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

ITA 230/AHD/2012

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 8732 (ITAT-AHMEDABAD)
• Duration Of Justice: 5 year(s) 6 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-08-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 02-08-2017
• Assessment Year: 2008-2009
• Appeal Filed On: 27-01-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Competent authority
• Section: 80IB

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, AHMEDABAD BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER AND SHRI MAHAVIR PRASAD, JUDICIAL MEMBER (1) !# I.T.A. NO.493/AHD/2011 FOR A.Y. 2007-08 (2) !# I.T.A. NO.230/AHD/2012 FOR A.Y. 2008-09 (3) !# I.T.A. NO.1783/AHD/2012 FOR A.Y. 2009-10 (1)M/S. SHREE HARI DEVELOPERS 1 VED BUNGLOWS, NOBALNAGAR, NANA CHILODA, AHMEDABAD 382340 (2-3) THE INCOME TAX OFFICER, WARD 9(1), AHMEDABAD # VS. (1)THE INCOME TAX OFFICER, WARD 9(1), AHMEDABAD (2-3) M/S. SHREE HARI DEVELOPERS 1 VED BUNGLOWS, NOBALNAGAR, NANA CHILODA, AHMEDABAD 382340 $ # % & # PAN/GIR NO. : AAFFS 8801 D ( !$' / APPELLANT ) .. ( ($' # RESPONDENT ) !$') # APPELLANT BY : SHRI DHIREN SHAH, A.R. ($'*) / RESPONDENT BY : SHRI V. K. SINGH, SR. D.R. + ,*-. / DATE OF HEARING 02/08/2017 /012*-. / DATE OF PRONOUNCEMENT 08/08/2017 3# O R D E R PER SHRI MAHAVIR PRASAD, JUDICIAL MEMBER : THESE ARE THREE APPEALS, OUT OF THREE APPEALS ON E IS TAKEN BY ASSESSEE AND OTHER TWO ARE TAKEN BY THE DEPARTMENT AGAINST THE ORDER OF ITA NO. 493/AHD/2011 & 230 & 1783/AHD/2012 ASST.YEAR 2007-08, 2008-09 & 2009-10 - 2 - THE COMMISSIONER OF INCOME TAX(APPEALS)-XV, AHMEDAB AD, DATED 10/01/2011 FOR THE ASSESSMENT YEAR (AY) 2007-08, DA TED 25/11/2011 FOR A.Y.2008-09 AND 28/05/2012 FOR A.Y. 2009-10. 2. FIRST WE TAKE UP THE ASSESSEES APPEAL IN ITA NO .493/AHD/2011 FOR ASST. YEAR 2007-08. ASSESSEE HAS TAKEN THE FOLLOWIN G GROUNDS OF APPEAL: I. THE LEARNED CIT(A) ERRED IN LAW AND ON FACTS IN UPHOLDING THE DISALLOWANCE OF RS.46,92,729/- MADE BY THE LEARNED AO U/S.80IB(10) OF THE INCOME TAX ACT, 1961. II. THE LEARNED CIT(A) ERRED IN LAW AND ON FACTS IN INCLUDING THE AREA OF TERRACE OF EACH TENEMENT IN THE BUILT UP AREA FOR WORKING OUT THE LIMIT OF 1500 SQ. FEET AS PROVIDED U/S.80IB(10)(C) OF THE INCOME TAX ACT, 1961. III. WITHOUT PREJUDICE TO THE ABOVE, THE LEARNED CI T(A) ERRED IN LAW AND ON FACTS IN NOT CONSIDERING THE PROPORTIONATE D EDUCTION IN RESPECT OF THE TENEMENTS, WHERE THE CONDITION MENTI ONED IN SECTION 80IB(10)(C) OF THE INCOME TAX ACT, 1961 IS SATISFIED. 3. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERI ALS ON RECORD ARE AS UNDER:- THE RETURN OF INCOME WAS FILED BY THE APPELLANT ON 30/10/2007 SHOWING TOTAL INCOME OF RS. NIL AFTER CLAIMING LEGI TIMATE BENEFIT OF DEDUCTION U/S.80IB(10) OF RS.46,92,729/-. THEREAFTE R, THE CASE OF THE APPELLANT WAS SUBJECTED TO SCRUTINY ASSESSMENT AND THE LEARNED AO HAS PASSED THE IMPUGNED ORDER AFTER MAKING FOLLOWING ADDITION/ADJUSTMENTS/DISALLOWANCES. 