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2014 (4) TMI 482 - HC - Income TaxDeduction u/s 80IB r.w. Section 80IB(1) of the Act – Works contract - Nature of agreement not appreciated - Profit derived from sale of unutilized FSI - Whether the ITAT was right in allowing the deduction u/s. 80IB (10) read with Section 80IB(1) of the Act – Held that:- The decision in Commissioner of Income-Tax v. Radhe Developers, reported in [2011 (12) TMI 248 - GUJARAT HIGH COURT] followed - Section 80IB(10) provides for deductions to an undertaking engaged in the business of developing and constructing housing projects under certain circumstances - It does not provide that the land must be owned by the assessee seeking such deductions - from the terms and conditions it can be conferred that the assessee had taken full responsibilities for execution of the development projects and have not acted only as a works contractor. The assessee had, in part performance of the agreement to sell the land, was given possession thereof and had also carried out the construction work for development of the housing project - Combined reading of Section 2(47)(v) and Section 53A of the Transfer of Property Act leads to conclusion even for limited purpose of Income tax that assessee had satisfied the condition of ownership also - assessees were entitled to the benefit u/s 80IB(10) even where the title of the lands had not passed on to the assessees and in some cases, the development permissions may also have been obtained in the name of the original land owners - The assessee, in the process of developing two housing projects, had utilized 9595.64 sq.m of buildable area against the maximum permissible area of 13004 sq.m and in other cases, put up construction of 5997.28 sq.m against maximum permissible construction on 8127.75 sq.m. Underutilization, if at all was in the marginal range of 25% to 30% - marginal underutilization of FSI would not be hit by disallowance of deduction u/s 80IB of the Act – Decided against Revenue.
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