Deduction under section 80IB(10) allowed for later independent building projects commencing after 01/10/1998 with unit-size compliance

HC upheld the ITAT in allowing deduction under section 80IB(10). It found the later-constructed buildings were independent projects, not extensions of the original four-building project, and their commencement post-01/10/1998 satisfied the statutory requirement. The unit-size condition (each unit under 1000 sq. ft.) was met. The HC rejected Revenue's contention that sale of adjacent units to family members and subsequent removal of a partition breached the then-operative law, noting the relevant restriction was inserted only from 01/04/2010 and did not apply retrospectively.

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Issues:
1. Deduction under Section 80IB(10) for housing projects.
2. Commencement date of construction for eligibility.
3. Approval of additional building projects.
4. Breach of condition regarding unit size not exceeding 1000 sq.ft.
5. Interpretation of Section 80IB(10) conditions.

Analysis:
1. The Appeals concern the deduction under Section 80IB(10) of the Income Tax Act, 1961 for housing projects. The Respondent Assessee, a real estate development company, claimed this deduction for the Assessment Year 2009-2010, which was contested by the Revenue.

2. The main issue was the eligibility of the housing projects for the deduction based on the commencement date of construction. The Revenue argued that certain projects commenced before the stipulated date of 01/10/1998, making them ineligible. However, the Assessee contended that the subsequent projects were independent and not extensions of the original project.

3. Another contention was regarding the approval of additional building projects. The Revenue claimed that these projects were part of the original housing project, thus not qualifying for the deduction. The Tribunal, however, found that the additional projects were separate and not extensions of the initial construction.

4. The Revenue also raised concerns about a breach of the condition that each housing unit should not exceed 1000 sq.ft. It was noted that some units were combined by removing partition walls, exceeding the specified area. The CIT (Appeals) highlighted this breach but the Tribunal disagreed, stating that the condition was not violated as each individual unit met the size requirement.

5. The interpretation of Section 80IB(10) conditions was crucial in this case. The Tribunal upheld that the projects in question were independent, commenced after the specified date, and did not breach the unit size condition. The Court affirmed the Tribunal's decision, emphasizing that the Assessee followed the law as it stood during the construction period, and no legal issues warranted interference.

In conclusion, the High Court dismissed the Income Tax Appeals, finding no legal grounds for intervention as no questions of law arose from the Tribunal's decision.

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