3.2 THE APPELLANT-FIRM IS A PARTNERSHIP-FIRM HAVING FOLLOWING PARTNERS (I) BHUPATBHAI SAVJIBAI BHALALA ITA NO. 493/AHD/2011 & 230 & 1783/AHD/2012 ASST.YEAR 2007-08, 2008-09 & 2009-10 - 3 - (II) HIMATBHAI DHANJIBHAI KOTIYA (III) RAMESHHAI RAVJIBHAI VAGHASIYA (IV) MAHENDRABHAI JANIBHAI VADODARIYA (V) MAVJIBHAI POPATBHAI LUNGARIYA (VI) DILIPBHAI DHANJIBHAI KOTHIYA 3.3 THE PARTNERS OF THE APPELLANT-FIRM WERE HAVING LAND IN THEIR HANDS ON WHICH THE HOUSING PROJECT IS FLOATED. THE LAND W AS PURCHASED BY THEM IN THEIR INDIVIDUAL HANDS. SUBSEQUENTLY, THEY HAVE DECIDED TO FLOAT A HOUSING PROJECT ON THE LAND AND IN CONSEQUENCE THER EOF THE PARTNERS OF THE APPELLANT-FIRM INTRODUCED THEIR OWN LAND FOR FL OATING THE HOUSING PROJECT ON THE LAND. LAND AREA 9294 SQ. MTRS. BUYERS BHUPATBHAI SAVJIBHAI BHALALA, PACH TOPRA, TALUKA GARIADHAR, DIST- BHAVNAGAR HIMMATBHAI DHANJIBHAI KOTHIA, A/10, SOMNATH SOCIETY, NEAR HARSHAD COLONEY, BAPUNAGAR, AHMEDABAD. RAMESHBHAI RAVJIBHAI VAGHASIA, 10, NANDI APARTMENT, INDIA COLONEY, BAPUNAGAR, AHMEDABAD SELLERS SUBODH NATHJI DHANSUKH NATHJI, BAVAJIS HAVELI PREM DARWAJA, AHMEDABAD. SURVEY NO. 72 MEASURED AT 9294 SQ. MTRS AREA 9294 SQ. MTRS. LOCATION VED BUNGLOWS, AIR PORT ROAD, NANA CHILODA, AHMEDABAD CONSIDERATION PAID RS.12,41,500/- DT. OF PURCHASE 25/01/2006 ITA NO. 493/AHD/2011 & 230 & 1783/AHD/2012 ASST.YEAR 2007-08, 2008-09 & 2009-10 - 4 - LAND AREA 1059 SQ. MTRS. + 9409 SQ. MTRS BUYERS BHUPATBHAI SAVJIBHAI BHALALA, PACH TOPRA, TALUKA GARIADHAR, DIST- BHAVNAGAR HIMMATBHAI DHANJIBHAI KOTHIA, A/10, SOMNATH SOCIETY, NEAR HARSHAD COLONEY, BAPUNAGAR, AHMEDABAD SELLERS ANANDIBEN NARANBHAI PRAJAPATI, VIKEN NARANBHAI PRAJAPATI, 22, HARIDWAR SOCIETY, NARODA, AHMEDABAD. SURVEY NO. 71/1/2 & 4 MEASURED AT 1059 SQ. MTRS. AREA 1059 SQ. MTRS + 9409 SQ MTRS LOCATION VED BUNGLOWS, AIR PORT ROAD, NANA CHILODA, AHMEDABAD CONSIDERATION PAID RS.9,00,000/- DT. OF PURCHASE 11/05/2006 LAND AREA 9308 SQ. MTRS. BUYERS BHUPATBHAI SAVJIBHAI BHALALA, PACH TOPRA, TALUKA GARIADHAR, DIST- BHAVNAGAR SELLERS SUBODH NATHJI DHANSUKH NATHJI, BAVAJIS HAVELI PREM DARWAJA, AHMEDABAD. SURVEY NO. 71/1 MEASURED AT 9308 SQ. MTRS. AREA 9308 SQ. MTRS LOCATION VED BUNGLOWS, AIR PORT ROAD, NANA CHILODA, AHMEDABAD CONSIDERATION PAID RS.8,25,000/- DT. OF PURCHASE- 11/05/2006 3.4 DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE APPELLANT-FIRM WAS ISSUED A SHOW-CAUSE NOTICE WHEREIN IT WAS ASKED THAT ON PERUSAL OF ITA NO. 493/AHD/2011 & 230 & 1783/AHD/2012 ASST.YEAR 2007-08, 2008-09 & 2009-10 - 5 - THE DEVELOPMENT AGREEMENT WHY THE APPELLANT-FIRM IS THE OWNER OF THE LAND ON WHICH THE HOUSING PROJECT IS FLOATED. 3.5 SURPRISINGLY, ON PERUSAL OF THE IMPUGNED ASSESS MENT ORDER IT IS FOUND THAT THE RESIDENTIAL UNIT ALLEGEDLY EXCEEDS T HE PRESCRIBED LIMIT AS LEARNED A.O HAS GIVEN IN PARA-2.4.1 TO PARA- 2.4.8 FROM PAGE NO. 4 TO PAGE NO. 9 OF THE ASSESSMENT ORDER. WITHOUT ISSUING SHOW-CAUSE NOTICE, THE LEARNED A.O HAS DISTURBED THE MEASUREMENT OF TH E RESIDENTIAL UNIT OF THE HOUSING PROJECT OF THE APPELLANT-FIRM. THE LEAR NED A.O HAS CONSIDERED 'OPEN TERRACE' IN 'BUILT UP AREA'. IF TH E SHOW-CAUSE WOULD HAVE ISSUED ON THIS POINT, THE APPELLANT-FIRM WOULD HAVE REPLIED ALSO ON THIS POINT. BUT, AS THE LEARNED A.O. HAS GIVEN HIS OBSER VATION FIRST TIME IN THE IMPUGNED ORDER, THE APPELLANT-FIRM IS BEFORE YOUR H ONOUR WITH THE FOLLOWING SUBMISSIONS ON THIS ISSUE. 