Case Law Details
Kamat Constructions Pvt. Ltd. Vs ACIT (Bombay High Court)
In this case the Assessing Officer (AO) vide Order dated 31.01.2014 disallowed deductions to the assessee under Section 80IB(10) of the Income Tax Act, 1961 (said Act) in respect of its housing project “Kamat Riviera” inter alia on the ground that 4 out of the 60 residential units in the said project, did not comply with the condition prescribed in Section 80IB(10)(f) of the said Act. This is because Flat Nos.401 and 402 were allotted to the same individual namely Mr. Suraj Kamble vide agreements dated 13.03.2009 and 29.06.2009 and Flat Nos. 104 and 103 were allotted to Ms. Sangita V. N. Panvelcar vide agreement dated 26.06.2009 and to her husband, Mr. Vivek V. N. Panvelcar vide agreement dated 10.10.2009. The assessee appealed to the Commissioner (Appeals), who, vide order dated 28.08.2015, partly allowed the appeal and directed the AO to grant the pro-rata deductions under Section 80IB(10) of the said Act to the assessee.
There is no dispute that the provisions of Section 80IB(10)(f) entered into force on 19.08.2009. Therefore, the allotment of Flat Nos.401 and 402 to Mr. Suraj Kamble on 13.03.2009 and 29.06.2009 would not constitute a breach of the condition in Section 80IB(10)(f) of the said Act. The same is the position about allotment of flat no. 104 to Ms. Sangita Panvelcar. At the highest, there may be some issue about the allotment of Flat No.103 on 10.10.2009. This is because clause (f) to Section 80IB(10) entered into force on 19.08.2009, in terms of which, there was a prohibition for allotment in favour of a spouse. Therefore, deduction proportionate to the amount involved for allotment of Flat No.104 could have been denied to the assessee but certainly not the deduction in respect of the entire housing project comprising of 60 residential units.
12. The reasoning of the ITAT in the context of the area of the plot on which the housing project was put up is vitiated by perversity. Even if the area proportionate to the 4 residential units were to be excluded from consideration, still, the available area exceeded 4000 sq. meters or 1 Acre. In any case, now that only one of the residential units can be excluded, the area exceeds 1 Acre and there is no breach whatsoever on this count.
On the issue of pro-rata deduction, in the connected Tax Appeal Nos. 4 to 8 of 2016 and Tax Appeal Nos. 49 and 52 of 2016, we have already held that such pro-rata deductions can be granted under Section 80IB(10) of the said Act. This is after considering the very same contentions of Ms. Linhares as have been raised in the present matter. We have considered and distinguished the rulings relied upon by Ms. Linhares in this appeal, since, the very same rulings were relied upon in the connected appeals.
Please become a Premium member. If you are already a Premium member, login here to access the full content.
