COMMISSIONER OF INCOME-TAX Vs. BRIGADE ENTERPRISES LTD.

JUDGEMENT

(1.) This appeal under Section 260A of the Income Tax Act, 1961 (hereinafter referred to as the Act for short) has been preferred by the revenue. The subject matter of the appeal pertains to the Assessment year 2007-08. The appeal was admitted by a bench of this Court vide order dated 30.05.2013 on the following substantial questions of law:

(2.) Facts leading to filing of this appeal briefly stated are that the assessee is engaged in the business of construction, property development and real estate. The assessee filed return declaring an income of Rs.98,15,55,940/-. The return was processed under Section 143(1) of the Act. However, the assessee filed a revised return of income on 30.03.2009, in which the income returned was reduced from Rs.98,15,55,940/- to Rs.49,96,89,936/-. In the revised return, the assessee claimed deduction under Section 80IB(10) of the Act to the extent of Rs.61,60,49,743/- as against deduction of Rs.11,19,14,742/-, which was claimed earlier. The case was selected for scrutiny and notice under Section 143(2) of the Act was issued. The Assessing Officer by an order dated 31.12.2009 inter alia held that Section 80IB(10) of the Act does not permit a claim on proportionate basis, only in respect of units, which were less than 1500 square feet. It was also held that the assessee has used 60% of the total built up area for commercial purposes as against 5%, which is permissible in law. It was also held that the assessee company in almost every block had a housing unit, which was more than 1500 square feet and approval from Bruhat Bangalore Mahanagara Palike (BBMP) has been obtained for the entire project and not for individual units. It was also held that one of the housing units did not satisfy the condition of minimum area i.e., one acre. The Assessing Officer concluded that the assessee has failed to satisfy the conditions, which are sine qua non for claiming deduction under Section 80IB(10) of the Act. The Assessing Officer, assessed the total income of the assessee at Rs.105,56,89,820/- and levied interest and initiated the penalty proceedings under Section 271(1)(c) of the Act.

(3.) The assessee challenged the aforesaid order in an appeal before the Commissioner of Income Tax (Appeals). The Commissioner of Income Tax (Appeals) vide order dated 12.05.2010, inter alia held that claim of assessee under Section 80IB(10) of the Act was allowed for previous Assessment Years viz., 2004-05, 2005-06 by the Commissioner of Income Tax (Appeals) and the aforesaid orders has been upheld by the Income Tax Appellate Tribunal (hereinafter referred to as 'the Tribunal' for short). Accordingly, the claim for deduction under Section 80IB(10) of the Act for Assessment Year 2007-08 was allowed and the order passed by the Assessing Officer was set aside.