2016 (10) TMI 1204 - HC - Income Tax

Deduction u/s 80IB(10) - commencement certificate by the Municipal Authorities for the housing project - project be on the size of a plot of land which has a minimum area of one acre - Held that - Date on which the earlier housing project had commenced construction could not be applied to the housing project consisting of E building merely because the conditions set out while granting approval to the earlier housing project have also been made applicable to the housing project in question. Section 80IB(10) does not suggest that the plot of land must be vacant. Deduction is available on construction of a housing project on a plot having area of one acre irrespective of the fact that there exist other housing projects or not. Further as contended by Revenue that two flats were merged and size of flat exceeded 1000 sq ft It is found that there was no merger of flats. Therefore Tribunal rightly allowed deduction u/s 80IB - See Commissioner of Income tax 25 vs. Vandana Properties 2012 (4) TMI 54 - BOMBAY HIGH COURT Decided in favor of assessee.

Summary

Issues Involved:
1. Challenge to the order of the Income Tax Appellate Tribunal regarding deduction u/s 80IB(10) for Assessment Year 2009-10.
2. Interpretation of Section 80IB(10)(a) regarding the timing of the commencement certificate for the housing project.
3. Compliance with Section 80IB(10)(b) concerning the minimum land area requirement for claiming deduction.
4. Reliance on previous Tribunal orders and High Court decisions in similar cases.
5. Dismissal of the appeal based on lack of substantial legal questions.

Analysis:

1. The appellant challenged the Income Tax Appellate Tribunal's order regarding the deduction u/s 80IB(10) for Assessment Year 2009-10. The primary issue revolved around the timing of the commencement certificate for the housing project. The Tribunal allowed the deduction despite the certificate being granted prior to the specified date, and the appellant questioned the justification for this decision.

2. The first question raised was whether the Tribunal was justified in holding that the deduction u/s 80IB(10) was applicable even though the commencement certificate was issued before the required date. The appellant argued that the certificate for Wing 'G' was merely an extension of the existing certificate from 1990, questioning the validity of the deduction claim based on this extension.

3. The second question focused on whether the Tribunal correctly allowed the deduction u/s 80IB(10) while ignoring the minimum land area requirement specified in Section 80IB(10)(b) of the Act. The appellant highlighted that Wing 'G' did not meet the minimum one-acre land size criteria, raising concerns about the eligibility for the deduction.

4. The Tribunal's decision was influenced by its previous orders in the Respondent assessee's case for Assessment Years 2003-04 and 2004-05. The Tribunal dismissed the Revenue's appeal based on the precedent set by the High Court's decision in Commissioner of Incometax25 vs. Vandana Properties, which covered similar issues. This reliance on past judgments and legal interpretations played a crucial role in the final outcome of the case.

5. Ultimately, the High Court dismissed the appeal, emphasizing that the questions raised did not present any substantial legal issues warranting further consideration. The lack of new legal complexities or disputes led to the rejection of the appeal, with no costs imposed on either party. The decision highlighted the importance of legal precedents and the need for substantial legal questions to be raised for a successful appeal in such cases.