2013 (10) TMI 290 - HC - Income Tax

Deduction Section 80IB - fulfillment of conditions - housing project Held that - Deduction under Section 80IB(10) of the Act with respect to only those units of housing project named Maninagar approved prior to 01/04/2004 and of which constructions have been completed prior to 31/03/2008 be granted In the present case, housing project named Maninagar was already approved prior to 01/04/2004 with respect to different units. - And constructions that have been put up have been completed prior to 31/03/2008 Decided against the Revenue.

Summary

Issues:
Challenge to ITAT's judgment confirming deduction under Section 80IB(10) of the Income Tax Act for units of a housing project approved and constructed before 31/03/2008.

Analysis:
1. Issue of Deduction under Section 80IB(10):
The respondent, engaged in the business of builders and developers, claimed deduction under Section 80IB(10) for a housing project named 'Maninagar' at Rajkot. The Assessing Officer disallowed the deductions, stating that the entire project was not completed before 31/03/2008. However, the CIT(A) allowed the deduction for units approved and constructed before 31/03/2008. The ITAT upheld this decision, emphasizing that most units were completed before the deadline. The CIT(A) clarified that multiple approvals do not disqualify a project from claiming the deduction. The tribunal concurred with this view, stating that as long as the project was approved before 01/04/2004 and constructions were completed by 31/03/2008, the deduction was valid.

2. Interpretation of Section 80IB(10) Conditions:
The CIT(A) highlighted that the Act allows for multiple approvals for a housing project, as long as the conditions under Section 80IB(10) are cumulatively fulfilled. The completion date is crucial for eligibility, and units completed after 31/03/2008 are not eligible for the deduction. The tribunal referenced legal precedents to support the view that separate approvals for different units do not affect the deduction claim if the conditions are met. The tribunal's decision was based on a thorough analysis of the project's approval dates and completion status, aligning with the provisions of Section 80IB(10) regarding project approval and completion timelines.

3. Conclusion and Dismissal of Appeal:
The High Court upheld the ITAT's decision, stating that the respondent was entitled to the deduction for units approved before 01/04/2004 and completed before 31/03/2008. As all conditions under Section 80IB(10) were met, there was no substantial question of law in the appeal. Therefore, the appeal challenging the deduction under Section 80IB(10) was dismissed, affirming the eligibility of the respondent for the claimed deduction based on the project's approval and completion timelines.