The definition of 'built-up area' under Section 80-IB excludes open terraces and porticos, affirming that deductions cannot apply if the total area exceeds stipulated limits.

JUDGMENT :

P. SAM KOSHY, J.

1. Since the issue arising in the instant batch of appeals is one and the same, we proceed to decide the instant appeals by way of this common judgment.

2. I.T.T.A.No.167 of 2012 is filed by the appellant herein under Section 260-A of the INCOME TAX ACT , 1961 assailing the order passed by the Income Tax Appellate Tribunal, Hyderabad “A” Bench in I.T.A.No.1458/Hyd/2011 for the Assessment Year 2008-09, dated 22.03.2012 (for short, ‘the impugned order’); I.T.T.A.No.229 of 2016 is filed by the appellant under Section 260-A of the INCOME TAX ACT , 1961 assailing the order passed by the Income Tax Appellate Tribunal, Hyderabad “A” Bench in I.T.A.No.1565/Hyd/2013 for the Assessment Year 2009-10, dated 29.01.2016 (for short, ‘the impugned order’) and I.T.T.A.No.230 of 2016 is filed by the appellant under Section 260-A of the INCOME TAX ACT , 1961 assailing the order passed by the Income Tax Appellate Tribunal, Hyderabad “A” Bench in I.T.A.No.1566/Hyd/2013 for the Assessment Year 2009-10, dated 29.01.2016 (for short, ‘the impugned order’).

3. Heard Mr. S. Ravi, learned Senior Counsel appearing on behalf of Mr. C.H. Pushyam Kiran, learned counsel for the appellant, in all the appeals; and Mr. J.V. Prasad, learned Senior Standing Counsel for the Income Tax Department, for the sole respondent, in all the appeals.

4. For convenience, the facts in I.T.T.A.No.229 of 2016 are discussed hereunder.

5. The appellant herein is a real estate developer, (for short, ‘the assessee’). The assessee is engaged in the business of construction of residential units/bungalows which are duplexes surrounded by a compound wall. Each residential unit consists of a portico and an open terrace. In the course of business, the assessee filed its return of income for the Assessment Year 2009-10 on 21.09.2009 admitting an income of Rs.3,16,46,847/- and claimed the entire amount as deduction under Section 80-IB (10) showing taxable income at Rs.NIL. The same was processed under Section 143(1) of the INCOME TAX ACT , 1961 on 30.03.2011. After scrutiny, the respondent had issued a notice under Section 143(2) of the Act.

6. After assessment, the respondent determined the total income of the assessee at Rs.3,41,41,862/- by making disallowances on two grounds, viz., disallowance of deduction under Section 80-IB (10) for a sum of Rs.3,16,46,847/- and disallowance under Section 14A for a sum of Rs.24,95,015/-. However, vide the impugned order the Tribunal rejected the claim of the assessee pertaining to deduction under Section 80-IB of the INCOME TAX ACT , 1961 (for short ‘the Act’) amounting to Rs.3,16,46,847/- on the ground that the terrace which is open to sky and portico without walls can be included in computing the built-up area of each residential unit were exceeding 1,500 sq.ft. for the purposes of determining eligibility for deduction under Section 80-IB of the Act.

7. Assailing the same, the assessee preferred the instant appeal.

8. The question of law which has cropped up for consideration in the instant appeal is : “Whether the terrace / balcony that is in the form of open to sky or portico / porch area without walls could be added while computing the built-up area for the purpose of determining the eligibility for deduction under Section 80-IB of the INCOME TAX ACT , 1961?”

9. As per Section 80-IB of the Act an assessee is entitled for deduction in respect of profit and gain from certain industrial undertakings and other infrastructural undertakings. Such d