TaxTMI 
TaxTMI 
2026 (6) TMI 1085
X X X X Extracts X X X X
X X X X Extracts X X X X
....er dated 16 October 2025 passed by the National Faceless Appeal Centre, Delhi [the ld. CIT(A)]. By that order, the ld. CIT(A) dismissed the assessee's appeal against the assessment order dated 23 March 2015, passed by the DCIT, Circle-1(1), Kozhikode [the ld. AO], under section 143(3) read with section 263 of the Income Tax Act, 1961 [the Act]. Aggrieved, the assessee is in appeal before us. 3. Briefly stated, the assessee is an individual engaged in the business of constructing residential apartments and earns remuneration and interest on capital from firms, besides insurance commission. For AY 2009-10, she filed her return of income on 23 September 2009 declaring total income of Rs. 1,426,500, which was revised on 13 October 2009 to Rs....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ke a fresh assessment. 7. In paragraph 6.1 of the assessment order, the ld. AO held that the project did not satisfy the requirement of being situated on a minimum area of one acre. Accordingly, he disallowed the assessee's claim for deduction of Rs. 3,13,19,704 under section 80- IB (10) of the Act and passed the assessment order dated 23 March 2015 under section 143(3) read with section 263 of the Act. 8. Aggrieved, the assessee preferred an appeal before the ld. CIT(A), relying on the decision of the Hon'ble Bombay High Court in CIT v. Vandana Properties (2013) 353 ITR 36. After considering the assessee's explanation, the ld. CIT(A) held that such reliance was misplaced. In paragraph 6.6 of the appellate order, he noted that althoug....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rlier finding. Accordingly, the assessee's appeal was dismissed. 11. The learned authorised representative submitted a paper book and contended that the issue is squarely covered in favour of the assessee by the decision of the Hon'ble Bombay High Court in CIT v. Vandana Properties, which the ld. CIT(A) rejected without assigning any reason. He submitted that the existence of a bungalow constructed for the appellant's personal use, in respect of which no deduction under section 80-IB was claimed, cannot justify denial of deduction for an otherwise eligible housing project. He further argued that section 80-IB does not prohibit any other structure from existing on the plot. Reliance was also placed on the assessment proceedings for AY 201....
X X X X Extracts X X X X
X X X X Extracts X X X X
....o one acre. Accordingly, the deduction was not allowable. He also argued that the assessee's reliance on the assessment order for AY 2015-16 was misplaced, as that year was selected only for limited scrutiny and was not the first year of the claim. 13. We have carefully considered the rival contentions and perused the orders of the lower authorities. 14. Section 80-IB (10) of the Income-tax Act, 1961 provides a significant incentive for undertakings engaged in developing and building housing projects. It allows for a deduction of one hundred per cent of the profits derived from such eligible housing projects. This provision was introduced to promote the development of affordable housing by setting specific criteria for project approva....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s not part of the approved housing project or its common amenities, does not satisfy this condition. The phrase "the project is on the size of a plot of land" directly links the minimum area requirement to the specific land parcel on which the housing project itself is being developed and constructed. The law requires this particular plot of land, dedicated to the housing project, to measure not less than one acre. It does not refer to the entire contiguous landholding of the assessee, especially if parts of that land are not integral to the approved housing project. 16. The sole issue is whether the housing project constructed by the assessee was situated on a plot measuring at least one acre. The assessment order for AY 2009-10 shows t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....2012] 19 taxmann.com 316 (Bombay), it was held that the Section 80-IB(10) deduction is allowed on the construction of a housing project on a plot having an area of one acre, irrespective of whether any other housing projects are existing on the said plot of land or not. While this case dealt with the existence of other projects, it underscores that the one-acre condition is tied to the specific housing project seeking the deduction. We find that the Hon'ble Bombay High Court does not cover issue in favour of the assessee. Though, In paragraph 24 of that judgment, the Hon'ble High Court held that section 80- IB(10)(b) prescribes the minimum size of the plot of land, and not the size of the housing project, and that the provision does not req....