DEDUCTION U/S. 80IB(10) OF THE INCOME TAX ACT

[RAMESH MANSHARAMANI]

one of my client who is proprietor of the firm and engaged in the business of "Development of Housing Project" In the Asst. Year 2008-2009 the assessee has claimed 100% exemption u/s. 80IB(10) of the Income Tax Act

In which Proprietor fullfill all the conditions of said section but only query is "assessee is the owner of land and on which he builds residential bunglow (neither appointing developer nor contractor) and same sold to the buyer but at the time of sale he made two agreement with the buyer 1st Agreement of sale of Land on stamp paper (as notified Gujarat Govt. Stamp value) and 2nd Agreement of Building Construction on Rs. 100 stamp Paper but he books both profit under one firm in which he claims 100% deduction u/s. 80IB(10) of the income tax. Can he is eligible to claim if yes then can u send me any judgement came on said issue because Income Tax Officer wants to reject whole deduction with objection that assessee business is just like contractor to do construction work on land alloted to buyer

kindly reply me whether claim is allowable u/s. 80IB(10) if yes then send me judgement if any

If any further clarification require please mail me without fail

Ramesh K M

[email protected]

98258 79833

AI Summary

Developer investment risk determines eligibility for housing project tax deduction; works-contract structures and split agreements can defeat claims.
Deduction under section 80IB(10) is available only to persons undertaking the investment risk as actual developers; the Explanation added to the section excludes undertakings executing housing projects as works contracts. Structuring sales via separate land and construction agreements may jeopardise the concession, and substance over form governs - the assessee must show ownership and investment risk to sustain the deduction.