2016 (5) TMI 1184 - AT - Income Tax

Eligibility for deduction u/s 80IB(10) on a plot/housing project - Held that - Ownership of the plot is not necessary for availing the claimed deduction u/s 80IB(10) of the Act. See Radhe Developers case 2011 (12) TMI 248 - GUJARAT HIGH COURT - Decided in favour of assessee

Summary

Issues:
Appeal by Revenue against order granting deduction u/s 80IB(10) - Ownership of plot for housing project - Interpretation of statutory provisions.

Analysis:
The judgment involves two appeals by the Revenue challenging an order granting the assessee a deduction u/s 80IB(10) of the Income Tax Act, 1961 for two assessment years. The primary issue revolves around whether the assessee, engaged in the business of builders and developers, is eligible for the deduction without fulfilling the condition of owning the plot on which the housing project is constructed. The Revenue contended that the assessee did not meet the stipulated conditions under the section. The First Appellate Authority had ruled in favor of the assessee, emphasizing that ownership of the land by the developer was not a prerequisite for claiming the deduction. The Authority analyzed the agreement between the assessee and the landowners, concluding that the assessee acted as a developer and not a mere contractor. The FAA relied on relevant legal provisions and previous judicial decisions to support its decision.

During the hearing before the Appellate Tribunal, the Departmental Representative supported the AO's order, while the Authorized Representative cited a judgment of the Hon'ble Gujarat High Court in favor of the assessee. The Tribunal examined the legal position and noted the Gujarat High Court's ruling that ownership of the land is not a mandatory requirement for availing the deduction u/s 80IB(10). The Tribunal also mentioned the dismissal of the Special Leave Petition filed by the Department before the Supreme Court in a similar case. Consequently, the Tribunal upheld the FAA's decision, dismissing the Revenue's appeals based on the established legal principles and precedents.

In conclusion, the Tribunal reiterated the legal position that ownership of the land by the developer is not a prerequisite for claiming the deduction u/s 80IB(10) of the Act. The judgment emphasized the importance of statutory interpretation and adherence to established legal principles in tax matters. The decision was based on a thorough analysis of relevant legal provisions, judicial precedents, and the specific facts of the case, ultimately upholding the assessee's eligibility for the deduction.