By TIOL News Service

NEW DELHI, MAY 29, 2018: THE ISSUE BEFORE THE COURT IS - Whether, for the period prior to April 1, 2005, the law does not mandate accounting of balcony area for calculating the limit of 1000 sq. feet for the purpose of Sec. 80IB(10)(c) benefits - AND THE VERDICT IS YES.

Facts of the case:

The Revenue had filed the appeal challenging the two issues: Firstly, whether the reckoning of balconies raised in respect of housing development that resulted in each unit exceeding 1000 sq. ft. is entitled to the relief u/s 80IB(10)(c); and secondly, whether the conditions with respect to the commencement of the project on or after 01.10.1998 is linked with the approval granted by the local authority or actual development.

High Court held that,

++ there is no reason to interfere with the logic of the CIT(A) who is of the view that the balconies raised could not be taken into account for calculating 1000 sq. ft. limit prior to 01.04.2005. And as far as the second issue with respect to the commencement of the project is concerned, again it is found that the concurrent findings are based upon the actual commencement of the project. Though, the Revenue urged that the date of approval is determinative and commencement has to be reckoned from that period, this court is of the opinion that the ITAT cannot be faulted on this aspect for the simple reason that mere securing the approval does not lead to any step towards development. Rather that may be the foundation for various steps that may ultimately lead to obtain finances and starting construction activity. Therefore, it is the actual date of construction which is determinative. For the foregoing reasons, no substantial question of law arises.

(See 2018-TIOL-1009-HC-DEL-IT)