The ITO, Ward-9(1), Ahmedabad V. M/s. S.P. Developers, Ahmedabad

ITA 2250/AHD/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 0350 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-01-2013
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 14-01-2013
• Assessment Year: 2007-2008
• Appeal Filed On: 08-10-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: RAHUL KUMAR
• Assessee Lawyers: B T THAKKAR
• Keywords: Opportunity of being heard

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, A BENCH, AHMEDABAD BEFORE SHRI A. K. GARODIA, ACCOUNTANT MEMBER AND SHRI KUL BHARAT, JUDICIAL MEMBER I.T.A. NO. 2250 & 2251/ AHD/2012 (ASSESSMENT YEAR 2007-08 & 2008-09) ITO, WARD 9(1), AHMEDABAD VS. M/S. S.P. DEVELOPERS, F/P-72, NR. SARAN RESIDENCY, OPP. MOKSHARAJ VILLA, NEW VASNA, AHMEDABAD PAN/GIR NO. : ABEFS7581B (APPELLANT) .. (RESPONDENT) APPELLANT BY: SHRI RAHUL KUMAR, SR. DR RESPONDENT BY: SHRI B T THAKKAR, AR DATE OF HEARING: 14.01.2013 DATE OF PRONOUNCEMENT: 18.01.2013 O R D E R PER SHRI A. K. GARODIA, AM:- BOTH THESE APPEALS ARE FILED BY THE REVENUE, WHICH ARE DIRECTED AGAINST TWO SEPARATE ORDERS OF LD. CIT(A)-XV, AHMED ABAD BOTH DATED 04.07.2012 FOR THE ASSESSMENT YEARS 2007-08 & 2008- 09. THE ISSUE INVOLVED IS COMMON IN BOTH THESE CASES AND HENCE, B OTH THESE APPEALS WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY WA Y OF THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. THE GROUNDS RAI SED BY THE REVENUE IN BOTH THESE YEARS ARE IDENTICAL EXCEPT DIFFERENCE IN AMOUNT. THE GROUNDS IN APPEAL FOR THE ASSESSMENT YEAR 2007-08 ARE AS UN DER: 1A). THE LD. COMMISSIONER OF INCOME-TAX (APPEA LS)-XV, AHMEDABAD HAS ERRED IN LAW AND ON FACTS IN DIRECTIN G THE I.T.A.NO.2250, 2251 /AHD/2012 2 ASSESSING OFFICER TO ALLOW THE ASSESSEE'S CLAIM FOR DEDUCTION OF RS.11,54,9297- U/S. 8016(10) OF THE IT. ACT. 1B). THE LD. COMMISSIONER OF INCOME-TAX (APPEAL S)-XV, AHMEDABAD HAS DECIDED THE ISSUE NO.1 ON THE GROUND IN HOLDING THAT THE ASSESSEE FULFILLS THE CONDITIONS LAID DOWN FOR CLAIMING DEDUCTION U/S.80IB(10) EVEN WHEN THE LAND WAS IN TH E NAME OF TARABEN PATEL & OTHERS, WHICH IS A SEPARATE LEGAL E NTITY IN THE EYE OF LAW AND THE ASSESSEE ENTERED INTO THE PROJECT BY A DEVELOPMENT AGREEMENT WITH THE SOCIETY. THE ENTIRE RESPONSIBILI TY TO EXECUTE THE HOUSING PROJECT AND ABIDE BY THE TERMS AND CONDITIO NS OF ITS APPROVAL RIGHT FROM THE INCEPTION OF THE PROJECT TI LL ITS COMPLETION RESTS WITH THE SOCIETY. THE LOCAL AUTHORITY HAD GRA NTED PERMISSION FOR DEVELOPMENT TO THE SOCIETY. ASSESSEE WAS JUST A CONTRACTOR OF THE LAND OWNERS CONSTRUCTING RESIDENTIAL UNITS AND NOT A DEVELOPER. 2). ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. COMMISSIONER OF INCOME-TAX (APPEALS)-XV, AHMEDABAD OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESSING OFFICER. J 3). IT IS THEREFORE, PRAYED THAT THE ORDER OF THE LD. COMMISSIONER OF INCOME-TAX (APPEALS)-XV, AHMEDABAD MAY BE SET-ASIDE AND THAT OF THE ASSESSING OFFICER BE REST ORED. 2. AT THE VERY OUTSET, IT WAS SUBMITTED BY THE LD. D.R. THAT THE ORDER OF LD. CIT(A) IS VERY CRYPTIC AND THERE IS NO DISCU SSION REGARDING FACTS OF THE PRESENT CASE AND HENCE, THE ISSUE SHOULD GO BAC K TO THE FILE OF LD. CIT(A) FOR A FRESH DECISION BY WAY OF SPEAKING ORDE R AFTER EXAMINING THE AGREEMENT BETWEEN THE ASSESSEE AND THE CO-OWNERS OF THE LAND. AS AGAINST THIS, IT WAS SUBMITTED BY THE LD. A.R. THAT THIS ISSUE IS DECIDED BY LD. CIT(A) BY FOLLOWING THE JUDGEMENT OF HONBLE GU JARAT HIGH COURT RENDERED IN THE CASE OF RADHE DEVELOPERS & ORS. VS ITO AS REPORTED IN 204 TAXMAN 543 (GUJ.). AT THIS JUNCTURE, A QUERY WAS RAISED BY THE BENCH AS TO WHICH IS THE RELEVANT PARA OF THE ORDER OF LD. CIT(A) IN WHICH HE HAS DISCUSSED AND COMPARED THE FACTS OF THE PRES ENT CASE WITH THE FACTS IN THE CASE OF RADHE DEVELOPERS & OTHERS (SUPRA). LD. A.R. COULD NOT POINT OUT ANY SUCH PARA IN THE ORDER OF LD. CIT(A) AND HE DRAWN OUR I.T.A.NO.2250, 2251 /AHD/2012 3 ATTENTION TO THE LAST PARA OF THE ORDER OF LD. CIT( A) ON PAGE 17 OF HIS ORDER. HE AGREED TO THIS PROPOSITION THAT THE MATT ER MAY BE RESTORED BACK TO THE FILE OF LD. CIT(A) FOR A FRESH DECISION AFTE R EXAMINING THE RELEVANT AGREEMENT BY WAY OF SPEAKING ORDER. 