80IB(10) exemption ?

[hubert fernandes]

We have availed deduction u/s 80ib(10).The assesse has fulfilled all conditions u/s 80IB(10).ie land criterria,approval date,time frame for project completion and builindg standalone residential units for less than 1500 sq ft. the AO has disallowed the claim by virtue of oath statement recored u/s 131(1) wherein the purchaser has stated that 'during the stage of construction , the builder at request of the purchaser have agreed to combine the adjacant unit' . There is no documentary evidence to support this claim , the very basis on which the AO has made the addition.The Assesse possesses the evidence incl the completion cert/occupance cert as issued by loacl authorities for stand alone residentioal units.Can the AO deny us the entire exemption , are there any case laws vis a vis the above factual position.

[Deepak Nagori]

Dear Hubert,

From your query, it seems that because of combining two units, the area of some units may have exceeded 1500 sft. However, deduction u/s 80-IB(10) will still be available on pro-rata basis for other units which are less than 1500 sft in area. Refer case laws: [Sreevatsa Real Estates P Ltd vs ITO (2010 (4) TMI 838 - ITAT CHENNAI)= (2010) 41 DTR 497 Chennai ITAT] and [SJR Builders vs ACIT (2009 (8) TMI 953 - BANGALORE TRIBUNAL Court )= (2010) 3 ITR 569 Bang ITAT].

Regards

CA Deepak Nagori

[K.M. Mohandass]

dear fernandes

pl refer the decision of ITAT chennai"A "third member bench reported in (2011) 141 TTJ (chennai) TN1

AI Summary

Deduction under section 80IB(10) applies pro rata where some residential units exceed size limit; full denial unwarranted. Deduction under section 80IB(10) is contested after a purchaser's statement under section 131(1) alleged combination of adjacent units increasing unit sizes; the assessee holds completion and occupancy certificates for standalone residential units. Tribunal precedents indicate the exemption may be allowed on a pro rata basis for units that meet the statutory size requirement rather than being wholly denied, presenting a conflict between municipal documentary approvals and an oral statement as evidentiary bases.