Tribunal grants deductions under Section 80IB(10) for housing projects

The Tribunal allowed the assessee's appeals for the 'Damodar Residency' project and dismissed the Revenue's appeals for the 'Bhujbal Township' project, affirming the eligibility for deductions under Section 80IB(10) for both housing projects.

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Issues Involved:
1. Deduction under Section 80IB(10) of the Income Tax Act, 1961 for the housing project at 'Bhujbal Township.'
2. Deduction under Section 80IB(10) of the Income Tax Act, 1961 for the housing project at 'Damodar Residency.'

Issue-wise Detailed Analysis:

1. Deduction under Section 80IB(10) for 'Bhujbal Township':

The assessee, a builder and developer, developed a residential project at 'Bhujbal Township,' situated on ancestral property of the Bhujbal Family. The project included three buildings (B2, B5, and B9) on a plot measuring 4,902 Sq. Mtrs. The assessee claimed deduction under Section 80IB(10) for the assessment year 2007-08, which was initially denied by the Assessing Officer on the grounds that the plot was less than the required 1 acre. However, the Commissioner of Income Tax (Appeals) upheld the claim, and the Tribunal dismissed the Revenue's appeal, affirming the eligibility for deduction.

For the assessment years 2008-09 and 2009-10, the Assessing Officer again disallowed the deduction, citing the Department's pending appeal before the Bombay High Court. The Tribunal reiterated its previous decision, confirming that the project met the criteria for deduction under Section 80IB(10). The Tribunal emphasized that no stay or reversal from the High Court was presented, thereby dismissing the Revenue's appeals and upholding the deduction for the 'Bhujbal Township' project.

2. Deduction under Section 80IB(10) for 'Damodar Residency':

The second project, 'Damodar Residency,' involved the development of seven buildings on a plot measuring 14,400 Sq. Mtrs. The assessee claimed deduction for residential buildings A2 and A3, constructed on a plot measuring 4,100 Sq. Mtrs., which exceeds the 1-acre requirement. The Assessing Officer denied the deduction, arguing that the plot was less than 1 acre and that the land was undivided and not owned by the assessee.

The Commissioner of Income Tax (Appeals) upheld the denial, but the Tribunal found these conclusions erroneous. The Tribunal noted that the total project area was 3 acres, and the specific plot for buildings A2 and A3 met the 1-acre requirement. The Tribunal cited the Bombay High Court's decision in CIT Vs. Vandana Properties, which clarified that Section 80IB(10) does not mandate the plot to be vacant and allows for multiple projects on a single plot exceeding 1 acre.

Regarding the ownership issue, the Tribunal referred to the Madras High Court's ruling in CIT Vs. Sanghvi and Doshi Enterprise, stating that ownership of land is not a prerequisite for claiming the deduction under Section 80IB(10). The Tribunal concluded that the 'Damodar Residency' project met all conditions for the deduction and directed the Assessing Officer to grant the deduction for the assessment years 2008-09, 2009-10, and 2010-11.

Conclusion:

The Tribunal allowed the assessee's appeals for the 'Damodar Residency' project and dismissed the Revenue's appeals for the 'Bhujbal Township' project, affirming the eligibility for deductions under Section 80IB(10) for both housing projects.

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