P.V. Hemalatha Vs CIT (ITAT Cochin)
The Cochin Bench of the Income Tax Appellate Tribunal (ITAT) disposed of two appeals filed by the assessee for Assessment Years 2009-10 and 2018-19 through a common order, as both involved the common issue of eligibility for deduction under Section 80-IB(10) of the Income-tax Act, 1961.
For Assessment Year 2009-10, the assessee, engaged in the business of constructing residential apartments and earning remuneration, interest on capital from firms, and insurance commission, filed a revised return claiming deduction of ₹3,13,19,704 under Section 80-IB(10). The original assessment under Section 143(3) allowed the deduction.
Subsequently, the Commissioner revised the assessment under Section 263 after examining the assessee’s claim. The Commissioner observed that although the assessee owned a total of 117.5 cents of land, the approved housing project covered only a portion of the land. According to the approved plan, out of the total land area of 4,755.22 square metres, 1,899.53 square metres had been earmarked for a second phase that was not proposed for development when the building permit was granted. As a result, the housing project was found to have been constructed on only 70.57 cents of land. Since Section 80-IB(10) requires the project to be situated on a plot having a minimum area of one acre, the Commissioner held that the assessment allowing the deduction was erroneous and prejudicial to the interests of the Revenue and restored the matter to the Assessing Officer for fresh assessment.
