2016 (3) TMI 1058 - AT - Income Tax

Disallowance of deduction u/s.80IB(10) - claim of the assessee was disallowed mainly for the reason that assessee did not own the land on which the project was constructed and the assessee was a works contractor and that the approval for construction of residential units was given by the local authority to the land owners and not to the assessee - CIT(A) allowed the claim - Held that - CIT(A) after considering the submissions of the assessee and remand report from the Assessing Officer has given a finding that assessee had practically purchased the land. Ld. CIT(A) further after perusing the development agreement has given a finding that the assessee was having dominant control over the land and was found to have been fulfilling the tests laid down by the Tribunal in the case of M/s. Shakti Corporation 2008 (11) TMI 436 - ITAT AHMEDABAD . Before us, Revenue has not brought any material on record to controvert the findings of ld. CIT(A) and has not brought on record any contrary binding decision. In view of the aforesaid facts, we find no reason to interfere in the order of ld.CIT(A) - Decided against revenue

Summary

Issues:
Dispute over deduction under section 80IB(10) of the Income Tax Act for the assessment year 2008-09.

Detailed Analysis:
1. The appellant, a partnership firm engaged in housing projects, filed for deduction under section 80IB(10) of the Income Tax Act for the assessment year 2008-09. The Assessing Officer denied the claim, stating the appellant did not meet the conditions of developing and building the housing project as per the Act. The appellant appealed to the CIT(A), who ruled in favor of the appellant, emphasizing that the appellant had practically purchased the land and had dominant control over the project, meeting the criteria laid down by the Tribunal in previous cases.

2. The CIT(A) highlighted that the appellant had arranged funds for the land purchase and had control over the project's development. The Development Agreement supported the appellant's dominant control over the land and the project. The appellant's actions aligned with the conditions specified in section 80IB(10), and the CIT(A) directed the Assessing Officer to delete the addition made under this section.

3. The appellant appealed to the ITAT against the order of the CIT(A). During the proceedings, the ITAT reviewed the Assessing Officer's reasoning for disallowing the deduction. The ITAT noted that the Assessing Officer's arguments were not substantiated with any new evidence or contrary binding decisions. The ITAT upheld the CIT(A)'s findings, stating that the Revenue did not present any material to challenge the CIT(A)'s decision. Consequently, the ITAT dismissed the Revenue's appeal.

In conclusion, the ITAT upheld the CIT(A)'s decision, emphasizing that the appellant had met the requirements for the deduction under section 80IB(10) of the Income Tax Act for the assessment year 2008-09.