Tribunal allows deductions under Income Tax Act, includes approach road land, excludes common areas.

The Tribunal set aside the revisional order under Section 263 of the Income Tax Act, directing the Assessing Officer to allow the deductions claimed under Section 80IB(10). It was held that the inclusion of additional land for the approach road in the plot area was appropriate, and the built-up area calculations should exclude common areas. The Tribunal found that the issues raised were debatable, and the Assessing Officer had conducted thorough verification, including site visits, before allowing the deductions.

---

---

Issues Involved:
1. Validity of the revisional order passed under Section 263 of the Income Tax Act.
2. Eligibility of the assessee for deduction under Section 80IB(10) of the Income Tax Act.
3. Determination of the plot area for the housing project.
4. Built-up area of the residential units exceeding the prescribed limit of 1500 sq. ft.
5. Merger of flats and modifications not as per approved plans.

Detailed Analysis:

1. Validity of the Revisional Order under Section 263:
The assessee challenged the revisional order passed under Section 263 of the Income Tax Act, claiming that the assessment order was neither erroneous nor prejudicial to the interest of revenue. The Tribunal noted that the Assessing Officer (A.O.) had verified the claim of the assessee, including personal visits to the site, and found the assessment order to be neither erroneous nor prejudicial to revenue. Thus, the revisional order was set aside.

2. Eligibility for Deduction under Section 80IB(10):
The primary issue was whether the assessee was eligible for the deduction under Section 80IB(10), which requires the project to be on a plot of at least 1 acre and each residential unit to have a built-up area not exceeding 1500 sq. ft. The Tribunal found that the assessee had acquired an additional 5 'Are' of land for the approach road, which, when included, made the total plot area exceed 1 acre. Thus, the requirement of Section 80IB(10) was fulfilled.

3. Determination of Plot Area:
The A.O. initially allowed the deduction based on the total plot area, including the additional 5 'Are' acquired for the approach road. The Commissioner of Income Tax (CIT) later found this inclusion erroneous. However, the Tribunal held that the approach road was integral to the project and should be included in the plot area, thus meeting the 1-acre requirement.

4. Built-up Area of Residential Units:
The CIT noted that some row houses exceeded the 1500 sq. ft. limit. The assessee argued that the saleable area mentioned in the agreements included open land/garden, which should not be considered in the built-up area. The Tribunal agreed, stating that the built-up area should exclude common areas, and thus, the residential units met the criteria under Section 80IB(10).

5. Merger of Flats and Modifications:
The CIT also raised concerns about the merger of flats, which allegedly exceeded the prescribed limit of 1500 sq. ft. The Tribunal found that each flat, before merging, was within the prescribed limit, and the merger by the owners did not affect the eligibility for deduction. Therefore, the modifications were not a valid ground for denying the deduction.

Conclusion:
The Tribunal allowed the appeals, setting aside the revisional order under Section 263 and directing the A.O. to allow the claimed deductions under Section 80IB(10). The Tribunal emphasized that the issues raised were debatable and that the A.O. had conducted sufficient verification, including site visits, before allowing the deductions. The Tribunal also noted that the additional land for the approach road should be included in the plot area, and the built-up area calculations should exclude common areas, thereby meeting the requirements of Section 80IB(10).

---