Karnataka High Court
The Commissioner Of Income Tax vs M/S Sjr Builders on 19 March, 2012
Bench: N.Kumar, Ravi Malimath
This ITA filed under section 260-A of I.T.Act, .1961
arising out of order dated 21.08.2009 pass:e'd:.:"g:'-i.nvi_4
ITA.No.1192/BNG/2008, for the Assessment yeegrist_2oLo'5;go.6;:..T _
praying to formulate the substantial questiossrispolfii l_aw;"
stated therein, allow the appeal ands" set iaside
passed by the ITAT, Bangalore in ITA.:i\lo".(1192,[sBNG/2'008v"
dated 21.08.2009, confirming'i'_t'h.e order' of tiige'sA'p--p.egllate
Commissioner & confirm the"e_oi'der 'passed by the
Asst.Commissioner of Income Ta'k,'C'ij4a'cl'er._7(1),'Bangalore.
This ITA gcomihg__u:ei:iV *for_'.sheefr*i1n'g' this day,
N.i<UMAR 1., aewcsred the miioiwiirigf:.ii he
" JLibi7Gr4E'N'T V
__._._...
The re\s/er'iu;e...g_ti'as 'pore-fei're.d this appeal challenging
the orderpasssed granting proportionate
benefit"of e>tempt'ion "under Section 80IB(10) of the
"i'hcoh1esT'e§< Act, 1961':
'T-"h_e..e1'assessee is engaged in construction and
'real estatteibusiness in the name and style of SJR Builders.
unsdhertook construction in the name of 'SJR Eastwood'
multistorey residential project in the name of 'SJR
E/
Redwood', 'Park vista', 'Spencer' and 'Brookland'
residential projects were in the initial stage. The
the said project was sanctioned on
was modified on 01.06.2004. In allV,Mthey constru'_cte'd " 1'
flats, out of which 116 flats was
36 flats was the owner's share'. 01"r.._'i52 .<i;a:V't;3R.z:5:Wrlate.
consists of mezzanine floor. Hotwetziez-.,VV_vsepara.t_e.isale deeds
were executed in respe;:ctfo_f' megaari-i.n've.A:"floor and flats in
respect of the very samve.V--pu_rcha-seir. ".éAvdVr;n.i1t1tedly, all these
flat totally less g.'i'sooVié.rqr."':rt per unit. The
total area undertaken is 3.38
acres. claimed 100% benefit of
deduction'u_n'der'Seéct:g.on:_4t50:gi'Bf10) of the Act amounting to
Rs.2,02;0_8.,6'43.V0/-_Vin': respect of 'Redwood project'. The
0aAssessinghfAu't~h_ority denied the said benefit on the ground
exceeded the permissible limit of 1500
sqhft. tQ_v'i3e3c'oAme eligible under Section 80IB(10) of the
Agg-r'ieved by the same, the assessee preferred an
..«ap'peal*é to the Commissioner of Income Tax (Appeals).
l/
Agreeing with the said finding of the Assessing Authority,
he dismissed the appeal. Aggrieved by the said or_d.er;..._tl:e
assessee preferred an appeal to the Tribunal. .
held that because some flats are larger thar'i"1'5..QQ "' if
the assessee will not lose the benefit i_»riAi.t:'s
with reference to the flatsV'iV'wh.ichV"a_re more rithe
prescribed limit, the assessee"-x_wi--|,l__ lose: ifibenefit.
Accordingly, the appeal;'«4..w'as matter was
remitted back to the» for fresh
consideration, made in the
Tribunal's order, the revenue
is in ap*peal._
3. 'Thelea-r_ne~d Counsel for the revenue assailing
~'"~._the._fi_r3npu_ggned ordevr...co'ntended that once it is established
that iconstructed measures more than 1500 sq.
ft.',. the ass'esj_se'e is not entitled to exemption under Section
'V._V8OIB'('1.O:j}_of the Act. It is immaterial whether such a
A C_'violla'tion is found only in few flats and therefore, he
sugbmits that the impugned order requires to be set aside.
4. Per contra, the learned Counsel
assessee submitted that on the day the
sanctioned and up to 01.04.2005,» in .'v'i't-2*..I\.{'_Vvgo'f:: 'theyé
interpretation of the building regula4tio:n',rtheaballconyliwasqr
not to be included for the built_ up area forVthte:'p.urp_oVse'§ of
calculating 1500 sq. ft." The auithori-tigeslbycinvcludfing the
balcony area have comeA"'to" t_hefigcon:cl"u-sgion'that the built up
area is more thanV1500'- incorrect.
Similarly, prohibiting for
a the said project.
Nodoubt, the area is more than 1500 sq.
ft, but the'meizzan-ine.'floors"4a.s such are registered under a
separ_;a't'e.sale and the flat is registered under a
separateistalerdeed. The total measurement in each of the
exceeding 1500 sq. ft. Therefore, the
V _ auth"orit§._es'v.Iii"ere not justified in holding that the assessee
not entitled to the benefit of exemption under Section
1~__'8.0I'B*f"(10) of the Act. Though the Tribunal held that the
T "assessee is entitled to a proportionate benefit, which order
\l/
is not challenged by the assessee, in view of the-"law
declared by this Court in the case of Commissioner4.j"oVfl.V
Income Tax vs. M/s.G.R.Deve/opers in ITA M
disposed off on 29.02.2012, the asses'see tolvaxf
100% benefit.
5. Prior to balcolnytliairzeaflwas not
added to the flats for out the total
built up area. It.is onil,'/~ was added.
The word of Section 8018
has beenNdef.i,n'ed:".;_,a_nVd made clear. In the
insta nt:._caseA,A -..wa.s j sanctioned on 18.10.2003
and theA'm.odifie'd"V.pl'an waslisanctioned on 01.06.2004, for
calcuiating the'*t.o_ta'l' built up area of these flats, the space
the balcony cannot be taken into
Al'conside'r*ati..on.x.l'Vv'v$imilarly, prior to 19.08.2009, during that
period, was no prohibition for a person purchasing
_two__flat's'. Therefore, when a mezzanine floor and a flat is
'purchased under two separate sale deeds for the purpose
finding out the benefit under the aforesaid provision, we
ll/
have to look into the measurement contained in
deeds. If that is done, there is no violation. "
the appellate Tribunal though has held' that A
entitled to proportionate benefit has."l'rem_Ai'tted the
the Assessing Authority for not
see any error committedyzby th-e-VViTd'ri.b'u~nal 'se-ttinlig aside
the order passed by not on
the ground ongvwhich the correct
interpretatio€n"'o'f_..tVhe: A
~~~~ substantial questions of law
are ansyvered V:fa.yaou'r..4V_o'f--::t'lV;..eassessee and against the
assessee. ll:.e Asse.ssi~ngVAuthority shall keep in mind the
..statut3ory.,u»i§r'ovisions;--~the interpretation placed by this Court
Kanid Tt'her"1»,.»_épa'srs;'appropriate orders in accordance with law.
the ends of justice. Accordingly, we pass
'xthe folloyyihg:
ORDER
i) The appeal is dismissed. l/
ii) The Assessing Authority shall keep in mind"'t--he statutory provision, the interpretation_J"pVl'aced:*3 by this Court and then, pass appropriaite jovrtieiirs in accordance with law Sax I .j_x;rU_DGE Prs*