Tribunal affirms housing project eligibility under section 80IB(10) and disallows excess units for deduction.

The Tribunal upheld the CIT(A)'s decision, determining that the housing project was eligible for deduction under section 80IB(10) as the approval date for four blocks was considered to be 06/02/06. The Tribunal also supported the proportionate disallowance for residential units exceeding the built-up area limit, allowing the deduction for compliant units. The department's appeal was dismissed, affirming the assessee's entitlement to the deduction.

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Issues Involved:
1. Eligibility of the assessee for deduction under section 80IB(10) of the Income Tax Act.
2. Completion of the housing project within the stipulated period.
3. Compliance with the built-up area limit for residential units.

Issue-wise Detailed Analysis:

1. Eligibility for Deduction under Section 80IB(10):
The primary issue revolves around whether the assessee, a partnership firm engaged in the development of housing projects, is eligible for deduction under section 80IB(10). The assessee claimed a deduction of Rs. 9,16,96,622 under this section for the AY 2010-11. The Assessing Officer (AO) rejected this claim, arguing that the housing project did not meet the completion deadline and some residential units exceeded the prescribed built-up area.

2. Completion of the Housing Project:
The AO noted that the housing project, consisting of six blocks on a 7.39-acre land, had initial approval from HUDA on 07/05/01 and the local authority on 10/05/01. The AO argued that the project should have been completed by 31/03/08 to qualify for the deduction. However, the assessee contended that the approval for four blocks was granted by HUDA on 20/01/06 and by the local authority on 06/02/06, and the project was completed within five years from this date. The CIT(A) agreed with the assessee, stating that the approval date by the local authority for the four blocks should be considered as 06/02/06, making the project eligible for the deduction.

3. Compliance with Built-up Area Limit:
The AO also observed that some residential units exceeded the built-up area limit of 1500 sq.ft., violating one of the conditions for the deduction. The assessee argued that only 9% of the units exceeded this limit and had proportionately disallowed the deduction for these units. The CIT(A) supported this view, allowing the deduction for the compliant units and restricting the disallowance to the non-compliant 9%.

Conclusion:
The Tribunal upheld the CIT(A)'s decision, agreeing that the approval date for the four blocks should be considered as 06/02/06, making the project eligible for the deduction under section 80IB(10). The Tribunal also supported the proportionate disallowance for the units exceeding the built-up area limit, allowing the deduction for the compliant units. The department's appeal was dismissed, and the assessee's claim for the deduction was upheld.

Pronouncement:
The judgment was pronounced in the open court on 4th September 2015, dismissing the department's appeal and upholding the order of the CIT(A).

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