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2011 (8) TMI 1141 - AT - Income TaxDeduction u/s 80IB(10) - Profit derived from building and developing housing projects - integrated activity or not - Construction on land registered in the name of buyers directly - The total consideration quoted by the assessee consisted of both the cost of plot and cost of building - HELD THAT:- As stated by the Learned A.R, the assessee has chosen to register the plot in the name of the buyer on payment of specified amount in order to achieve cost saving and to ensure reliability. Thereafter the assessee has proceeded to construct the house as per the building plan obtained in the name of the plot owners, on payment of subsequent instalments. The assessee has also developed various public amenities within the project. In our view, all these facts should be considered cumulatively in order to ascertain the true nature of the project. On a totally of the facts, we are of the view that the assessee has undertaken developing and building housing projects as per the scheme provided in sec. 80IB(10) of the Act - Decision in favour of Assessee. Scope of Revision Proceedings u/s 263 - The AO denied deduction u/s 80IB(10) to the assessee in the assessment year 2006-07 but allowed the deduction for AYs 2004-05 & 2005-06 - CIT proposed to deny the decision for the AYs 2004-05 and 2005-06 also - An order erroneous but is prejudicial to the Revenue - debateble issue - HELD THAT:- Scope of revision proceedings has been well explained by Hon'ble Supreme Court in the case of MALABAR INDUSTRIAL CO. LTD. VERSUS COMMISSIONER OF INCOME-TAX [2000 (2) TMI 10 - SUPREME COURT], where it was held that the Commissioner has to be satisfied of twin conditions, namely, (i) the order of the Assessing Officer sought to be revised is erroneous; and (ii) it is prejudicial to the interests of the Revenue. If one of them is absent-if the order of the Income-tax Officer is erroneous but is not prejudicial to the Revenue or if it is not erroneous but is prejudicial to the Revenue recourse cannot be had to section 263(1). It is clear that the issue of allowing deduction under section 80IB(10) in respect of aforementioned project in the hands of the assessee is a debatable issue on which two views are possible. There cannot be any doubt that the Assessing Officer has taken one of the possible views in the impugned two years, in which case the assessment order cannot be termed as erroneous and prejudicial to the interests of the revenue. In that case, the Learned CIT could not have jurisdiction to initiate revision proceedings under section 263 in respect of the said issue. Accordingly, we set aside the impugned orders of Learned CIT.
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