P.V. Hemalatha Vs CIT (ITAT Cochin)
Cochin ITAT: One-Acre Condition u/s 80-IB(10) Must Be Satisfied by Land Actually Forming Part of Housing Project-Personal Residence Land Cannot Be Clubbed
The assessee, engaged in construction of residential apartments, claimed deduction of ₹3.13 crore u/s 80-IB(10) for AY 2009-10 in respect of an 11-storeyed residential project at Kozhikode. Though her aggregate landholding was 117.5 cents, part of the land was not included in the housing project and was subsequently used for construction of her own bungalow. The approved housing project effectively covered only about 70.57 cents, which was below the statutory minimum of one acre.
The assessee relied heavily on the Bombay High Court judgment in CIT v. Vandana Properties, contending that Section 80-IB(10) does not prohibit another structure from existing on the same larger plot and that her total landholding exceeded one acre.
The ITAT rejected the contention. It held that the requirement under Section 80-IB(10)(b) is that the plot of land on which the eligible housing project is constructed must itself have a minimum area of one acre. Areas comprising common amenities such as roads, gardens and playgrounds may be included where they form an integral part of the approved housing project, but land put to an independent use and not forming part of the approved project cannot be included merely because it forms part of the assessee’s contiguous landholding.
In the present case, the housing project occupied only about 70 cents (0.70 acre). The fact that the assessee’s personal residential bungalow stood on the balance land and that the combined landholding exceeded one acre could not satisfy the statutory condition because the focus is on the land directly attributable to the housing project for which deduction is claimed.
The Tribunal distinguished Vandana Properties, observing that while that judgment permits more than one housing project on a plot exceeding one acre, it does not support the proposition that land used for the assessee’s own residence can be clubbed with the land of a housing project merely to cross the one-acre threshold.
Accordingly, the ITAT confirmed the denial of deduction u/s 80-IB(10) for AY 2009-10. For the same reasons, it also upheld the disallowance of ₹46.82 lakh for AY 2018-19, and both appeals were dismissed.
Key takeaway: For Section 80-IB(10), the housing project itself must be situated on a plot of at least one acre. A developer cannot meet the one-acre requirement by adding adjoining land used independently for a personal residence or another non-project purpose.
Cases Discussed
- CIT v. Vandana Properties (Bombay High Court), [2012] 19 taxmann.com 316 (Bombay)
- CIT v. Vandana Properties (Bombay High Court), (2013) 353 ITR 36
FULL TEXT OF THE ORDER OF ITAT COCHIN
1. These two appeals filed by P. V. Hemalatha for AYs 2009–10 and 2018–19 involve a common issue and are, therefore, disposed of by this common order.
