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2023 (7) TMI 1165 - HC - Income TaxDeduction u/s. 80IB(1) - Assessee was not the owner of the land and the approval of the project was not in the name of Assessee - HELD THAT - As decided in Green Associate 2018 (9) TMI 1181 - GUJARAT HIGH COURT Assessee had undertaken a development of the project at its own risk and cost and therefore, the Assessee was entitled to the deduction as claimed. The Court also held that just because the land was in the name of the original owner when the housing development project was executed would not be detrimental to Assessee s claim of deduction under Section 80IB(10) of the Act. Therefore, in our view the section does not prescribe anywhere that the commencement certificate should be in the name of Assessee. What is required to be seen is whether Assessee has developed the project during the year under consideration and offered the income from the project for tax. Admittedly the Assessee has developed the project. No substantial questions of law arises.
Issues:
The issues involved in the judgment are: 1. Whether the ITAT was justified in quashing the assessment order passed under Section 143(3) r.w.s. 153a of the Income Tax Act, 1961. 2. Whether the ITAT was justified in directing the Assessing Officer to allow the claim of deduction under Section 80IB(1) made by the assessee on a pro-rata basis without appreciating the provisions of Section 80IB(10). Issue 1: The appellant, during the Assessment Year 2008-09, developed a project named 'Harsh Vihar Project' and claimed a deduction under Section 80IB(10) of the Income Tax Act, 1961. The Assessing Officer (AO) concluded that the appellant was not entitled to the deduction as the project was not eligible under Section 80IB(10) since the commencement certificate was in the name of a different entity. This decision was upheld by the CIT(A). However, the ITAT correctly interpreted Section 80IB(10) and found that the conditions for claiming the benefit were fulfilled irrespective of the name on the certificate. The ITAT considered the conditions prescribed under Section 80IB(10) and concluded that the appellant met the requirements, as confirmed by a certificate from the Architect. Therefore, the ITAT's decision to quash the assessment order was justified. Issue 2: A similar issue was considered by the Gujarat High Court in a previous case where the Assessing Officer disallowed a claim under Section 80IB(10) due to the land ownership not being in the name of the assessee. The court held that the assessee, who undertook the project at its own risk and cost, was entitled to the deduction claimed. The court emphasized that the ownership of the land at the time of project execution did not affect the eligibility for the deduction under Section 80IB(10). Drawing from this precedent, the Bombay High Court reiterated that the section does not mandate the commencement certificate to be in the name of the assessee; rather, the crucial factor is whether the assessee developed the project during the relevant year and offered the income for tax. Since the appellant had undertaken the project and met the conditions of Section 80IB(10), the court found no substantial question of law to arise. Conclusion: The High Court of Bombay upheld the ITAT's decision to quash the assessment order and allow the deduction claimed under Section 80IB(10). The court found that the appellant fulfilled the conditions specified under the Act, emphasizing that the ownership of the land or the name on the commencement certificate did not affect the eligibility for the deduction. As a result, the appeal was disposed of, and another related appeal was deemed unnecessary based on the same conclusions.
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