3.6 IN RESPECT OF THE LEARNED A.O'S OBSERVATION THA T THE BUILT UP AREA........... 'DOES NOT INCLUDE COMMON AREA SHARE D WITH OTHER RESIDENTIAL UNIT' IS FOR THE PURPOSE THE COMMON AREA OF 'FOYER' USED AND SHARED BY MORE THAN ONE APARTMENT ON THE SAME FLOOR, (IN CASE OF MULTI-STORIED APARTMENTS). OTHERWISE, THERE COULD HAVE BEEN CONFU SION THAT IN WHICH APARTMENT THE SHARING OF COMMON AREA SHOULD BE ADDE D. OPEN TO SKY 'TERRACE' CANNOT BE ADDED IN THE 'BUILT UP AREA' OF THE RESIDENTIAL UNIT. HOWEVER, IF THE OPEN TERRACE AT FIRST FLOOR AS WELL AS THE OPEN TERRACE ON THE SECOND FLOOR WOULD BE INCLUDED IN BUILT UP ARE A AS IN THE INDEPENDENT RESIDENTIAL UNIT, OUTSIDER WOULD HAVE N O RIGHT TO USE SUCH ITA NO. 493/AHD/2011 & 230 & 1783/AHD/2012 ASST.YEAR 2007-08, 2008-09 & 2009-10 - 6 - 'OPEN TERRACE', IT WOULD GIVE ABSURD RESULT. IF THI S IS THE OPINION OF THE LEARNED A.O THAT THE 'OPEN TO SKY TERRACE' SITUATED AT FIRST FLOOR AS WELL AS THE WHOLE TERRACE OPEN TO SKY SITUATED AT SECOND FL OOR WOULD BE COVERED IN THE DEFINITION OF THE 'BUILT UP AREA' AND THIS W ILL APPLY TO ALL THE PLANS FILED BY VARIOUS ASSESSEES BEFORE THE LEARNED A.O. ALL THE CASES ASSESSED IN RANGE-9 WOULD BE SUBJECT TO REVISION. THE LEARNE D A.O HAS BY HIS OWN IMAGINATION ADDED THE 'OPEN TO SKY TERRACE' IN THE 'BUILT UP AREA'. THE LEARNED A.O IS NOT THE TECHNICAL PERSON WHO CAN DEC IDE THAT WHAT WOULD BE THE 'BUILT UP AREA' AND WHAT WOULD NOT BE. IF TH E SHOW-CAUSE ON THIS POINT WOULD HAVE ISSUED, THE APPELLANT WOULD HAVE M ADE HUMBLE REQUEST FOR REFERRING THE CASE TO THE DVO FOR THE MEASUREME NT OF THE UNIT AS THE SAME IS TECHNICAL ISSUE INVOLVED IN THE CASE. 3.7 IN SPITE OF THE FACTS THAT THE LEARNED A.O IS N OT A TECHNICAL PERSON, HE HAS DISTURBED MEASUREMENT OF THE RESIDENTIAL UNI T OF THE HOUSING PROJECT OF THE APPELLANT-FIRM. HE HAS NOT DISTURBED THE 'BUILT UP AREA' OF THE PLANS APPROVED BY AUDA/AMC IN OTHER ASSESSEE'S CASE. THEREFORE, THE APPROVED PLAN FILED BY THE APPELLANT-FIRM MAY B E CONSIDERED CORRECT ON THE LINE OF OTHER ASSESSEE'S CASE WHO HAVE FILED THEIR PLANS FOR CLAIMING THE LEGITIMATE CLAIM OF DEDUCTION UNDER SECTION 80I B (10). 4. ON PERUSAL OF THE IMPUGNED ASSESSMENT ORDER, IT MAY BE SEEN THAT THE LEARNED AO IS OF THE OPINION THAT ONLY THE LAND OWNER CAN BE SAID TO BE THE DEVELOPER OF THE HOUSING PROJECT. IF THE D EVELOPER DOES NOT POSSESS THE LAND ON WHICH THE HOUSING PROJECT IS FL OATED, THE DEVELOPER ITA NO. 493/AHD/2011 & 230 & 1783/AHD/2012 ASST.YEAR 2007-08, 2008-09 & 2009-10 - 7 - WOULD BE CONSIDERED AS WORK-CONTRACTOR ONLY AND COU LD NOT BE TREATED AS DEVELOPER IN TRUE SENSE. 