Law: Income Tax Act, 1961

Section: 80IB(10)

JUDGMENT R. Sudhakar, J. - This Tax Case (Appeal) has been filed by the Revenue as against the order of the Income Tax Appellate Tribunal relating to the assessment year 2004-05. At the time of admission, the following substantial questions of law were admitted by this Court for consideration: "(1.) Whether on the facts and circumstances of the case, the Tribunal was right in holding that as the provision is violated only on the 7th floor of the building, proportionate deduction under Section 80-IB(10) is to be allowed? (2.) Whether on the facts and circumstances of the case, the Tribunal was right in granting partial exemption where one of the conditions of granting exemption is that the residential units should be less than 1500 sq.ft.?" 2. In the course of the hearing before this Court, learned Standing Counsel appearing for the Revenue sought permission to reframe the questions of law, since the questions admitted by this Court did not project the issues fully. Hence, after hearing the learned counsel appearing for the assessee, who had no serious objection for re-framing the questions, the following substantial questions of law, as reframed, arise for consideration: "(1.) Whether on the facts and circumstances of the case, the Tribunal was right in allowing the benefit of claim under Section 80IB(10) when the assessee is not a developer, but only a builder, when the eligibility to deduction under Section 80IB(10) is conferred for developing and building housing projects? (2.) Whether on the facts and circumstances of the case, the Tribunal was right in holding that car park area could not be taken as built up area of the residential unit for the purpose of computing deduction under Section 80IB(10)?" 3. The assessee, who is a promoter, has claimed deduction under Section 80IB(10) of the Income Tax Act on the housing project, which was denied by the Assessing Officer on two counts, viz., (i) the assessee had not developed the flats and (ii) out of 66 flats constructed, the 'built-up area' of 25 flats exceeded the prescribed maximum limit of 1500 sq.ft., if we include the car park area of 220 sq.ft. sold to these 25 flat owners. The reasoning of the…

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