One-acre housing project for section 80-IB(10) deduction cannot be met by clubbing private bungalow land

Deduction under section 80-IB(10)(b) was denied because the approved housing project itself had to be on a plot of at least one acre, and only the land actually comprised in that project could be counted. Land occupied by the assessee's separate personal bungalow could not be aggregated with the project land to satisfy the statutory minimum. On the facts, the project area was only 0.70 acre, so the one-acre condition was not met. The reliance on Vandana Properties was rejected as it did not support clubbing private residential land with the housing project land. The disallowance of deduction was therefore upheld.

---

---

Issues: Whether the assessee was entitled to deduction under section 80-IB(10) where the housing project, as approved and constructed, was on less than one acre of land, and whether land used for the assessee's personal residential bungalow could be aggregated with the project land to satisfy the statutory minimum area requirement.

Analysis: The deduction under section 80-IB(10)(b) is available only when the eligible housing project is on a plot of land having a minimum area of one acre. The relevant land is the plot on which the approved housing project is actually developed, and not the entirety of the assessee's contiguous holding. Land occupied by a separate personal residence, which is not part of the approved housing project or its common amenities, cannot be added to meet the one-acre condition. On the facts found, the project area was only 0.70 acre, and the assessee's reliance on Vandana Properties was held to be misplaced because that decision did not support aggregation of land used for a private bungalow with land on which the housing project stood.

Conclusion: The assessee was not entitled to deduction under section 80-IB(10), as the housing project itself did not satisfy the minimum one-acre plot requirement.

Final Conclusion: The disallowance of the deduction was upheld for both assessment years, and the assessee's appeals failed.

Ratio Decidendi: For deduction under section 80-IB(10)(b), the one-acre requirement must be satisfied by the land comprised in the approved housing project itself, and land used for unrelated personal construction cannot be clubbed to satisfy that condition.

---