DCIT Vs Bombay Slum Redevelopment Corporation Pvt. Ltd. (ITAT Mumbai)
80IB(10) Disallowance on SLP Ground Becomes Academic: ITAT Mumbai Dismisses Revenue Appeal After Bombay HC Quashes Reassessment
ITAT Mumbai (B Bench) in DCIT vs Bombay Slum Redevelopment Corporation Pvt. Ltd. (ITA No. 6126/Mum/2025, AY 2015-16, order dated 23.12.2025) has dismissed the Revenue’s appeal, holding that once the Bombay High Court has quashed the reassessment notice u/s 148 and all consequential proceedings, the Revenue’s challenge to deletion of deduction u/s 80IB(10) becomes purely academic.
The Assessee, engaged in slum redevelopment projects, had originally been assessed u/s 143(3). The assessment was later reopened u/s 147 solely on the premise that the allowability of deduction u/s 80IB(10) on profits from sale of FSI/TDR was sub judice before the Supreme Court in Sonasha Enterprises. In reassessment u/s 144 r.w.s. 147, the AO disallowed ₹17.32 crore.
CIT(A) deleted the disallowance, holding that:
- The issue was squarely covered in favour of the assessee by ITAT and Bombay High Court decisions, including Sonasha Enterprises, Vandana Properties and Aarti Projects & Constructions
- Deduction u/s 80IB(10) cannot be denied merely because an SLP is pending
- Profits from sale of FSI/TDR received in lieu of slum rehabilitation construction are eligible for deduction when the project is approved prior to 01.04.2005
During pendency of the Revenue’s appeal before ITAT, the Bombay High Court (WP No. 2611 of 2024) quashed the reopening notice u/s 148 and all consequential proceedings, following Hexaware Technologies Ltd.
ITAT held that:
