Commissioner Of Income Tax,Chennai v. M/S.vignesh Flat Housing Promotors

IN THE HIGH COURT OF JUDICATURE AT MADRAS CORAM: THE HON'BLE MR. JUSTICE M.DURAISWAMYAND THE HON'BLE MRS.JUSTICE T.V.THAMILSELVI T.C.A.No.603 of 2013 Commissioner of Income Tax,Chennai.... Appellant Vs. M/s.Vignesh Flat Housing Promotors,No.100C, Gandhi Road,Srirangam – 620 006.... Respondent Appeal preferred under Section 260A of the Income Tax Act,1961, against the order of the Income Tax Appellate Tribunal,Madras, "B" Bench, dated 11.04.2013 in I.TA.No.437/Mds/2011. Appeal against the order dated 15/12/2010 made inITA.No.236/09-10 on the file of the Commissioner of Income Tax(Appeals), Tiruchirappalli for the Assessment year 2007-08.and As Appeal against the order dated 30.12.2009 made inPAN.No./GIR.No.AACFV5520C on the file of the AssistantCommissioner of Income Tax, Central Circle -I, Tiruchirappallifor the Assessment year 2007-08.For Appellant : Mr.M.Swaminathan, Senior Standing CounselFor Respondent : Mr.M.Kaushik for Mr.S.Sridhar JUDGMENT (Judgment was delivered by M.DURAISWAMY, J.) Challenging the order passed in I.T.A.No.437/Mds/2011 inrespect of the Assessment Year 2007-08 on the file of the IncomeTax Appellate Tribunal, Chennai, "B" Bench, the Revenue hasfiled the above appeal. 2.The above appeal was admitted on the followingsubstantial question of law:“1)Whether on the facts and circumstances ofthe case, the Tribunal was right in holding thatproportionate deduction had to be allowed underSection 80IB(10) with respect to the units lessthan 1500 sq.ft. where the housing project https://hcservices.ecourts.gov.in/hcservices/ contains units with built up area exceeding1500 sq.ft.?” 3.When the above appeal was taken up for hearing,Mr.M.Swaminathan, learned senior standing counsel appearing forthe appellant-Revenue fairly submitted that the question of lawinvolved in the present appeal is covered by the decision of theHon'ble Division Bench of this Court reported in [2017] 79taxmann.com 397 (Madras) [Commissioner of Income-tax, ChennaiVs. Elegant Estates] wherein the Hon'ble Division Bench held asfollows: “... 2.4 Aggrieved by the said order of the Income TaxAppellate Tribunal, the appellant has filed the presentappeal before this Court under Section 260A of the Act,raising the following 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 measuringless than 1500 sq ft limit and assessee will notentitled for deduction u/s 80IB(10) proportionatelyonly with respect to the income from the 2 flatsexceeding the limit of 1500 sq ft when the assesseehad considered all the flats as forming part ofsingle project on interpretation of the provisionsof section 80IB(10)(c)." 3.The learned counsel appearing on behalf of theappellant had submitted that the order passed by theIncome Tax Appellant Tribunal is erroneous in law andcontrary to the facts and circumstances of the case.The Tribunal had erred in holding that the assesseewould not be entitled for deduction, under Section 80IB(10) of the Act, proportionately, in respect of the twoflats, which had been built with an extent of more than1500 square feet. 4.The learned counsel had further submitted thatthe Tribunal had erred in holding that the assesseewould be entitled for deduction, under Section 80IB(10)of the Act, in respect of the other flats in theproject in question, which were built less than 1500square feet. 5.It had been further submitted that the Tribunalought to have held that, as per Section 80IB(10) of theAct, the assessee is entitled for the deduction, inrespect of the project "Elegant Estate Palmere Gardens"only, if all the residential units in the said projectnot exceed 1500 square feet in area and even if one unit exceeds the said limit, the assessee would not beentitled for deduction of the entire income from thehousing project. 4.The learned counsel had further submitted thatthe Tribunal had erred in holding that the assesseewould be entitled for deduction, under Section 80IB(10)of the Act, in respect of the other flats in theproject in question, which were built less than 1500square feet. 5.It had been further submitted that the Tribunalought to have held that, as per Section 80IB(10) of theAct, the assessee is entitled for the deduction, inrespect of the project "Elegant Estate Palmere Gardens"only, if all the residential units in the said projectnot exceed 1500 square feet in area and even if one unit exceeds the said limit, the assessee would not beentitled for deduction of the entire income from thehousing project. 6.Per contra, the learned counsel appearing onbehalf of the respondent had submitted that thefindings of the Income Tax Appellate Tribunal, 'A'Bench, Chennai, dated 27.2.2015, is right in law, as itis in consonance with the findings of this court, inCIT v. Arun Excello Foundations (P) Ltd, [2013] 212Taxman 342/29 taxmann.com 149, wherein, it has beenheld that the language used in the relevant provisionof law does not bar a deduction claim altogether ifsome of the units sold exceed the specified dimensions. 7.In view of the submissions made by the learnedcounsels appearing on behalf of the appellant, as wellas the respondent and in view of the decisions renderedby this court, in Arun Excello Foundations (P) Ltd.(supra), we find that the order passed by the Tribunal,dated 27.2.2015, is correct in the eye of law. Hence,the contentions raised on behalf of the appellantcannot be countenanced. Thus, the question of lawraised in the appeal is answered against the Revenueand in favour of the assessee, for the reasons statedabove. Accordingly, the Tax Case Appeal standsdismissed.” 4.The learned senior standing counsel appearing for theappellant – Revenue further submitted that in view of thejudgment of the Hon'ble Division Bench of this Court, citedsupra, the appeal may be dismissed. 5.Mr.M.Kaushik, learned counsel appearing for therespondent – assessee also submitted that the issue is coveredby the decision of the Hon'ble Division Bench, cited supra. 6.Having regard to the submissions made by the learnedcounsel on either side, following the decision of the Hon'bleDivision Bench of this Court, reported in [2017] 79 taxmann.com397 (Madras) [Commissioner of Income-tax, Chennai Vs. ElegantEstates], the question of law is decided against the Revenue andin favour of the assessee. Accordingly, the Tax Case Appeal isdismissed. No costs. Sd/-Assistant Registrar (C.O.) /True Copy/ Sub Assistant Registrar To 1.The Income Tax Appellate Tribunal, Chennai, "B" Bench. 2.The Commissioner of Income Tax(Appeals),Tiruchirappalli. 3.The Assistant Commissioner of Income Tax, Central Circle -I, Tiruchirappalli. +1cc to Mr.M.Swaminathan, Advocate SR.NO..16589+1cc to Mr.S.Sridhar, Advocate SR.NO..16593 AKM/01.04.21/ 4P- 6C/ T.C.A.No.603 of 201315.03.2021