THE COMMISSIONER OF INCOME TAX vs. M/S. PVS APARTMENTS

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ITA/120/2015HC KeralaKLHC01025521201516 June 2015Bench: HONOURABLE MR. JUSTICE SHAJI P.CHALY,HONOURABLE MR.JUSTICE ANTONY DOMINIC5 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that the approach of the Assessing Officer in dividing the total land area of 1.67 acres by the number of towers (four) to determine the plot area for each tower was untenable. The court found that the assessee's project consisted of four towers constructed on a single plot of land measuring 1.67 acres. This total land extent satisfied the minimum requirement of one acre stipulated by Section 80-IB(10)(b) for the project. Therefore, the benefit of Section 80-IB(10)(b) could not have been denied by the Assessing Officer on the basis of a proportional division of the land. The court fully concurred with the view taken by the Tribunal. The appeals filed by the Revenue were dismissed.

What were the facts?

The Revenue, represented by the Commissioner of Income Tax, Kozhikode, filed appeals against the orders of the Income Tax Appellate Tribunal (ITAT), Cochin Bench. The ITAT had dismissed appeals filed by the Revenue against the assessee, M/s. PVS Apartments, a company engaged in real estate. The assessee constructed four towers with various flats on a 1.67-acre plot. The Assessing Officer denied deduction under Section 80-IB of the Income Tax Act, 1961, on the grounds that the land area for each tower did not meet the minimum prescribed one acre. The Commissioner of Income Tax (Appeals) and subsequently the ITAT set aside this view.

What were the issues?

1. Whether the deduction under Section 80-IB(10)(b) of the Income Tax Act, 1961, can be denied when the total project land area of 1.67 acres, on which four towers were constructed, is divided proportionally for each tower, failing to meet the minimum one-acre requirement per tower? Assessee's contention: The assessee argued that the entire project, comprising four towers, was undertaken on a single plot of 1.67 acres, which satisfies the minimum one-acre requirement for the project as a whole. The denial of deduction by dividing the land area proportionally for each tower was incorrect. Revenue's contention: The Revenue contended that the benefit of Section 80-IB(10)(b) requires the plot of land where the project is undertaken to have a minimum area of one acre. They argued that by dividing the total land area by the number of towers, the proportionate area for each tower fell below this threshold, thus disentitling the assessee to the deduction.

Which sections of the Income-tax Act were involved?

Section 80-IB

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE ANTONY DOMINIC & THE HONOURABLE MR. JUSTICE SHAJI P.CHALY TUESDAY, THE 16TH DAY OF JUNE 2015/26TH JYAISHTA, 1937 ITA.No. 120 of 2015 () ----------------------- AGAINST THE ORDER/JUDGMENT IN ITA 345/COCH/2014 of I.T.A.TRIBUNAL, COCHIN BENCH DATED 21-11-2014 APPELLANT(S)/APPELLANT/RESPONDENT/REVENUE: ------------------------ THE COMMISSIONER OF INCOME TAX, KOZHIKODE.

BY ADVS.SRI.CHRISTOPHER ABRAHAM, INCOME TAX DEP SRI.K.M.V.PANDALAI, INCOME TAX DEPARTMENT RESPONDENT(S)/RESPONDENT/APPELLANT/ASSESSEE: ---------------------------- M/S. PVS APARTMENTS, YMCA ROAD, KOZHIKODE.

THIS INCOME TAX APPEAL HAVING COME UP FOR ADMISSION ON 16-06-2015, ALONG WITH I.T.A.122/15 and CONNECTED CASES, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

APPENDIX IN I.T.A.120/15 APPELLANTS' EXHIBITS: ANNEXURE A: COPY OF ASST. ORDER DT.28.2.2013. ANNEXURE B: COPY OF CIT(A)'S ORDER DT.28.4.2014. ANNEXURE C: ORDER OF THE ITAT, KOCHI DATED 21.11.2014. /TRUE COPY/ PS TO JUDGE

ANTONY DOMINIC & SHAJI P. CHALY, JJ. ----------------------------------- I.T.A.Nos.120, 122, 123 & 124 of 2015 ----------------------------------- Dated this the 16th day of June, 2015 JUDGMENT Antony Dominic, J. 1.These appeals are filed by the Commissioner of Income Tax, Kozhikode challenging the orders passed by the Income Tax Appellate Tribunal, Cochin Bench dismissing ITA.Nos.345 to 349 of 2014 filed by the Revenue. 2.We heard the standing counsel for the appellant and considered the submissions made. 3.The respondent assessee is a company engaged in real estate business. The company constructed 4 towers with various flats in a plot of land having an extent of 1.67 acres. For these 4 towers, the company had obtained separate building permits in accordance with the provisions of the Kerala Municipality Building Rules. Deduction under section 80 1B of the Income Tax Act was denied to the company on the ground that the extent of the land in which the project has been undertaken did not satisfy the minimum prescribed

ITA.120/15 & con. cases 2 area of one acre. That view taken by the Assessing Officer was set aside by the Commissioner of Income Tax (Appeals) and the Tribunal confirmed that order. This is the background in which these appeals are filed by the Revenue. 4.The benefit of section 80 1B(10)(b) could be availed when the extent of the plot where the project is undertaken has a minimum area of one acre. In so far as this case is concerned, as we have already stated, 4 towers were constructed by the respondent and the benefit of the section has been denied dividing the total extent of 1.67 acres into 4 and treating the proportionate extent as the extent of the plot where each of the towers were constructed. In our view, this approach of the Assessing Officer is totally untenable. The project of the assessee consists of 4 towers and these 4 towers were constructed in a plot of land, the extent of which is 1.67 acres. That satisfies the requirement of the section. That being the situation, the benefit of section 80 1B(10)(b) could not have been denied by dividing the land by

ITA.120/15 & con. cases 3 the number of the towers constructed. Therefore, we fully concur with the view taken by the Tribunal. Appeals fail and are therefore dismissed.

Sd/- ANTONY DOMINIC, Judge. Sd/-

SHAJI P. CHALY, Judge. kkb.

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