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2024 Supreme(Online)(ITAT) 3042
INCOME TAX APPELLATE TRIBUNAL (AHMEDABAD BENCH)
Suchitra Kamble, J, Waseem Ahmed, ACJ
Revenue – Appellant
Versus
M/s Shree Parshwanath Corporation – Respondent
Income Tax Appeal/ITA No.1871/AHD/2019
For the Appellants/Petitioners: Shri Ashok Kumar Suthar, Sr. D.R.
For the Respondents: Ms. Arti N Shah, A.R.
Tax deductions under section 80-IB(10) are permissible if built-up area adheres to approved plans, reinforcing reliance on official documentation in disputes of area measurement.
Headnote:(A) Income Tax Act, 1961 - Sections 80-IB(10) and 10(2A) - Deduction claimed under section 80-IB(10) was denied by Assessing Officer due to built-up area exceeding 1500 sq. ft. - Commissioner of Income Tax (Appeals) allowed the deduction based on approved plans and property details provided. (Paras 5.5, 6.4)
(B) Appeal - Revenue's challenge against eligibility for deduction based on built-up area regulations and assertions regarding partnership share disallowance. - CIT(A) provided reasoned findings supporting allowance of deductions. (Paras 15-24)
Facts of the case:
The appeal involves a dispute regarding eligibility for deductions under section 80-IB(10) for an income tax assessment year where it was determined that the built-up area did not exceed the prescribed limits according to approved government plans. Further, the argument about excessive profit share in a partnership claimed by the assessee was also resolved in favor of the assessee.
Findings of Court:
The Court affirmed the findings of the CIT(A) regarding the valid deductions due to reliance on government approved plans. No evidence was provided to contradict the findings of the learned CIT(A) in the matter of exemptions claimed.
Issues: The primary issues addressed include the determination of built-up area under section 80-IB(10) and the validity of profit share under section 10(2A).
Ratio Decidendi: The judgment reaffirms the necessity of relying on government-approved plans to ascertain eligibility for tax deductions, emphasizing that the revenue failed to provide cogent evidence against the findings of the CIT(A). Conclusion: The Revenue's appeal was dismissed.
Result: Appeal dismissed.
| Table of Content |
|---|
| 1. arguments regarding the cit(a)'s findings on built-up area. (Para 1 , 3) |
| 2. dispute over eligibility for tax deduction based on built area. (Para 2 , 4 , 5 , 6) |
| 3. clarifications sought from dvo regarding area measurement. (Para 8) |
ORDER
PER WASEEM AHMED, ACCOUNTANT MEMBER:
The captioned appeal has been filed at the instance of the Revenue against the order of the Learned Commissioner of Income Tax (Appeals)-9, (in short “Ld. CIT(A)”), Ahmedabad order dated 15.10.2019 for A.Y. 2012-13.
2. The revenue has raised following grounds of appeal:
“1. (a) Whether the Ld. CIT(A) has erred in deleting the disallowance of deduction of Rs. 2,19,56,870/- made u/s 80-IB(10) of the Act when he himself agreed with the finding that the built up area of the units was more than 1500 sq.ft. as per DVO's report.
(b) Whether the Ld. CIT(A) has erred in adopting a lump-sum rate of external/internal walls while determining the so called 'carpet area1 instead of working out the exact 'built up area' in accordance with clause (a) of sub section (14) of the section 80-IB of the Act.
2. Whether the Ld. CIT(A) has erred in deleting the disallowance of Rs.5,07,076/- u/s 10(2A) of the Act on account of share of profit from M/s Shree Parshwanalh Corporation?
3. On the facts and circumstances of the case, Ld CIT(A) ought to have upheld the order of the Assessing Officer.
4. It is, therefore, prayed that the order of Ld CIT(A) may be set aside and that of the Assessing Officer be restored.”
3. The first issue raised by the Revenue is the learned CIT(A) erred in deleting the disallowance of deduction made by the AO under section 80IB(10) of the Act amounting to Rs. 2,19,56,870/- only.
4. The facts in brief are that the assessee, a public company, is engaged in the business of development of residential and commercial complexes. The assessee in the returned filed for the year under consideration claimed deduction under section 80IB(10) of the Act for Rs. 2,52,50,190/-with respect to its residential project namely “Parshwanath Homes”. In the original assessment proceedings under section 143(3) of the Act, the AO referred to the DVO to ascertain the total area of the project for finding out total built up area of the residential unit within the limit of 1500 Sq. Ft. as per the provisions of the Act. The report from the DVO was not received till the time limit available to frame the assessment order. However, the AO finally finalized the assessment order under section 143(3) of the Act, dated 31st March 2015by denying the deduction of Rs. 32,93,320.00 and restricted the deduction Rs. 2,19,56,870/- under section 80IB(10) of the Act after considering the submission of the assessee.
5. Subsequently, after the assessment, the AO received DVO report on 6th April 2015 wherein it was reported that the built-up area of the sample residential unit, not having common wall, was at 1620.61 Sq. Ft. and built-up area of the unit having common wall was at 1596.07 sq. ft. Thus, the AO found that the built-up area of the unit exceeds the required built up area of 1500 sq. ft. as specified under section 80IB(10) of the Act to claim deduction under section 80IB(10)(c) of the Act. Accordingly, the assessment was reopened under section 147/148 of the Act and during the assessment proceedings, the assessee was show-caused why the entire deduction claimed under section 80IB(10) of the Act should not be disallowed.
6. The assessee in response to the notice submitted that on the date of DVO’s inspection its engineer was not present. The inspection was carried out in the presence of normal staff only. Furthermore, the DVO did not ask for any explanation with respect to any discrepancy in built up area noticed by him and the DVO made the report on his own. Further, the DVO report does not hold evidentiary value as the same received after the completion of the assessment based on the submission made by the assessee.
7. However, the AO was of the view that the assessee was very much aware a
