TaxTMI 
TaxTMI 
TaxTMI 
2020 (9) TMI 193
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....butable to Car parking space and preferential location charges aggregating to Rs. 7,02,58,296/- on the fact that the assessee does not qualify for exemption beyond 1500 sq. ft. if car parking space and PLC are included and thereby violating sec. 80IB(10). 2. Whether on the facts and circumstances of the case, the Ld. CIT(A) erred by allowing car parking space and PLC , the sale proceeds of which were charged differently from sale proceeds of flats measuring upto 1500 sq. ft. and hence it is income attributable and does not qualify for 80IB and as per various judgments in the case of ACIT Vs. Bengal Housing Development Ltd. and Kolkata Bench, ITAT and Liberty India vs. CIT(2009) 317 ITR 218 (SC). 4. Facts as noted by the AO are that the assessee has claimed the benefit of deduction u/s. 80 IB(1) of the Income-tax Act, 1961 ( hereinafter referred to as the 'Act') to the tune of Rs. 46,93,10,980/-. Accordingly, the assessee was directed by the AO to furnish the details with regard to the housing-project along with the necessary mandatory permissions granted by the Municipal Corporation and other authorities for the commencement of the project. The AO notes that the housing-projec....
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....ovided in the builder's rate card or mentioned by the builder Hence, the PLC will be higher for a larger flat PLC also changes depending on the quality of construction the floor on which the unit is located, and the location of the unit. The assessee has claimed deduction on the above amount which is a mere charged by thereal estate sector on the purchasers who prefer a particular location commensurateto the flat/residential unit booked by them. Such charges do not qualify for any deduction u/s. 80 IB(10) for reasons similar to those discussed above in relation to car parking charges. PLC is moreof decorative charge. As far as HE cost is concerned the same is concerned with thein height/increase in floors as it allows a better view to the customer from theresidential unit concerned. Hence on the basis of the above discussion, it is determined that the abo e charges on account of car parking and PLC, to the tune of Rs. 23,00,56,633/-( Rs. 14,20,33,832/-, Rs. 8, 80,22 801/-, is no eligible for deduction u/s 80IB(10). Total deduction claimed-by the assessee u/s. 80IB is Rs. 46,93,10,980/- and the total sales of the undertaking is Rs. 53,678, ,484/- as per Form 10CCB submitte....
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....oth (he parties. The issue involve d is whether the assessee is eligible for the deduction on sale proceeds of the parking outside the purview of section 80IB(10) admittedly it is not the case of the revenue that the assessee is not eligible or deduction uls.80IB(10) of the Act. The plain reading of section 80IB(10) had clearly indicated that the amount of deduction in the case of all undertaking developing and building housing projects approved before the 31stday of March, 2007 by a local authority and fulfillment of other conditions. In the present case, stilt parking is part and parcel of the housing project, which was approved by the competent authority stilt parking was sold and therefore, there is no case for denying the claim of theassessee. Even in the assessee 's own case, in ITA No.7223/Mum/200 for the assessment year 2005-06. the Tribunal allowed the claim a/the assessee i811 issue of stilt parking. We, therefore, in view of the above findings of the Tribunal, find no infirmity in the order of the CIT(A). On perusal or the above it is observed that the Hon 'ble Mumbai ITAT has given a clear finding that profit attributable to the car parking charges are eligib....
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..../2014 order dated 21-06-2019]. According to him, it is not the case of the AO that the assessee is not eligible for deduction under section 80IB of the Act. However, according to him, the AO was of the opinion that for the sale proceeds of car parking space and preferential location charges, the benefit of deduction u/s. 80IB of the Act cannot be given. According to the Ld. AR, therefore, the order of the Ld. CIT(A) should not be disturbed by this Bench. It has also been pointed out by him that the judgments cited by the AO in respect of ground no. 2 is not applicable in the instant case. According to him, the Tribunal's decision of ACIT Vs. Bengal Ambuja Housing Development is pertaining to deduction u/s. 80IA of the Act and therefore, the same is not applicable to this present case. It has also been contended by the Ld. AR that the case law in respect of Liberty India Vs. CIT reported in 317 ITR 218 decided by the Hon'ble Supreme Court is in fact, applicable in favour of assessee since the first degree nexus has been proved by the assessee for claiming the deduction. According to the Ld. AR, the car parking space is sold along with the residential unit and without car parking spa....
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....ed it as part & parcel of the cost of the flats and claimed deduction. The AO has disallowed the claim for deduction u/s. 80IB (10) of the Act on such PLC & HEC on the ground that the same also does not qualify for deduction u/s. 80IB(10) of the Act. The AO taking note that the total sales of the undertaking is Rs. 153,67,87,484/- and the assessee had claimed total deduction of Rs. 46,93,10,980/-, he applied the same ratio and disallowed Rs. 7,02,58,296/-. On appeal the Ld CIT(A) allowed the deduction as claimed by the assessee and we have to see whether the decision of Ld CIT(A) is legally tenable. We note that it is not the case of the AO that the assessee is not eligible for deduction u/s. 80IB(10) of the Act on the housing project for which the assessee has claimed deduction [Ideal Heights]. The only objection of the AO is that the profits derived from sale of car parking space, preferential location charges (PLC) & Height Escalation Charges (HEC)to the tune of Rs. 7,02,58,296/- cannot be allowed, since it is not part and parcel of the residential unit and if car parking is included it will exceed 1500 sq. ft as envisaged u/s. 80 IB of the Act. We note that the car parking spac....
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....ause the profits derived from sale of car parking space as well as preferential location charges (PLC) &Height Escalation Charges (HEC) are part and parcel of the housing projects. And since these are integral part of the housing project, the profit derived from sale of car parking space as well as on PLC & HEC is eligible for deduction u/s. 80IB (10) of the Act since deduction u/s 80 IB is available in respect of eligible housing project. Therefore profits derived by assessee from eligible housing project including the profit from sale of car-parking/PLC&HEC as discussed has been rightly allowed by the Ld CIT(A). Therefore, we do not deem it necessary to interfere in the impugned order of the ld. CIT(A) and accordingly, ground No.1 & 2 raised by the revenue are dismissed. 11. Ground no. 3 reads as under:- "3. Whether on the facts and circumstances of the case, the Ld. CIT(A) erred in deleting the addition for compensation paid of Rs. 28 lacs u/s. 37(i) and 40(a)(ia) without remand report from AO and any speaking order by Ld. CIT(A)" 12. The fact as noted by the AO are as under:- It is observed from the records that the assessee had paid an amount of Rs. 28,00,000/- on accoun....