M/s. Skyland Developers, Ahmedabad V. The Income tax Officer,Ward-9(3), Ahmedabad

ITA 1191/AHD/2011

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 76839 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 1 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-06-2014
• Appeal Filed By: Assessee
• Bench Allotted: D
• Next Hearing Date: 05-06-2014
• Assessment Year: 2000-2001
• Appeal Filed On: 21-04-2011
• Court: TRIBUNAL
• Department Lawyers: K C MATHEWS
• Assessee Lawyers: M K PATEL
• Section: 80IB

Judgement Text

, , , , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, AHMEDABAD 0 00 0 0 00 0 , , , , !' # $% !' # $% !' # $% !' # $%, , , , & & & & BEFORE SHRI N.S. SAINI, ACCOUNTANT MEMBER AND SHRI KUL BHARAT, JUDICIAL MEMBER ITA NO. 1191/AHD/2011 (ASSESSMENT YEAR 2000-01) ITA NO. 1192/AHD/2011 (ASSESSMENT YEAR 2001-02) ITA NO. 1193/AHD/2011 (ASSESSMENT YEAR 2006-07) M/S. SKYLAND DEVELOPERS C/O V.P. PATEL & CO. ADV. A-102, AKSHARDHAM, SHAIBAUG, NR. UNDERBRIDGE, AHMEDABAD-4. PAN: AAMFS7459M VS INCOME TAX OFFICER WARD-9(3) AHMEDABAD. '(/ APPELLANT *+'( / RESPONDENT REVENUE BY : SHRI K.C. MATHEWS, SR. DR ASSESSEE(S) BY : SHRI M.K. PATEL, AR #!, - %/ // / DATE OF HEARING : 05/06/2014 ./0 - % / DATE OF PRONOUNCEMENT : 09/06/2014 1 1 1 1/ // / O R D E R PER SHRI N.S. SAINI, ACCOUNTANT MEMBER: THESE ARE THE APPEALS FILED BY THE ASSESSEE AGAINST THE SEPARATE ORDERS OF THE COMMISSIONER OF INCOME TAX(APPEALS) F OR ASSESSMENT YEARS 2000-01 AND 2001-02, BOTH DATED 29.01.2010 AND FOR ASSESSMENT YEAR 2006-07 DATED 31.01.2011. ITA NOS. 1191, 1192 & 1193 OF 2011 M/S SKYLAND DEVELOPERS, AHMEDABAD. FOR AYS 2000-01, 2001-02 & 2006-07 - 2 - 2. THE SOLE ISSUE INVOLVED IN ALL THESE APPEALS IS THAT THE COMMISSIONER OF INCOME TAX(APPEALS) ERRED IN DISALL OWING THE CLAIM FOR DEDUCTION U/S. 80IB(10) OF THE ACT FOR RS 17,48,939 /- IN ASSESSMENT YEAR 2000-01, RS 35,53,660/- IN ASSESSMENT YEAR 2001-02 AND RS. 9,56,170/- IN ASSESSMENT YEAR 2006-07. 3. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF LOWER AUTHORITIES AND MATERIALS AVAILABLE ON RECORD . THE UNDISPUTED FACTS OF THE CASE ARE THAT THE ASSESSEE CLAIMED DEDUCTION U/ S. 80IB(10) ON HOUSING PROJECT CONSTRUCTED NEAR BLIND MAN ASSOCIATION, RAN IP, AHMEDABAD. THE SAME WAS DISALLOWED BY THE ASSESSING OFFICER AND CO NFIRMED IN APPEAL BY THE COMMISSIONER OF INCOME TAX(APPEALS). 4. THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE F ILED BEFORE US A COPY OF THE CONSOLIDATED ORDER OF THIS BENCH OF THE TRIBUNAL PASSED IN THE CASE OF THE ASSESSEE ITSELF IN ITA NOS. 1086 & 1087 /AHD/2007 IN THE ASSESSMENT YEAR 2002-03 AND 2003-04 DATED 11.03.200 8 AND SUBMITTED THAT THE DISALLOWANCE OF DEDUCTION U/S. 80IB(10) TO THE ASSESSEE IN ASSESSMENT YEAR 2002-03 AND 2003-04 MADE BY THE ASS ESSING OFFICER WAS DELETED BY THE COMMISSIONER OF INCOME TAX(APPEALS) ON APPEAL FILED BY THE ASSESSEE AND ON FURTHER APPEAL FILED BY THE REVENUE , THE TRIBUNAL CONFIRMED THE ORDER OF THE COMMISSIONER OF INCOME TAX(APPEALS ) AND DISMISSED THE APPEAL OF THE REVENUE. HE FURTHER SUBMITTED THAT I N THE PRESENT YEARS UNDER CONSIDERATION, THE PROJECT REMAINS THE SAME O N WHICH THE ASSESSEE HAS CLAIMED DEDUCTION U/S. 80IB(10). HE FURTHER SU BMITTED THAT THE REVENUE HAS NOT FILED ANY FURTHER APPEAL TO THE HIG H COURT AGAINST THE ORDER OF THE TRIBUNAL FOR ASSESSMENT YEAR 2002-03 AND 200 3-04. THUS, THE ISSUE HAS ATTAINED FINALITY AND THEREFORE, FOLLOWING THE ORDER OF THE TRIBUNAL IN THE PRESENT YEARS OF THE APPEAL ALSO, DEDUCTION U/S. 80 IB(10) SHOULD BE ALLOWED TO THE ASSESSEE. ITA NOS. 1191, 1192 & 1193 OF 2011 M/S SKYLAND DEVELOPERS, AHMEDABAD. FOR AYS 2000-01, 2001-02 & 2006-07 - 3 - 5. THE DEPARTMENTAL REPRESENTATIVE COULD NOT CONTR OVERT THE ABOVE SUBMISSIONS OF THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE. 6. WE FIND THAT THE TRIBUNAL IN ASSESSMENT YEAR 20 02-03 AND 2003- 04 VIDE ORDER DATED 11.03.2008 HAS HELD AS UNDER: 6. THE CIT(A) CONSIDERING THESE FACTS IN 2002-03 ASSESSMENT YEAR TOOK SPECIFIC NOTE OF THE FACT THAT THE VIEW T AKEN IN 2000-01 ASSESSMENT YEAR IS THE LATEST IN POINT OF TIME BY T HE CIT(A) SINCE THE ORDER DATED 27.1.2006 WHEREAS THE ISSUE IN 2001 -02 ASSESSMENT YEAR WAS DECIDED BY HIS PREDECESSOR ON 5 .11.2004. ACCORDINGLY, TAKING INTO CONSIDERATION THESE FACTS HE WAS OF THE VIEW THAT THE FACTS AND CIRCUMSTANCES AS TAKEN INTO CONSIDERATION BY HIS PREDECESSOR IN 2000-01 ASSESSM ENT YEAR IN HIS ORDER DATED 27.1.2006 NEEDS TO BE FOLLOWED. BEI NG ALSO OF THE VIEW THAT THE DEDUCTION U/S 80IB(10) WHICH HAS BEEN CLAIMED IN CONTINUITY WITH THE EARLIER YEARS, THE F ACTS AND CIRCUMSTANCES CONTINUED TO BE THE SAME, HE DIRECTED THE A.O. TO ALLOW THE DEDUCTION U/S 80IB FOR THE ASSESSMENT YEA R UNDER CONSIDERATION ALSO. FOR READY REFERENCE, WE REPRODU CE THE SPECIFIC FINDING ADDRESSING THE FACTS AND CIRCUMSTA NCES TAKEN INTO CONSIDERATION BY THE CIT(A) IN 2000-01 ASSESSM ENT YEAR WHICH HAVE BEEN REPRODUCED IN PAGE 3 OF THE IMPUGNE D ORDER AND CONSIDERED TO BE THE .SAME IN THE YEAR UNDER CO NSIDERATION ALSO:- 'THE RELEVANT PORTION OF THE APPELLATE ORDER OF MY LD. PREDECESSOR GIVEN IN APPEAL NO. CIT(A)-XV/ ITO. WD.9(L)/78/05-06 DATED 27/01/2006 IS REPRODUCED AS UNDER: 'I HAVE CONSIDERED THE SUBMISSIONS O F THE AUTHORISED REPRESENTATIVE CAREFULLY. THE APPEL LANT IS A SUPERVISION AND LABOUR CONTRACTOR. DURING THE YEA R IN APPEAL THE APPELLANT HAS CARRIED OUT LABOUR CON TRACT WORK AND SUPERVISION WORK FOR CONSTRUCTION OF FLATS FOR THE THREE CO. OP. HOUSING SOCIETIES I.E. PINK C ITY (RANIP) CO. OP. HOUSING SOCIETY LTD., KAILASNATH (R ANIP) CO. OP. HOUSING SOCIETY LTD. AND PRAKARSH (RANIP) C O. OP. HOUSING SOCIETY LTD. I FIND THAT THE APPELLANT HAS SATISFIED ALL THE THREE CONDITIONS REQUIRED FOR DEDUCTION U/S . 