2016 (10) TMI 1031 - HC - Income Tax

Eligibility for deduction u/s 80IB (10) for two consecutive assessment years - approval granted by the Village Panchayat - Held that - In the present matters, both the Authorities have concurrently recorded a finding of fact that the development of the housing project was completed within the time prescribed under Section 80IB(10) of the Act. In the admitted appeals, though it was sought to be canvassed on behalf of the Revenue that Gram Panchayat, Besa was not the local authority , a substantial question of law was not framed in that regard. We further find from a reading of the judgment in the case of Commissioner of Income Tax vs. Cajetano Mario Pereira 2014 (5) TMI 228 - BOMBAY HIGH COURT that this Court had considered the permission approval granted by the Village Panchayat for the housing project to be as one granted by the local authority in accordance with the provisions of Section 80IB(10) of the Act. - Decided in favour of assessee.

Summary

Issues: Eligibility for deduction under Section 80IB (10) of the Income Tax Act, 1961 for two consecutive assessment years.

Analysis:
The appellant challenged the orders of the Commissioner of Income Tax (Appeals) and the Income Tax Appellate Tribunal regarding the eligibility of the respondent assessee for deduction under Section 80IB (10) of the Income Tax Act, 1961 for two consecutive assessment years. The respondent assessee, engaged in real estate and housing projects, claimed deductions for the assessment years 2009-10 and 2010-11. The Assessing Officer initially denied the deductions, stating non-compliance with Section 80IB(10) as the development sanction did not cover one acre of plot and lacked proof of approval from the Gram Panchayat. However, both the Commissioner of Income Tax (Appeals) and the Income Tax Appellate Tribunal ruled in favor of the assessee, stating that the housing project was completed within the specified time and met the necessary conditions under Section 80IB(10). They found that the Gram Panchayat was the Local Authority for granting permission and that the necessary documents were submitted by the assessee.

The High Court noted that both Authorities had correctly assessed the facts and concluded that there was no substantial question of law arising from their findings. The Court dismissed the Revenue's argument that similar appeals were admitted in other cases, emphasizing that the present case had met all requirements under Section 80IB(10). The Court differentiated the present case from previous appeals where issues regarding permission from the Local Authority and completion time were contested, stating that in this instance, the housing project was completed on time, and the Gram Panchayat's approval sufficed as the Local Authority's permission. The Court referred to a previous judgment to support this interpretation. As no substantial question of law was identified, the appeals were dismissed with no costs awarded.