The ITO, Ward-1, Bharuch V. M/s. Samruddhi Developers, Bharuch

ITA 1558/AHD/2014

• Counselvise Citation: [2018] 111 COUNSELVISE.COM (IT) 1924 (ITAT-SURAT)
• Duration Of Justice: 3 year(s) 10 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-03-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 27-06-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 16-05-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MRS M KAVITHA
• Keywords: Set aside
• Section: 80IB

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL,SURAT BENCH,SURAT , , BEFORE SHRI C.M.GARG, JUDICIAL MEMBER AND SHRI O.P.MEENA, ACCOUNTANT MEMBER . / ITA NO.1558/AHD/2014/SRT [ [ / ASSESSMENT YEAR: 2009-10 INCOME TAX OFFICER, WARD-1, BHARUCH. VS. M/S. SAMRUDDHI DEVELOPERS, G-7, INDRAPRASTHA APARTMENT, ZADESHWAR ROAD, BHOLAV, GHARUCH 392 001. [PAN: ABJFS 1223M ( / APPELLANT) ( /RESPONDENT) / APPELLANT BY : MRS. M.KAVITHA, SR. D.R /RESPONDENT BY : SHRI MUKUND BAKSHI, C.A /DATE OF HEARING : 07-03-2018 /DATE OF PRONOUNCEMENT : 19-03-2018 / ORDER PERC.M.GARG, JUDICIAL MEMBER : THIS APPEAL HAS BEEN FILED BY THE REVENUE CHALLENGING THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-VI, BARODA (CIT(A) FOR SHORT) DATED 14.02.2014 FOR THE ASSESSMENT YEAR (AY) 2009-10 PASSED IN THE FIRST APPEALNO.CAB/VI-474/2011-12. 2. THE SOLE GROUND RAISED BY THE REVENUE READS AS FOLLOWS: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN; LAW, THE LEARNED CIT(A) ERRED IN DELETING DISALLOWANCE OF RS.1,52,37,149/- CLAIMED AS 2 ITA NO.1558/AHD/2016/SRT (A.Y: 2009-10) M/S. SAMRUDDHI DEVELOPERS DEDUCTION U/S. 80IB(10) OF THE IT ACT, THEREBY IGNORING THE FACT THAT ASSESSEE WAS NOT ENTITLED FOR CLAIMING DEDUCTION U/S. 80IB (10) OF THE IT ACT AS A WHOLE, IN VIEW OF THE FACT THAT IN ASSESSEES CASE, THERE WERE TWO SEPARATE AGREEMENTS FOR SALE OF PLOT AND CONSTRUCTION ON THE PLOT AND THERE WAS NO SALE OF CONSTRUCTED HOUSE AND THUS, ASSESSEE HAD MERELY ACTED AS A CONTRACTOR OF THE UNIT OWNER IN RESPECT OF CONSTRUCTION OF HOUSE AND THEREFORE, NOT ENTITLED TO DEDUCTION U/S. 80IB(10) OF THE ACT BECAUSE THE SUB SECTION DOES NOT APPLY TO A DEVELOPER OF A PLOTTING SCHEME OR A CONTRACTOR. 3. WE HAVE HEARD THE ARGUMENTS OF BOTH SIDES AND CAREFULLY PERUSED THE RELEVANT MATERIAL PLACED ON THE RECORD OF THE TRIBUNAL. THE LD. DEPARTMENTAL REPRESENTATIVE (DR) SUPPORTING THE ASSESSMENT ORDER SUBMITTED THAT THE LEARNED CIT(A) ERRED IN DELETING DISALLOWANCE OF RS.1,52,37,149/- CLAIMED AS DEDUCTION U/S. 80IB(10) OF THE IT ACT, THEREBY IGNORING THE FACT THAT ASSESSEE WAS NOT ENTITLED FOR CLAIMING DEDUCTION U/S. 80IB (10) OF THE IT ACT AS A WHOLE, IN VIEW OF THE FACT THAT IN ASSESSEES CASE, THERE WERE TWO SEPARATE AGREEMENTS FOR SALE OF PLOT AND CONSTRUCTION ON THE PLOT AND THERE WAS NO SALE OF CONSTRUCTED HOUSE AND THUS, ASSESSEE HAD MERELY ACTED AS A CONTRACTOR OF THE UNIT OWNER IN RESPECT OF CONSTRUCTION OF HOUSE AND THEREFORE, NOT ENTITLED TO DEDUCTION U/S. 80IB(10) OF THE ACT BECAUSE THE SUB SECTION DOES NOT APPLY TO A DEVELOPER OF A PLOTTING SCHEME OR A CONTRACTOR. 4. THE LD. DR FURTHER SUBMITTED THAT THE CIT(A) HAS GRANTED RELIEF TO THE ASSESSEE WITHOUT ANY JUSTIFIED REASON AND BASIS THEREFORE, IMPUGNED ORDER MAY KINDLY BE SET ASIDE BY RESTORING THAT OF THE ASSESSING OFFICER (AO). 