Section 801B(10): Deduction for Housing Projects Not Tied to Separate Approvals for Eligible Units

Shipra Estate Ltd. & Jai Krishan Estate Developers Pvt. Ltd. Vs ACIT (ITAT Delhi)

In the case of Shipra Estate Ltd. & Jai Krishan Estate Developers Pvt. Ltd. Vs. ACIT (Income Tax Appellate Tribunal Delhi), several critical aspects of Section 80IB(10) of the Income Tax Act were deliberated upon, particularly concerning the eligibility for deduction in housing projects. This section allows for deductions on profits derived from the development and construction of affordable housing projects, subject to certain conditions.

Background and Legal Context

The dispute revolved around whether a housing project needed separate approvals for each eligible unit to qualify for deduction under Section 80IB(10). The Income Tax Department (referred to as the Revenue) contended that for claiming deduction, each eligible unit within a housing project must have individual approvals from local authorities. This position was challenged by the assessees, Shipra Estate Ltd. and Jai Krishan Estate Developers Pvt. Ltd., who argued that a single approval for the entire housing project suffices, even if the project contains both eligible and ineligible units.

Tribunal’s Analysis and Decision

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