2014 (6) TMI 704 - AT - Income Tax

Appeals allowed for deduction under section 80IB(10) - Tribunal emphasizes project continuity

M/s. Skyland Developers C/o. VP. Patel & Co. Adv. Versus Income Tax Officer

The Tribunal allowed the appeals of the assessee, overturning the disallowance of deduction under section 80IB(10) for the Assessment Years in question. ... Disallowance of claim of deduction u/s 80IB(10) of the Act – Housing project – Held that:- As decided in assessee’s own case for the earlier assessment year, it has been held that the appellant has satisfied all the three conditions required for deduction u/s 80IB of the Act - in the case of contractors who have been held to be entitled to deduction u/s 80IB which has been denied solely on the ground that the land was not owned by the developer - The activity of the development has been carried on by the contractor-developer as per the agreement entered into with the land owners which carried on the developmental activity in terms of the agreement - simply because the land was not owned by the developers it has consistently been held is not a relevant criteria to disallow the deduction claimed – Relying upon Commissioner of Income-tax Versus Radhe Developers [2011 (12) TMI 248 - GUJARAT HIGH COURT] – the order is set aside and the assesse is entitled for the claim of deduction u/s 80IB(10) of the Act – Decided in favour of Assessee. Issues:Appeals against disallowance of deduction u/s. 80IB(10) for Assessment Years 2000-01, 2001-02, and 2006-07.Analysis:The appeals were filed by the assessee challenging the disallowance of deduction u/s. 80IB(10) for specific Assessment Years. The primary issue revolved around the Commissioner of Income Tax(Appeals) disallowing the claimed deductions. The Tribunal examined the facts, submissions, and previous orders related to the housing project near Blind Man Association, Ranip, Ahmedabad. The Authorized Representative of the assessee presented the Tribunal with a previous order where a similar disallowance was overturned, indicating the continuity and consistency of the project. The Tribunal referenced specific findings from past judgments to support the claim for deduction, highlighting the role of the appellant as a contractor/builder in the housing project. The Departmental Representative failed to counter the arguments presented.In a detailed analysis, the Tribunal referred to its earlier decision in the case of Radhe Developers, emphasizing that ownership of the land by the developer was not a relevant criterion for disallowing the deduction under section 80IB. The Tribunal dismissed the departmental appeal, citing the consistent application of law in similar cases and the lack of distinguishing facts presented by the Department. The Tribunal concluded that since the facts and circumstances remained identical to previous cases where deductions were allowed, the claim for deduction u/s. 80IB(10) should be granted to the assessee for the respective Assessment Years. The Tribunal relied on the affirmed decision by the Hon'ble Gujarat High Court in the case of CIT Vs. Radhe Developers to support its judgment.In the final order, the Tribunal set aside the decisions of the lower authorities and allowed the claim for deduction u/s. 80IB(10) for the amounts disallowed in the respective Assessment Years. The appeals of the assessee were allowed, and the orders were pronounced in the Court on the specified date at Ahmedabad.