Housing project deduction under section 80IB(10) allowed for D.P. road land and on a proportionate basis for timely completed units.

For housing project deductions under section 80IB(10), land earmarked for a development plan road was treated as part of the project and not excluded from the minimum 1-acre plot test, so the reduced net area did not defeat eligibility. The Tribunal also accepted that where the originally approved flats were completed and certified within the prescribed period, while additional flats under a revised plan were completed later, deduction could be allowed on a proportionate basis for the completed portion. Relief was therefore confined to the units completed within time, resulting in partial success for the assessee.

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Issues: (i) Whether reduction of the project plot area below 1 acre because land was reserved or acquired for D.P. Road disentitled the assessee to deduction under section 80IB(10); (ii) Whether deduction under section 80IB(10) could be allowed on a proportionate basis for the completed portion of the housing project where the remaining flats were completed beyond the stipulated time.

Issue (i): Whether reduction of the project plot area below 1 acre because land was reserved or acquired for D.P. Road disentitled the assessee to deduction under section 80IB(10).

Analysis: The project had originally been approved on a larger plot, but part of the land was earmarked for D.P. Road, reducing the net area below 1 acre. The issue was treated as covered by earlier Tribunal precedent holding that land reserved for D.P. Road forms part of the project and should not be excluded while testing the minimum plot area condition.

Conclusion: The reduced plot area did not make the assessee ineligible for deduction under section 80IB(10).

Issue (ii): Whether deduction under section 80IB(10) could be allowed on a proportionate basis for the completed portion of the housing project where the remaining flats were completed beyond the stipulated time.

Analysis: The originally approved 30 flats were completed and certified within the prescribed four-year period, while the additional six flats introduced under the revised plan were completed later. The completed portion satisfied the statutory conditions, and the Tribunal accepted the settled principle that deduction can be granted on a pro-rata basis for the completed part of the project.

Conclusion: Deduction under section 80IB(10) was allowable on a proportionate basis for the 30 flats completed within time.

Final Conclusion: The assessee succeeded on both core issues to the extent that the project was held eligible under section 80IB(10), but relief was confined to the completed portion of the project, resulting in only partial success in the appeal.

Ratio Decidendi: For a housing project deduction, land earmarked for a development plan road need not be excluded from the plot-area test, and where only part of the project is completed within the statutory period, deduction may be granted on a proportionate basis for the completed units.

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