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TMI Blog2023 (1) TMI 651X X X X Extracts X X X X X X X X Extracts X X X X ..... these appeals has challenged the following common grounds of appeal: a. Whether on the facts and in the circumstances of the case and in law, the ld.CIT(A) was justified in holding that the assessee is entitled for deduction u/s. 80-IB(10) of the I.T. Act, 1961" b. Whether on the facts and in the circumstances of the case and in law, the ld. CIT(A) was justified in ignoring the fact that is clearly established that the very intention and also the subsequent construction was to construct the duplex flats out of most of 1-BHK flats which are of ITO vs. Poddar Ashish Developers built up area in excess of the prescribed limit of 1000 sq. ft, which is in contravention with the provisions of section 80IB(10) of the I.T. Act, 1961. 3. As the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ject in the name of 'Garden Estate' for construction of residential flats. The said project was completed in the A.Y. 2009-10 and has been assessed on the project completion basis in that year. It is also observed that the assessment for A.Ys. 2007-08 and 2008-09 were completed on WIP method for which the assessee was in appeal before the ld. CIT(A) on the ground that the project completion method should be adopted. The assessee's appeal was allowed by the ld. CIT(A) for both the years for which the Revenue was in appeal before the Tribunal. 7. The crux of the disallowance was that during the assessment proceedings, it was observed that each flat in the said project was below 1000 sq. ft. built up area and a total of 18 one BHK flats were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s not there at the time of plan approved by Municipal Corporation, which was only for construction of twenty four 1 BHK independent flats. The assessee further contended that the proposal of converting these flats was by the purchasers and not by the assessee's. On this note, the assessee stated that it had not violated the condition of section 80IB(10) of the Act. The A.O. at the time of assessment proceeding for A.Y. 2009-10 issued notice to all the purchasers of 1 BHK flats, asking for clarification, whether the flats were converted and, if so, who had undertaken to combine the flats. The reply from these some of the owners stated that they owned independent 1 BHK flats and had not combined into duplex. The other 18 flats purchasers stat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... litate the construction of staircase by having a large hole on the roof, which was unusual in such projects. Further to this, the A.O. also observed that only single kitchen was provided for two flats and also the fact that the investors Shri Vimal Kumar Poddar and Mrs. Chaula Vimal Poddar had taken two adjacent flats, shows that these flats were not meant for small and middle income groups. The A.O. on these grounds denied the claim of the deduction u/s. 80IB(10) of the Act and added the same to the income of the assessee. 8. In an appeal before the ld. CIT(A), the assessee's claim of deduction us/. 80IB(10) was allowed by the ld. CIT(A) on the ground that the Tribunal has allowed the assessee's claim for A.Ys. 2009-10 and 2010-11 in ITA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the flat buyers have done it so to their better living in the residential units. In our opinion, mere making a provisions of hole and providing methods/design vide the brochure to the advantage of the flat buyers does not amount to construction of duplex flats by the developer, who is aware of the consequences in matters of claims of deduction one side as well as the obtaining the completion /occupancy certificates from the Authorities, who approved the project with 1 to 3 BHK flats only and not to the duplex flats. 25. Thus, the discrepancy of mere providing a hole for intended stair case for flat buyers and supplying of the design to merge the flats into a duplex flat in our opinion constitutes a marketing strategy to boost the sale ..... X X X X Extracts X X X X X X X X Extracts X X X X
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