Tribunal rules in favor of assessee on u/s.80IB(10) deduction, emphasizing independence of residential units.

The Tribunal upheld the assessee's grievance and rejected the Assessing Officer's challenge, dismissing the appeal and pronouncing the judgment in favor of the assessee on 12th August, 2011. The Tribunal concluded that the deduction u/s.80IB(10) should have been allowed to the assessee, as each flat was deemed an independent residential unit as per approved building plans, even if multiple flats were merged into larger units. The Tribunal emphasized that the legislative amendment restricting sales to family members was prospective and did not apply retrospectively.

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Issues:
1. Eligibility of deduction u/s.80IB(10) for profits from a housing project failing to meet specific conditions.

Detailed Analysis:

Issue 1:
The Assessing Officer challenged the correctness of the CIT(A)'s order regarding the eligibility of deduction u/s.80IB(10) for profits derived from a housing project. The key contention was that the housing project did not satisfy the conditions stipulated in clauses (b) and (c) of section 80IB(10) of the Income Tax Act, 1961. The first condition required the plot area to be not less than one acre, which the assessee's plot was found to be less than. The second condition specified that the built-up area of individual flats should not exceed 1000 square feet, but the flats were combined and sold as larger units exceeding the limit. The Assessing Officer relied on survey proceedings and evidence to support the denial of the deduction. However, the CIT(A) found that the assessee had fulfilled all conditions under section 80IB(10) and directed the AO to allow the deduction. The Tribunal analyzed the case in light of a similar precedent and concluded that the deduction should have been allowed to the assessee as each flat was an independent residential unit as per approved building plans, even if multiple flats were merged into larger units. The Tribunal emphasized that the legislative amendment restricting sale to family members was prospective and did not apply retrospectively. Therefore, the deduction u/s.80IB(10) should have been allowed to the assessee.

Conclusion:
The Tribunal upheld the assessee's grievance and rejected the Assessing Officer's challenge, dismissing the appeal and pronouncing the judgment in favor of the assessee on 12th August, 2011.

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