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2021 (8) TMI 362 - AT - Income TaxDisallowance u/s 80IB - CIT (Appeals) confirming the action of assessing officer in holding that income from housing project in the name of Hampton Park belongs to AOP and not in the individual capacity as co-owner - HELD THAT - As decided in own case 2021 (4) TMI 1253 - ITAT SURAT assessee was allowed deduction under section 80IB of the Act. - Decided in favour of assessee.
Issues Involved:
1. Classification of income from the housing project "Hampton Park" as belonging to an Association of Persons (AOP) or as individual co-owners. 2. Disallowance of deduction claimed under Section 80IB(10) of the Income Tax Act, 1961. Detailed Analysis: Issue 1: Classification of Income from Housing Project The primary issue revolves around whether the income from the housing project "Hampton Park" should be classified as belonging to an Association of Persons (AOP) or as individual co-owners. The assessee, along with his mother, developed the housing project and claimed the income individually. The Assessing Officer (AO) classified the income as belonging to an AOP, leading to the disallowance of the deduction under Section 80IB(10). The Tribunal noted that the same issue had been previously addressed in the case of the assessee's co-owner (mother) in ITA No. 2476/Ahd/2014, where the Tribunal ruled in favor of the co-owner, allowing the deduction. The Tribunal observed that the land was inherited, and the project was developed in the status of co-ownership, not as an AOP. The documentary evidence, such as approved plans, development permission letters, sale deeds, and joint bank accounts, supported the status of co-ownership. The Tribunal reiterated that an AOP is a voluntary association, and in this case, the association was forced due to inheritance, thus constituting co-ownership. The Tribunal also referenced the decision of the Hon'ble Allahabad High Court in CIT Vs. Laxmi P Da Sons, which held that forced associations due to inheritance do not constitute an AOP. Issue 2: Disallowance of Deduction under Section 80IB(10) The second issue pertains to the disallowance of the deduction claimed under Section 80IB(10) of the Income Tax Act, 1961. The AO disallowed the deduction on the grounds that the project was developed by an AOP, not individual co-owners. The Tribunal, however, found that the project was indeed developed by individual co-owners, thus entitling them to the deduction. The Tribunal referenced its previous decisions in similar cases, including the co-owner's case for AY 2011-12 and AY 2012-13, where the deduction under Section 80IB(10) was allowed. The Tribunal emphasized that both the landowner and the developer are eligible for the deduction if they fulfill the conditions laid down under Section 80IB(10). The Tribunal also cited the decision of the Hon'ble Karnataka High Court in CIT v. Shrayanee Constructions, which held that the benefit of Section 80IB(10) applies to both the landowner and the developer. The Tribunal concluded that the assessee, as a co-owner, fulfilled all the conditions for the deduction under Section 80IB(10). Conclusion: The Tribunal allowed the appeal of the assessee, holding that the income from the housing project "Hampton Park" belongs to individual co-owners and not an AOP. Consequently, the assessee is entitled to the deduction under Section 80IB(10) of the Income Tax Act, 1961. The Tribunal's decision is consistent with its previous rulings in similar cases and relevant judicial precedents.
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