Tribunal grants deduction appeals for AY 2006-07 & 2007-08 under section 80IB(10)

The Tribunal allowed appeals for AY 2006-07 and 2007-08 regarding deduction u/s.80IB(10). The decision was based on settled ownership issues, lack of attribution for flat size violations, and the need for a fresh assessment considering the new evidence. The Tribunal directed a re-examination of the deduction eligibility for AY 2006-07 based on the AUDA certificate, granting both parties a fair hearing. Both appeals were allowed for statistical purposes.

---

---

Issues:
Appeals against CIT(A) order for AY 2006-07 & 2007-08 regarding deduction u/s.80IB(10) of the Act.

Analysis:
1. Ownership of Land Issue:
- Assessee, a partnership firm in construction business, claimed deduction u/s.80IB(10) for AY 2006-07. AO denied the deduction, stating the land was not owned by the assessee. However, the CIT(A) denied the deduction citing violations of conditions in Section 80IB(10). Assessee argued that the issue of land ownership was settled in its favor by the Gujarat High Court in Radhe Developers case.

2. Size of Flats Issue:
- CIT(A) also denied the deduction due to some flats exceeding 1500 sq.ft. Assessee sold flats below 1500 sq.ft., but purchasers later combined them. Tribunal ruled that the combined area exceeding 1500 sq.ft. post-sale cannot be attributed to the assessee, hence the deduction cannot be denied on this ground.

3. Compliance with Conditions Issue:
- The CIT(A) concluded that the assessee did not comply with conditions under Section 80IB(10) based on DVO's report. However, the certificate from AUDA, issued after the CIT(A)'s order, confirmed the development on 8838.74 sq.mtrs. of land. Tribunal directed a re-examination of the deduction eligibility in light of the certificate, granting both parties a fair hearing.

4. Appeal for AY 2007-08:
- Both parties agreed that the issues and arguments for AY 2006-07 applied to AY 2007-08. Tribunal allowed the appeal for AY 2007-08 based on similar reasons as AY 2006-07.

5. Conclusion:
- The Tribunal allowed both appeals for statistical purposes, directing a re-examination of the deduction eligibility for AY 2006-07 based on the AUDA certificate. The decision was based on settled ownership issues, lack of attribution for flat size violations, and the need for a fresh assessment considering the new evidence.

---