5. BEFORE MAKING SPECIFIC SUBMISSIONS TO THE OBSERV ATIONS AND THE REASONS OF DISALLOWANCE GIVEN BY THE LEARNED A.O IN PARA 2.20 ON PAGE NO.27 OF THE IMPUGNED ASSESSMENT ORDER, IT IS NECES SARY TO UNDERSTAND THE 'MODUS OPERANDI' OF THE BUSINESS OF HOUSING PRO JECT. THE SAME IS NARRATED AS UNDER: (A) IN THE BUSINESS OF HOUSING PROJECT, A GROUP OF ENTR EPRENEURS CONCEIVED A HOUSING PROJECT IN THEIR MIND. FOR THE PURPOSE, THEY GATHERED TO ASSESS THE VIABILITY OF HOUSING PR OJECT IN A PARTICULAR AREA. (B) ON FINDING THE POSSIBILITY AND VIABILITY OF THE HOU SING PROJECT, THE GROUP OF ENTREPRENEURS BECOMES THE PARTNER AND HAVE SHARE IN PROFIT AND LOSS OF THE BUSINESS COMMENSURATE TO THEIR CONTRIBUTION TO PURCHASE THE LAND OF HOUSING PROJEC T. THUS, THE GROUP OF THE ENTREPRENEURS ENTERED INTO THE PARTNER SHIP THROUGH A PARTNERSHIP DEED. THEREAFTER, THE PARTNERS OF THE FIRM DESIGNED/GET IT DESIGNED THE CONCEIVED HOUSING PROJ ECT KEEPING IN MIND THE LOCALITY OF AREA AND CHOICE OF THE PEOP LE RESIDING AROUND THE AREA OF THE PROPOSED HOUSING PROJECT. ITA NO. 493/AHD/2011 & 230 & 1783/AHD/2012 ASST.YEAR 2007-08, 2008-09 & 2009-10 - 8 - (C) AFTER DESIGNING A CONCEPTION OF THE HOUSING PRO JECT AND DRAFT LAY OUT PLANS/OTHER PLANS, THE PARTNERS OF THE FIRM WILL DECIDE THAT IN WHICH HANDS THE LAND IS TO BE PURCHASED. IT WAS DECIDED TO PURCHASE THE LAND IN THE HANDS OF THE APPELLANT- PARTNERSHIP- FIRM. BUT, SINCE THE LAND WAS 'AGRICULTURAL LAND' A T THAT POINT OF TIME, THE LAND OUGHT TO HAVE BEEN PURCHASED IN THE HANDS OF THE PARTNERS (PARTNERS ARE AGRICULTURIST). IT IS A RULE THAT 'AGRICULTURAL LAND' CANNOT BE PURCHASED OTHER THAN AGRICULTURIST. SO, THE PARTNERS COMPELLED TO PURCHASE THE LAND OF THE HOUSING PROJECT IN THEIR INDIVIDUAL HANDS. (C) IF THE LAND PURCHASED BY THE PARTNERSHIP FIRM IN TH E HANDS OF THE SOCIETY, THERE WOULD BE A 'DEVELOPMENT AGREEMENT' B ETWEEN THE SOCIETY AND THE DEVELOPER PARTNERSHIP-FIRM. THE CONTENTS OF THE 'DEVELOPMENT AGREEMENT' WOULD BE LIKE THE HOUSI NG PROJECT BELONGING TO THE DEVELOPER PARTNERSHIP-FIRM ONLY. THE SOCIETY WOULD HAVE NOTHING TO DO EXCEPT TO SELL THE SUB-PLOT OF THE HOUSING PROJECT TO THE PROSPECTIVE BUYER/MEMBER ONLY. ALL THE RELEVANT AND INCIDENTAL ACTIVITIES OF DEVELOPME NT AND CONSTRUCTION OF THE HOUSING PROJECT WOULD BE CARRIE D OUT BY THE DEVELOPER PARTNERSHIP-FIRM ONLY. HERE IS NOT THE CA SE BECAUSE THERE IS NO SOCIETY. 6. THE HOUSING PROJECT IS NORMALLY DEVELOPED AND BU ILT AS PER THE 'MODUS OPERANDI' MENTIONED ABOVE. THEREFORE, UNDOUB TEDLY THE HOUSING ITA NO. 493/AHD/2011 & 230 & 1783/AHD/2012 ASST.YEAR 2007-08, 2008-09 & 2009-10 - 9 - PROJECT IS A 'BABY' OF THE DEVELOPER PARTNERSHIP-FI RM OR ITS PARTNERS BECAUSE; THE CONCEPTION OF THE HOUSING PROJECT TOOK PLACE IN THE MIND OF A GROUP OF ENTREPRENEURS WHO SUBSEQUENTLY BECOMES T HE PARTNER OF THE DEVELOPER-FIRM. 7. THE COST/PRICE OF THE LAND NEGOTIATED BY THE PAR TNERS OF THE APPELLANT DEVELOPER-FIRM WITH ORIGINAL LAND OWNERS AND HAS DECIDED WITH A GROUP OF PARTNERS OF THE APPELLANT-FIRM TO PURCHA SE THE LAND ON WHICH THE HOUSING PROJECT IS FLOATED. 7.2 FOR THE PURPOSE TO PURCHASE AFORESAID LAND AN D SUBSEQUENTLY INTRODUCED THE LAND IN THE HANDS OF THE APPELLANT-F IRM AS CAPITA CONTRIBUTION. 