Land ownership not required for deduction under section 80IB(10) - ITAT ruling clarifies on unutilized FSI proceeds.

The ITAT upheld the CIT(A)'s decision, allowing the deduction u/s 80IB(10) for a non-owner developer and on proceeds from the sale of unutilized FSI. The ITAT clarified that ownership of land is not a prerequisite for claiming the deduction and that profits from the sale of unutilized FSI can still qualify under the provision. The Revenue's appeal was dismissed, affirming the eligibility of the assessee for the deductions.

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Issues Involved:

1. Deduction u/s 80IB(10) for non-owner developers.
2. Deduction u/s 80IB(10) on proceeds from the sale of unutilized FSI.

Summary:

Issue 1: Deduction u/s 80IB(10) for non-owner developers

The Revenue contended that the assessee was not entitled to deduction u/s 80IB(10) as the assessee was not the owner of the land and the approval for the housing project was not in the assessee's name but in the name of the original landowner. The CIT(A) allowed the deduction, referencing the ITAT Ahmedabad decision in the case of M/s. Radhe Developers & Others, which held that ownership of land is not a prerequisite for claiming deduction u/s 80IB(10). The ITAT affirmed this view, stating that the deduction is available to the entity developing and building the housing project, irrespective of land ownership.

Issue 2: Deduction u/s 80IB(10) on proceeds from the sale of unutilized FSI

The Revenue argued that the profit from the sale of unutilized FSI should not qualify for deduction u/s 80IB(10) as it is not derived from the development and construction of housing projects. The CIT(A) rejected this argument, again referencing the ITAT Ahmedabad decision in M/s. Radhe Developers & Others, which clarified that there is no mandatory requirement to fully utilize permissible FSI for claiming deduction u/s 80IB(10). The ITAT upheld this view, noting that the sale of unutilized FSI does not disqualify the profits from being considered as derived from the housing project.

Conclusion:

The ITAT confirmed the CIT(A)'s order allowing the deduction u/s 80IB(10) to the assessee, both for the development of the housing project and the proceeds from the sale of unutilized FSI. The appeal of the Revenue was dismissed.

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