Judgt. dt. 11.9.2020 in T.C.(A) 314/2011 CIT V. C.Subba Reddy (HUF) 1/8 IN HIGH COURT OF JUDICATURE AT MADRAS DATED: 11.9.2020 CORAM HON'BLE DR.JUSTICE VINEET KOTHARI AND HON'BLE MR.JUSTICE KRISHNAN RAMASAMY Tax Case (Appeal) No.314 of 2011 Commissioner of Income Tax, Chennai. Appellant Vs. Shri.C.Subba Reddy (HUF), 'Sukriti', 19/1, 3rd Cross Street, R.A.Puram, Chennai 600 028. Respondent Tax Case (Appeal) filed under Section 260A of Income Tax Act, 1961 against order of Income Tax Appellate Tribunal, 'A' Bench, Chennai, dated 10.12.2010 made in ITA No.1907/Mds/2008. For Appellant : Mr.T.Ravikumar Senior Standing Counsel & Mrs.R.Hemalatha, Senior Standing Counsel For Respondent : Mr.S.Sridhar JUDGMENT (Delivered by DR.VINEET KOTHARI,J) Revenue has filed this Tax Case under Section 260-A of Income Tax Act by raising following purported substantial question of law arising from order passed by Income Tax Appellate http://www.judis.nic.in Judgt. dt. 11.9.2020 in T.C.(A) 314/2011 CIT V. C.Subba Reddy (HUF) 2/8 Tribunal on 10.12.2010 for Assessment Year 2005-2006:- "Whether on facts and circumstances of case, Tribunal was right in holding that assessee is entitled for deduction under Section 80IB?" 2. Heard Mr.T.Ravikumar and Mrs.R.Hemalatha, learned Senior Standing Counsels appearing for Appellant/Revenue and Mr.S.Sridhar, learned counsel appearing for Respondent/Revenue. 3. issue involved in present Appeal filed by Revenue is squarely covered by Judgment of co-ordinate Bench of this court in Assessee's own case for preceding Assessment Year 2004-2005. 4. question of law raised before us in present Appeal filed by Revenue is about entitlement of Assessee to get deduction under Section 80IB of Act. 5. relevant findings of learned Tribunal in impugned order dated 10.12.2010 are quoted below for ready reference:- "The other issue raised in this appeal is regarding benefit of section 80-IB(10) given regarding car parking area sold to flat owners which according to Revenue does not form part of built-up area for purpose of verifying permissible limit of http://www.judis.nic.in Judgt. dt. 11.9.2020 in T.C.(A) 314/2011 CIT V. C.Subba Reddy (HUF) 3/8 1500 sq.ft prescribed in section. case of Revenue is that covered Car parking allotted to buyers is only for regulating parking in complex and to avoid confusion in parking. As car parking area is not deemed place and it is only common amenity provided to buyers in complex in which CMDA, i.e. planning authority, does not consider car parking for Floor Space Index (FSI) of building. It was also argued that under Tamil Nadu Apartments Act, only parking area is defined as common amenity . In our opinion, ld. CIT(Appeals) has correctly held that built-up area is only inner measurement of residential units at floor level plus projections and balconies plus thickness of walls. But, car parking area is not living space and it is common area which can be accessed by anyone since it has no boundary wall. Tamil Nadu Apartments Ownership Act defines same and this definition takes same out of purview of built-up area. Undeniably, car parking area is allotted and belonged to buyers http://www.judis.nic.in Judgt. dt. 11.9.2020 in T.C.(A) 314/2011 CIT V. C.Subba Reddy (HUF) 4/8 alone. It cannot be said to be private area and has to be treated as common area and has to be excluded from calculation of built-up residential units particularly keeping in view agreements and Tamil Nadu Apartments Ownership Act. Consequently, we dismiss this ground also." 6. relevant portion from Judgement of co-ordinate Bench of this court in CIT v. Subba Reddy (HUF) (373 ITR 105) is also quoted below for ready reference:- "12. It is seen that car park has been separately shown in agreement and according to assessee, same does not form part of residential unit for purpose of determining maximum built-up area, in view of definition for term 'built-up area' came into effect from 01.04.2005. Commissioner of Income Tax (Appeals) relied upon provisions of Tamil Nadu Apartment Ownership Act, 1994 , wherein Section 3(h) defines term 'common areas and facilities' in which clause 3 states that basements, cellars, yards, gardens, parking areas and storage spaces are common areas. Hence, following said provision, Commissioner of Income Tax http://www.judis.nic.in Judgt. dt. 11.9.2020 in T.C.(A) 314/2011 CIT V. C.Subba Reddy (HUF) 5/8 (Appeals) allowed deduction. 13. In absence of any specific definition for term 'built-up area' during relevant period, reasoning of Commissioner of Income Tax (Appeals), which was confirmed by Tribunal is justified. Nevertheless, we find that Section 80IB(10) of Income Tax Act speaks about residential unit having maximum built-up area of 1500 sq.ft. to claim deduction. Even in definition under Section 80IB(14)(a), which came into effect from 01.04.2005, "builtup area" was defined as inner measurements of residential unit at floor level, including projections and balconies, as increased by thickness of walls, meaning thereby, actual residential portion of property. It, however, clearly states that it will not include common area shared with other residential units. Hence, definition under Section 80IB(14)(a), could, at best, throw some light as to how built-up area of residential unit should be computed for purpose of determining deduction under Section 80IB(10) of Income Tax Act. 14. From reading of above-said provisions, we http://www.judis.nic.in Judgt. dt. 11.9.2020 in T.C.(A) 314/2011 CIT V. C.Subba Reddy (HUF) 6/8 find that there is no justification in including car park in definition of built-up area of residential unit for purpose of determining maximum built-up area. In such view of matter, we are inclined to accept reasoning of Commissioner of Income Tax (Appeals) drawing support from Tamil Nadu Apartment Ownership Act, 1994, which was confirmed by Tribunal. Accordingly, second substantial question of law is answered against Revenue and in favour of assessee." 7. In view of fact that matter is covered by decision of co-ordinate Bench of this court, present Appeal is disposed of in terms of decision of co-ordinate Bench holding that Assessee is entitled to benefit of deduction under Section 80IB of Act. Accordingly, Appeal filed Revenue is liable to be dismissed and same is hereby dismissed. question of law is answered in favour of Assessee and against Revenue. (V.K.,J.) (K.R.,J.) 11.9.2020 Index : Yes/No Internet : Yes/No ssk. http://www.judis.nic.in Judgt. dt. 11.9.2020 in T.C.(A) 314/2011 CIT V. C.Subba Reddy (HUF) 7/8 To 1. Commissioner of Income Tax, Chennai. 2. Deputy Commissioner of Income Tax, Circle II, Chennai 600 034. http://www.judis.nic.in Judgt. dt. 11.9.2020 in T.C.(A) 314/2011 CIT V. C.Subba Reddy (HUF) 8/8 DR.VINEET KOTHARI, J. and KRISHNAN RAMASAMY, J. ssk. T.C.(A) No.314 of 2011 11.9.2020 http://www.judis.nic.in Commissioner of Income-tax, Chennai v. C. Subba Reddy (HUF)