Case Law Details

Case Name : M/s. D.S. Kulkarni Developers Ltd. Vs ACIT (ITAT Pune)
Appeal Number : ITA No.570 /PN/2014
Date of Judgement/Order : 28/10/2015
Related Assessment Year : 2010-11
Courts : All ITAT (1730) ITAT Pune (63)

Brief of the Case

ITAT Pune held in the case M/s. D.S. Kulkarni Developers Ltd. vs. ACIT that an identical issue of claim of deduction under section 80IB(10) arose before the Tribunal in assessee’s own case in ITA Nos.723 to 725/PN/2013 & 769 to 771/PN/2013 vide order dated 31.07.2014.In this case, tribunal held that the building plans for the residential and amenities space were sanctioned independently and merely because a common lay out plan was passed by the authorities, does not disentitle the assessee to the claim of deduction under section 80IB (10). In the current case, the facts and issues arising are identical to the facts before the Tribunal in above case, so following the same parity of reasoning, we hold that the assessee is entitled to the claim of deduction under section 80IB(10).

Facts of the Case

The assessee had claimed the deduction u/s 80IB (10) in respect of various projects including DSK Sundarban and DSK Vishwa Phase-V – Meghmalhar Phase – I. The Assessing Officer while completing assessment had denied the deduction in the hands of assessee in respect of above two projects. In relation to the first project i.e. DSK Sundarban though the assessee had complied with all the conditions laid down under section 80IB(10) vis-a-vis the area of flats along with projections being less than 1500 sq.ft., the project having been completed within four years from the date of commencement and also there being no commercial units in the said project, but the Assessing Officer noted that there was amenities space – I and amenities space – II on west side and east side respectively, which was an integral part of the plan sanctioned by the District Collector in respect of plot ‘A’. Since the amenities space – I and amenities space – II existed in the very lay out plan of the housing project DSK Sunderban and the said commercial space including shops were part and parcel of the said project, the Assessing Officer held the assessee to have violated the conditions laid down under section 80IB (10) since the built up area of commercial establishment of the project was more than 56000 sq.ft. The claim of the assessee that two projects were separate was not accepted by the Assessing Officer.

In relation to second project i.e. Meghmalhar Phase – I, buildings for which sanction was received from the Corporation for parking + seven floors constitute the eligible project, against which it had claimed deduction under section 80IB (10) . The buildings for which sanction was received for parking + first floor and 22 row houses were not part of the eligible project. The Assessing Officer however, rejecting the claim of assessee held that all the buildings from ‘A’ to ‘W’ and 22 row houses were part of the same project and since all the buildings were not completed and the built up area of the proposed row houses exceeded 1500 sq.ft., hence, the assessee was not entitled to the claim of deduction under section 80IB (10).

Held by CIT (A)

CIT (A) upheld the order of AO.

Held by ITAT

ITAT held that an identical issue of claim of deduction under section 80IB(10) of the Act in respect of DSK Sunderban arose before the Tribunal in assessee’s own case in ITA Nos.723 to 725/PN/2013 & 769 to 771/PN/2013 relating to assessment years 2007-08 to 2009-10 and vide order dated 31.07.2014. In this case, tribunal held that the building plans for the residential and amenities space were sanctioned independently and merely because a common lay out plan was passed by the authorities, does not disentitle the assessee to the claim of deduction under section 80IB (10) of the Act in respect of the residential buildings, for which the building plans were sanctioned separately from the building plans of amenities space. The facts and issues arising before us are identical to the facts before the Tribunal and following the same parity of reasoning, we hold that the assessee is entitled to the claim of deduction under section 80IB(10) of the Act in respect of DSK Sunderban.

Also in above case, with regard to second project i.e. Meghmalhar Phase –I, the Tribunal held that since the assessee has completed all the buildings for which sanction is received for parking + 7 floors and all the conditions laid down in Section 80IB (10) were complied with, the assessee is entitled for claiming deduction u/s 80IB (10). It is settled legal position that beneficial provisions have to be interpreted liberally in favour of assessee. Regarding the contention of the Assessing Officer that the built up area of the row houses exceeded 1500 sq. ft. is not relevant since the row houses do not form part of the eligible housing project. In view of above discussion, the Assessing Officer is directed to allow the assessee’s claim of deduction u/s 80IB(10) in respect of Parking + 7 floors of DSK Vishwa Phase-V, Meghmalhar Phase-I project as independent project.

Accordingly appeal of the assessee allowed.

Download Judgment/Order

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Category : Income Tax (20866)
Type : Judiciary (8910)

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