Deduction u/s.80-IB(10): Income from developing and building housing project: Land not owned by assessee: All other conditions satisfied: Assessee entitled to deduction u/s.80-IB(10).

The assessee entered into a development agreement with the owners of the land for a housing project. The assessee claimed deduction u/s.80- IB(10) of the Income-tax Act, 1961. The Assessing Officer rejected the claim on the ground that the assessee was not the owner of the land. The Tribunal allowed the assessee’s claim. The Tribunal held that for deduction u/s.80-IB(10) of the Act it is not necessary that the assessee must be the owner of the land. The Tribunal also held that even otherwise looking to the provisions of section 2(47) of the Act, r/w section 53A of the Transfer of the Property Act, by virtue of the development agreement and the agreement to sell, the assessee had, for the purpose of incometax, become the owner of the land.

On appeal by the Revenue, the Gujarat High Court upheld the decision of the Tribunal and held as under:

 “Terms and conditions of development agreement showed that assessee had taken full responsibility for execution of the projects and the resultant profits or loss belonged to the assessee in entirety and all other conditions of section 80-IB(10) being satisfied, deduction u/s.80-IB(10) could not be disallowed to assessee on the ground that the land under development projects was not owned by the assessee and in some cases development permission was granted in the name of original land owners.”