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.