2008 (10) TMI 550 - AT - Income Tax

Deduction u/s 80IB(10) alleged that assessee was not the owner of the property and the permission was not granted in the assessee s name Held that - In the appellant s own case in the assessment year 2005-06 2008 (11) TMI 436 - ITAT AHMEDABAD has decided in favour of the appellant on both the issues i.e. allowing the claim of deduction u/s. 80IB(10) and not restricting the claim to utilized FSI of 9490 sq.ft. - Further following the decision in CIT v. Radhe Developers 2011 (12) TMI 248 - GUJARAT HIGH COURT decided in favour of assessee

Summary

Issues:
Appeal against order of CIT(A) allowing deduction u/s. 80IB(10) without approval by local authority for developing housing projects.

Analysis:
The Revenue appealed against the CIT(A)'s decision allowing the deduction u/s. 80IB(10) for the assessment year 2006-07 without approval from the local authority for developing housing projects. The Revenue contended that the CIT(A) erred in interpreting the provisions of section 80IB(1) and 80IB(10) by not requiring complete identity between the assessee and the entity developing the housing projects. The Revenue argued that the ownership of land is crucial for passing on full title over dwelling units to customers and that the approval by the local authority should be in the name of the actual landowner. The Revenue also raised concerns about the passing on of benefits under section 80IB(10) without any provision for such transfer. The Revenue further disputed the allowance of deduction for the sale of unutilized FSI, claiming it does not qualify as profits derived from developing and building housing projects.

The assessee did not appear during the hearing, and the appeal proceeded in their absence. The assessment under section 143(3) of the Income-tax Act, 1961, was finalized with the disallowance of the deduction u/s. 80IB(10) for the assessee. The CIT(A) considered the assessee's submission and relied on a previous order by a co-ordinate Bench in the assessee's favor for the same issue in a different assessment year. The Revenue argued in support of the Assessing Officer's decision, emphasizing the denial of the deduction based on ownership and permission issues.

After reviewing the arguments and submissions, the ITAT found that the ownership and approval concerns raised by the Revenue were not substantiated. The ITAT noted that a similar issue for the assessment year 2005-06 had been decided in favor of the assessee by a co-ordinate Bench, and this decision was upheld by the jurisdictional High Court. Citing the precedent set by the High Court's judgment, the ITAT confirmed the CIT(A)'s order and dismissed the Revenue's appeal.

In conclusion, the ITAT upheld the CIT(A)'s decision to allow the deduction u/s. 80IB(10) for the assessee, as the ownership and approval requirements were deemed to be met based on previous judicial rulings. The Revenue's appeal was dismissed, and the order was pronounced in open court.