2016 (3) TMI 1085 - AT - Income Tax

Eligibility of deduction u/s.80 IB (10) - whether deduction was allowable if the profits were derived from the business of developing and construction of residential unit, that there was no requirement in the provision that the assessee carrying on the said business should also on the plot of land? - Held that - As decided in case of Radhe Developers 2011 (12) TMI 248 - GUJARAT HIGH COURT The provisions nowhere require that only those developers who themselves own the land would receive the deduction u/s.80-IB(10) of the Act. Neither the provisions of section 80-IB nor any other provisions contained in other related statutes demonstrate that ownership of the land would be a condition precedent for developing the housing project. Such requirement cannot be read into the statute because there is nothing in section 80-IB(10) of the Act requiring that ownership of the land must vest in the developer for him to be able to qualify for such deduction. Moreover, the term developer has been understood in common parlance as well as in the legal sense as carrying a much wider connotation. It is well settled that while interpreting a statute, particularly, a taxing statute, nothing can be read into the provisions which has not been provided by the Legislature. A condition which is not made part of section 80-IB(10) of the Act, namely, that of owning the land which the assessee develops, cannot be supplied by any purported legislative intent. Respectfully following the above, we decide the effective ground of appeal against the revenue.

Summary

Issues Involved:
Challenge to CIT (A) order regarding deduction under section 80 IB(10) of the Income Tax Act.

Analysis:

Issue 1: Deduction under section 80 IB(10)
The appellant, a company engaged in the business of builders and developers, filed its income tax return declaring income. The assessing officer (AO) completed the assessment, determining the income significantly higher than declared. The AO disallowed the deduction claimed under section 80 IB(10) as the appellant was not the owner of the land on which the housing project was developed. The AO held that ownership of the land was a prerequisite for availing the deduction.

Issue 2: Appeal before the first appellate authority
The appellant appealed the AO's decision before the first appellate authority (FAA), arguing that ownership was not a requirement for claiming the deduction under section 80 IB(10). The FAA analyzed the agreement between the appellant and the landowners, concluding that the appellant was a developer and not a mere contractor. The FAA referred to relevant provisions and decided in favor of the appellant, emphasizing that ownership of the land was not mandatory for availing the deduction.

Issue 3: Tribunal's decision
During the hearing, the Departmental Representative supported the AO's order, while the Authorized Representative cited a judgment of the Hon'ble Gujarat High Court in favor of the appellant. The Tribunal examined the arguments and referred to the Gujarat High Court judgment, which clarified that ownership of the land was not a prerequisite for claiming the deduction under section 80 IB(10). The Tribunal upheld the Gujarat High Court's interpretation and dismissed the AO's appeal, ruling in favor of the appellant based on the legal provisions and precedents cited.

In conclusion, the Tribunal upheld the appellant's right to claim the deduction under section 80 IB(10) without requiring ownership of the land. The judgment emphasized that statutory provisions did not mandate land ownership for developers to qualify for the deduction. The decision aligned with the legal interpretation provided by the Hon'ble Gujarat High Court, emphasizing that legislative intent cannot impose additional conditions beyond what is explicitly stated in the statute.