80IB OF THE I. T. ACT. THE APPELLANT HAS PROVIDED THE FUNDS TO THE SOCIETIES FOR ACQUIRING THE LAND IN THEIR NAMES AND THE ITA NOS. 1191, 1192 & 1193 OF 2011 M/S SKYLAND DEVELOPERS, AHMEDABAD. FOR AYS 2000-01, 2001-02 & 2006-07 - 4 - SOCIETIES HAD PAID THE SALE CONSIDERATION TO ORIGIN AL LAND OWNERS. THE APPELLANT GOT THE LAND CONVERTED BY N.A ./NOC PROCEEDINGS. IN TURN, THE DEVELOPMENT RIGHT WAS GIV EN TO THE APPELLANT. THE DEVELOPMENT CHARGES OF MORE THAN RS. 25 LACS HAVE BEEN PAID TO AUDA ON BEHALF OF THE SOC IETY AND THE APPELLANT HAS CARRIED OUT CONSTRUCTION WORK AS PER THE PLAN. AS PER THE CONDITIONS OF THE AGREEMENT, T HE APPELLANT HAD PUT UP THE PLAN AND MADE PAYMENTS TO AUDA FOR THE DEVELOPMENT AND CONSTRUCTION OF THE SC HEME AS PER THE APPROVED PLAN. THE APPELLANT HAD ALSO GI VEN ADVERTISEMENT IN LOCAL NEWSPAPERS TO ATTRACT THE ME MBERS FOR BOOKING. THE APPELLANT HAD PREPARED GROUND WATE R TANK, APPROACH ROAD AND CONSTRUCTION LIFT AT THE SI TE OF HOUSING PROJECT. THE APPELLANT HAD APPOINTED THE RC C CONTRACTORS AND OTHER LABOR CONTRACTOR AND EXPERTS TO CARRY OUT THE CONSTRUCTION AND DEVELOPMENT WORKS. THE APPELLANT HAD ALSO PURCHASED THE BUILDING MATERIALS AND MADE PAYMENTS TO THE RESPECTIVE PARTIES. IN VIEW OF THESE FACTS, I AGREE WITH THE AUTHORISED REPRESENTATIVE T HAT THE APPELLANT'S ROLE HAS BEEN THAT OF A FULL FLEDGED CONTRACTOR/BUILDER IN HOUSING PROJECT. THE DEVE LOPMENT CHARGES WERE FIXED @ 23% OF HOUSING PROJECT WHICH I S IN THE GUISE OF NET INCOME FROM THE HOUSING SCHEME. TH E APPELLANT IS INVOLVED FROM THE BEGINNING I.E. FROM THE TIME OF LAND PURCHASE TO THE LAST STEP OF COMPLETION OF HOUSING PROJECT THESE FACTS SHOW THAT THE APPELLANT HAS ACT UALLY CARRIED OUT THE WORK OF CONSTRUCTION. I AGREE WITH THE CONTENTIONS OF THE AUTHORISED REPRESENTATIVE THAT I N A NORMAL COURSE OF CONSTRUCTION BUSINESS, FOR ERECTIN G THE BUILDING AS PER PLAN, THE SOCIETY HAS TO ENTRUST SU CH VERY DIFFICULT TASK TO EXPERIENCED CONTRACTOR/DEVELOPER, AS THE MEMBERS OF SOCIETY DO NOT HAVE ANY KNOWLEDGE OR EXPERTISE IN CONSTRUCTION AND DEVELOPMENT WORK AND FOR EFFECTIVE AND TIMELY COMPLETION OF SCHEME SUCH SOCI ETY ENGAGED RELIABLE AND EXPERIENCED DEVELOPER/CONTRACT OR AND LABOUR CONTRACTOR; BY AN AGREEMENT BY STIPULATI NG CERTAIN CONDITIONS. THUS THE SOCIETY IN THIS CASE H AS ENTRUSTED THE CONSTRUCTION AND LABOUR WORK TO THE APPELLANT FIRM AS PER THE TERMS AND CONDITIONS LAID