The Income Tax Appellate Tribunal (ITAT) Pune bench held that, while noting the development of commercial projects by assessee along with residential projects directed readjudication for claiming deduction under Section 80IB (10) of the Income Tax Act, 1961.
Assessee, Gajanana Developers,filed the appeal against the order of National Faceless Appeal Centre by disallowing deduction claimed under section 80IB(10) of the Income Tax Act.
The assessee had developed a residential project with a commercial built up area of 11 shops bearing built up area of more than 2000 sq.ft due to the reason AO during assessment proceedings denied the deduction.
During the appellate proceedings before the tribunal Ganesh Budruk, counsel for revenue contended that benefit of section 80IB of the Income Tax Act has to be given for development of housing projects.
It was observed that The object of this provision is to encourage residential projects, however, along with housing projects, there can be certain commercial establishments also, but should not exceed the prescribed limit as given in the concerned provision of the Income Tax Act itself.
Before the NFAC, assessee had not submitted the details about the residential units.
Thus the bench opined that when no details have been submitted regarding the total residential units, in that case it cannot be said that the Revenue is correct in denying the deduction under Section 80IB(10) of the Income Tax Act for the violation.
Therefore when it is categorically identified as to what is the area of housing project and what is the area of commercial project and whether it is in compliance with sec. 80IB(10) or not, then only it can be decided whether there is any violation.
After considering the facts submitted and circumstances, the two member bench of G.D. Padmahshali (Accountant Member) and Partha Sarathi Chaudhury (Judicial Member) restored to the file of the NFAC for adjudication as per law and the assessee was directed to submit the details of residential units. The adjudicating authority was also directed to decide the case in accordance with natural justice principles.
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