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS, PERUSE D THE MATERIAL ON RECORD AND HAVE GONE THROUGH THE ORDERS OF AUTHORIT IES BELOW. WE FIND THAT IN THE IMPUGNED ORDER OF 18 PAGES, PASSED BY L D. CIT(A), HE HAS DISCUSSED REGARDING THE BASIS OF ASSESSMENT ORDER A ND THE DECISION OF HONBLE GUJARAT HIGH COURT RENDERED IN THE CASE OF RADHE DEVELOPERS (SUPRA) BUT THERE IS NO DISCUSSION REGARDING THE VA RIOUS CLAUSES OF THE DEVELOPMENT AGREEMENT IN THE PRESENT CASE AND THERE IS NO COMPARISON MADE BY LD. CIT(A) AS TO HOW THE BASIC GUIDELINES F RAMED BY HONBLE GUJARAT HIGH COURT ARE BEING COMPLIED WITH IN THE P RESENT CASE. THE MAIN THRUST OF THE JUDGEMENT OF HONBLE GUJARAT HIGH COU RT IS THIS THAT THE ASSESSEE SHOULD HAVE DOMINANT CONTROL OVER THE PROJ ECT AND HE SHOULD BE ENTITLED FOR THE PROFIT AND LOSS WHICH MAY ARISE OU T OF THE EXECUTION OF THE PROJECT AND SUCH PROFIT AND LOSS SHOULD BELONG ENTI RELY TO THE ASSESSEE. ON PAGE 17 OF THE ORDER OF LD. CIT(A), THE FINDING OF LD. CIT(A) IS VERY CRYPTIC, WHICH IS REPRODUCED BELOW: THE FACTS OF THE APPELLANT ARE IDENTICAL WITH THE CASES DEALT BY HONBLE GUJARAT HIGH COURT, EVEN THE CONTENTION RAI SED BY THE A.O. ALONG WITH RELIANCE OF VARIOUS JUDICIAL AUTHOR ITIES ARE IDENTICAL. THEREFORE, FOLLOWING THE RATIO OF HONB LE GUJARAT HIGH COURT IN THIS CASE, THE DISALLOWANCE AND THEREBY AD DITIONS MADE BY THE A.O. IN THE CASE OF APPELLANT ARE NOT JUSTIFIED AND DIRECTED TO BE DELETED. APPELLANT GETS RELIEF OF RS.11,54,930/-. 4. FROM THE ABOVE FINDINGS OF LD. CIT(A), IT IS SEE N THAT THERE IS NO DISCUSSION REGARDING THE FACTS OF THE PRESENT CASE AND HENCE, IN OUR CONSIDERED OPINION, THIS CRYPTIC ORDER OF LD. CIT(A ) CANNOT BE SUSTAINED I.T.A.NO.2250, 2251 /AHD/2012 4 AND HENCE, WE SET AIDE THIS ORDER OF LD. CIT(A) AND RESTORE THE MATTER BACK TO HIS FILE FOR A FRESH DECISION IN BOTH THE Y EARS. WHILE DECIDING THE ISSUE AFRESH, LD. CIT(A) SHOULD EXAMINE THE RELEVAN T CLAUSES OF THE DEVELOPMENT AGREEMENT IN THE PRESENT CASE AND HE SH OULD GIVE A CLEAR FINDING ON ALL FACTUAL ASPECTS IN THE LIGHT OF THE JUDGEMENT OF HONBLE GUJARAT HIGH COURT RENDERED IN THE CASE OF RADHE DE VELOPERS (SUPRA). HE SHOULD GIVE A SPECIFIC FINDING AS TO WHETHER IN THE PRESENT CASE, THE ASSESSEE IS HAVING DOMINANT CONTROL OVER THE PROJEC T OR NOT AND ALSO WHETHER THE ASSESSEE IS SUPPOSED TO BEAR THE PROFIT AND LOSS AS THE CASE MAY BE IN ITS ENTIRETY FROM THIS PROJECT. HE SHOUL D PASS SPEAKING ORDER AFTER PROVIDING ADEQUATE OPPORTUNITY OF BEING HEARD TO BOTH THE SIDES IN THE LIGHT OF ABOVE DISCUSSION. 5. IN THE RESULT, BOTH THESE APPEALS OF THE REVENUE STAND ALLOWED FOR STATISTICAL PURPOSES. 6. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE M ENTIONED HEREINABOVE. SD./- SD./- (KUL BHARAT) (A. K. GARODIA) JUDICIAL MEMBER ACCOUNTANT MEMBER SP COPY OF THE ORDER FORWARDED TO: 1. THE APPLICANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE LD. CIT (APPEALS) 5. THE DR, AHMEDABAD BY ORDER 6. THE GUARD FILE AR,ITAT,AHMEDABAD I.T.A.NO.2250, 2251 /AHD/2012 5 1. DATE OF DICTATION 14/01/2013 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 15/01/2013.OTHER MEMBER 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P .S./P.S. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 18/01/2013 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. P.S./P.S.18/01 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 18/01/2013 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK .. 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER . 9. DATE OF DESPATCH OF THE ORDER. .