The Income Tax Appellate Tribunal (ITAT), Chennai bench consisting of Mahavir Singh, Vice President and Manoj Kumar Aggarwal, Accountant Member held that assessee entitled to deduction u/s 801B as extent of commercial holding in housing project undertaken less than 100 sq. m.
The assessee, M/s. Macro Marvel Projects Limited, originally claimed the deduction of Rs. 28,32,048/- u/s. 80IB (10) of the Act in respect of its project named Marvel Apoorva and Wood Creek Country. Subsequently, the assessee revised its return of income on 03.02.2006, restricting its claim of deduction in the project Marvel Apoorva only. The assessee in the revised statement of income claimed deduction of Rs. 68,79,782/- u/s. 80IB (10) of the Act in respect to projectMarvel Apoorva resulting thereby a net loss of Rs. 35,78,307/-. The assessee claimed before the AO that the project name Marvel Apoorva was a plot area of 2.7 acres and having sanctioned built up area.
The AO noted from the copies of plans sanctioned furnished before him that the commercial block consists of 98.46 sq.m. of departmental store in the ground floor and a committee room in the first floor for the residence association. According to AO, the project consists of commercial area and hence, he disallowed the claim of deduction. The CIT(A), confirmed the order of the AO. Hence the assessee is in appeal before the Tribunal.
The Tribunal held that “On going through the facts and circumstances of the case, we noted that out of the assessee’s housing project of total built up area of 15,843.85 sq.mt., this commercial built up area constituted only 98.46 sq.mt. which is negligible and marginal and hence the appeal filed by Revenue has become academic and infructuous. The Tribunal allowed the deduction claimed by the assessee”.
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