Housing project deduction depends on actual development, construction control, and project risk, not mere land ownership.

Deduction under section 80-IB(10) is available only where the claimant substantively develops and builds an approved housing project, not where it merely owns land. The decisive test is whether the assessee undertook developmental activity, bore construction costs, assumed project risk, and controlled execution as owner, developer, or joint developer. On the stated facts, the assessee had transferred part of the land, the construction was carried out by the developer, and no construction expenditure or actual development role was established. The deduction was therefore denied and the order allowing it was set aside in favour of the Revenue.

---

---

Issues: Whether the assessee was entitled to deduction under section 80-IB(10) of the Income-tax Act, 1961 on the housing project.

Analysis: Deduction under section 80-IB(10) is available only where the undertaking has in substance developed and built a housing project approved by the local authority. Mere ownership of land is not sufficient by itself, and the decisive inquiry is whether the assessee undertook the developmental activity, bore the construction cost, assumed the project risk, and exercised control over the execution of the project. On the facts, the assessee had transferred 50% of the land and the construction was undertaken by the developer. The assessee did not incur construction expenditure or establish that it had carried out developmental activities as owner, developer, or jointly with the other entity.

Conclusion: The assessee was not eligible for deduction under section 80-IB(10); the finding is against the assessee and in favour of the Revenue.

Final Conclusion: The order allowing the deduction was set aside and the Revenue's appeal succeeded.

Ratio Decidendi: For deduction under section 80-IB(10), the claimant must establish actual development and building of the housing project with the attendant risk and responsibility; mere ownership of land, without such developmental participation, is insufficient.

---