DOWN IN THE DEVELOPMENT AND LABOUR AGREEMENT. IN A NORMAL COURSE OF CONSTRUCTION BUSINESS, THE SOCIETY HAS TO BEAR THE EXPENSES IN RESPECT OF ELECTRICITY CONNECTIONS, WIRE LINES AND LEGAL EXPENSE INCURRED FOR THE LAND ETC., AS THE A.B.C. CONNECTIONS ARE TO BE OBTAINED IN THE NAME O F THE SOCIETY. LAND IS ALSO PURCHASED BY THE SOCIETY. HEN CE FOR SUCH WORK, DEVELOPMENT CHARGES HAVE BEEN FIXED AT T HE ITA NOS. 1191, 1192 & 1193 OF 2011 M/S SKYLAND DEVELOPERS, AHMEDABAD. FOR AYS 2000-01, 2001-02 & 2006-07 - 5 - RATE OF 23% IN ADDITION TO RS. 700/- FOR LABOUR CHA RGES, WHICH HAS BEEN FIXED IN THE GUISE OF PROFIT AND SUC H TYPE OF AGREEMENTS ARE COMMON IN THE CONSTRUCTION BUSINESS. FURTHER THE PROFIT DECLARED BY THE APPELLANT IS SUB STANTIALLY HIGHER THAN THE PRESUMPTIVE PROFIT AS PER SECTION 4 4 AD OF THE INCOME-TAX ACT. IF MEMBERS COULD NOT BE BOOKED FOR THE VACANT PREMISES, THEN SUCH VACANT PREMISES ARE TO BE HELD BY THE APPELLANT AS PER CLAUSE NO.3 OF THE DEVELOPMENT AGREEMENT. FOR THE CONSTRUCTION OF SCHE ME, NECESSARY BUILDING MATERIALS HAVE BEEN PURCHA SED AND PAYMENTS HAVE BEEN MADE AND THE LABOUR CONTRACTOR H AS BEEN APPOINTED FOR CONSTRUCTION WORK BY THE APPELLA NT. THESE CLAUSES PROVE THAT THE OWNERSHIP AND THE RISK FACTOR IS THERE ON THE APPELLANT FURTHER AS PER THE BROCHU RE OF THE SCHEME, THE APPELLANT FIRM HAS BEEN SHOWN AS DEVELO PERS, WHICH INDICATES THE ROLE OF THE APPELLANT AS A DEVE LOPER. ON A CONSIDERATION OF THE TOTALITY OF FACTS, I ARRI VE AT THE CONCLUSION THAT THE APPELLANT HAS ACTUALLY CARRIED OUT THE WORK OF DEVELOPMENT AND CONSTRUCTION, AS THERE WAS NO OTHER PERSON WHO HAS DONE THE WORK, AN D THEREFORE, THE APPELLANT IS ENTITLED TO DEDUCTION U /S. 801B OF THE I.T. ACT. FURTHER IT HAS BEEN HELD BY ITAT, MUMBAI IN THE CASE OF PATEL ENGINEERING LTD. VS. DCIT (2004) REPORTED IN 84 TTJ (MUM.) 646/94 ITD 411 THAT MER ELY BECAUSE STATE GOVERNMENT PAID FOR DEVELOPMEN T OF INFRASTRUCTURE FACILITY CARRIED OUT BY THE ASSESSEE AS CONTRACTOR, IT CANNOT BE S AID THAT THE ASSESSEE HAD NO DEVELOPED INFRASTRUCTUR E FACILITY AND FOR AVAILING DEDUCTION UNDER SECTION 80-IA, 'INFRASTRUCTURE FACILITY' SHOULD N OT NECESSARILY BE OWNED BY THE ASSESSEE. IT IS ALSO FOUND THAT TH E WORDINGS OF SECTION 80IA(4) AND 80IB(10) ARE SIMILA R. RELYING ON THE RATIO LAID DOWN IN THE SAID CASE, TH E APPELLANT IS HELD TO HAVE CARRIED OUT THE D EVELOPMENT WORK. ACCORDINGLY, THE ASSESSING OFFICER IS DI RECTED TO ALLOW DEDUCTION U/S. 80IB(10) TO THE APPELLANT.' 