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Issues involved: Appeal against deletion of addition u/s 80IB(10) of the Income Tax Act, 1961.
The issue pertains to the deduction claim by the assessee u/s 80IB(10) of the Act on the development of a housing project. The Revenue contended that the respondent-assessee did not own the land on which the project was developed. However, the Tribunal found that as per the development agreement, the assessee bore all expenses for the development and had the right to allot possession of the units. The Tribunal relied on a previous decision where it was held that the assessee had taken full responsibility for the project, including engaging professionals, enrolling members, and bearing the profit or loss. The Tribunal concluded that the assessee had total and complete control over the land and the project, assuming all risks and responsibilities. The Court examined the terms and conditions of the development agreements and the agreement of sale between the parties involved. It was noted that the landowner had received part of the sale consideration and granted development permission to the assessee. The assessee was responsible for constructing residential units on the land, bringing in technical knowledge, paying fees to professionals, appointing subcontractors, and managing financial arrangements. The Court found that the assessee had undertaken the entire development task, including construction, sale of units, and financial arrangements, demonstrating total control and responsibility over the project. The Court emphasized that the risk element was borne entirely by the assessee, while the landowner received a fixed price for the land, insulated from any project risks. In conclusion, the Tax Appeal was dismissed, upholding the Tribunal's decision to delete the addition u/s 80IB(10) of the Income Tax Act, 1961.
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