The Hyderabad Bench of Income Tax Appellate Tribunal (ITAT) held that the deduction under Section 80IB(10) of the Income Tax Act,1961 can be claimed by the joint venture and not by the assessee who is merely a partner in the partnership firm.
The assessee Sai Teja Constructions is a partnership firm engaged in the business of investment and construction of residential flats. It filed its return of income for the Assessment Years 2008-09 belatedly declaring total income of Rs.Nil. The assessee firm is a partner of M/s. SMR SAI TEJA ESTATES which is in the business of construction of residential flats.
The Assessing Officer (AO) denied the claim of deduction under Section 80IB (10) of the Income Tax Act. Aggrieved by the order the assessee filed an appeal before the Commissioner of Income-Tax (Appeals) [CIT(A)], which confirmed the action of the AO in not granting deduction under Section 80IB(10) of the Income Tax Act.
Further aggrieved the assessee filed an appeal before the Tribunal. The Authorised Representative of the assessee (AR) submitted that the income derived of Rs.81,25,295/- by the appellant is attributable to the business which is eligible for deduction under Section 80IB(I0) of the Income Tax Act.
The Bench comprising of R.K. Panda, Vice-President and Laliet Kumar, Judicial Member observed that the deduction under Section 80IB(10) of the Income Tax Act is applicable to an undertaking developing and building housing projects with certain conditions. However, in the instant case, the assessee is not an undertaking developing and building housing projects but is merely a partner in a joint venture/partnership firm.
It was held that the assessee is not entitled to deduction under Section 80IB(10) of the Income Tax Act since the assessee is merely a partner in SMR Sai Teja Estates and deduction, if any, can only be claimed by the said firm upon fulfilling the requisite conditions.
Hence the ground of appeal by the assessee was dismissed.
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