TMI Blog2018 (9) TMI 856X X X X Extracts X X X X X X X X Extracts X X X X ..... on of eligible profit wherever the flat size is less than 1500 sq.ft. subject to fulfillment of other conditions specified in section 80IB(10). Deductibility of eligible profit from Tower T5 & T6 in the light of provisions of section 80IB(10) - Held that:- The deduction claimed u/s 80IB(10) needs to be examined in the light of said provisions to ascertain whether the assessee is eligible for deduction or not in the given facts and circumstances of the case. The issue of revenue neutrality in the light of book profit computed u/s 115JB does not in any way hamper the allowability of deduction claimed u/s 80IB(10) as the assessee could always claim tax credit on taxes paid on book profit in subsequent years. Therefore, we are of the view that the issue needs to be re-examined by the Ld.CIT(A) in the light of facts of assessee’s case and provisions of section 80IB(10) in respect of Tower T5 & T6. Hence, we set aside ground 4 raised by the revenue in their appeal and cross objection filed by the assessee to the file of the CIT(A) and direct him to decide the issue. - I.T.A No.4677/Mum/2016, C.O. No.12/Mum/2018, (Arising out of I.T.A No.4677/Mum/2016) - - - Dated:- 31-5-2018 - Shri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the I. T .Act is permitted, where T5 and T6 of the flats exceed the stipulated area restriction of 1500 sq.ft., without appreciating the fact that these decision's of the High Courts were not accepted by the department and SLP has been filed. 4. On the facts and in the circumstances of the case and in law, the Ld CIT(A) erred in accepting that the disallowance of deduction u/s 80IB(10) of the I T Act as revenue neutral for the reason that the income was assessable u/s 115JB of the I T Act, disregarding the fact that the assessee is eligible to avail MA T credit in subsequent years. 3. The brief facts of the case are that the assessee company is engaged in the business of development of housing projects, filed its return of income for the assessment year 2012-13 on 30-09-2012 declaring total income of ₹ 2,56,48,330. The case has been selected for scrutiny and accordingly notices u/s 143(2) and 142(1) of the Act were issued. In response to notices, the authorized representative of the assessee appeared from time to time and filed various details, as called for. During the course of assessment proceedings, the AO noticed that the assessee has claimed deduction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... here the flat size is less than 1500 sq.ft. However, the CIT(A) failed to give any findings in respect of proportionate deductions claimed by the assessee towards Towers T5 T6 of Kapil Malhar Intelligent Homes by holding that the deduction claimed u/s 80IB(10) will be revenue neutral as regular tax liability is less than tax paid on the book profit. The relevant portion of the order of CIT(A) is extracted below:- During the course of hearing, attention VasT invited to predecessor CIT(A)-14 order dated 24.6.2014 vide appeal ry. CIT(A)-U/DCIT 6(1)/IT-42/201344 for the A.Y. 2010-11 wherein thetTTJk) had allowed claim for Section 80IB of the LT. Act, 1961 on the basis of Hon. Bombay High Court decision in the case of M/s. Vandana Properties in Appeal no. ITA no. 3633 of 2009 and of M/s. Bengal Ambuja Housing Development Ltd. wherein the Hon. IT AT, West Bengal had decided that smaller flats should not be denied deduction u/s. 80IB and the same view had been confirmed by Hon. High Court of Calcutta in ITA no. 453 of 2206 vide order dated 2.1.2007. It is seen that the appellant's contention is correct. It is also stated that there is no such claim by the appellant for the A.Y ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt and Special Leave Petition has been filed before the Hon ble Supreme Court. The Ld.DR further submitted that the Ld.CIT(A) was erred in holding that each project can be treated as independent of each other based on different commencement certificate disregarding the fact that the condition of minimum flat area applies independently and not collectively and also the whole project needs to be completed within 4 years as per the provisions of section 80IB(10) of the Act. The AO has brought out clear facts to the effect that as per the assessee s admission itself, the flat area in T5 T6 is more than 1500 sq.ft. and hence, the assessee failed to fulfil the condition specified u/s 80IB(10) and hence not eligible for deduction. 5. On the other hand, the Ld.AR for the assessee strongly supporting the order of the CIT(A) in respect of grounds 1 to 3 submitted that the issue is covered in favour of the assessee by the decision of ITAT, Mumbai Bench I in assessee s own case for AY 2010-11 in ITA No.5436/Mum/2014 wherein the co-ordinate bench by following the decision of Hon ble Bombay High Court in the case of CIT Vs Vandana Properties (supra) held that the assessee is eligible for p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... up area of less than 1500 sq.ft. This view is further supported by the decision of ITAT, Kolkatta in the case of Bengal Ambuja Housing Development Ltd and this decision has been affirmed by the Hon ble Calcutta High Court in ITA No.453/2006. The CIT(A), after considering relevant facts has rightly directed the AO to allow proportionate deductions in respect of Tower T4 out of total deductions claimed by the assessee including Towers T5 T6. In this view of the matter and consistent with the view taken by the co-ordinate bench in assessee s own case in line with the decision of Hon ble Bomby High Court in the case of CIT Vs Vandana Properties (supra), we are of the view that the assessee is eligible for proportionate deduction of eligible profit wherever the flat size is less than 1500 sq.ft. subject to fulfillment of other conditions specified in section 80IB(10) of the Act. Accordingly, we affirm the findings of the Ld.CIT(A) and reject these grounds raised by the revenue. 8. The next issue that came up for our consideration from revenue s ground No.4 and assessee s cross objection is not adjudicating the issue of deduction claimed towards Towers T5 T6 on the groun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provisions of section 80IB(10), but not on the basis of section 115JB of the Act. 12. Having heard both the sides and considered material on record, we find merits in the arguments of the assessee as well as the Ld.DR for the reason that the Ld.CIT(A) has not decided the issue of deductibility of eligible profit from Tower T5 T6 in the light of provisions of section 80IB(10) of the Income-tax Act, 1961. The deduction claimed u/s 80IB(10) needs to be examined in the light of said provisions to ascertain whether the assessee is eligible for deduction or not in the given facts and circumstances of the case. The issue of revenue neutrality in the light of book profit computed u/s 115JB does not in any way hamper the allowability of deduction claimed u/s 80IB(10) as the assessee could always claim tax credit on taxes paid on book profit in subsequent years. Therefore, we are of the view that the issue needs to be re-examined by the Ld.CIT(A) in the light of facts of assessee s case and provisions of section 80IB(10) of the Income-tax Act, 1961 in respect of Tower T5 T6. Hence, we set aside ground 4 raised by the revenue in their appeal and cross objection filed by the assessee to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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