Multiple housing projects on same land eligible for tax deduction under Section 80-IB(10)

The Tribunal allowed the appeal, holding that the assessee was eligible to claim the deduction under Section 80-IB(10) for the composite housing project "Voora Prithvi," despite separate permits for the 6 blocks on a single acre of land. The Tribunal emphasized that multiple projects on the same land could qualify for the deduction if they met statutory conditions, as clarified by a Bombay High Court judgment supporting the assessee's position.

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Issues:
Disallowance of deduction under Section 80-IB(10) due to separate permits for construction of 6 blocks on a single acre of land.

Analysis:
The appeal was filed against the order disallowing deduction under Section 80-IB(10) for constructing 6 blocks on a land measuring slightly over one acre. The assessee, a construction company, claimed the deduction for the assessment year 2007-08. The Commissioner of Income Tax and the Assessing Officer held that the 6 blocks constituted separate projects, rendering the assessee ineligible for the deduction. The CIT(Appeals) upheld this decision, leading to the appeal before the Tribunal.

The assessee argued that all 6 blocks were part of a single housing project named "Voora Prithvi," with each allottee receiving an undivided share of the total land. The permits for the blocks were granted on the same day, indicating a composite housing scheme. The assessee relied on a Bombay High Court judgment to support their claim that multiple projects on the same land are eligible for the deduction under Section 80-IB(10), provided they meet the specified conditions.

The Department contended that the separate permits for the blocks indicated distinct projects on the land, unlike the Mumbai scenario, where land scarcity justified a different interpretation. The Tribunal examined the records, sale deed, and the Bombay High Court judgment cited by the assessee. It noted that the Revenue did not dispute the land size requirement under Section 80-IB(10) and found merit in the assessee's argument that all 6 blocks were part of a single project, as evidenced by the allottees' undivided shares and simultaneous construction.

Citing the Bombay High Court's decision, the Tribunal emphasized that the intention behind Section 80-IB(10) was to promote housing projects for lower and middle-income groups. The Court clarified that the size of the plot of land did not mandate it to be vacant, allowing for multiple projects on the same land to qualify for the deduction, subject to meeting statutory conditions. Therefore, the Tribunal held that the assessee was eligible for the deduction under Section 80-IB(10) for the "Voora Prithvi" project, overturning the lower authorities' decisions.

In conclusion, the Tribunal allowed the appeal, emphasizing the eligibility of the assessee to claim the deduction under Section 80-IB(10) for the composite housing project, despite the separate permits for the 6 blocks on the single acre of land.

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