2015 (8) TMI 888 - HC - Income Tax

Court upholds Income Tax Tribunal's decision on Section 80IB(10) deduction for Housing Project

The High Court dismissed the appeal challenging the Income Tax Appellate Tribunal's decision regarding the interpretation of Section 80IB(10) of the ... Eligibility for deduction u/s.80IB(10) - Whether Tribunal was justified in holding that the deduction u/s. 80IB(10) is admissible to a Housing Project on the size of two plots of land together making minimum area of one acre? - whether admissible to a Housing Project comprising of residential and commercial units?' - Held that:- Revenue very fairly states that the impugned order of the Tribunal has followed its orders dated 4 May 2012 for the Assessment Years 2005-06 and 2006-07. Being aggrieved, the revenue had filed two appeals in respect of the order dated 4 May 2012 for each of the two Assessment Years i.e. 2005-06 and 2006-07 [2015 (8) TMI 860 - BOMBAY HIGH COURT] and [2015 (8) TMI 859 - BOMBAY HIGH COURT] wherein held it is not in dispute that where a project is approved as a housing project without or with commercial user to the extent permitted under the rules / Regulations, then, deduction under section 80-IB(10) would be allowable. In other words, if a project could be approved as a housing project having residential units with permissible commercial user, then it is not open to the income tax authorities to contend that the expression “housing project” in section 80-IB(10) is applicable to projects having only residential units. This Court by orders dated 4 December 2014 and 9 January 2015 in respect of each appeal respectively were not entertained as it did not give rise to any substantial question of law. - Decided against revenue. Issues:1. Interpretation of Section 80IB(10) of the Income Tax Act, 1961 regarding admissibility of deduction for a Housing Project on the size of two plots of land.2. Admissibility of deduction under Section 80IB(10) for a Housing Project comprising of residential and commercial units.Analysis:1. The High Court considered the appeal challenging the order of the Income Tax Appellate Tribunal for the Assessment Year 2007-08. The revenue raised questions regarding the interpretation of Section 80IB(10) of the Income Tax Act, specifically concerning the size requirement for a Housing Project. The Tribunal had allowed the deduction for a project on the size of two plots of land making a minimum area of one acre, contrary to the clause in Section 80IB(10) specifying that the project should be on land with a minimum area of one acre. The revenue contended that the Tribunal's interpretation was incorrect. However, the Court noted that the Tribunal's decision was consistent with its previous orders for the Assessment Years 2005-06 and 2006-07. The Court also highlighted that previous appeals by the revenue for those years were not entertained by the Court as they did not raise substantial questions of law. Consequently, the Court found no substantial question of law in the current appeal and dismissed it.2. The second issue raised in the appeal concerned the admissibility of deduction under Section 80IB(10) for a Housing Project comprising both residential and commercial units. However, the Court did not delve into this issue extensively as it found no substantial question of law arising from the appeal. The Court's decision to dismiss the appeal was based on the lack of new legal issues raised beyond what had been previously considered in related cases. Therefore, the Court's judgment focused on the lack of substantial legal questions warranting a review of the Tribunal's decision. The dismissal of the appeal indicates that the Court did not find grounds to challenge the Tribunal's interpretation of the relevant provisions of the Income Tax Act in the context of the issues raised by the revenue.