Karnataka High Court
The Commissioner Of Income Tax vs M/S Mystic Investments on 29 February, 2012
Bench: N.Kumar, Ravi Malimath
Richmond Towers
Richmond Road
Bangalore
(By Sri S. Parthasarathi Mlaila R30 6'
AC1VOC.§tes) A.
llns rna fikxi under Secficn 26oA:zmfLifi Act 1961
arising out of order dated... 25-04-2008' passed in ITA
No 1170/Bang/2007, far the 'Asseaanent gmgr 2oo4~05.
praying to (i) forrnulatethde. Ast1.bs?taynti3c{i'l questions of law stated
therein. (ii) allow the appeal and set_.~asid;e, the order passed by
the ITAT Bangalore g'in= -- VITA" ._'N_o.lV'_l 70/'Bang/2007, dated
25-04-2008a.n'dr._confirm the.'orde'1'sfof the Income Tax Officer, Ward--1(l), Bangalore... 3 .
This this day, N. KUMAR J., delivere'd"th¢,. .f91l0W:ii¢§i"~.g '6 * ' %mgUnGMENT "appeal~__isIpreferred by the revenue challenging the p_ order pgassved by*th_e___TribL1nal which has granted benefit to the ' ;asSessee.un:d'er__ Section 801B (10) of the Income Tax Act, 1961. .'".The assessee is a firm dealing in property "drey_elopment. The assessee obtained a sanctioned plan in the 1966 for construction of a multistoried residential flats on land measuring about 38 guntas, i.e., 44,030 sq. ft. Before _. ;6.';:vR_espoi1dVe-tit 6 j t the completion of the project, Section 80113 be introduced. In order to have the benefit of the assessee purchased an adjoining pi'ec_§l--.p/of 7, about L440 sq. ft. and clubbed the?sarn_e landrwherep he was putting up the housingfiiiroject. of the land became 44,740vsq_. which minimum required for being eligible_e_folf Section 801B (10) is 1 acre ' ft. Thereafter, he applied f0T.:-3 {Op "flea lthelrequirement of Section 80113 (,.1.0_)., i'1i...thVeV:'year 2001. On 20.5.2003 occupancgg "been: issued. He has built 63 units. Each ofthe units 1,500 sq. ft. Thereafter, he sold these 'residentiall units" to Various purchasers. In the sale deed description of the land held by the assessee is clearly ouvt.4a.ndthe:reafter a fraction of the share in the said land p'roportionatc:: is transferred to the purchasers. Therefore, the assessee. claimed the benefit of the aforesaid provision. The ~ Avgptssessing officer denied the said benefit on the ground that the said project was not completed within four years, the ll/~ 4 construction is put in violation of the sanctiongé lfi1jats'a1j¢l' used as service apartments, the id.
area of 38 guntas and some of the 'On that ground, the assessingl d.enied'=.th.e 'to the assessee. . l
3. Aggrieved by preferred an appeal to the (Appeals). He confirmed the authority. It is against the said orvder; appeal to the Tribunal.
that, when the assessee has completed tlieVVpro_ject"within 4 years from the date of modified V' _platii'l'it:b_ca11vnot ls'-aidthat the project is not completed within l the 'stip'u_la.tedVpp'eriod. Though there are some minor deviations in the sanctiiofied plan, that would not come in the way of the assesseeplaiming the benefit. Though the flats which are sold, are"-used as service apartments, the assessee has no role to Aplayfland therefore on that ground the benefit cannot be denied. l\/ Factually they held the project is in an area than 1 acre and not in an area of 38 guntasas; held authorities. If common areas and[bAalc"or1y7is the T. flats are within 1,500 sq. ft. lThe'renfore,.'v_they '~fouindll'no justification to deny the bel11efip:"t"~..'Qf S.ect.ionr,i§OIl§fl(lO)to the assessee. Accordingly, ,---they "the ordlerpassed by the assessing authority as rjommissioner and granted the bvenefit fiéérieved by the said order, the l We learned counsel appearing for the parties. la a l V l at .
appeal was admitted to consider the following d"'sul-ostanvtial,_qaestion of law: -- V Whether the Tribunal was correct in holding a " 4_ that the assessee had complied with the conditions provided in Section 8OIB (10) of the Act subsequently and therefore the allowance had to be The said submission has no su'b.s:tance. like a sanction of plan for service sanctioned for putting up residential construction, depending upontthe apartments are put to, they are apartments. That is where the olfficer §.%e'11~~a'§ the Appellate Authority miscoln.5t{\--/gieqxp . project developed by the assessee and committeditkie error.
A pp 63 flats it is stated 8 flats exceed the built up of 1,500 sq. ft. In coming to the conclusion the authori'ties"have taken into consideration the balcony area and thepcolmmon area. Prior to 1.4.2005 as law stood then, "balconies and common areas have to be excluded for the it purpose of calculating the built up area. If those two areas are excluded, admittedly the apartments measure less than 1,500 sq. ft. In that View of the matter, the Tribunal was justified in setting aside the order passed by the lower authorities and granting exemption to the assessee to which he is legitimately l/