2016 (7) TMI 527 - HC - Income Tax

Deduction u/s.80IB(10) r.w.s. 80IB(1)- title of lands not passed - Held that - Considering the decision of this Court in the case of Radhe Developers (2011 (12) TMI 248 - GUJARAT HIGH COURT) and Swastik Associates (2014 (5) TMI 708 - GUJARAT HIGH COURT), the questions, which are raised in the present appeals are required to be answered in favour of the assessee as held that assessees are entitled to benefit under section 80IB(10) even where title of lands had not passed on to assessees and in some cases, development permissions may also have been obtained in name of original land owners. Since the facts in the present matters are identical, disallowance is required to be deleted and the order of the Tribunal is required to be confirmed. - Decided in favour of assessee

Summary

Issues:
1. Interpretation of deduction u/s 80IB(10) regarding approval by local authority and completion certificate.
2. Fulfillment of conditions under Section 80IB(10) for housing project development.
3. Allowance of deduction u/s 80IB(10) for profit derived from sale of unutilized SFI.

Interpretation of Deduction u/s 80IB(10):
The case involved the question of whether the Appellate Tribunal was correct in allowing deduction u/s 80IB(10) when the approval by the local authority and completion certificate were granted to the landowner, not the assessee. The Tribunal reversed the CIT(A)'s decision disallowing the deduction, leading to the revenue's appeal. The revenue argued that the approval of the local authority must be for the housing project of the assessee's undertaking. However, the assessee contended that previous court decisions supported their entitlement to the deduction even if the title of the land had not been transferred to them.

Fulfillment of Conditions under Section 80IB(10):
The Tribunal's decision was based on previous court rulings, including one where it was held that for the purpose of income derived from the property, the assessee could be considered the owner of the land even if the title had not passed to them. The Tribunal concluded that the assessee satisfied the ownership condition for the deduction under Section 80IB(10). The revenue's argument against this interpretation was dismissed, and the Tribunal's decision was upheld.

Allowance of Deduction for Profit Derived from Sale of Unutilized SFI:
Another issue raised was whether the Tribunal was correct in allowing deduction for profit derived from the sale of unutilized SFI, which was not part of the business activity of developing and constructing the housing project. The Tribunal's decision to allow this deduction was supported by previous court judgments, and the revenue's appeal against this was also dismissed.

In conclusion, the High Court confirmed the Tribunal's decision to allow the deductions under Section 80IB(10) in all the cases presented. The court relied on previous judgments and held that the assessee met the conditions for the deductions, even if the approval by the local authority and completion certificates were not in the assessee's name. The court emphasized that the ownership condition for the deduction was satisfied based on the specific circumstances of the cases. As a result, the revenue's appeals were dismissed, and the Tribunal's orders were upheld.