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Facts
The assessee, a partnership firm engaged in building and development, filed its return declaring 'Nil' income after claiming deduction under Section 80-IB(10). The case involved a second round of litigation before the ITAT.
Held
The Tribunal, following a previous order concerning the same assessee for different assessment years, held that the assessee was engaged in the activity of developing and building housing projects and was entitled to the deduction under Section 80-IB(10).
Key Issues
Whether the assessee-developer is eligible for deduction under Section 80-IB(10) for its housing project.
Sections Cited
143(3), 80-IB(10), 80IB(10)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, INDORE BENCH, INDORE
Before: SHRI B.M. BIYANI & SHRI PARESH M.JOSHI
आदेश/ O R D E R
Per B.M. Biyani, AM:
Feeling aggrieved by order of first appeal dated 20.09.2024 passed by learned Commissioner of Income-Tax (Appeals)-Addl./JCIT(A)-6, Chennai, [“CIT(A)”] which in turn arises out of assessment-order dated 25.02.2016 passed by learned ITO-1(2), Bhopal [“AO”] u/s 143(3) of Income-tax Act, 1961 [“the Act”] for Assessment-Year [“AY”] 2008-09, the assessee has filed this appeal.
This is 2nd round of litigation before ITAT. The background facts are 2. such that the assessee is a partnership-firm engaged in the business of builders and developers. For AY 2008-09 involved in this appeal, the Page 1 of 5 assessee filed return declaring total income of Rs. Nil after claiming deduction u/s 80-IB(10) of Rs. 14,63,207/-. The case was selected for scrutiny and the assessment-order dated 22.12.2010 was passed after denying assessee’s claim of deduction u/s 80-IB(10). The assessee carried matter upto ITAT, Indore in ITA No. 19/Ind/2013. The ITAT, Indore passed order dated 25.11.2014 whereby the matter was restored to AO for de novo consideration with certain directions. This way, the 1st rounded ended.
Pursuant to ITAT’s order, the AO passed fresh assessment-order dated 25.02.2016 again denying the deduction u/s 80-IB(10) to assessee.
Aggrieved, the assessee went in first-appeal before CIT(A) but did not get any success. Now, the assessee has come in next appeal before ITAT. Accordingly, this is 2nd round before us.
The grounds raised in this appeal are as under:
“1.That on the facts and in the circumstances of the case, the decision of the learned lower authorities is contrary to law, materially incorrect, and unsustainable in law as well as facts. And that all the adverse findings recorded therein are opposed to facts, equity, and law. 2.That on the facts and in the circumstances of the case and in law, the appellant submits that its housing project fulfills all the conditions laid down in section 80IB (10) of the I.T. Act and, therefore, the income from such project is deductible under the said provisions. The learned CIT (A) erred and not justified in his findings that the appellant is not eligible for the deduction u/s. 801B (10) of the I.T. Act and, therefore, the findings of the learned CIT(A) be quashed and the exemption as claimed u/s.80IB(10) be kindly allowed. 3.That on the facts and in the circumstances of the case, and in law the learned CIT (A) erred in affirming the view of the AO that "the appellant had acted merely as a contractor after selling the plot and not as a developer. Therefore the appellant was not eligible for claiming deduction u/s 80IB (10) on the profits claimed from this project".
4.That on the facts and in the circumstances of the case and in law the learned CIT(A) erred in holding that the appellant had earned profit on account of construction activities undertaken as a contractor after selling the plots and thus had not sold residential units after completion as envisaged in section 801B(10) of the Act. 5.That the appellant craves, leaves to add, amend or modify any of the ground of appeal
.”
4. By means of various grounds, the main grievance of assessee is such that the lower-authorities are not justified in denying deduction u/s 80- IB(10) claimed by assessee.
Ld. AR for assessee made a straightforward submission that the issue involved in present appeal and the underlying facts are identical to other two assessment-years [i.e. AYs 2007-08 and 2009-10] in the case of this very assessee and the appeals filed by assessee being ITA Nos.
26/Ind/2024 and 27/Ind/2024 respectively for those two assessment years, have already been decided by Co-ordinate Bench of ITAT, Indore vide order dated 24.02.2025 in favour of assessee. Ld. AR has filed a copy of ITAT’s order at Pages 85 – 188 of Paper-Book. Ld. AR submitted that there is no change in the issue to be adjudicated or underlying facts or the applicable law; therefore the pre-existing view already taken by Co-ordinate Bench has to be adopted and the present appeal be decided accordingly in favour of assessee. As a matter of fact, Ld. AR also pointed out that the assessment-order of AY 2008-09 with which we are concerned in present appeal was passed by same AO [ITO-Ward-1(2), Bhopal] on 25.02.2016 who passed assessment-orders of other two assessment-years i.e. AYs 2007-08 & 2009-10 on 18.03.2016 & 25.02.2016. However, the first-appeals of AYs
Page 3 of 5 2007-08 & 2009-10 were decided by CIT(A) vide a consolidated order dated 30.03.2017 and the first-appeal of AY 2008-09 was decided much later by a separate order dated 20.09.2024; that is the only reason that the matter of AY 2008-09 got separated, otherwise there is no change in issue, facts or law.
Ld. DR for revenue could not controvert the above submissions made by Ld. AR.
We have considered above submissions of learned Representatives. We find that the issue of deduction u/s 80-IB(10) claimed by assessee is already decided by Co-ordinate Bench of ITAT, Indore in assessee’s favour in AYs 2007-08 & 2009-10 vide order dated 24.02.2025. The learned Representatives of both sides further agree that there is no change in underlying facts or law in current year i.e. AY 2008-09 under consideration and hence the pre-existing view of ITAT shall apply. The order of Co-ordinate bench is lengthy, therefore we confine ourselves to re-produce only final concluding para reading as under:
“17. Thus, considering the facts of the projects done by assessee in the light of various decisions, we are inclined to hold that the assessee was engaged in the activity of developing and building housing projects and entitled to deduction u/s 80-IB(10). Accordingly, we direct the AO to allow the deduction as claimed by assessee. The assessee succeeds in these appeals.”
Respectfully adopting the adjudication made by Co-ordinate Bench, we too are inclined to hold that the assessee was entitled to deduction u/s Page 4 of 5 80-IB(10). Accordingly, we direct the AO to allow the deduction as claimed by assessee. The assessee succeeds in this appeal.
Resultantly, this appeal is allowed.
Order pronounced in open court on 06/06/2025