2015 (9) TMI 489 - AT - Income Tax

ITAT grants deduction under section 80IB, emphasizing proportionate disallowance for exceeding limits.

Mrs. Cherukuri Swapna Versus Deputy Commissioner of Income Tax

The ITAT allowed the appellant's appeal, directing the Assessing Officer to grant the deduction claimed under section 80IB of the Income Tax Act. The ITAT ... Disallowance of deduction claimed u/s. 80IB - Held that:- There is no doubt with reference to the fact that assessee's claim pertains to AYs. 2009-10 to 2011-12 as recorded by the Revenue authorities. The Ld.CIT(A) also gave a factual finding that issues are similar to AY. 2009-10, therefore, since the issue was decided in favour of assessee in AY. 2009-10 wherein held there was no violation of any condition in respect of the project developed by the assessee for the purpose of claiming deduction under S.80IB(10) and the learned CIT(A) was not justified in confirming the disallowance made by the Assessing Officer on account of assessee’s claim for deduction under S.80IB(10), we direct the AO to grant deduction u/s. 80IB(10) for present AY - Decided in favour of assessee. Issues:Disallowance of deduction claimed under section 80IB of the Income Tax Act.Analysis:The appellant, an individual engaged in real estate development, filed an appeal against the disallowance of a deduction claimed under section 80IB for profits from a housing project. The Assessing Officer disallowed the claim based on findings from a previous assessment year. The Commissioner of Income Tax (Appeals) upheld the disallowance citing similar facts from the previous year. However, the appellant pointed out that in a previous appeal for a different assessment year, the ITAT had allowed the deduction under section 80IB. The ITAT noted that the issues were similar to the previous year and directed the Assessing Officer to grant the deduction for the current assessment years.The ITAT reviewed the grounds for disallowance by the Assessing Officer and the Commissioner of Income Tax (Appeals). The disallowance was based on the commercial space exceeding the prescribed limit and certain residential units having a built-up area exceeding the permissible limit. The ITAT examined the details of the project, including the sale of commercial space and the construction of residential units. It noted that the commercial complex was not developed by the appellant and the profit from its sale was offered for taxation by the owners. The ITAT also found that the residential units in question did not exceed the permissible area limits as claimed by the authorities. The ITAT emphasized that even if some units exceeded the limit, the deduction should be disallowed proportionately, not entirely.Based on the detailed analysis, the ITAT allowed the appellant's grounds and directed the Assessing Officer to grant the deduction under section 80IB. The ITAT concluded that there was no violation of conditions for claiming the deduction and set aside the Commissioner of Income Tax (Appeals) order. Consequently, the appellant's appeal was allowed, and the order was pronounced in the open court on the specified date.