Commissioner Of Income Taxchennai v. M/S.elegant Estates

IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 07-12-2015 CORAM THE HONOURABLE MR.JUSTICE M.JAICHANDRENANDTHE HONOURABLE MRS.JUSTICE S.VIMALA Tax Case Appeal No.1172 of 2015 Commissioner of Income TaxChennai. Versus M/s.Elegant Estates,No.1B/3, First Main Road,Gandhi Nagar, Adyar,Chennai-600 020. .. Respondent/Appellant Prayer: Appeal presented to the High Court against the order ofthe Income Tax Appellate Tribunal Madras `A' Bench, dated27.2.2015, in ITA No.2902/Mds/2014 against the AACFE 1274GA.Y.2010-2011, dated 20.03.2013. This Tax Case Appeal has been filed against the order ofthe Income Tax Appellate Tribunal “A” Bench, Chennai, dated27.2.2015, in ITA No.2902/Mds/2014. 2. The brief facts of the case, necessary for the disposalof the appeal, are as follows: 2.1) The assessing officer, while completing the assessmentof the assessee, for the assessment period 2010-2011, had foundthat the assessee had built two flats, namely Flat Nos.401 and403, measuring 1572 square feet and 1653 square feet,respectively, exceeding 1500 square feet limit. Consequently,the deduction under Section 80IB(10) of the Income Tax Act, 1961(hereinafter referred to as `the Act'), had been denied to theassessee. The assessing officer had held that Section 80IB(10)of the Act clearly stipulates that the units built should beless than or equal to 1500 square feet to qualify the project https://hcservices.ecourts.gov.in/hcservices/ for deduction, under Section 80IB(10) of the Act. Since therewas a breach of the condition in the construction of the twoflats, as they were measuring more than 1500 square feet, theassessing officer had denied the deduction, under Section 80IB(10) of the Act, to the entire project/flats sold during theyear. 2.2) Aggrieved by the assessment order, the assessee hadfiled an appeal to the Commissioner of Income Tax (Appeals). TheCommissioner of Income Tax (Appeals), had confirmed theassessment order holding that the assessee is not entitled fordeduction, under Section 80IB(10) of the Act, in respect of theentire project/flats sold during the year. 2.3) Challenging the order of the Commissioner of IncomeTax (Appeals), the assessee had filed an appeal to the IncomeTax Appellate Tribunal. The Tribunal had held that the assesseewould not be entitled for deduction, under Section 80IB(10) ofthe Act, proportionately, only in respect of the two flats,which had been built exceeding 1500 square feet. The Tribunalhad held that the assessee would be entitled for deduction,under Section 80IB(10) of the Act, in respect of the otherflats, which were less than 1500 square feet in extent. 2.4) Aggrieved by the said order of the Income TaxAppellate Tribunal, the appellant has filed the present appealbefore this Court under Section 260A of the Act, raising thefollowing substantial question of law: "Whether on the facts and in the circumstances ofthe case the tribunal was right in holding that theassessee will be entitled for deduction u/s 80IB(10)with respect to income from flats measuring less than1500 sq ft limit and assessee will not entitled fordeduction u/s 80IB(10) proportionately only withrespect to the income from the 2 flats exceeding thelimit of 1500 sq ft when the assessee had consideredall the flats as forming part of single project oninterpretation of the provisions of section 80IB(10)(c)." 3. The learned counsel appearing on behalf of the appellanthad submitted that the order passed by the Income Tax AppellantTribunal is erroneous in law and contrary to the facts andcircumstances of the case. The Tribunal had erred in holdingthat the assessee would not be entitled for deduction, underSection 80IB(10) of the Act, proportionately, in respect of thetwo flats, which had been built with an extent of more than 1500square feet. 3. The learned counsel appearing on behalf of the appellanthad submitted that the order passed by the Income Tax AppellantTribunal is erroneous in law and contrary to the facts andcircumstances of the case. The Tribunal had erred in holdingthat the assessee would not be entitled for deduction, underSection 80IB(10) of the Act, proportionately, in respect of thetwo flats, which had been built with an extent of more than 1500square feet. 4. The learned counsel had further submitted that theTribunal had erred in holding that the assessee would beentitled for deduction, under Section 80IB(10) of the Act, inrespect of the other flats in the project in question, whichwere built less than 1500 square feet. 5. It had been further submitted that the Tribunal ought tohave held that, as per Section 80IB(10) of the Act, the assesseeis entitled for the deduction, in respect of the project"Elegant Estate Palmere Gardens" only, if all the residentialunits in the said project not exceed 1500 square feet in areaand even if one unit exceeds the said limit, the assessee wouldnot be entitled for deduction of the entire income from thehousing project. 6. Per contra, the learned counsel appearing on behalf ofthe respondent had submitted that the findings of the Income TaxAppellate Tribunal, `A' Bench, Chennai, dated 27.2.2015, isright in law, as it is in consonance with the findings of thiscourt, in CIT Vs. Arun Excello Foundations (P) Ltd, (2013) 212Taxman 342 (Mad), wherein, it has been held that the languageused in the relevant provision of law does not bar a deductionclaim altogether if some of the units sold exceed the specifieddimensions. 7. In view of the submissions made by the learned counselsappearing on behalf of the appellant, as well as the respondentand in view of the decisions rendered by this court, in CIT Vs.Arun Excello Foundations (P) Ltd, (2013) 212 Taxman 342 (Mad),we find that the order passed by the Tribunal, dated 27.2.2015,is correct in the eye of law. Hence, the contentions raised onbehalf of the appellant cannot be countenanced. Thus, thequestion of law raised in the appeal is answered against theRevenue and in favour of the assessee, for the reasons statedabove. Accordingly, the Tax Case Appeal stands dismissed. Sub-Assistant Registrar To 1.Commissioner of Income TaxChennai. 2.The Income Tax Officer,Business ward-III(3)Chennai-600 034 3.The Income tax Appellate TribunalÄ"bench Chennai +2 cc to Mr.J.Narayana Swamy Advocate sr.66048Tax Case Appeal No.1172 of 2015aa20/01/2016