7.3 LATER ON, A GROUP OF ENTREPRENEUR FORMED A PA RTNERSHIP-FIRM I.E THE APPELLANT-FIRM ON 25/5/2006. THEREAFTER, IT WAS DEC IDED TO INTRODUCE THE LAND OF THE HOUSING PROJECT IN THE HANDS OF THE APP ELLANT-FIRM AS CAPITAL CONTRIBUTION OF THE PARTNERS. BY VIRTUE OF THIS, TH E APPELLANT-FIRM BECOMES THE OWNER OF THE LAND ON WHICH THE HOUSING PROJECT IS FLOATED. THE LAND IS DULY SHOWN AS STOCK IN HAND IN THE TRAD ING, P & L ACCOUNT. 7.4 THE APPELLANT DEVELOPER-FIRM HAS FUNDED THE CON SIDERATION OF THE LAND OF THE HOUSING PROJECT. ITA NO. 493/AHD/2011 & 230 & 1783/AHD/2012 ASST.YEAR 2007-08, 2008-09 & 2009-10 - 10 - 7.5 AS PER GDCR OF AUDA THE 'DEVELOPMENT PERMISSION S' ALWAYS GRANTED IN THE NAME OF THE OWNER OF THE LAND WHOSE NAME IS APPEARING IN REVENUE RECORDS I.E. 7X12 EXTRACT. THEREFORE, EVER IF THE PLAN OF THE HOUSING PROJECT IS PASSED WITH THE EFFORTS OF THE P ARTNERS OF THE APPELLANT- FIRM, THE PLAN AND THE DEVELOPMENT PERMISSIONS ALWA YS ARE IN THE NAME OF THE OWNER OF THE LAND OF THE HOUSING PROJECT. 7.6 THE DEVELOPER-FIRM HAS OBTAINED AND SUBMITTED THE AUDA, ALONG WITH THE APPLICATION FOR DEVELOPMENT PERMISSION; EA CH PROGRESS REPORT AND APPLICATION FOR OCCUPATION CERTIFICATE. 7.7 THE DEVELOPER-FIRM HAS APPOINTED REGISTERED ARC HITECT/ENGINEER AND STRUCTURAL DESIGNER. 7.8 THE DEVELOPER-FIRM HAS OBTAINED AT RELEVANT STA GES CERTIFICATES FROM APPROVED ARCHITECT, ENGINEER AND STRUCTURAL DE SIGNER AND SUBMITTED TO THE COMPETENT AUTHORITY. 7.9 THE APPELLANT DEVELOPER FIRM HAS APPOINTED REGI STERED SIDE SUPERVISOR. 7.10 THE DEVELOPER APPELLANT-FIRM HAS ADEQUATELY EN ABLED THE SITE SUPERVISOR TO CARRY OUT HIS RESPONSIBILITIES. ITA NO. 493/AHD/2011 & 230 & 1783/AHD/2012 ASST.YEAR 2007-08, 2008-09 & 2009-10 - 11 - 7.11 THE DEVELOPER APPELLANT-FIRM HAS CERTIFIED ALO NG WITH THE SITE SUPERVISOR THAT CONSTRUCTION AND DEVELOPMENT OF THE HOUSING PROJECT HAS BEEN CARRIED OUT AS PER THE DESIGN DETAILED DRAWING PROVIDED BY ARCHITECT, ENGINEER AND STRUCTURAL DESIGNER. 7.12 THE APPELLANT DEVELOPER-FIRM HAS OBTAINED 'DEV ELOPMENT PERMISSION' FROM AUDA. 7.13 THE APPELLANT DEVELOPER-FIRM HAS REGULARLY SUB MITTED PROGRESS REPORT AND CERTIFICATE AS REQUIRED BY THE COMPETENT AUTHORITY. 7.14 THE APPELLANT DEVELOPER-FIRM HAS NOT CAUSED OR ALLOWED ANY DEVIATION FROM THE APPROVED DRAWING IN THE COURSE O F EXECUTION OF THE HOUSING PROJECT AGAINST THE INSTRUCTION OF ARCHITEC T, ENGINEER, AND STRUCTURAL DESIGNER ETC. 7.15 THE APPELLANT DEVELOPER-FIRM IS TOTALLY RESPON SIBLE FOR ITS DUTY AND RESPONSIBLE UNDER GDCR RULES. 7.16 THE APPELLANT DEVELOPER-FIRM HAS NOT COMMENCED THE USE OF THE PARTICULAR AREA AND HAS NOT GIVEN THE POSSESSION TO OCCUPY THE RESIDENTIAL UNIT TO ANYONE BEFORE OBTAINING B. U. PERMISSION, O CCUPATION CERTIFICATE FROM HUDA. ITA NO. 493/AHD/2011 & 230 & 1783/AHD/2012 ASST.YEAR 2007-08, 2008-09 & 2009-10 - 12 - 7.17 THE APPELLANT DEVELOPER-FIRM HAS PROVIDED ADEQ UATE SAFETY MEASURES FOR STRUCTURE AND PROTECTION AGAINST FIRE LIKELY FROM ELECTRICAL SERVICES, DRAINAGE, PLUMBING, WATER SUPPLY ETC. 7.18 THE APPELLANT DEVELOPER-FIRM HAS EXHIBITED THE NAMES OF REGISTERED PERSONS ONLY ON THE SITE OF THE HOUSING PROJECT AND NO ADDITIONAL NAME WAS EXHIBITED OR DISPLAYED. 