2010 (2) TMI 1307

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....fit earned on construction and sale of residential units. 2. The learned CIT(A) has eared in holding that the assessee is eligible for deduction u/s 80IB (10) of the Act only on the proportionate pro9fit from commercial area without appreciating that the project consists of commercial and residential area. 3. The learned CIT(A) has failed to appreciating the fact that Act does not permit for the proportionate deduction to be allowed in respect of violation made while availing the deduction u/s 80IB(10). 4. On the facts and in the circumstances of the case, the Ld. CIT(A) has failed in appreciating the fact that the A.O. has clearly established that the assessee has violated the conditions prescribed under section 80IB(10) of the Ac....

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....ted to the granting of 80IB when there are violations of provisions in view of commercial area, which is more than 10% in some of the units. He referred to the facts culled out from the CIT(A)'s order in support of the grounds. 5. The learned counsel in reply submitted that the assessee has 4 sectors and the commercial area of the entire project is only at 6.15% and gave the following table with reference to various assessment years and claims thereon: - Sector No. Resi. Area Sq.Ft. Shop Area Sq.Ft. Profit Total Profit Deduction u/s. 80IB Assessment Year 1 49788 10135 90,62,623 2003-04 2 52650 0 73,40,541 1,64,03,164 1,64,03,164 2003-04 3 51160 8598 50,40,147 2004-05 4 54410 0 45,89,082 96,29,229 95,32,588 20....

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....A.R., that sub-section (c) of section 80IB(10) of the Act clearly means deduction for a residential unit which is not more than 1000 sq.ft/1500 sq.ft. as the case may be eligible for deduction. The stated view in this proceedings has been supported by the decision of Hon'ble ITAT, Kolkatta, in the case of Bengal Ambuja Housing Development Ltd. Vs DCIT ITA No. 1735/Kol/2005 for the A.Y. 2002-03. The Hon'ble Kolkatta Tribunal agreed to the vie of the CIT(A) and held that the denial of the claim of the assessee was on account of rather restricted and narrow interpretation of the provision of clause (c) of section 80IB(10). The Tribunal while coming to this conclusion relied upon the judgement of the Apex Court in the case of M/s. Bajaj....