7. IN THE LIGHT OF THE ABOVE FACTS BOTH THE PARTIES HAVE BEEN HEARD ALTHOUGH THE LD. D.R. PLACED RELIANCE ON THE ASSESS MENT ORDER, HOWEVER, CONFRONTED WITH THE ORDER OF THE TRIBUNAL IN THE CASE OF RADHE DEVELOPERS WHICH HAS CONSISTENTLY BEEN FOLLOW ED BY THE AHMEDABAD BENCH IN THE CASE OF CONTRACTORS WHO HAVE BEEN HELD TO BE ENTITLED TO DEDUCTION U/S 80IB WHICH HAS BEEN DENIE D SOLELY ON THE GROUND THAT THE LAND WAS NOT OWNED BY THE DEVELOPER . THE ACTIVITY OF THE DEVELOPMENT HAS BEEN CARRIED ON BY THE CONTRACT OR-DEVELOPER AS PER THE AGREEMENT ENTERED INTO WITH THE LAND OWNERS WHICH CARRIED ON THE DEVELOPMENTAL ACTIVITY IN TERMS OF THE AGREEMEN T. SIMPLY BECAUSE ITA NOS. 1191, 1192 & 1193 OF 2011 M/S SKYLAND DEVELOPERS, AHMEDABAD. FOR AYS 2000-01, 2001-02 & 2006-07 - 6 - THE LAND WAS NOT OWNED BY THE DEVELOPERS IT HAS CON SISTENTLY BEEN HELD IS NOT A RELEVANT CRITERIA TO DISALLOW THE DED UCTION CLAIMED NOT ONLY IN THE CASE OF RADHE DEVELOPERS BUT ALSO HAS B EEN CONSISTENTLY FOLLOWED BY THE AHMEDABAD BENCHES. WE FIND NO MERIT IN THE DEPARTMENTAL APPEAL IN THE LIGHT OF THE ABOVE FACTS AND CIRCUMSTANCES AND POSITION OF LAW. THUS, SINCE THE FACTS AND CIRC UMSTANCES REMAIN IDENTICAL AND NO DISTINGUISHING FACT DESPITE SPECIF IC OPPORTUNITIES COULD BE POINTED OUT BY THE DEPARTMENT, RESPECTFULLY FOLL OWING THE ORDER OF THE AHMEDABAD BENCH, WE DISMISS THE DEPARTMENTAL AP PEAL. 8. IN THE RESULT, APPEAL IN ITA NO. 1086/ AHD / 2007 BY THE DEPARTMENT IS DISMISSED. 7. KEEPING IN VIEW THE FACTS AND CIRCUMSTANCES OF THE CASE, AS THE HOUSING PROJECT AND RELATED AGREEMENT IS THE SAME W HICH WAS IN THE ASSESSMENT YEAR 2002-03 AND 2003-04 IN THE YEARS IN VOLVED IN THE PRESENT APPEAL AND THE FACT THAT THE DECISION OF THE TRIBUN AL IN THE CASE OF RADHE DEVELOPERS WHICH WAS RELIED UPON BY THE TRIBUNAL IN THE ABOVE QUOTED ORDER HAS SINCE BEEN AFFIRMED BY THE HONBLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. RADHE DEVELOPERS (2012) 341 ITR 403, WE SET ASI DE THE ORDERS OF THE LOWER AUTHORITIES AND ALLOW THE CLAIM FOR DEDUCTION U/S. 80IB(10) TO THE ASSESSEE FOR RS 17,48,939/- IN ASSESSMENT YEAR 200 0-01, RS 35,53,660/- IN ASSESSMENT YEAR 2001-02 AND RS 9,56,170/- IN ASS ESSMENT YEAR 2006- 07. 8. IN THE RESULT, THE APPEALS OF THE ASSESSEE ARE ALLOWED. ORDER PRONOUNCED IN THE COURT ON MONDAY, THE 9 TH OF JUNE, 2014 AT AHMEDABAD. SD/- SD/- (KUL BHARAT) JUDICIAL MEMBER ( N.S. SAINI) ACCOUNTANT MEMBER AHMEDABAD; DATED 09/06/2014 GHANSHYAM MAURYA, SR. P.S. ITA NOS. 1191, 1192 & 1193 OF 2011 M/S SKYLAND DEVELOPERS, AHMEDABAD. FOR AYS 2000-01, 2001-02 & 2006-07 - 7 - TRUE COPY 1 - *%2 320% 1 - *%2 320% 1 - *%2 320% 1 - *%2 320%/ COPY OF THE ORDER FORWARDED TO : 1. '( / THE APPELLANT 2. *+'( / THE RESPONDENT. 3. '' % #4 / CONCERNED CIT 4. #4() / THE CIT(A)-III, AHMEDABAD 5. 2!$7 *% , , / DR, ITAT, AHMEDABAD 6. 78 9, / GUARD FILE. 1# 1# 1# 1# / BY ORDER, : :: :/ // / '; '; '; '; ( DY./ASSTT.REGISTRAR) , , , , / ITAT, AHMEDABAD