The ITO, Ward-9(1), Ahmedabad V. M/s. Shree Khodiyar Krupa Builder, Ahmedabad

ITA 1843/AHD/2011

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 1248 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 11 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-06-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 14-06-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 21-07-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: ARATI N SHAH

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD .., , !' BEFORE SHRI R.P. TOLANI, JUDICIAL MEMBER AND SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER ./ I.T.A. NO.1843/AHD/2011 ( / ASSESSMENT YEAR : 2008-09) THE ITO WARD-9(1) AHMEDABAD / VS. M/S.SHREE KHODIYAR KRUPA BUILDER ANKUR COMPLEX NEW INDIA COLONY NIKOL, AHMEDABAD $ ./ ./ PAN/GIR NO. : ABEFS 6242 D ( $' / APPELLANT ) .. ( ()$' / RESPONDENT ) $'* / APPELLANT BY : SHRI K. MADHUSUDAN, SR.DR ()$'+* / RESPONDENT BY : SMT. ARATI N. SHAH, AR ,+ / DATE OF HEARING 14/06/2016 -./+ / DATE OF PRONOUNCEMENT 22/06/2016 / O R D E R PER SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER : THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST TH E ORDER OF THE COMMISSIONER OF INCOME TAX(APPEALS)-XV, AHMEDABAD DATED 26/05/2011 FOR THE ASSESSMENT YEAR 2008-09. 2. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERI ALS ON RECORD ARE AS UNDER:- ITA NO. 1843/AH D/2011 ITO VS. M/S.SHREE KHODIYAR KRUPA BUILDER ASST.YEAR 2008-09 - 2 - 2.1. ASSESSEE IS A PARTNERSHIP-FIRM STATED TO BE ENGAGED IN THE BUSINESS OF CONSTRUCTION OF HOUSING PROJECTS. ASSESSEE ELE CTRONICALLY FILED ITS RETURN OF INCOME FOR AY 2008-09 ON 27/09/2008 DECLA RING TOTAL INCOME AT RS.NIL AFTER CLAIMING DEDUCTION U/S.80IB(10) O F THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS 'THE ACT'). THE C ASE WAS SELECTED FOR SCRUTINY AND THEREAFTER ASSESSMENT WAS FRAMED U/S.1 43(3) OF THE ACT VIDE ORDER DATED 16/12/2010 AND THE TOTAL INCOME WAS DET ERMINED AT RS.1,01,07,658/- BY DISALLOWING THE CLAIM OF DEDUCT ION U/S.80IB(10) OF THE ACT. AGGRIEVED BY THE ORDER OF THE ASSESSING OFFICER (AO), ASSESSEE CARRIED THE MATTER BEFORE THE LD.CIT(A), WHO VIDE ORDER DATED 26/05/2011 (IN APPEAL NO. CIT(A)-XV/9(1)/353/10-11 ) ALLOWED THE APPEAL OF THE ASSESSEE. AGGRIEVED BY THE ORDER OF THE LD.CIT(A), REVENUE IS NOW IN APPEAL BEFORE US AND HAS RAISED T HE FOLLOWING GROUNDS:- 1) THE LD.COMMISSIONER OF INCOME-TAX(A)-XV, AHMEDA BAD HAS ERRED IN LAW AND ON FACTS IN DIRECTING THE ASSESSIN G OFFICER TO ALLOW THE ASSESSEES CLAIM FOR DEDUCTION OF RS.1,01 ,07,658/- U/S.80IB(10) OF THE ACT. 2) THE LD. COMMISSIONER OF INCOME-TAX(A)-XV, AHME DABAD HAS ERRED IN HOLDING THAT THE ASSESSEE FULFILLS THE CON DITIONS LAID DOWN FOR CLAIMING DEDUCTION U/S.80IB(10) EVEN WHEN THE LAND WAS IN THE NAME OF SURJA (GHODASAR) OWNERS ASSOCIAT ION, WHICH IS A SEPARATE LEGAL ENTITY IN THE EYE OF LAW AND TH E ASSESSEE ENTERED INTO THE PROJECT BY A DEVELOPMENT AGREEMEN T WITH THEM. THE ENTIRE RESPONSIBILITY TO EXECUTE THE HOUSING PR OJECT AND ABIDE BY THE TERMS AND CONDITIONS OF ITS APPROVAL RIGHT F ROM THE INCEPTION OF THE PROJECT TILL ITS COMPLETION RESTS WITH THEM. ITA NO. 1843/AH D/2011 ITO VS. M/S.SHREE KHODIYAR KRUPA BUILDER ASST.YEAR 2008-09 - 3 - ASSESSEE WAS JUST A CONTRACTOR OF THE LAND CONSTRUC TION 41 RESIDENTIAL UNITS AND NOT A DEVELOPER. 3) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LD.COMMISIONER OF INCOME-TAX(A)-XV, AHMEDABAD OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESSING OFFICER. 4) IT IS THEREFORE, PRAYED THAT THE ORDER OF THE LD .COMMISSIONER OF INCOME-TAX(A)-XV, AHMEDABAD MAY BE SET-ASIDE AND TH AT OF THE ASSESSING OFFICER BE RESTORED. 2.2. AT THE OUTSET, IT WAS SUBMITTED THAT THE SOLIT ARY ISSUE WHICH IS TO BE DECIDED IS WITH RESPECT TO DEDUCTION U/S.80IB (10) OF THE ACT. 2.3. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, A O NOTICED THAT ASSESSEE HAD CONSTRUCTED 41 RESIDENTIAL HOUSING UNI TS AT NIKOL AS ANKUR DUPLEX AND HAD STATED TO HAVE EARNED NET PR OFIT (NP) OF RS.1,01,07,658/- WHICH WAS CLAIMED AS EXEMPT U/S.80 IB(10) OF THE ACT. AO NOTICED THAT LAND ON WHICH THE HOUSING PRO JECT WAS CONSTRUCTED WAS OWNED BY SMT.KAMUBEN BHIKHAJI THAKO R & OTHERS, APPLICATION AND PLAN WITH THE LOCAL AUTHORI TIES FOR CONSTRUCTION WAS FILED BY THE LAND OWNERS AND PERMI SSION FOR DEVELOPMENT AND CONSTRUCTION OF THE PROJECT WAS ALS O GIVEN IN THE NAMES OF LAND OWNERS. HE FURTHER NOTICED THAT THE ASSESSEE HAD ENTERED INTO A DEVELOPMENT AGREEMENT FOR CONSTRUCTI ON OF THE HOUSE. ACCORDING TO AO, ASSESSEE WAS THEREFORE A MERE CON TRACTOR FOR ITA NO. 1843/AH D/2011 ITO VS. M/S.SHREE KHODIYAR KRUPA BUILDER ASST.YEAR 2008-09 - 4 - CONSTRUCTION OF THE HOUSING PROJECT AND WAS NOT THE DEVELOPER OF THE PROJECT AS THE ASSESSEE WAS NOT DESIGNER, CREATOR A ND THE OWNER AND THE ASSESSEE DID NOT CONCEPTUALIZE AND OWNED THE PR OJECT. HE WAS THEREFORE OF THE VIEW THAT THE ASSESSEE FAILED TO S ATISFY THE CONDITIONS STIPULATED U/S.80IB(10) OF THE ACT FOR CLAIMING DED UCTION. HE ACCORDINGLY DENIED THE CLAIM OF DEDUCTION. AGGRIEV ED BY THE ORDER OF THE AO, ASSESSEE CARRIED THE MATTER BEFORE THE L D.CIT(A), WHO VIDE ORDER DATED 26/05/2011 DECIDED THE ISSUE IN FA VOUR OF ASSESSEE BY HOLDING AS UNDER:- 5. IT IS SEEN THAT THE AO HAS NOT DISPUTED THAT TH E APPELLANT DID NOT FULFILL ANY OF THE CONDITIONS SPECIFIED IN SECTION 80IB(10) FROM CLAUSE (A) TO (D) WITH RESPECT TO THE APPROVALS FROM THE LOCAL AUTHORITY, COMPLETION OF PROJECT WITHIN THE SPECIFIED TIME LIMITS, ONE AC RE OF LAND CONDITION, 1500 SQ.FT. BUILT UP AREA CONDITION OF EACH UNIT IN THE PROJECT AND THAT OF PERCENTAGE OF CONSTRUCTION FOR COMMERCIAL USE. HIS OBJECTION IS THAT THE APPELLANT IS NOT THE OWNER OF THE LAND. THIS OBJECT ION OF THE AO HAS TO BE SEEN IN THE LIGHT OF THE TESTS LAID DOWN BY HON' BLE ITAT BENCH A AHMEDABAD DECISION IN THE CASE OF M/S.SHAKTI CORPOR ATION, BARODA IN ITA NO.1503/AHD/2008 IN AY 2005-06. WHEREIN IT HAS BEEN HELD THAT WHERE THE APPELLANT IS FOUND HAVING PRACTICALLY PUR CHASED THE LAND AND BEARING THE RISK OF THE PROJECT THE DEDUCTION SHOUL D BE ALLOWED. HERE THE APPELLANT HAS BEEN FOUND FULFILLING THE CONDITI ONS LAID DOWN IN SECTION 80IB(10) AND HAS ALSO BEEN FOUND MEETING TH E TESTS LAID DOWN IN HON'BLE ITAT BENCH A AHMEDABAD DECISION IN THE CASE OF M/S.SHAKTI CORPORATION, BARODA IN ITA NO.1503/AHD/2008 IN AY 2005-06 AND AS IT HAD PRACTICALLY PURCHASED THE LAND AS CLEAR FROM CL AUSE 2 OF THE DEVELOPMENT AGREEMENT AND IT BORE THE ENTIRE COST A ND RISK OF DEVELOPING THE PROJECT AS CLEAR FROM CLAUSE 11 OF T HE DEVELOPMENT ITA NO. 1843/AH D/2011 ITO VS. M/S.SHREE KHODIYAR KRUPA BUILDER ASST.YEAR 