Deduction u/s 80IB(10)-Land ownership not a condition precedent for developing the housing project and claiming the deduction. ITAT
ABCAUS Case Law Citation:
966 2016 (07) ITAT
Assessment Year: 2008-09
Date/Month of Judgment/Order July, 2016
Important Judgment Cited/relied upon:
CIT vs. Radhe Developers (2012) Gujarat High Court
Brief Facts of the Case:
The assessee was a partnership firm engaged in the business of construction and developing of infrastructure housing projects. During the year under consideration, the assessee filed return of income showing Nil income after claiming deduction u/s 80IB(10). However the deduction was disallowed by the Assessing Officer on the ground that the assessee was only a work contractor and not a developer. On appeal, the CIT(A) allowed the claim for deduction u/s. 80IB(10) to the assessee holding that the assessee-firm had not worked in the capacity of a contractor but has acquired dominant control over the land and has also borne the entire risk and responsibility of the project.
Observations of the Tribunal:
The Tribunal noted that the Gujarat High Court had held that the provisions nowhere required that only those developers who themselves own the land would receive the deduction under Section 80IB(10) of the Income Tax Act, 1961. Neither the provisions of Section 80IB nor any other provisions contained in other related statutes demonstrate that ownership of the land would be a condition precedent for developing the housing project. Such requirement cannot be read into the statute because there is nothing under Section 80IB(10) requiring that ownership of the land must vest in the developer to be able to qualify for such deduction.
Accordingly the order of the CIT(A) allowing deduction to the assessee was confirmed and the appeal of the Revenue was dismissed.