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TMI Blog2011 (1) TMI 1388X X X X Extracts X X X X X X X X Extracts X X X X ..... tulating complete identity between the assessee as referred to in section 80IB(1), and the undertaking developing and building housing projects approved by the local authority as referred to in section 80IB(10), not permitting such splitting between the assessee and the person who is granted approval by the local authority for developing and building housing projects, as presumed by the CIT(A). 3. The Id CIT (A) failed to abide by the scheme of section 80! B based on complete identity between the assessee as referred to in section 80IB(1), on the one hand, and the entity fulfilling the conditions laid down in sections 80lB(3), 80IB{9), 80IB(11) and 80IB(11AA), besides section 80IB(10), on the other. 4. The Id CIT(A) failed to appreciate that the land being integral part of any housing project, the assessee, without owning the land component, could not pass on full title over dwelling units to the customers so as to derive profits from developing and building housing projects and this integration is further fortified by the requirement of approval by the local authority as well as grant of completion certificate by the local authority under clause (ii) of the Explanati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of the project. In view of Assessing Officer, the fundamental condition that the approval must be accorded in assessee's name was not satisfied and therefore the claim was denied. Without prejudice to the aforesaid argument it was observed by the Assessing Officer that the assessee had utilized FSI of 5993.03 sq. mt. and left unutilized FSI of 3587 sq. mt. and as the said land was disposed by the assessee along with the tenements to prospective buyers, the profit booked from sale of 3587 sq. mt. was stated to be outside the ambit of provisions of section 80IB (10) as it is not the profit derived from activities of merit and construction. In essence ' deduction u/s.80IB(10) was denied and in the alternate the deduction on sale of unutilized FSI was disallowed. 2.2. It is contended by the counsel that similar issue came up the Hon'ble ITAT, Ahmedabad, in ITA No.2482/Ahd./2006 in the M/s. Radhe Developers Others. The ITAT, Ahmedabad held that purpose of claiming deduction u/s.80IB (10) of the Act, it is not necessary for the assessee to own the land. Since such condition is not ed in the section it would not be correct to deny deduction on this ground. The couns ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which a tripartite agreement has been entered into for development and building housing project; or be the assessee a contractor for developing and building housing project or an owner of the land. 45. Therefore, look at from any angle, we are of the considered opinion, that to claim deduction for developing and building housing project, it is not necessary that assessee must be an owner of the land and it would be sufficient if there was an undertaking develops and build housing project. The assessee is also the owner of the project, though the title does not vest in it. 2.1.1. Further, in respect of unutilized FSI, the Hon. ITAT, has Ahmedabad observed has follows : 63. A question has also been raised by the Revenue that the profit earned the assessee are not for developing and building housing project alone but for the sale of extra FSI, which has not been utilized for developing and building housing project. On a perusal of the provisions of Sec. 80IB (10). We find that it is not mandatory requirement to fully utilize permissible FSI; there is no condition as to FSI under the scheme of the provisions of Sec. 80IB(10) of the Act; there is no question o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isfied for the purpose of the claim of deduction under section 80IB of the Act have no force; that the assessees have claimed deduction under section 80IB of the Act for the profit derived during the year under consideration from the business : development and construction of a housing project which though etudes profit earned from sales of unutilized FSI of the housing project also and that the other part of unutilized FSI relating to the 'proved units have not been constructed or developed but being sold directly, although as a unrestrictive bundle of rights attached the sale of land plot. As aforesaid, there is no requirement as to FSI under the scheme of provisions of Sec. 80IB(1). In any case assessee has not sold FSI of plot, even if the unutilized FSI rights available with the assessee, it is the only way left out of utilizing unutilized FSI is to make construction on top of the ground floor, which is already being sold to prospective buyers. With this so called Utilized FSI rights, if the assessee wishes to make further instruction than it will practically impossible as the assessee is left with no Easement rights for making construction or access to go on pi of the gro ..... X X X X Extracts X X X X X X X X Extracts X X X X
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