7.19 THE APPELLANT DEVELOPER-FIRM HAS EXPLAINED THE CONSTRUCTOR DESIGNED AND IT IS INTENDED USE AS PER APPROVED PLA N TO THE PROSPECTIVE PURCHASER OF THE RESIDENTIAL UNIT. ACCORDINGLY, THE APPELLANT DEVELOPER-FIRM HAS FULFI LLED ALL THE CRITERIA OF BEING A 'DEVELOPER' IN THE EYES OF GDCR OF AUDA ALSO. 8. IT IS WORTH TO MENTION THAT THE OWNERSHIP ISSUED HAS BEEN SET A REST BY THE LEGISLATURE BY INSERTING AN EXPLANATION BELO W SECTION 80IB(10) W.R.E.F. 1/4/2001. [EXPLANATION-FOR THE REMOVAL OF DOUBTS, IT IS HEREB Y DECLARED THE NOTHING CONTAINED IN THIS SUB-SECTION SHALL APPLY T O AN UNDERTAKING WHICH EXECUTES THE HOUSING PROJECT AS WORKS CONTRAC T AWARDED BY ANY PERSON (INCLUDING THE CENTRAL OR STAT GOVERNMENT)] AFTER INSERTION OF AN EXPLANATION BELOW SECTION 80I B(10), THE IMPORTANT ISSUE WOULD BE WHETHER THE APPELLANT-FIRM IS A DEVE LOPER IN REAL SENSE OR ONLY A WORK-CONTRACTOR. THE DEVELOPER APPELLANT-FIR M HAS GIVEN 24 ITA NO. 493/AHD/2011 & 230 & 1783/AHD/2012 ASST.YEAR 2007-08, 2008-09 & 2009-10 - 13 - DIFFERENCES WITH TITLE TO THE LEARNED AO FROM WHICH IT CAN BE DECIDED THAT WHETHER THE DEVELOPER APPELLANT-FIRM IS A DEVE LOPER IN REAL SENSE OR SIMPLY A WORK-CONTRACTOR. IT WAS ALSO GIVEN THAT HO W THE 24 DIFFERENCES ARE APPLICABLE TO THE DEVELOPER APPELLANT-FIRM. THE SAME IS GIVEN ON PAGE NO.13 AND 19 OF THE IMPUGNED ASSESSMENT ORDER. WITH OUT REBUTTING IT, THE LEARNED A.O HAS DISALLOWED THE CLAIM ON THE BASIS O F STEREO-TYPED ORDER. HE EMPHASIZED ON WORD 'AND' USED BETWEEN DEVELOPING AND BUILDING THE HOUSING PROJECT. IN THE OPINION OF THE LEARNED A.O THE DEVELOPER APPELLANT-FIRM HAS TO SATISFY THAT THE FIRM HAS NOT ONLY BUILT BUT ALSO DEVELOPED THE HOUSING PROJECT. IT IS IMPORTANT TO N OTE THAT THE DEVELOPER APPELLANT-FIRM HAS FULFILLED ALL THE CRITERIA OF BE ING A DEVELOPER IN THE EYES OF GDCR OF AUDA (WHO IS HIGHEST TECHNICAL AUTH ORITY). THE ACTIVITY CARRIED OUT BY THE DEVELOPER APPELLANT-FIR M CAN ALSO BE SUMMARIZED AS UNDER: (I) THE DEVELOPER-FIRM HAS ACTED OR PROCESSED OR DEVELO PED THE HOUSING PROJECT. THE DEVELOPING PROGRESS OF THE HOU SING PROJECT HAS BEEN INTIMATED TO THE COMPETENT AUTHORI TY FROM TIME TO TIME. (II) THE PARTNERS OF THE DEVELOPER APPELLANT-FIRM HAVE R EALIZED THE POTENTIAL OF THE LOCALITY WHERE THE HOUSING PROJECT IS FLOATED. THEREFORE, THE LAND WHICH IS PLACED IN THE AREA WAS SELECTED BY PARTNERS OF THE DEVELOPER APPELLANT-FIRM. (III) THE DEVELOPER APPELLANT-FIRM HAS NOT ONLY CARRIED O UT THE CONSTRUCTION ACTIVITY BUT HAS CARRIED OUT ALL THE A CTIVITIES WHICH IS NECESSARY FOR MAKING THE HOUSING PROJECT INHABIT ABLE. ITA NO. 493/AHD/2011 & 230 & 1783/AHD/2012 ASST.YEAR 2007-08, 2008-09 & 2009-10 - 14 - (IV) BY DEVELOPING OF THE HOUSING PROJECT BY THE DEVELOP ER APPELLANT-FIRM, THE GROWTH OF THE CITY INCREASED AN D THE STATE IS STRENGTHEN. (V) THE DEVELOPER APPELLANT-FIRM HAS MADE IT POSSIBLE W ITH THE CONCEPTION AND DESIGNED OF