5. REPLYING TO THE ABOVE, THE LD. ASSESSEES REPRESENTATIVE (AR) SUBMITTED THAT AS PER DECISION OF HONBLE GUJARAT HIGH COURT IN THE CASES OF CIT VS. VISHAL CONSTRUCTION COMPANY [2013] 35 TAXMANN. COM 182 (GUJARAT), CIT VS. MAHADEV DEVELOPERS [2013] 32 TAXMANN.COM 291 3 ITA NO.1558/AHD/2016/SRT (A.Y: 2009-10) M/S. SAMRUDDHI DEVELOPERS (GUJARAT) AND RADHE DEVELOPERS, WHEREIN IT HAS BEEN HELD THAT OWNERSHIP OF LAND FOR DEVELOPMENT OF A HOUSING PROJECT IS NOT A PRECONDITION FOR CLAIMING DEDUCTION U/S. 80IB(10) OF THE ACT. THE LD. AR ALSO POINTED OUT THAT AS PER ORDER OF ITAT, AHMEDABAD IN THE CASE OF M/S. SATSANG DEVELOPERS VS. ACIT, IN ITA NO.1011/AHD/2012 AND OTHER RELATED APPEALS ORDER DATED 12.11.2013 HAS FOLLOWED THE DECISION OF HONBLE GUJARAT HIGH COURT (SUPRA) AND HAS HELD THAT THE OWNERSHIP OF LAND IS NOT A CONDITION PRECEDENT FOR DEVELOPING HOUSING PROJECT AND CLAIMING DEDUCTION U/S. 80IB(10) OF THE ACT. 6. ON CAREFUL CONSIDERATION OF ABOVE RIVAL SUBMISSIONS, WHEN WE CAREFULLY PERUSED AND LOGICALLY ANALYZED THAT THE RELEVANT OPERATIVE PART OF THE FIRST APPELLATE ORDER I.E., PARA 5.3 TO 5.7 THEN WE FIND THAT THE LD. CIT(A) HAS CONSIDERED RATIO OF THE VARIOUS DECISIONS OF HONBLE GUJARAT HIGH COURT INCLUDING DECISION IN THE CASE OF VEDANT ENTERPRISES IN TAX APPEAL 1225/2009, DECISION IN THE CASE OF VISHAL CONSTRUCTION (SUPRA) AND MADHAV DEVELOPERS (SUPRA), WHEREIN THEIR LORDSHIP SPEAKING FOR THE JURISDICTIONAL HIGH COURT CATEGORICALLY HELD THAT THE OWNERSHIP OF LAND FOR DEVELOPMENT OF HOUSING PROJECT IS NOT A PRECONDITION FOR CLAIMING DEDUCTION U/S. 80IB(10) OF THE ACT. AT THIS JUNCTURE, WE ALSO FIND IT APPROPRIATE TO CONSIDER THE ORDER OF ITAT, AHMEDABAD IN THE CASE OF M/S. SATSANG DEVELOPERS VS. ACIT (SUPRA)REPORTED AT [2013] 37 CCH 0249 AHDTRIB WHICH WAS AGAIN FOLLOWED BY THE ITAT, AHMEDABAD IN THE CASE OF NARAYAN REALTY LTD. VS. DY. CIT REPORTED AT [2014] 40 CCH 0177 AHDTRIB, AS VEHEMENTLY RELIED BY THE LD. AR, WHEREIN IT WAS HELD THAT IN A SITUATION WHERE THE ASSESSEE HAD SOLD THE LAND 4 ITA NO.1558/AHD/2016/SRT (A.Y: 2009-10) M/S. SAMRUDDHI DEVELOPERS SEPARATELY AND UNDERTOOK WORK OF CONSTRUCTION OF THE HOUSE ON THE LAND AND ENTERED INTO TWO SEPARATE CONTRACTS THEN, IT HAS TO BE HELD THAT THE ASSESSEE IS A DEVELOPER AND NOT A MERE CONTRACTOR AND HENCE IT IS ELIGIBLE FOR DEDUCTION U/S. 80IB(10) OF THE ACT. 7. IN THE PRESENT CASE, THE ASSESSEE BY CUTTING LAND INTO INDEPENDENT PLOTS ON DIFFERENT SIZED SOLD THE LAND THEREAFTER BY ENTERING INTO AN INDEPENDENT CONSTRUCTION AGREEMENT WITH INDIVIDUAL PLOT OWNERS UNDERTOOK CONSTRUCTION WORK. THE AO IN PARA 4 HELD THAT AFTER SELLING PLOTS THE ASSESSEE SEIZED TO HAVING A STATUS OF DEVELOPER OF THE PROJECT AND THEREFORE, BECAME INELIGIBLE FOR CLAIMING DEDUCTION U/S. 80IB(10) OF THE ACT. BUT THESE CONTENTIONS OF THE AO DOES NOT STAND ON THE MERITS IN VIEW OF THE DECISIONS OF HONBLE JURISDICTIONAL HIGH COURT AS RESPECTFULLY NOTED ABOVE. THE CONCLUSION DRAWN BY THE LD. CIT(A) IS QUITE CORRECT AND WE ARE UNABLE TO SEE ANY PERVERSITY OR ANY OTHER VALID REASON TO INTERFERE WITH THE SAME. THUS, THE SAME IS CONFIRMED. ACCORDINGLY, SOLE GROUND OF THE REVENUE BEING DEVOID OF MERITS IS DISMISSED. 8. IN THE RESULT,THE APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS DAY OF19 TH MARCH, 2018. / SURAT ; DATED :19 TH MARCH, 2018 SD/ - SD/ - ( ) ( O.P.MEENA ) / ACCOUNTANT MEMBER ( ) (C.M.GARG) / JUDICIAL MEMBER 5 ITA NO.1558/AHD/2016/SRT (A.Y: 2009-10) M/S. SAMRUDDHI DEVELOPERS EDN / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT; 2. / THE RESPONDENT; 3. ( ) / THE CIT; 4. THE PRL. CIT, BARODA 5. , , / DR, ITAT, SURAT; 6. [ / GUARD FILE. / BY ORDER, // TRUE COPY // / ASSISTANT REGISTRAR , / ITAT, SURAT