2021 (11) TMI 640 - HC - Income Tax

Deduction u/s 80IB - Whether assessee has not built the housing project ? - joint development agreement - HELD THAT - As the assessee has actively participated in completing the project and was not merely a land owner. The Karnataka High Court in its order in CIT Vs. M/s Shravanee Construction 2012 (7) TMI 88 - KARNATAKA HIGH COURT while dealing with the similar circumstances, has held that the assessee is entitled for deduction under Section 80IB.

Summary

Issues:
- Deduction under Section 80IB of the Income Tax Act, 1961 for a joint venture housing project.

Analysis:
The case involved an appeal against the order of the Income Tax Appellate Tribunal (ITAT) regarding the deduction claimed by the assessee under Section 80IB of the Income Tax Act, 1961 for a joint venture housing project. The appellant, who had entered into a joint venture with a company to develop residential flats on her land, claimed deduction for her share of the super built area after completion of the project. The Assessing Officer and the Commissioner of Income Tax (Appeals) had initially denied the deduction, stating that the appellant was not involved in the development and construction activities. However, the ITAT allowed the deduction, emphasizing the active participation of the appellant in various project-related activities beyond being a mere landowner.

The ITAT's order highlighted that the appellant's involvement in obtaining clearances, building approach roads, making the land conducive for construction, supervision, and promotion of the project demonstrated her integral role in the development and construction activities. The ITAT referred to judicial pronouncements, such as the case of M/s Shravanee Construction, to support the appellant's eligibility for the deduction under Section 80IB of the Act. The ITAT also noted that the appellant's case was similar to that of another individual who was granted the deduction for a joint housing project.

The High Court, after reviewing the ITAT's findings and the material on record, upheld the decision and dismissed the appeal. The Court emphasized that the appellant's active participation in the project justified the deduction claimed under Section 80IB of the Act. Citing a previous judgment by the Karnataka High Court in a similar case, the High Court concluded that there was no basis for interference in the ITAT's order. Consequently, the appeal was dismissed, affirming the appellant's entitlement to the deduction for her share in the joint venture housing project.