Case Note & Summary
The appellant, M/s. Commonwealth Developers, a partnership firm, filed its return of income for the assessment year 2006-07 declaring a total income of Rs.53,620/- on 30.10.2006. The Assessing Officer passed an order under Section 143(3) of the Income Tax Act, 1961 on 21.11.2008 accepting the returned income. Subsequently, the Commissioner of Income Tax (CIT) invoked jurisdiction under Section 263 of the Act and set aside the order dated 30.3.2011, directing the Assessing Officer to examine the claim of deduction under Section 80-IB(10) of the Act. The Assessing Officer then examined the claim and disallowed the deduction, leading to appeals before the Commissioner of Income Tax (Appeals) and the Income Tax Appellate Tribunal. The Tribunal upheld the disallowance, prompting the appellant to file the present tax appeal before the High Court. The substantial questions of law framed were whether a rear courtyard enclosed by walls of a residential unit could be included as built-up area for the purpose of deduction under Section 80-IB(10), and whether the Tribunal could inquire into and get measured the courtyard which was not part of the lis. The High Court, after hearing both sides, allowed the appeal, holding that the rear courtyard is not part of the built-up area and the Tribunal exceeded its jurisdiction by inquiring into matters beyond the lis. The court set aside the Tribunal's order and restored the matter to the Tribunal for fresh consideration in accordance with law.
Headnote
A) Income Tax - Deduction under Section 80-IB(10) - Built-up Area - Rear Courtyard - The issue was whether a rear courtyard enclosed by walls of a residential unit could be included as built-up area for computing deduction under Section 80-IB(10) of the Income Tax Act, 1961. The court held that the rear courtyard is not part of the built-up area and cannot be included for the purpose of deduction. (Paras 1-2) B) Income Tax - Tribunal's Jurisdiction - Inquiry Beyond Lis - The question was whether the Tribunal can inquire into and get measured the courtyard which was not included in the built-up area and which is not the lis between the parties. The court held that the Tribunal cannot inquire into matters beyond the lis between the parties. (Paras 1-2)
Issue of Consideration
Whether the rear courtyard enclosed by walls of a residential unit could be included as built-up area of the residential unit, and whether the learned Tribunal can inquire into and get measured the courtyard which was not included in the built-up area and which is not the lis between the parties.
Final Decision
Appeal allowed. The order of the Income Tax Appellate Tribunal is set aside. The matter is restored to the Tribunal for fresh consideration in accordance with law.
Law Points
- Built-up area definition
- Section 80-IB(10) deduction
- Tribunal's jurisdiction to inquire beyond lis
