Lady signs POA with land owner, builds flats on land and sells, claims Rs 13 crore tax deduction, I-T dept sends notice; She fights back and wins in HC

[16/01, 14:32] Sekarreporter: ”
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TAX
Lady signs POA with land owner, builds flats on land and sells, claims Rs 13 crore tax deduction, I-T dept sends notice; She fights back and wins in HC

Synopsis
The Madras High Court has ruled that taxpayers can claim deductions under Section 80-IB without owning the land. This decision supports a previous order by ITAT Chennai. The court found that land ownership is not a prerequisite for claiming this tax benefit. The ruling benefits Smt Rajini, who developed a housing project through a Power of Attorney.
By NEELANJIT DAS

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Jan 16, 2026, 07:41:09 AM IST
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On December 1, 2025, the Madras High Court upheld ITAT Chennai’s order, stating that a taxpayer can claim deduction under Section 80-IB without needing to own the land for this tax benefit. The Madras High Court held that ownership of land is not a mandatory condition for claiming deduction under Section 80-IB(10) of the Income-tax Act. Thus the high court held:

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A developer need not be the land owner to claim Section 80-IB(10) deduction.
What matters is who actually develops the housing project, not whose name the land stands in.
Summary of the judgement
On December 1, 2025, Smt Rajini won the case in Madras High Court. She was represented by M/s A.S.Sriraman.

Chartered Accountant Suresh Surana said to ET Wealth Online that in the given case (TCA No. 388 of 2011) the issue pertained to the allowability of deduction under Section 80-IB(10) of the Income-tax Act, 1961 , in respect of profits derived from a housing project, where the assessee was not the legal owner of the land.

The assessee, an individual developer, had claimed deduction for the Assessment Year 2005–06 amounting to approximately Rs 13.32 crore. The Assessing Officer, while completing assessment under Section 143(3), disallowed the deduction on the ground that the assessee was neither the owner of the land nor had invested funds for land acquisition, and had merely executed a works contract.
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The Assessing Officer also made ancillary disallowances, including payments to a flat owners’ association.
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On appeal, the Commissioner (Appeals) allowed the deduction, holding that ownership of land is not a statutory condition under Section 80-IB(10) and that the assessee had in substance developed the housing project.
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[16/01, 14:32] Sekarreporter: மெட்ராஸ் உயர் நீதிமன்றம், வருமான வரிச் சட்டத்தின் பிரிவு 80-IB கீழ் வரிவிலக்கு பெற நில உரிமை அவசியமில்லை என தீர்ப்பளித்துள்ளது. ஸ்மட் ரஜினி என்ற பெண், நில உரிமையாளருடன் பவர் ஆஃப் அட்டர்னி (POA) கையெழுத்திட்டு, அந்த நிலத்தில் அடுக்குமாடி குடியிருப்புகளை கட்டி விற்பனை செய்து, ₹13 கோடி வரிவிலக்கு கோரிய வழக்கில், வருமான வரித்துறை அனுப்பிய நோட்டீஸுக்கு எதிராக அவர் தாக்கல் செய்த வழக்கில், நீதிமன்றம் அவருக்கு ஆதரவாக தீர்ப்பளித்தது. ¹

இந்த தீர்ப்பு, வீட்டு திட்டத்தை உருவாக்கியவர் யார் என்பதே முக்கியம், நிலம் யார் பெயரில் உள்ளது என்பது முக்கியமல்ல என்பதை உறுதிப்படுத்துகிறது.

இந்த வழக்கு தொடர்பாக உங்களுக்கு ஏதேனும் கேள்விகள் அல்லது கருத்துக்கள் உள்ளதா?

வருமான வரிச் சட்டத்தின் பிரிவு 80-IB கீழ் வரிவிலக்கு பெறுவதற்கான வழிகாட்டுதல்கள் பற்றி மேலும் அறிய விரும்புகிறீர்களா?