Built-up area, approval date, and developer status principles governed eligibility for housing project deduction.

For deduction under section 80IB(10), open terrace area is not part of built-up area and cannot be used to disqualify a housing project. The completion period is to be reckoned from the last building plan approval governing the project as a whole, not from the first layout approval. A completion certificate issued by the competent local authority was held sufficient, so a separate CMDA completion certificate was unnecessary. The absence of registered title in the assessee's name did not bar relief where it acted as the real developer, having undertaken development and construction at its own risk. The statutory conditions for the deduction were therefore treated as satisfied.

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Issues: (i) Whether open terrace area is to be included in the computation of built up area for deduction under section 80IB(10); (ii) whether the period for completion of the housing project is to be reckoned from the first layout approval date or from the last building plan approval date; (iii) whether a separate CMDA completion/approval certificate was necessary notwithstanding completion certificate issued by the local authority; (iv) whether the assessee was a developer entitled to deduction under section 80IB(10) despite the absence of registered title in its name.

Issue (i): Whether open terrace area is to be included in the computation of built up area for deduction under section 80IB(10).

Analysis: The relevant question was whether an open terrace, being an unbuilt open space, could be treated as part of the built up area so as to deny the statutory deduction. The Court followed the settled view that where the terrace remains open and there is no specific statutory basis to include it within built up area, it cannot be added for the purpose of disqualifying the project from the benefit under section 80IB(10).

Conclusion: Open terrace area is not includible in built up area, and the issue is answered in favour of the assessee.

Issue (ii): Whether the period for completion of the housing project is to be reckoned from the first layout approval date or from the last building plan approval date.

Analysis: The statutory scheme was applied to the facts of multiple approvals for the same housing project. The Court accepted that the initial layout approval predated the assessee's conception of the project, whereas the housing project came into existence through subsequent building plan approvals. In such circumstances, the project was to be treated as approved on the date of the last approval relevant to the whole project, and completion within the prescribed time had to be tested from that date.

Conclusion: The completion period is to be reckoned from the last building plan approval for the housing project, and the issue is answered in favour of the assessee.

Issue (iii): Whether a separate CMDA completion/approval certificate was necessary notwithstanding completion certificate issued by the local authority.

Analysis: The Court accepted the view that in a project developed in an already approved layout, the competent authority for planning permission and building permit for independent houses was the local authority. On that basis, the completion certificate issued by the local authority was sufficient and no separate CMDA certificate was required for the claim under section 80IB(10).

Conclusion: A separate CMDA completion certificate was not required, and the issue is answered in favour of the assessee.

Issue (iv): Whether the assessee was a developer entitled to deduction under section 80IB(10) despite the absence of registered title in its name.

Analysis: The Court applied the settled principle that deduction under section 80IB(10) is available to a person engaged in developing and constructing housing projects, and that ownership of the land is not a precondition where the assessee has entered into the development arrangement, taken possession, developed infrastructure, and undertaken construction at its own risk. The Court treated the assessee as a builder and developer rather than a mere works contractor.

Conclusion: The assessee was a developer entitled to deduction, and the issue is answered in favour of the assessee.

Final Conclusion: The statutory conditions for deduction under section 80IB(10) were held to have been satisfied, and the revenue's challenge to the assessee's claim failed.

Ratio Decidendi: For deduction under section 80IB(10), open terrace cannot be treated as built up area, the relevant approval date is the approval governing the housing project as a whole, local authority completion certification can suffice where it is the competent authority, and land ownership is not essential if the assessee is the actual developer undertaking the project at its own risk.

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