THE HOUSING PROJECT INTO BEING. (VI) THE DEVELOPER APPELLANT-FIRM HAS CONVERTED THE RAW LAND INTO INHABITABLE LAND BY DEVELOPING THE HOUSING PROJECT ON THE LAND. THUS, THE PARTNERS OF THE DEVELOPER APPELLANT-FIRM HAS REALIZED THE POTENTIALITY OF THE LAND OR TERRITORY AND FLOAT ED THE HOUSING PROJECT ON THE LAND. (VII) THE LAND OWNER FIRM HAS MADE EFFORTS TO DEVELOP THE HOUSING PROJECT WHICH APPROVED IN THE NAME OF ORIGINAL LAND OWNERS FROM WHOM THE LAND WAS PURCHASED. THE LAND OWNER AP PELLANT- FIRM HAS NOT THROWN ITSELF INTO DEVELOPING OF THE H OUSING PROJECT. THROWING ITSELF INTO THE BUSINESS OF DEVEL OPMENT AND BUILDING OF HOUSING PROJECTS BY TAKING ALL RISKS AS SOCIATED WITH THE BUSINESS BY ENGAGING ARCHITECTS, STRUCTURAL CON SULTANTS, DESIGNING NECESSARY PERMISSIONS, APPROVING PLANS, H IRING MACHINERY AND EQUIPMENTS, HIRING ENGINEERS, APPOINT ING CONTRACTORS ETC., IT IS DONE BY THE DEVELOPER-FIRM ONLY. (VIII) IT IS ALSO IMPORTANT TO NOTE THAT THE DEVELOPER APP ELLANT-FIRM HAS WORKED FOR ITS OWN IN ORDER TO EXPLOIT THE POTENTIA L OF ITS BUSINESS IN ITS OWN INTEREST AND, THEREFORE, OPTION FOR ALL ITA NO. 493/AHD/2011 & 230 & 1783/AHD/2012 ASST.YEAR 2007-08, 2008-09 & 2009-10 - 15 - BUSINESS RISKS ASSOCIATED WITH THE BUSINESS OF DEVE LOPMENT OF HOUSING PROJECT. (IX) THE APPELLANT-FIRM HAD PHYSICAL POSSESSION AND DOMI NANT CONTROL ON THE LAND OF THE HOUSING PROJECT. THE PRO FIT AND LOSS ACCRUED OUT OF THE ACTIVITY OF DEVELOPING AND BUILD ING THE HOUSING PROJECT WOULD ALSO TO BE CONSIDERED BELONGI NG TO THE DEVELOPER-FIRM ONLY. (X) THE ALL RISKS CARRIED BY THE DEVELOPER APPELLANT-FI RM ONLY. (XI) IT IS SURPRISING THAT HOW THE DEVELOPER CAN BE SAID TO BE WORK- CONTRACTOR BECAUSE THE WORK CONTRACTOR IS ALWAYS EN GAGED AT THE FIXED REMUNERATION OR AT FIXED PRICE, A PERSON WHO ACCEPTS THE WORK OF RCC WORK CAN BE SAID TO BE A WORK CONTRACTO R, A PERSON WHO ACCEPTS THE WORK OF PLASTERING/COLOURING/CARPENTERING CAN BE SAID TO BE A WORK CONTRACTOR. THESE ARE THE EXAMPLES OF WORK CONTRACT ORS. THE WORK CONTRACTORS ARE NOT RESPONSIBLE TO THE BUYER O F THE RESIDENTIAL UNIT OF THE HOUSING PROJECT. ONLY THE D EVELOPER IS ANSWERABLE AND RESPONSIBLE TO THE BUYER OF THE RESI DENTS UNIT. (XII) THE LEARNED A.O HAS TRIED TO CONVERT DEVELOPER APPE LLANT FIRM INTO WORK-CONTRACTOR BY GIVING THE CASE-LAW DECIDED BY MUMBAI ITAT IN THE CASE OF B. T. PATIL & SONS, BELG AM CONSTRUCTION PVT. LTD. THE LEARNED A.O HIMSELF IS C OMMITTING THAT 'DEVELOPER' IS A PERSON OR COMPANY THAT DESIGN S AND CREATE ITA NO. 493/AHD/2011 & 230 & 1783/AHD/2012 ASST.YEAR 2007-08, 2008-09 & 2009-10 - 16 - NEW PRODUCT WHEREAS 'CONTRACTOR' IS A PERSON OR COM PANY THAT HAS CONTRACTED TO DO WORK OR PROVIDE SERVICES OR GO ODS TO ANOTHER. THE DEVELOPER APPELLANT-FIRM (THROUGH ITS PARTNERS) HAS CONCEIVED AND DESIGNED THE PRODUCT I.E. THE HOUSING PROJECT. THE DEVELOPER APPELLANT-FIRM HAS EXECUTED THE ENTIR E PROJECT. HE HAS NOT BEEN ASSIGNED THE PARTICULAR OBJECT TO B E ACCOMPLISHED ON BEHALF OF ANOTHER PERSON. THE APPEL LANT-FIRM HAS TRANSLATED THE CONCEPTION