COMMISSIONER OF INCOME TAX vs. M/S M D REALTORS PVT LTD

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ITA/76/2013HC KarnatakaKAHC01015989201322 September 2020Bench: ALOK ARADHE,H.T. NARENDRA PRASAD4 pages
AI SummaryDismissed

What did the High Court hold?

The High Court, following its order in a related case, held that the Tribunal was correct in allowing proportionate deduction under Section 80IB. The substantial questions of law were answered against the revenue.

What were the facts?

The revenue appealed against an ITAT order that allowed proportionate deduction under Section 80IB for units with built-up area below 1500 sq.ft. The case pertains to the Assessment Year 2006-07.

What were the issues?

Whether proportionate deduction under Section 80IB is allowable for units with built-up area below 1500 sq.ft., and if Section 80IB(10) allows for proportionate deduction.

Which sections of the Income-tax Act were involved?

Section 80IB

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF KARNATAKA AT BENGALURU

DATED THIS THE 22ND DAY OF SEPTEMBER 2020

PRESENT

THE HON’BLE MR. JUSTICE ALOK ARADHE

AND

THE HON’BLE MR. JUSTICE H.T.NARENDRA PRASAD

I.T.A. NO.76 OF 2013

BETWEEN:

1.

COMMISSIONER OF INCOME TAX

BANGALORE-III, BANGALORE.

2.

ASST. COMMISSIONER OF INCOME TAX

CIRCLE-12(1), BANGALORE. ... APPELLANTS (BY SRI. E.I. SANMATHI, ADV.,)

AND:

M/S. M.D. REALTORS PVT. LTD., NO.150, EMBASSY POINT 1ST FLOOR, INFANTRY ROAD BANGALORE-560001. ... RESPONDENT (BY SRI. CHYTHANYA K.K. ADV.,) - - -

THIS I.T.A. IS FILED UNDER SECTION 260-A OF I.T.ACT, 1961, ARISING OUT OF ORDER DATED 28-09-2012 PASSED IN ITA NO.870/BANG/2011, FOR THE ASSESSMENT YEAR 2006-07, PRAYING TO:

I. FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW STATED THEREIN. II. ALLOW THE APPEAL AND SET ASIDE THE ORDER OF THE ITAT, BANGALORE BEARING ITA NO.870/BANG/2011 DATED 28-09-2012 AND ORDER OF COMMISSIONER OF INCOME TAX, (APPEALS)-III, BANGALORE IN APPEAL NO.ITA NO.199/W-12(1)/CIT(A)-III/BANG/08-09 DATED 30.06.2011.

THIS I.T.A. COMING ON FOR FURTHER HEARING, THIS DAY, ALOK ARADHE J., DELIVERED THE FOLLOWING:

JUDGMENT

This appeal under Section 260A of the Income Tax Act, 1961 (hereinafter referred to as the Act for short) has been preferred by the revenue. The subject matter of the appeal pertains to the Assessment year 2006-07. The appeal was admitted by a bench of this Court vide order dated 09.07.2013 on the following substantial questions of law: (i) Whether in the given facts and circumstances of the case, the Tribunal was right in law in upholding the order of the Commissioner of Income Tax (Appeals) in directing the Assessing Officer to allow proportionate deduction under Section 80IB to the extent of profits attributable to the units, where

the built up area is below 1500 sq.ft.?

(ii) Whether in the given facts and circumstances of the case, the Tribunal was right in law in holding that the assessee is entitled to claim deduction under Section 80IB in respect of profits derived from sale of residential units, wherein the built up area is below 1500 sq.ft. without appreciating the fact that the deduction under Section 80IB is project based rather than unit and there is no concept of proportionate deduction under Section 80IB(10)?

2.

For the reasons assigned by us in the order passed today in ITA No.54/2013, the substantial questions of law are answered against the revenue and in favour of the assessee.

In the result, the appeal fails and is hereby dismissed.

Sd/- JUDGE

Sd/- JUDGE

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