TaxTMI 
TaxTMI 
2026 (9) TMI 1176
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....Gopinathan Nair), Additional Standing Counsel, Income Tax Department. JUDGMENT PER DEVAN RAMACHANDRAN, J Indubitably for incentivising affordable housing, the Income Tax Act, 1961 ('Act' for short) provides, in Section 80-IB(10), that "the amount of deduction in the case of an undertaking developing and building housing projects approved before the 31st day of March, 2008 by a local authority shall be hundred per cent of the profits derived in the previous year relevant to the assessment year from such housing project." 2. However, the afore is qualified by several conditions, as are stipulated in the said Section; two of which are in Sub-Sections (b) and (c) thereof, which reads ut infra: "(b) the project is on the siz....
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....imed 100% deduction in two different assessment years, namely 2009-10 and 2018-19 - which is explained by her learned Senior Counsel, Sri. Abraham Joseph Markos, to be because the apartments were sold in those years. The claim afore for the first year was initially allowed, but to be disallowed later - the facts leading to which, we will trace presently; while, in the case of the latter year, it was disallowed. 6. When the assessee claimed 100% deduction under the afore Section for the years 2009-10, the first phase has been completed, but admittedly without the second phase having been initiated. The assessing Officer initially accepted her claim for deduction and issued Assessment Order dated 08.11.2011; but which, was then reopened by....
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....ctively. 10. Since both these appeals involve challenge to the orders of the ITAT issued within the same factual ambit; and the legal issues involved are also anologous, we have heard these matters together and propose to dispose it of jointly through this judgment. 11. Sri. Abraham Joseph Markose, learned Senior Counsel, instructed by Sri. John Vithayathil - learned counsel for the appellant, argued that, when it is admitted that the building permit obtained by her client in the year 2005 took in the entire 117.5 cents of land, it becomes incontestable and irrefutable that the benefit of 100% deduction, as provided under Section 80-IB(10) of the 'Act', becomes eligible to her. He contended that, it was after about 8 or 9 years later,....
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....t to which the deduction claimed by his client has been disallowed, be set aside. 13. Sri. Harikumar G - learned Senior Standing Counsel for the respondents, however had another version to present, namely, that the assessee has, in fact, attempted to misuse the provisions, by taking to herself a portion of the project and converting it as a personal residential house. He asserted that since Section 80-IB(10) of the 'Act' incentivises affordable housing on certain specified criteria - including that the plot of land ought to be a minimum of 1 acre in extent; and that each residential unit must only have a maximum built-up area of not more than 1500 sq.ft as far as Kerala is concerned - the deliberate reduction of land, by reducing it to h....
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.... and ownership, by constructing a residential house for herself. That the second construction was not part of a residential project - much less, an affordable one - is beyond any argument; and hence, it would axiomatically construe that the total extent of the project stood attenuated to 70.57 cents, by deliberate action. 18. As we have said prefatorily, the provisions of Section 80-IB(10) of the 'Act', particularly relating to development and building of housing projects, is intended solely to incentivise affordable housing and not residential houses for an individual or a set of individuals. This is unmistakable from Sub-Section (c) of Section 80-IB(10), which mandates that each of the residential units, to be entitled for the deductio....