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Income Tax Appellate Tribunal, AHMEDABAD – BENCH ‘A’
Before: SHRI RAJPAL YADAV & SHRI PRADIPKUMAR KEDIA
Revenue by : Shri S.K. Dev, Sr.DR Assessee by : None सुनवाई क� तार�ख/Date of Hearing : 05/08/2019 घोषणा क� तार�ख /Date of Pronouncement: 7/08/2019 आदेश/O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER:
Revenue is in appeal before the Tribunal against order of the ld.CIT(A)-XV, Ahmedabad dated 25.5.2012 passed for Asstt.Year 2009-10.
Revenue has taken three grounds of appeal which included sub-grounds under ground no.1. However, its grievance revolves around a single issue viz. the ld.CIT(A) has erred in allowing the 2 claim of the assessee for deduction amounting to Rs.70,02,972/- under section 80IB(10) of the Income Tax Act, 1961.
In response to notice of hearing no one has come present on behalf of the assessee. With the help of ld.DR we have gone through the record carefully and proceed to decide the appeal ex parte.
Brief facts of the case are that the assessee has filed its return of income on 28.9.2009 declaring total income at NIL after claiming deduction under section 80IB of the Act at Rs.70,02,972/-. The case of the assessee was selected for scrutiny assessment and notice under section 143(2) was issued and served upon the assessee. Basically, there is only one objection at the end of the AO for rejecting the claim of the assessee. According to him, deduction under section 80IB(10) is admissible to an assessee if it has constructed residential house/flat which has maximum built-up area of 1500 sq.ft. For this purpose, he made reference to section 80IB(10)(C) of the Act. Thereafter, the ld.AO took meaning of “built-up area” provided in sub-section (14) of section 80IB(10). Such clause reads as under:
“(a) “built-up area” means the inner measurements of the residential unit at the floor level, including the projections and balconies, as increased by the thickness of the walls but does not include the common areas shared with other residential units;”
The AO thereafter examined built-up area of the assessee, and arrived at a conclusion that area constructed by it under Type-A and B is 1519.25 sq.feets and 1525.87 sq.feets. On the 3 basis of the above, he disallowed deduction claimed under section 80IB(10) of the Act and made addition of Rs.70,02,972/-. On appeal, the ld.CIT(A) did not concur with the conclusions of the AO and allowed the claim of the assessee by recording following finding: “6.(6.1.) I have perused the details filed by the appellant with written submission. I have perused the Hon'ble ITAT Ahmedabad order in the case of Amaltas Associates(supra). After careful consideration of facts and contention of both A.O. as well as appellant, I am inclined to accept the contention of the appellant that the A.O. has not properly appreciated the appellant's explanation in reference to 'built- up area' before reaching the conclusion of disallowing its claim u/s.80IB(10) of the Act. He even rejected the appellant's request to refer the same to the District Valuation Officer (DVO) in a summary manner and has not considered the certificate submitted by the appellant from approved Engineer in this regard. The ratio of case law as relied on by the appellant in the case of Amaltas Associates (supra) is squarely applicable in the case of the appellant.
6.2. The Hon'ble ITAT Ahmedabad in the case of Amaltas Associates(supra), where the matter related to open terrace for the pent house constructed by the assessee was referred to the DVO. After considering various facts related to dictionary meaning of 'Balcony' and following various ratio of case laws it was held that-
"(a) The open terrace is not covered and is open to sky and would not be part of the inner measurement of the residential floor at any floor level.
(b) As per Hon'ble ITAT Nagpur bench order in the case of AIR Developers (2010) 122 ITD 125 where Hon'ble ITAT followed the decision of the Kolkata Bench of the Tribunal in the case of Bengal Ambuja Housing Development Ltd. vs. Dy.CIT (IT appeal No.1595 (Kol) of 2005 dated 24.3.2006) held that on account of few residence having built-up area more than 1500 sq.ft. the entire deduction u/s.80IB(10) of the Act inclusive of 4 deduction for residential unit having less than 1500 sq.ft. area and entitled for 80IB(10) of the Act deduction, is not justified.
(c) Since Hon'ble ITAT already held in this case that the open terrace is not part of balcony/veranda therefore the alternative claim of appellant for proportionate deduction was not considered and claim u/s.80IB(10) of the case in entirety was allowed."
6.3. Respectfully following the ratio of Hon'ble ITAT Ahmedabad in the case of Amaltas, I am convinced that none of the unit of the housing project developed and constructed by appellant has built-up area more than 1500 sq.ft as per definition of 'built-up area' as given at 80IB(14) of the Act. The A.O.'s working and interpretation of such definition is not properly based on technical as well as legal facts. It is therefore disallowance and addition made by the A.O. U/s.80IB(10) of the Act is not justified and directed to be deleted. The appellant gets relief of Rs.70,02,970.
The ground in respect of initiation of penalty is pre- mature and therefore rejected.
In conclusion, the appeal of the appellant is partly allowed.”
With the assistance of the l.DR, we have gone through the record carefully. The ld.Revenue authorities have reproduced submissions made by the assessee vide letter dated 9.12.2011. In order to appreciate the factual aspects, we would like to take note of the details submitted by the assessee with regard to the built-up area which reads as under:
PARTICULARS TYPE -A ( In Sq. TYPE-B ( In Sq. Mtr.) Mtr.) 5 Area of Gr. Floor 132.89 135.05 Area of First Floor 126.71 126.26 Stair Case 16.61 13.52 Total Built up area 276.21 274.83
7. It is pertinent to note that the assessee has submitted copy of the site plan approved by the Development Authorities under GDCR. It has also submitted completion certificate. In all such certificates the constructed area has been shown below 1500 sq.feets. The case of the assessee was that the AO has erroneously construed the measurement. He has neither inspected site for measuring actual constructed area nor referred the matter to the DVO. He himself has assumed that area on the first floor which is open space, is also to be considered as a part of constructed area. In other words, he assumed that first floor is to be taken equivalent to the ground floor after including the space of stair-case etc. This calculation has not been approved by the ld.CIT(A) in the finding extracted (supra). We find that the ld.AO has wrongly calculated area by assuming ascertain aspects. He ought to have not differed with measurement reflected in the site plan which has been approved by the competent authorities which has also been accepted in the completion certificate unless some concrete evidence in the shape of physical examination of site has been done either by himself or by some experts viz. DVO. On the basis of such assumption, denial of examination is not in accordance with law and the ld.CIT(A) has rightly reversed the 6 finding of the AO. After perusing the order of the ld.CIT(A), we do not find any error in it. It is upheld. Accordingly, appeal of the Revenue is dismissed.
In the result, appeal of the Revenue is dismissed.
Order pronounced in the Court on 7TH August, 2019.