TMI Blog2022 (7) TMI 1203X X X X Extracts X X X X X X X X Extracts X X X X ..... in the said section. A plain reading of section 80-IB(10) evidently makes it clear that deduction is available in a case where an undertaking develops and builds a housing project on the profits derived from such housing project. In the given case the profit from the sale of flats earmarked for the land owners is also derived by the assessee from the development and building of the housing project. In view of the above discussion we are of the considered view that the assessee is entitled claim deduction u/s.80IB(10) on the profits derived from sale 22 flats earmarked for the land owners. The appeal is allowed in favour of the assessee. - ITA Nos.1302 & 1303/Bang/2019 - - - Dated:- 17-6-2022 - SHRI N.V. VASUDEVAN, VICE PRESEIDENT AND SHRI PADMAVATHY S, ACCOUNTANT MEMBER Appellant by : Shri Narendra Sharma, Advocate Respondent by : Shri Sankar Ganesh, Jt.CIT(DR)(ITAT), Bengaluru. ORDER Per Padmavathy S., Accountant Member These appeals are against the separate orders, both dated 29.3.2019 of the CIT(Appeals)-5, Bengaluru for the assessment years 2007-08 2008-09. They were heard together and disposed of by this common order for the sake of brevi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll be taken to be the date on which the completion certificate in respect of such housing project is issued by the local authority; (b) the project is on the size of a plot of land which has a minimum area of one acre: Provided that nothing contained in clause ( a) or clause (b) shall apply to a housing project carried out in accordance with a scheme framed by the Central Government or a State Government for reconstruction or redevelopment of existing buildings in areas declared to be slum areas under any law for the time being in force and such scheme is notified by the Board in this behalf; (c) the residential unit has a maximum built-up area of one thousand square feet where such residential unit is situated within the city of Delhi or Mumbai or within twenty-five kilometres from the municipal limits of these cities and one thousand and five hundred square feet at any other place; and (d) the built-up area of the shops and other commercial establishments included in the housing project does not exceed five per cent of the aggregate built-up area of the housing project or two thousand square feet, whichever is less.] 4. A survey was conducted in the premises of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e only when there is a failure on the part of the assessee to disclose fully and truly all material facts necessary for the assessment. He brought to our attention that the addition made in the proceedings u/s. 147 denying the deduction u/s. 80IB(10) of the Act is a moot issue since this disallowance towards the project Mahavir Springs was already made in the proceedings u/s. 143(3) of the Act and that the assessee had disclosed fully and truly all material facts necessary for his assessment. He therefore submitted that the reopening of assessment is bad in law. 8. On merits, the ld AR submitted that :- (a) The assessee has developed a housing project, which is eligible to deduction u/s. 80IB(10) of the Act and in respect of the said housing project, the assessee had secured the land for purposes of development under the joint development agreements. (b) In terms of the joint development agreement, it was required to deliver certain flats to the landowners and some of the landowners approached the assessee and renegotiated the terms for money instead of the apartments. (c) The assessee thereupon agreed to pay money instead of giving apartments to the landowners, which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see claimed a sum of Rs.1,52,02,456 towards the said project Mahavir Springs [pg. 2B 48 of PB] in terms of the JDA. 11. During the course of original assessment proceedings u/s. 143(3) of the Act, the AO had considered the findings of the survey with regard to the project Mahavir Springs . He observed that the built-up area in respect of 5 flats exceeded the statutory limit of 1500 sq.ft. u/s. 80IB(10) of the Act. When confronted with this discrepancy, the assessee withdrew the deduction claimed u/s. 80IB(10) pertaining to Mahavir Springs and the AO concluded the assessment by making certain other additions. The assessee did not prefer any appeal against this assessment order and thus the assessment became final. Subsequently there was another survey on 14/12/2012 and the assessment was reopened where the AO has made the impugned addition towards the consideration paid by the assessee towards 28 flats earmarked for the land owners treating the same as a trading activity. The AO in assessment order u/s. 143(3) r.w.s. 147 failed to mention to which project the deduction u/s. 80IB(10) is denied. The ld AR s contention was that it pertains to project Mahavir Springs and tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which is for the benefit of middle and lower class people and, when they have complied with all the conditions prescribed under the aforesaid provision, both of them are entitled to hundred percent benefit of tax deduction as provided under the said provision. In that view of the matter, we do not see any merit in these appeals. The substantial question of law is answered in favour of the assessee and against the revenue. Accordingly, the appeals are dismissed. 11. A plain reading of section 80-IB(10) evidently makes it clear that deduction is available in a case where an undertaking develops and builds a housing project on the profits derived from such housing project. In the given case the profit from the sale of flats earmarked for the land owners is also derived by the assessee from the development and building of the housing project. In view of the above discussion we are of the considered view that the assessee is entitled claim deduction u/s.80IB(10) on the profits derived from sale 22 flats earmarked for the land owners. The appeal is allowed in favour of the assessee. ITA Nos.1303/Bang/2019 14. The facts are identical in the appeal for the AY 2008-09 where t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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