Built-up area for housing tax deduction excludes car parking, preserving eligibility under the residential project incentive.

For Section 80IB(10), car parking allotted to flat purchasers was treated as a common area and not as part of the residential unit's built-up area. The reasoning relied on the absence of a specific definition for the relevant period, the statutory meaning later reflected in Section 80IB(14)(a), which excludes common areas, and the Tamil Nadu Apartment Ownership Act, 1994, which treats parking areas as common facilities. On that basis, car parking was held to be outside the built-up area limit, and the assessee remained entitled to deduction under Section 80IB.

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Issues: Whether car parking area forms part of the built-up area of a residential unit for the purpose of computing the maximum eligible area under Section 80IB(10) of the Income-tax Act, 1961, and whether the assessee was entitled to deduction under Section 80IB.

Analysis: The dispute turned on whether car parking allotted to flat purchasers could be treated as part of the residential unit's built-up area. The reasoning accepted that, in the absence of a specific definition for the relevant period, the concept of built-up area could be understood with reference to the statutory definition introduced in Section 80IB(14)(a), which excludes common areas shared with other units. Support was also drawn from Section 3(h) of the Tamil Nadu Apartment Ownership Act, 1994, which treats parking areas as common areas and facilities. On that basis, car parking was held not to be living space and not includible in the built-up area for the purpose of the statutory limit.

Conclusion: Car parking area is excluded from the built-up area calculation, and the assessee was entitled to deduction under Section 80IB. The question of law was answered against the Revenue and in favour of the assessee.

Ratio Decidendi: For the purpose of Section 80IB(10), common areas such as car parking are not part of the built-up area of a residential unit and cannot be counted towards the statutory size limit.

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