of Tribunal including the decision in the case of Shakti Corporation. As far as the denial of deduction on the ground that the size of the plot on which the housing project was constructed was not having minimum area of one acre, ld. A.R. submitted that the area of plot is 8838.74 sq.mtrs. which is more than one acre and thus, the condition laid down u/s.80IB(10)(a) of .....

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he units were also assessed separately by Ahmedabad Municipal Corporation but the occupants after having occupied their units, modified the units by combining the two units to one unit so as to suit their requirements and the modifications by the purchasers were done by them subsequent to the sale made by assessee. He submitted that since each unit was less than 1500 sq. ft. at the time of sale and the subsequent modifications by the purchasers could not be a ground for denial of benefit. He fur .....

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of District Valuation Officer (DVO) of assessee not effectively developed minimum one acre, he submitted that the aforesaid observation of the DVO which has been relied upon by the ld. CIT(A) on the basis of FSI calculation worked out by DVO is wrong in view of the fact that the plot area of 8838.74 sq. mtrs. has been utilized for development and that assessee has constructed the total built up area of 6945 sq. mtr. which is as per AUDA s BU permission and certificate. He also pointed to the cop .....

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ld. CIT(A). With respect to the sale of unutilized FSI, ld. D.R. submitted that profits relatable to sale of unutilized FSI was not eligible for deduction u/s.80IB(10) of the Act in view of the decision of Hon ble Gujarat High Court rendered in case of CIT vs. Desai Developers [2014] 52 taxmann.com 331 (Guj). He also placed the copy of the aforesaid order. 7. We have heard the rival submissions and perused the material on record. The issue in the present case is with respect to denial of deduct .....

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ial of deduction by ld. CIT(A) was that the size of flat sold by assessee was in excess of 1500 sq.ft. On this ground, we find that the Assessee had sold 4 flats namely A 41-42, A 47-48 & A 79-80 to 6 different purchasers vide separate sale deeds which have also been confirmed by the respective purchasers and at the time of its sale, each flat was less than 1500 sq. ft. It is also a fact that the inspection was carried out by the DVO subsequent and much after the date when assessee had hande .....

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ft. In such a situation, on the ground that the size of flat was in excess of ₹ 1500 sq.ft., the deduction u/s.80IB(10) of the Act cannot be denied to assessee. We further find that ld. CIT(A) had denied the claim of deduction for the reason that assessee had not complied with the conditions stipulated under clause (a), (b) & (c) of Section 80IB(10) of the Act and the basis such conclusion was DVO's report. It is CIT(A) s observation that assessee has constructed only on 5686.74 sq .....

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by ld. CIT(A), the aforesaid certificate issued by AUDA was not before her and therefore she did not have the benefit of the aforesaid certificate. Further on perusal of the certificate, it is seen that it gives details about the area of land, permission number, approved built up area, date of approval etc. which are important factors which would go in determining the eligibility of assessee for deduction u/s.80IB(10) of the Act. In such a situation, in the larger interest of justice, we are of .....

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