Housing project deduction depends on development risk and control, not formal land ownership, where the assessee is not a works contractor.

Deduction under section 80IB(10) is available where an assessee develops and constructs a housing project on its own risk and cost, even if it does not own the land and the development permission stands in the landowner's name. Ownership of the land is not a statutory condition for the deduction. Where the assessee has full control over execution, bears project risk, may engage contractors and professionals, and is entitled to profits and liable for losses, it is not merely a works contractor. Possession in part performance may also support treatment as owner for this limited purpose. On that basis, the deduction cannot be denied on the ground of non-ownership.

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Issues: Whether deduction under section 80IB(10) of the Income-tax Act, 1961 is available to an assessee developing and constructing a housing project on land not owned by it and where development permission stood in the name of the original landowner; and whether such assessee can be treated as a works contractor so as to be denied the deduction.

Analysis: Section 80IB(10) grants deduction to an undertaking engaged in developing and constructing housing projects and does not stipulate that ownership of the land is a prerequisite. In construing a taxing provision, nothing can be read into it that the Legislature has not expressed. On the facts found, the assessees had undertaken the projects at their own risk and cost, had full control over the land and the execution of the projects, could engage professionals and contractors, enroll members, collect charges, and were entitled to the profits and liable for the losses. The agreements showed that the landowners received a fixed land price and were insulated from project risk. The possession given in part performance also attracted the effect of section 2(47)(v) of the Income-tax Act, 1961 read with section 53A of the Transfer of Property Act, so that, for the limited purpose of the deduction, the assessees were to be treated as owners. The assessee, therefore, was not merely a works contractor.

Conclusion: The deduction under section 80IB(10) could not be denied on the ground that the land was not owned by the assessees or that development permission stood in the name of the landowners; the assessees were entitled to the benefit of the provision.

Final Conclusion: The common issue was answered in favour of the assessee, and the tax appeals were dismissed.

Ratio Decidendi: For deduction under section 80IB(10), ownership of the land is not a statutory condition when the assessee has undertaken development and construction of the housing project on its own risk and cost and is not acting merely as a works contractor.

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