2014 (6) TMI 109 - AT - Income Tax

Disallowance of claim u/s 80IB(10) of the Act Assessee not the owner of land Held that - The Assessee has claimed deduction u/s 80IB(10) - the project on which Assessee had claimed deduction was the same project on which the Assessee had claimed deduction u/s 80IB(10) in earlier years and for earlier years Following Commissioner of Income-tax Versus Radhe Developers 2011 (12) TMI 248 - GUJARAT HIGH COURT section 80IB(10) does not provide that the land must be owned by the assessee - the assessee had taken full responsibilities for execution of the development projects and have not acted only as a works contractor - assessee was entitled to the benefit u/s 80IB(10) even where the title of the lands had not passed on to the assessees - CIT(A) has noted that the issue in the year under appeal is identical with that of A.Y. 06-07 and also pertains to the same project there was no reason to interfere with the order of CIT(A) Decided against Revenue.

Summary

Issues: Appeal against the order of CIT(A)-IV, Surat dated 11.01.2011 for A.Y. 2007-08 regarding the disallowance of deduction u/s 80IB(10) of the I.T. Act.

Analysis:
1. Issue of Disallowance of Deduction u/s 80IB(10):
The appeal was filed by the Revenue challenging the order of CIT(A) deleting the addition of Rs. 83,48,670 made on account of disallowance of the claim of deduction u/s 80IB(10) of the I.T. Act. The Assessing Officer (A.O) contended that the Assessee was not the real owner of the land and was merely a developer, not a builder as required by the section. However, CIT(A) allowed the appeal of the Assessee, stating that the Assessee was eligible for the deduction u/s 80IB(10) as they were considered a developer and builder based on previous decisions and evidence presented. The Tribunal upheld CIT(A)'s decision, emphasizing that ownership of the land was not a prerequisite for claiming the deduction under section 80IB(10). The Hon'ble High Court also dismissed the Revenue's appeal, affirming the decision in favor of the Assessee. The issue had already attained finality in previous years, and since the facts were identical, the appeal of the Revenue was ultimately dismissed.

2. Consistency in Previous Years' Decisions:
The Tribunal and the High Court considered the consistency in decisions regarding the Assessee's eligibility for deduction u/s 80IB(10) in previous years. The Co-ordinate Bench of Tribunal and the Hon'ble Gujarat High Court had previously ruled in favor of the Assessee based on evidence showing that the Assessee had full authority to develop the land as a developer, not just a contractor. The decisions in earlier years were cited to support the current appeal and to establish the Assessee's right to claim the deduction under section 80IB(10).

In conclusion, the judgment focused on the issue of disallowance of deduction u/s 80IB(10) of the I.T. Act, highlighting the Assessee's eligibility as a developer and builder despite not owning the land. The decision was supported by previous rulings and evidence presented, leading to the dismissal of the Revenue's appeal based on the consistency of decisions in previous years.