Tribunal upholds deduction under Section 80IB(10) for assessee, rejecting Revenue's appeal.

The Tribunal dismissed the Revenue's appeal and upheld the CIT(A)'s decision to allow the deduction under Section 80IB(10) for the assessee. The Tribunal found that the assessee met all conditions for claiming the deduction for the flats, rejecting the AO's disallowance based on incorrect interpretations. The decision was rendered on 28.02.2019.

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Issues Involved:
1. Disallowance of deduction under Section 80IB(10) of the Income Tax Act.
2. Compliance with conditions laid down in Section 80IB(10)(c) regarding the area of residential units.
3. Treatment of the entire housing project as a single unit.
4. Ownership of land for claiming deduction under Section 80IB(10).

Issue-wise Detailed Analysis:

1. Disallowance of Deduction under Section 80IB(10):
The Revenue challenged the relief granted by the CIT(A) who directed the AO to allow the deduction under Section 80IB(10). The CIT-DR relied on the AO's order, while the assessee's counsel argued that the issue was covered by a previous ITAT decision. The Tribunal found that the issue was indeed covered by the ITAT's earlier decision, which supported the assessee's claim for deduction. The Tribunal upheld the CIT(A)'s decision, finding no reason to deviate from it.

2. Compliance with Conditions Laid Down in Section 80IB(10)(c):
The AO denied the deduction on the grounds that the row houses exceeded the prescribed built-up area of 1500 sq. ft. However, the CIT(A) noted that the assessee had not claimed deductions for the row houses but had maintained separate profit and loss accounts for the flats and row houses. The flats complied with the built-up area condition, and the deduction was claimed only for the flats. The Tribunal agreed with the CIT(A) that the assessee fulfilled all the conditions of Section 80IB(10) for the flats, and thus, the deduction was allowable.

3. Treatment of the Entire Housing Project as a Single Unit:
The AO treated the entire housing project as a single unit, including the row houses, to deny the deduction. The CIT(A) and the Tribunal found this approach incorrect. The Tribunal cited the Madras High Court's decision in Vishwas Promoters Pvt. Ltd., which held that each block in a housing project could be treated separately for claiming deductions. Since the assessee maintained separate accounts and claimed deductions only for the flats, the Tribunal upheld the CIT(A)'s decision to allow the deduction for the flats.

4. Ownership of Land for Claiming Deduction under Section 80IB(10):
The AO argued that the assessee was not the owner of the land when the housing project was developed. The CIT(A) and the Tribunal referred to the ITAT's decision in Radhe Developers, which stated that ownership of land is not a prerequisite for claiming deduction under Section 80IB(10). The assessee had developed the housing project under an agreement and later became the owner of the land. The Tribunal found the AO's contention unsustainable and upheld the CIT(A)'s decision.

Conclusion:
The Tribunal dismissed the Revenue's appeal, upholding the CIT(A)'s order that allowed the deduction under Section 80IB(10) for the assessee. The Tribunal found that the assessee had complied with all the conditions for claiming the deduction for the flats, and the AO's disallowance was based on incorrect interpretations and hyper-technical grounds. The Tribunal's decision was pronounced in the open court on 28.02.2019.

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