2017 (3) TMI 1821

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....g substantial questions of law: "(1) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in upholding the order of the Commissioner of Income Tax (Appeals) in directing the assessing authority to allow proportionate deduction u/s.80IB to the extent of profits attributable to the units where the built-up area is below 1500 sq.ft. even when no such apportionment is prescribed under the provisions of the Act? (2) Whether on the facts and in the circumstances of the case, the Tribunal was justified in law in holding that the assessee is entitled to claim deduction under section 80IB in respect of profits derived from the sale of residential units, wherein the built up area is below 1500 sq.ft. wit....

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.... sanctioned on 18.10.2003. Later, it was modified on 01.06.2004. In all, they constructed 152 flats, out of which 116 flats was the developer's share and 36 flats was the owner's share. In 152 flats, 8 flats consists of mezzanine floor. However, separate sale deeds were executed in respect of mezzanine floor and flats in respect of the very same purchaser. Admittedly, all these flat totally measured less than 1500 sq. ft. per unit. The total area in which this project was undertaken is 3.38 acres. Therefore, the assessee claimed 100% benefit of deduction under Section 80IB(10) of the Act amounting to Rs. 2,02,08,690/- in respect of 'Redwood Project'. The Assessing Authority denied the said benefit on the ground that the main flats exceeded ....

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....1500 sq. ft. The authorities by including the balcony area have come to the conclusion that the built up area is more than 1500 sq. ft. It is ex-facie incorrect. Similarly, prior to 01.04.2009, there was no prohibiting for a person to purchase two flats in the said project. No doubt, the total constructed area is more than 1500 sq. ft., but the mezzanine floors as such are registered under a separate sale deed and the flat is registered under a separate sale deed. The total measurement in each of the sale deeds is not exceeding 1500 sq. ft. Therefore, the authorities were not justified in holding that the assessee is not entitled to the benefit of exemption under Section 80IB(10) of the Act. Though the Tribunal held that the assessee is ....