No denial of sec. 80-IB relief merely on ground that developer didn’t undertake construction of property itself

Loading

No denial of sec. 80-IB relief merely on ground that developer didn’t undertake construction of property itself

IT: Where assessee was developer of project and company ‘ETA’ was builder of said project and their right and obligation were inextricably linked with each other, assessee could not be denied deduction under section 80-IB(10) on ground that it itself did not carried out activity of building and developing housing project

Section 80-IB of the Income-tax Act, 1961 – Deductions – Profits and gains from industrial undertakings other than infrastructure development undertaking (Housing project) – Assessment year 2010-11 – Assessee company was a owner of a site – It entered into a Joint Venture Agreement with company ‘ETA’ wherein ETA offered to develop property by putting up multistoreyed building complex on said site at its own cost – ETA allotted 33.33 per cent of total built up area to assessee and kept 66.67 per cent built up area with it in lieu of value of land provided by assessee – In terms of said agreement assessee had incurred and ETA had incurred certain other expenses – Whether factual position as culled out from Joint Venture Agreement clearly showed that assessee was developer certain expences and ETA was builder and mutual rights and obligations were inextricably linked with each other and undoubtedly project was a housing project – Held, yes – Whether thus, assessee’s claim of deduction under section 80-IB(10) could not be denied on ground that assessee itself did not carry out activity of building and developing housing project – Held, yes

Bashyam Constructions (P.) Ltd.

Menu