TMI Blog2022 (9) TMI 504X X X X Extracts X X X X X X X X Extracts X X X X ..... r 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 No.1305/Bang/2019 - - - Dated:- 9-9-2022 - Shri N.V. Vasudevan, Vice Preseident And Shri Padmavathy S, Accountant Member For the Assessee : Shri Narendra Sharma, Advocate For the Respondent : Shri Sankar Ganesh, Jt.CIT(DR)(ITAT), Bengaluru. ORDER PER PADMAVATHY S., ACCOUNTANT MEMBER This appeal by the assessee is against the order of the CIT(Appeals)-5, Bengalur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /2010 declaring a total income of Rs. NIL after claiming deduction u/s 80IB of Rs.6.76,56,621/- and had ultimately calculated tax on book profit of Rs. 6,71,42,990/-. Subsequently, the assessee company filed a revised return of income on 06/01/2011 declaring total income of Rs. NIL after claiming deduction u/s 80IB of Rs. 11,04,20,090/- which was restricted to the gross total income of Rs. 9,59,83,298/-. In the revised return, the assessee had calculated tax on Book Profit of Rs. 9,52,80,560/-. The assessee s case was selected for scrutiny and the assessment proceedings were completed by order of assessment passed u/s. 143[3] of the Act dated 26/03/2012, making certain disallowances and additions determined at Rs. 11,47,270/-. The said orde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al before the ITAT. 5. During the proceedings u/s.143(3) r.w.s. 263, the AO has firstly, examined the claim of deduction u/s. 80IB[10] of the Act in respect of certain apartments that were purchased from the landowners share of built-up area in the projects developed by the assessee, which were later sold by it. The A.O. found that the assessee had during the year purchased 45 flats for a consideration of Rs. 10,45,75,000/- and had sold 20 flats for a consideration of Rs. 6,48,06,210/-and has computed the profit on sale of these flats at Rs.1,83,28,440/-. He has also noted that the assessee had claimed expenses of Rs. 19,03,085/- on the sale of these flats. The AO has taken the view that the profit earned on the aforesaid transaction is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the said flats and has paid consideration to the landowners. The consideration paid by the assessee is nothing but the amounts paid for purchase of the land and forms part of the overall cost of the project being developed by the assessee. The payments made to landowners are towards purchase of landowners share of built-up area in the eligible project developed by the assessee and according to the provisions of section 80(IB)(10) of the Act, the assessee is entitled to the deduction u/s. 80IB(10) on the profits derived from such housing projects , where the provision is not restricted to the share of developers alone. Thus there can be no question of any piecemeal consideration of the so-called profits from the sale of these flats and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee s own case for AYs 2007-08 2008-09 (supra) had dealt with similar issue of deduction u/s. 80IB(10) of the Act and decided the issue in favour of the assessee. The relevant observations of the Tribunal are as under:- 13. The assessee has entered into agreements whereby the land owners wanted the assessee to sell the flats that were to be allotted to them as per the terms mentioned therein the consideration is paid towards the land, the super built up area which is the land owner s out of 37% of the undivided right as per the original agreement entered into with the assessee. Thus the argument of the ld AR that the consideration paid by the assessee to the landowners is nothing but due amounts paid for purchase of the land which for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roject 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. 11. Respectfully following the above decision of the Hon ble Tribunal, on identical facts, we hold that the assessee is entitled to claim deduction u/s. 80IB(10) of the Act. 12. In the result, the appeal is partly allowed in favour of the assessee. Pronounced in the o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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