Tribunal allows Revenue's appeal on deduction eligibility under section 80-IB(10) for property development.

The Tribunal partially allowed the Revenue's appeal challenging the eligibility of the assessee for deduction under section 80-IB(10) for a property development project. The Tribunal concluded that the project qualified as a composite project in an area exceeding one acre, meeting the necessary conditions for the deduction. It directed the AO to allow the deduction for the built-up area exceeding 1500 sq. ft on a proportionate basis, in line with previous judicial decisions and statutory provisions. Compliance with the Act's requirements was emphasized, ultimately resulting in the allowance of the deduction for the project.

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Issues:
1. Eligibility for deduction u/s 80-IB(10) for property development project.
2. Compliance with conditions for deduction under section 80-IB(10).
3. Impact of project size and unit construction on deduction eligibility.

Detailed Analysis:
1. The appeal was filed by the Revenue against the order of the Ld CIT (A)-V, Chennai regarding the eligibility of the assessee, a property developer, for deduction u/s 80-IB(10) for the assessment year 2009-10. The AO denied the deduction due to the assessee being considered a 'contractor' not a 'developer' as required by the Act, lack of completion certification from the local authority, and construction of units exceeding the maximum limit of 1500 sq. ft per unit. The CIT (A) allowed the claim for the AY 2007-08, leading to the Revenue's appeal based on various grounds challenging the eligibility of the assessee for the deduction.
2. The Revenue contended that the project did not meet the conditions specified under section 80-IB(10), including the minimum area requirement of one acre for the project site. The approval for construction was obtained for two separate plots, each measuring less than an acre, which, according to the Revenue, disqualified the project from the deduction. Additionally, the construction of units exceeding 1500 sq. ft per unit was highlighted as non-compliant with the Act's provisions, affecting the eligibility for the deduction.
3. The Tribunal considered the previous decisions in the assessee's case for AY 2007-08 and AY 2008-09, where deductions were allowed for the project in question. Citing the High Court's decision and the Tribunal's findings, it was concluded that the project qualified as a composite project in an area exceeding one acre, meeting the necessary conditions for deduction u/s 80-IB(10). The Tribunal directed the AO to allow the deduction for the built-up area exceeding 1500 sq. ft on a proportionate basis, in line with the previous judicial decisions and the Act's provisions. Consequently, the Revenue's appeal was partly allowed based on the grounds raised.

In conclusion, the judgment addressed the issues of eligibility for deduction under section 80-IB(10) for a property development project, compliance with the specified conditions, and the impact of project size and unit construction on deduction eligibility. The decision was based on previous judicial findings and the Act's provisions, ultimately allowing the deduction for the project while emphasizing compliance with the stipulated requirements.

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