ACIT, NEW DELHI vs. M/S. S. G. ESTATES LTD., NEW DELHI

O R D E R PER PRASHANT MAHARISHI, A. M. 1. This appeal is filed by The Assistant Commissioner of Income Tax, Circle – 22 (2), New Delhi (the learned AO) against the order of the Principal Commissioner of Income Tax (OSD) (Appeals) – 8, New Delhi dated 8/6/2016 for assessment year 2012 – 13, raising the solitary ground of appeal as under :-

1. That on the facts and in the circumstances of the case the ld CIT(A) has erred in law and in deleting the disallowance of Rs. 1,98,87,408/- made by AO on account of deduction claimed u/s 80IB of the Income Tax Act, 1961.”

2. The brief facts of the case is that assessee is a company engaged in the business of real estate developers and builders who filed return of income of INR 12002400 on 25/9/2012. It claimed deduction u/s 80 IB (10) of the act. The learned assessing officer disallowed the claim holding that the requirement of section 80IB (10)(c) is not satisfied with respect to the specified area of the residential units. He held that only 72 out of 122 residential units in one project and 128 out of 154 residential units Page | 1 ACIT Vs. SG Estates Ltd (Assessment Year: 2012-13) in another projects satisfy that condition. Therefore, he disallowed the entire deduction of INR 19887408/- under section 80 IB (10) of the act and determined the total income of the assessee at INR 31889808/– by making an order u/s 143 (3) of the act on 31/3/2014.

3. The assessee aggrieved with the order of the learned assessing officer preferred an appeal before The Principal Commissioner Of Income Tax (Appeals) who vide order dated 8/6/2016 allowed the claim of the assessee following the order in case of the assessee by the coordinate bench for assessment year 2009 – 10. Therefore, revenue aggrieved with the order of the learned CIT(A), has preferred this appeal. 4. The learned departmental representative vehemently submitted that the various residential units constructed by the assessee are beyond the specified area eligible for deduction u/s 80 IB of the act. Therefore, necessary conditions have been violated by the assessee, full deduction claimed by the assessee is disallowable. He further stated that there is no provision in the income tax act to allow the deduction proportionately. 5. The learned authorised representative submitted a paper book wherein he stated that the issue is squarely covered in favour of the assessee by the decision of the Hon‟ble Delhi High Court in assessee‟s own case for assessment year 2009 – 10. 6. We have carefully considered the rival contentions and perused the orders of the lower authorities. The assessee has constructed two housing projects which are eligible for deduction u/s 80 IB of the income tax act. In the „Impression Vasundhara‟ project there were 122 residential unit out of which 50 units has the built up area exceeding 1000 ft². Further, in the project “Impressions 58” has 154 residential units out of which 26 units exceeds the built up area of 1000 ft². Therefore the learned assessing officer was of the view that assessee is not eligible for deduction u/s 80 IB of the income tax act. Hence, disallowance of INR 19887408 was made. The learned CIT(A) allowed the claim of the assessee following the decision of the coordinate bench in assessee‟s own