Skip to main content

Land owner can claim Section 80-IB(10) despite no expense on Housing Project

 In the Commissioner of Income Tax, Business Ward III(1), Chennai. vs M/s.Astoria Leathers, appeal was filed by the Revenue Dept. against the order of the Tribunal.

The substantial question of law before the High Court was whether the Income Tax Appellate Tribunal was correct and justified in directing the Assessing Officer to allow deduction under Section 80IB(10) of the Income Tax Act, 1961 to assessee land owner when it had not incurred any expenses towards development or construction of the housing project ?

The High Court o answer the substantial question of law, we need not labour much, as an identical question was considered and decided by a Division Bench of this Court, to which one of us (TSSJ) was a party, in TCA.No.177 of 2018 vide judgment dated 30.1.2019 [M/s.Bashyam Constructions Pvt. Ltd. Vs. DCIT]. In fact, the nature of transaction is also the same. After taking into consideration the decisions of this Court in the cases of (i) CIT Vs. Sanghvi & Doshi Enterprise [reported in (2013) 29 Taxman.com 386], (ii) ITO Vs. Doshi Enterprise [reported in (2013) 55 Taxmann.com 500], (iii) CIT Vs. Ceebros Property Development (P.) Ltd. [reported in (2014) 41 Taxmann.com 263], the decisions of the High Court of Gujarat in the cases of (i) CIT vs. Radhe Developers [reported in (2012) 17 Taxmann.com 156], (ii) CIT vs. Moon Star Developers [reported in (2014) 88 CCH 0211] and (iii) CIT vs. Prathama Developers [reported in (2013) 32 Taxmann.com 336], the decision of the Bombay High Court in the case of CIT vs. Cajetano Mario Pereira [reported in (2014) 88 CCH 0152] and the decision of the Hon'ble Supreme Court in the case of CIT vs. Veena Developers [reported in (2015) 93 CCH 0184 ISCC], the substantial questions of law framed therein were answered to the following effect that a plain reading of Section 80IB(10) of the Act evidently makes it clear that deduction is available in a case where an undertaking develops and builds a housing project. The Section clearly draws the distinction between 'developing' and 'building'. In the preceding paragraphs, we have noted the factual position as could be culled out from the joint venture agreement, which clearly shows that the assessee is the developer and  is the builder and mutual rights and obligations are inextricably linked with each other and undoubtedly, the project is a housing project thereby, the assessee would be entitled to claim deduction under Section 80IB (10) of the Act. Therefore, in a case of development, the developer is also entitled to claim deduction and ownership is not the criteria.

Comments

Post a Comment

Most viewed this month

The recovery of vehicles by the financier not an offence - SC

Special Leave Petition (Crl.) No. 8907  of 2009 Anup Sarmah (Petitioner) Vs Bhola Nath Sharma & Ors.(Respondents) The petitioner submitted that  respondents-financer had forcibly taken away the vehicle financed by them and  illegally deprived the petitioner from its lawful possession  and  thus,  committed  a crime. The complaint filed by the petitioner had been  entertained  by  the Judicial Magistrate (Ist Class), Gauhati (Assam) in Complaint Case  No.  608 of 2009, even directing the interim custody of the vehicle (Maruti  Zen)  be given to the petitioner vide order dated  17.3.2009.  The respondent on approaching the Guwahati High  Court against this order, the hon'ble court squashed the criminal  proceedings  pending   before  the  learned Magistrate. After hearing both sides, the Hon'ble Supreme Court decided on 30th...
7 comments
Read more

When debt is bona fide disputed and the defence is a substantial one, the court will not wind up the company

In SHITAL FIBERS LTD.  vs  INDIAN ACRYLICS LIMITED, as per the respondent, appellant had made a payment of Rs.61,83,218/­. However, there was an outstanding balance of Rs.8,92,723/­ as on 28.7.2008. Since despite repeated requests, balance amount was not paid, the respondent issued a statutory notice to the appellant. The same was duly responded to. As the payment was not made despite notice being duly served on the appellant, the respondent filed the aforesaid Company Petition seeking winding up of the present appellant for its inability to pay admitted debts. The learned Company Judge vide order dated 28.9.2015 admitted the Company Petition. However, while doing so, the learned Company Judge observed, that since the appellant was an on­going concern, an opportunity should be granted to it to settle the accounts with the respondent by 31.12.2015. Only in case of failure of the settlement, the citation was directed to be published. On appeal, the Division Bench of the High Cou...
Post a Comment
Read more

Abusing in-laws a ground for divorce: SC

Abusing in-laws and not allowing them to reside in the matrimonial home by a woman amounts to cruelty to her spouse, ground enough for grant of divorce, the Supreme Court has ruled while allowing an NRI's plea for legal separation from his wife. A bench of Justices Vikaramajit Sen and A M Sapre said such incidents could not be termed as "wear and tear" of family life as held by Madras High Court which had said that a couple must be prepared to face such situations in matrimonial relationship. The NRI had filed a divorce petition alleging that his wife was abusive to his family members and did not allow his parents and siblings to stay in his house when they visited the US. Referring to an incident, the husband told the court that his wife had once locked him and his sister out of the house and abused them saying they belonged to a 'prostitute family'. She refused to allow her sister-in-law to enter the house and even lodged a police complaint against her hu...
4 comments
Read more