The Income Tax Appellate Tribunal (ITAT) Chennai, on Wednesday, brought in further clarity to one of its previous orders regarding the inclusiveness of private open terrace in build-up area of a flat, for the purpose of deductions as per Section 80-IB(10) of the Income Tax Act.
The Court ordered that unless approved by the local authorities, the private open terrace of a flat cannot be included in the build-up area for deductions.
The Court made this clarity in the appeal filed by the deputy commissioner of income tax against the assesse M/S. Acestar Properties Pvt. Ltd.
In the aforementioned previous order, there wasn’t any special conditions mentioned and hence the order was open to doubts and debatable. With this order, the real estate sector now accesses more clarity while constructing such open terraces in private apartments.
In May this year, the same bench has held that the private open terrace attached with residential unit would form part of built-up area for the purpose of computing deduction under section 80-IB(10) of the Income Tax Act if the same was included in the house project approved by the local authority.
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