2008-09 - 5 - AGREEMENT, IN MY VIEW IT IS ELIGIBLE FOR DEDUCTION U/S.80IB(10) AND THE AO IS DIRECTED TO ALLOW THE SAME. 2.4. AGGRIEVED BY THE ORDER OF LD.CIT(A), REVEN UE IS NOW IN APPEAL BEFORE US. 2.5. BEFORE US, LD.SR.DR POINTED OUT TO VARIOUS FIN DING OF AO AND SUPPORTED HIS ORDER. ON THE OTHER HAND, LD.AR REIT ERATED THE SUBMISSIONS MADE BEFORE THE AO AND LD.CIT(A). SHE FURTHER PLA CED RELIANCE ON THE DECISION OF HONBLE GUJART HIGH COURT IN THE CASE O F CIT VS. MAHADEV DEVELOPERS REPORTED AT (2013) 32 TAXMANN.COM 291 (G UJARAT) AND ALSO PLACED ON RECORD THE COPY OF THE AFORESAID DECISION AND OTHER DECISIONS CITED IN THE SUBMISSIONS. SHE THUS SUPPORTED THE ORDER OF LD.CIT(A). 3. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. THE ISSUE IN THE PRESENT CASE IS WITH RESPECT TO DE NIAL OF CLAIM OF DEDUCTION U/S.80IB(10) OF THE ACT. THE CLAIM OF DE DUCTION WAS DENIED BY THE AO MAINLY FOR THE REASON THAT THE LAND WAS N OT OWNED BY THE ASSESSEE AND THE PERMISSION FOR DEVELOPMENT OF THE LAND WAS OBTAINED BY THE LAND OWNERS AND NOT THE ASSESSEE. WE FIND THAT LD.CIT(A) WHILE DECIDING THE ISSUE IN FAVOUR OF ASSESSEE AND IN TH E LIGHT OF THE DECISION OF THE COORDINATE BENCH OF TRIBUNAL IN THE CASE OF M/S .SHAKTI CORPORATION, BARODA IN ITA NO.1503/AHD/2008 AND THE DEVELOPMENT AGREEMENT ENTERED BY THE ASSESSEE WITH THE LAND OWNERS, HAS G IVEN A FINDING THAT THE ITA NO. 1843/AH D/2011 ITO VS. M/S.SHREE KHODIYAR KRUPA BUILDER ASST.YEAR 2008-09 - 6 - ASSESSEE HAS FULFILLED THE CONDITIONS LAID DOWN U/S .80IB(10) OF THE ACT AND FURTHER ASSESSEE HAS BORNE THE ENTIRE COST AND RISK OF DEVELOPING PROJECT AND HAD PRACTICALLY PURCHASED THE LAND. 3.1. BEFORE US, THE REVENUE HAS NOT CONTROVERTED TH E FINDINGS OF THE LD.CIT(A) NOR HAS PLACED ON RECORD ANY CONTRARY BIN DING DECISION IN ITS SUPPORT. WE FURTHER FIND THAT THE HONBLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. PRATHAMA DEVELOPERS REPORTED AT (2013) 3 2 TAXMANN.COM 336 (GUJARAT) HAS DECIDED THE ISSUE THAT WHEN THE ASSES SEE HAD DEVELOPED HOUSING PROJECT THOUGH THE ASSESSEE WAS NOT THE OWN ER OF THE LAND BUT STILL THE ASSESSEE WAS ELIGIBLE FOR DEDUCTION U/S.8 0IB(10) OF THE ACT. IN VIEW OF THE AFORESAID FACTS, WE FIND NO REASON TO I NTERFERE WITH THE ORDER OF THE LD.CIT(A). THUS, THIS GROUND OF REVENUE IS DISMISSED. 4. IN THE RESULT, REVENUES APPEAL STANDS DISMISSED . THIS ORDER PRONOUNCED IN OPEN COURT ON 22/06/2016 SD/- SD/- .. () () ( R.P. TOLANI) ( ANIL CHATURVEDI ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD; DATED 22/ 06 /2016 3..,.../ T.C. NAIR, SR. PS ITA NO. 1843/AH D/2011 ITO VS. M/S.SHREE KHODIYAR KRUPA BUILDER ASST.YEAR 2008-09 - 7 - !'#$%$' / COPY OF THE ORDER FORWARDED TO : 1. $' / THE APPELLANT 2. ()$' / THE RESPONDENT. 3. 456 7 / CONCERNED CIT 4. 7 ( ) / THE CIT(A)-XV, AHMEDABAD 5. 89: (56 , 56/ , 4 / DR, ITAT, AHMEDABAD 6. :<=, / GUARD FILE. / BY ORDER, )8( //TRUE COPY// / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD 1. DATE OF DICTATION .. 14.6.16. (DICTATION-PAD 10+ PAGES ATTACHED AT THE END OF THIS APPEAL-FILE) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 17.6.16/21.6.16 3. OTHER MEMBER 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S.22.6.16 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 22.6.16 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER