2018 (7) TMI 115

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....he Commissioner of Income Tax (Appeals) deleting the addition made by the Assessing Officer denying the deduction claimed by the assessee u/s 80IB(10) of the Act amounting to Rs. 43,66,480/-. 3. Briefly stated, the facts, as culled out from the record, are that the assessee is a partnership firm engaged in the business as builder and developer and construction of multi-storeyed buildings. The return of income declaring nil income was filed on 29.9.2013 after claiming deduction u/s 80IB(10) of the Act at Rs. 43,66,480/-. The case was selected for scrutiny. Necessary notices under sections 143(2) and 142(1) of the Act were duly served upon the assessee. Necessary details, as called for, were filed and duly examined. During the course of asse....

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.... the Assessing Officer and the learned counsel for the assessee relied upon the findings of the Commissioner of Income Tax (Appeals). 7. We have heard the rival contentions and perused the record placed before us. The solitary grievance of the revenue is against the order of the Commissioner of Income Tax (Appeals) partly allowing the deduction u/s 80IB(10) of the Act at Rs. 42,08,490/- as against the claim made by the assessee at Rs. 43,66,480/-. 8. We observe that there is no dispute to the fact that the assessee is in the business of construction of housing projects and has been claiming deduction u/s 80IB(10) of the Act since Assessment year 2011-12, on this very housing project. The assessee complied with most of the conditions provi....

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....se authorities realising the practical difficulty faced by the developer in the construction line as it is dependent upon illiterate labours and contractors, who cannot be expected to be expert in the measurement of feet by feet. 11. We also observe that the provisions of section 80IB(10) of the Act provide for giving deduction to such companies which are in the business of housing projects constructing housing apartments in order to curb the problem of lack of housing in the country. Such provision gives stimulating effect to the entrepreneurs to come up with such housing projects which even otherwise may not be so profitable, if such deduction is not provided. 12. It is further observed that in the preceding years i.e. assessment years ....

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....ing if the term is of general nature should be found out or if the term is of technical nature, then the definition of such term used in other laws should be taken into consideration. Accordingly, we hold that the meaning of term "built up area" prior to insertion of definition clause in the Act has to be found out as per the local law i.e. rules and regulations of Bhopal Municipal Corporation as well as from M.P. Bhoomi Vikas Rules and as a consequence thereof, the built up area of such flats is undisputedly less than the specified limit. Hence, the assessee, in our opinion, is eligible for deduction u/s 80IB(10). In this view of the matter, there remains no question for any pro-rata deduction. However, we consider it pertinent to state th....

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....nder Explanation to Section 80HHBA of the Act as referred to above as the construction of "any building" and the wordings in Section 80IB(10) of the Act, the question of rejection in entirety of the project on account of any one of the blocks not complying with the conditions, does not arise. Even in the case of each one of the blocks, wherever there are flats which satisfied the conditions particularly of the nature stated under Section 80IB(10)(c) of the Act, we have already upheld the case of the assessee in T.C.Nos.1348 and 1349 of 2007 dated 10.10.2012 for grant of relief under Section 80IB(10) of the Act on a proportionate basis, by following the decision of the Bombay High Court reported in [2011] 333 ITR 289 (CIT Vs. Brahma Associat....

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....ed in respect of these provisions ? 15. We find that in the case of Emgeen Holdings Pvt. Ltd.; ITA No. 322/Mum/2010 order dated 11.5.2011 it was held that "even if some flats are not eligible u/s 80IB(10) of the Act, the remaining flats are eligible". Similar view was also taken by the coordinate Bench, Bangalore, in the case of DCIT vs. Brigade Enterprise Pvt. Ltd.; 24 DTR 371 holding that disallowance, if any, under these provisions, will have to be restricted to the extent of non-compliance with the provisions alone. Further, the issue stands finally settled by the judgment of Hon'ble Bombay High Court in the case of Brahma Associates vs. CIT; 333 ITR 289 wherein it has been held that the assessee shall be eligible for deduction u/s....