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Issues involved:
The judgment involves the issue of claim for deduction u/s 80IB(10) of the Income-tax Act, 1961 in the Assessment Year 2004-05 and 2005-06. Assessment Year 2004-05: The assessee, engaged in construction of housing projects, claimed deduction u/s 80IB(10) of the Act. The Assessing Officer (AO) disallowed the claim stating that the assessee was not eligible as the land was owned by a cooperative housing society and the assessee was merely an agent entitled to commission. The AO emphasized the need for complete identity between the assessee and the undertaking as per Rule 18BBB(2) of the IT Rules, 1962. The CIT(A) allowed the deduction based on a previous ITAT decision. The ITAT, after considering relevant decisions, set aside the CIT(A)'s order and directed the AO to analyze the development agreement to determine if the assessee had control over the project and bore the risks, allowing the deduction if criteria were met. Assessment Year 2005-06: Similar to the previous year, the AO disallowed the deduction u/s 80IB(10) of the Act. The ITAT, following a previous decision, directed the AO to re-examine the matter in light of a specific ITAT decision and the development agreement. Both parties agreed to reconsider the issue based on the ITAT decision, leading to the vacation of the CIT(A)'s findings and a directive for the AO to analyze the relevant agreement to ascertain if the assessee had purchased the land and borne the risks, allowing the deduction accordingly. Conclusion: The ITAT allowed both appeals but for statistical purposes, emphasizing the need for a thorough analysis of the development agreements to determine the eligibility for deduction u/s 80IB(10) based on control over the project and risks borne by the assessee.
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