Court upholds assessee's claim, directs Assessing Authority to comply. Tribunal decision affirmed, correct legal interpretation emphasized.

The Court ruled in favor of the assessee, emphasizing adherence to statutory provisions and legal interpretations. The Assessing Authority was directed to consider the Court's interpretation and pass appropriate orders in accordance with the law. The Tribunal's decision to allow proportionate benefit and remand the matter was upheld, emphasizing the correct interpretation of the legal position.

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Issues:
Challenge to order granting exemption under Section 80IB(10) of the Income Tax Act, 1961 based on the size of constructed flats.

Analysis:
The case involved an appeal by the revenue challenging the Tribunal's order granting exemption under Section 80IB(10) of the Income Tax Act, 1961. The assessee, engaged in construction and real estate business, undertook projects named 'SJR Eastwood' and 'SJR residential'. The revenue denied the exemption claiming that the main flats exceeded the permissible limit of 1500 sq. ft. required for the benefit under Section 80IB(10). The Commissioner of Income Tax (Appeals) upheld the denial, leading the assessee to appeal to the Tribunal.

The Tribunal ruled that the assessee would not lose the benefit entirely due to some flats exceeding 1500 sq. ft. Only the flats exceeding the limit would be excluded from the benefit. Consequently, the matter was remitted back to the Assessing Authority for reconsideration. The revenue, aggrieved by this decision, appealed.

The revenue contended that any flat exceeding 1500 sq. ft. would disqualify the assessee from the exemption under Section 80IB(10), regardless of the number of flats violating the limit. On the contrary, the assessee argued that the balcony area was not included in the built-up area calculation before a certain date. Additionally, the mezzanine floors were registered under separate sale deeds, each not exceeding 1500 sq. ft., justifying the exemption.

The Court noted that before a specific date, the balcony area was not considered in the built-up area calculation. Similarly, prior to another date, there was no prohibition on purchasing two flats. The Tribunal's decision to allow proportionate benefit and remand the matter was upheld, emphasizing the correct interpretation of the legal position.

In conclusion, the Court ruled in favor of the assessee, emphasizing adherence to statutory provisions and legal interpretations. The Assessing Authority was directed to consider the Court's interpretation and pass appropriate orders in accordance with the law.

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