Housing-project deduction remains available without land ownership, while common-area parking is excluded from residential built-up area calculations.
Section 80IB(10) deduction is available to an undertaking that develops and builds a housing project even if it does not own the underlying land; land ownership is not a statutory condition. Car parking space treated as a common area under the Tamil Nadu Apartment Ownership Act, 1994 cannot be included in a residential unit's built-up area when applying the statutory size limit. The later definition of built-up area, covering inner measurements, projections, balconies and wall thickness while excluding common areas, supports this treatment. Consequently, the housing-project deduction remains available where the applicable conditions are otherwise met.
Issues: (i) Whether deduction under Section 80IB(10) of the Income-tax Act, 1961 was available when the assessee was a builder but not the owner of the land; (ii) Whether car park area could be included in the built-up area of the residential unit for computing the limit under Section 80IB(10) of the Income-tax Act, 1961.
Issue (i): Whether deduction under Section 80IB(10) of the Income-tax Act, 1961 was available when the assessee was a builder but not the owner of the land.
Analysis: The claim for deduction was tested against the statutory condition that the undertaking must be engaged in developing and building housing projects. The ownership of the land was held not to be a statutory requirement for claiming the deduction, and the earlier binding view on the point was followed.
Conclusion: The issue was decided against the Revenue and in favour of the assessee.
Issue (ii): Whether car park area could be included in the built-up area of the residential unit for computing the limit under Section 80IB(10) of the Income-tax Act, 1961.
Analysis: The relevant assessment year did not contain an express definition of built-up area, but Section 80IB(14)(a) later clarified that built-up area means the inner measurements of the residential unit with projections, balconies and wall thickness, excluding common areas. The parking area was separately dealt with and was treated as a common area under the Tamil Nadu Apartment Ownership Act, 1994. On that basis, car park area could not be added to the residential built-up area for applying the statutory limit.
Conclusion: The issue was decided against the Revenue and in favour of the assessee.
Final Conclusion: The deduction under Section 80IB(10) was upheld, the Revenue's challenge failed on both questions, and the assessee's relief was sustained.
Ratio Decidendi: For Section 80IB(10) deduction, ownership of the land is not indispensable if the assessee develops and builds the housing project, and parking space that constitutes a common area cannot be included in the residential unit's built-up area.