THE COMMISSIONER OF INCOME TAX Vs. SUBBA REDDY

JUDGEMENT

(1.) This Tax Case (Appeal) has been filed by the Revenue as against the order of the Income Tax Appellate Tribunal relating to the assessment year 2004-05. At the time of admission, the following substantial questions of law were admitted by this Court for consideration:

(2.) In the course of the hearing before this Court, learned Standing Counsel appearing for the Revenue sought permission to reframe the questions of law, since the questions admitted by this Court did not project the issues fully. Hence, after hearing the learned counsel appearing for the assessee, who had no serious objection for re-framing the questions, the following substantial questions of law, as reframed, arise for consideration:

(3.) The assessee, who is a promoter, has claimed deduction under Section 80IB(10) of the Income Tax Act on the housing project, which was denied by the Assessing Officer on two counts, viz., (i) the assessee had not developed the flats and (ii) out of 66 flats constructed, the 'built-up area' of 25 flats exceeded the prescribed maximum limit of 1500 sq.ft., if we include the car park area of 220 sq.ft. sold to these 25 flat owners. The reasoning of the Assessing Officer reads as follows: