Section 80IB(10) deduction: land ownership not required, and car park space excluded from built-up area.

Section 80IB(10) deduction is available to a builder who develops and builds a housing project even if the builder does not own the land, because land ownership is not a statutory precondition. Car park area cannot be included in the built-up area of a residential unit for computing the section's limit, since built-up area refers to the residential unit's inner measurements and excludes common areas; parking space is treated as a common area. The article therefore affirms that the deduction remains available where these conditions are satisfied.

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Issues: (i) Whether deduction under Section 80IB(10) of the Income-tax Act, 1961 was available when the assessee was a builder but not the owner of the land; (ii) Whether car park area could be included in the built-up area of the residential unit for computing the limit under Section 80IB(10) of the Income-tax Act, 1961.

Issue (i): Whether deduction under Section 80IB(10) of the Income-tax Act, 1961 was available when the assessee was a builder but not the owner of the land.

Analysis: The claim for deduction was tested against the statutory condition that the undertaking must be engaged in developing and building housing projects. The ownership of the land was held not to be a statutory requirement for claiming the deduction, and the earlier binding view on the point was followed.

Conclusion: The issue was decided against the Revenue and in favour of the assessee.

Issue (ii): Whether car park area could be included in the built-up area of the residential unit for computing the limit under Section 80IB(10) of the Income-tax Act, 1961.

Analysis: The relevant assessment year did not contain an express definition of built-up area, but Section 80IB(14)(a) later clarified that built-up area means the inner measurements of the residential unit with projections, balconies and wall thickness, excluding common areas. The parking area was separately dealt with and was treated as a common area under the Tamil Nadu Apartment Ownership Act, 1994. On that basis, car park area could not be added to the residential built-up area for applying the statutory limit.

Conclusion: The issue was decided against the Revenue and in favour of the assessee.

Final Conclusion: The deduction under Section 80IB(10) was upheld, the Revenue's challenge failed on both questions, and the assessee's relief was sustained.

Ratio Decidendi: For Section 80IB(10) deduction, ownership of the land is not indispensable if the assessee develops and builds the housing project, and parking space that constitutes a common area cannot be included in the residential unit's built-up area.

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