2017 (7) TMI 1208 - HC - Income Tax

Deduction u/s 80IB(10) - development and construction of the housing project - works contractor or developer - Held that - following the judgment in the case of CIT Jaipur vs. M/s Indo Continental Hotels and Resorts 2017 (5) TMI 1590 - RAJASTHAN HIGH COURT revenue appeal dismissed

Summary

Issues:
1. Tribunal's decision on deduction u/s 80IB(10) for the appellant.
2. Interpretation of the term "housing project" under Section 80IB(10).

Issue 1: Tribunal's decision on deduction u/s 80IB(10) for the appellant:
The High Court dealt with two appeals questioning the Tribunal's decision on allowing deductions under Section 80IB(10) for the appellants. The court framed substantial questions of law related to the justification of considering the assessee as the developer and granting the deductions, despite the existence of a development agreement with another developer. The court scrutinized whether the assessee fulfilled the requirements for development and construction of the housing project as mandated by the statute. The court referred to a previous judgment and remitted the matter back to the Tribunal for further consideration on specific issues, emphasizing that no opinion on merits was expressed.

Issue 2: Interpretation of the term "housing project" under Section 80IB(10):
The High Court referenced a previous decision in Commissioner of Income Tax Vs. Veena Developers to interpret the term "housing project" under Section 80IB(10). The court highlighted that a housing project approved by a local authority, even with a commercial component within prescribed limits, qualifies for deductions until a specified date. The court emphasized that once a project is approved by the local authority, it is deemed a housing project. The judgment favored the assessee on this issue, setting aside the Tribunal's decision and directing a fresh consideration only on the first issue. Ultimately, the court ruled in favor of the assessee on the second issue, leading to the dismissal of the appeals.

In conclusion, the High Court's judgment addressed the issues of deduction under Section 80IB(10) and the interpretation of "housing project" under the Income Tax Act. The court provided detailed analysis and referred to relevant legal precedents to arrive at its decision, ultimately ruling in favor of the assessee and dismissing the appeals.