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2012 (12) TMI 84 - HC - Income TaxDeduction u/s 80IB - Ownership vs Builder - held that:- Fact that Assessee was not the owner would not disentitle assessee from claiming relief u/s 80IB(10) of the Income Tax Act. As decided in Commissioner of Income-Tax V. Radhe Developers [2011 (12) TMI 248 - GUJARAT HIGH COURT], Gujarat High Court considered the question on ownership as a condition for grant of deduction under Section 80IB(10) in depth and accepted the case of an assessee similarly placed. It held that the provisions nowhere require that developers who are the owner of the land alone would be entitled for grant of deduction under Section 80IB(10). Therefore, 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 – Decided against the Revenue. Whether Tribunal was right in holding that the provisions of Sec 80IB(10) provide for partial deduction to housing project with respect to residential flats with built up area of less than 1500 sq.ft. where the same project contains flats with built up area exceeding 1500 sq.ft - held that:- Assessee was not entitled to relief in respect of those flats, which exceeded 1500 sq.ft. it is evident that what the assessee had undertaken is not a mere construction, but developing and constructing of a project, which qualifies for deduction u/s 80IB of the Income Tax Act. Deduction contemplated therein is oriented towards the project and not with reference to an assessee. It is no doubt true that the project has to be done by the assessee, but then, when the deduction is specific enough as regards the particular activity, administrative process, is purely at the hands of the Statutory Authority concerned, over which, the assessee could not have any control, the Explanation cannot, in any manner, have a negative effect on a factual aspect of the matter, namely, completion of the construction. Thus, in a case like this, where, the local authority, being the Corporation, had already certified about the completion of the project as per the approved plan, the fact that one of the Authorities, namely, Chennai Metropolitan Development Authority had issued a letter only on 13.6.2008, per se, cannot negative the assessee's claim for deduction. In the light of the above-said facts, Revenue's appeal is rejected. Though the assessee had complied with the extent of built-up area as per clause (c) and the assessee is entitled to have the benefit of deduction under Section 80IB of the Income Tax Act, since the Tribunal had remanded the portion of the built-up area for verification before the Assessing Officer and a factual enquiry has to be made thereon as to whether the built-up area is in fact 1500 sq.ft. or more than that In the circumstances, we confirm the order of the Tribunal on the remand portion. when the local authority, being part of Chennai Metropolitan Development Authority and also the approving authority, thus having certified about the completion, we do not find any justifiable ground to invoke Explanation (2) to sub-section (10) of Section 80IB of the Income Tax Act for the purpose of negativing the claim. In any event, going by the fact that the Explanation cannot have a control on the substantive provision, as a matter of construction, we agree with the assessee's contention and we have no hesitation in confirming the order of the Tribunal.
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