AND DESIGNED HOUSING PROJECT INTO REALITY. THE DEVELOPER APPELLANT-FIRMS ROLE AS DEV ELOPER IS MUCH LARGER THAN THAT OF CONTRACTOR. (XIII) THE LEARNED A.O HAS TRIED TO FIX THE DEVELOPER APPE LLANT-FIRM AS WORK-CONTRACTOR BY GIVING THAT SINCE THE PLAN WERE APPROVED IN THE NAME OF THE ORIGINAL LAND-OWNER DEVELOPMENT PERMISSION WAS ALSO IN THE NAME OF THE ORIGINAL LAND-OWNERS, T HE DEVELOPER APPELLANT-FIRM HAS UNDERTAKEN THE WORK ACCORDING TO THE PRE- DECIDED PLAN AND THEREFORE, THE DEVELOPER APPELLANT -FIRM IS WORK-CONTRACTOR AND NOT A 'DEVELOPER'. IN THIS REGA RDS, IT IS SUBMITTED THAT ACCORDING TO THE GDCR OF THE AUDA TH E PLAN ALWAYS TO BE PASSED IN THE NAME OF LAND-OWNER ONLY. THE HOUSING PROJECT ITSELF WAS CONCEIVED AND DESIGNED B Y THE DEVELOP APPELLANT-FIRM AND GOT IT APPROVED FROM THE COMPETENT AUTHORITY. HOWEVER, THE APPROVAL HAS TO BE IN THE N AME OF LAND- OWNER ONLY BECAUSE IT IS THE RULE OF GDCR THAT THE PLANS CAN ITA NO. 493/AHD/2011 & 230 & 1783/AHD/2012 ASST.YEAR 2007-08, 2008-09 & 2009-10 - 17 - BE APPROVED IN THE NAME OF LAND OWNER ONLY. THE DEV ELOPMENT PERMISSION CAN ALSO BE GIVEN IN THE NAME OF LAND OW NER ONLY. (XIV) IN THIS CASE THE LAND OWNER IS SILENT AND ALL THE E FFORTS TO MAKE THE HOUSING PROJECT VIABLE AND SUCCESSFUL HAVE BEEN (MADE BY THE DEVELOPER APPELLANT-FIRM ONLY. (XV) THE DEVELOPER APPELLANT-FIRM CARRIED OUT THE RISK A ND REWARD OF THE HOUSING PROJECT IN THE SENSE THAT IT HAS NOT BE EN GIVEN A FIXED REMUNERATION FROM THE LAND OWNER BUT THE DEVE LOPER APPELLANT-FIRM HAS FIXED THE CONSIDERATION OF THE R ESIDENTIAL UNIT WITH THE PROSPECTIVE BUYER INDEPENDENTLY. (XVI) WHATEVER THE PROFIT OF LOSS ACCRUED OUT OF THE ACTI VITY OF DEVELOPING AND BUILDING THE HOUSING PROJECT, IT WOU LD BELONG TO THE DEVELOPER-FIRM ONLY. THE SO-CALLED LAND OWNE RS HAVE NO AUTHORITY TO INTERFERE IN FIXING THE CONSIDERATION OF THE RESIDENTIAL UNIT BETWEEN THE 'DEVELOPER AND PROSPEC TIVE BUYER'. IF THERE IS BEARING TREND IN THE REAL ESTATE MARKET , THE DEVELOPER WOULD BE LOOSER AND IN THE CASE OF BULLISH TREND IN THE REAL ESTATE MARKET, THE DEVELOPER-FIRM WOULD BE A GAINER . IT IS ALSO IMPORTANT TO NOTE THAT THE DEVELOPER APPELLANT-FIRM HAS COMPLETED THE HOUSING PROJECT BY ITS OWN INVESTMENT WITHOUT WAITING THE CONSIDERATION/BOOKING OF THE RESIDENTIA L UNIT FROM PROSPECTIVE BUYER. ALL THE NECESSARY FACILITIES HAV E ALSO BET ITA NO. 493/AHD/2011 & 230 & 1783/AHD/2012 ASST.YEAR 2007-08, 2008-09 & 2009-10 - 18 - PROVIDED BY THE APPELLANT-FIRM TO MAKE THE RESIDENT IAL UR INHABITABLE. (XVII) THE DEVELOPER APPELLANT-FIRM OBJECTS THE OBSERVATIO NS GIVEN IN PARA 2.20 WHILE SUMMING OF THE ASSESSMENT ORDER UND ER: (A) SHRI VIKEN NARANBHAI IS THE PREVIOUS OWNER OF THE L AND FROM WHOM THE LAND ON WHICH THE HOUSING PROJECT IS FLOAT ED IS PURCHASED. SINCE THE LAND HAS ALREADY BEEN PURCHASE D BY THE PARTNERS, THERE IS NO EXISTENCE OF THE PREVIOUS OWN ER. SINCE THE APPLICATION WAS MADE BY THE PREVIOUS OWNER OF THE L AND, THE APPROVAL WAS ALSO GRANTED IN HIS NAME. IT DOES NOT MAKE ANY DIFFERENCE TO DECIDE WHO HAS DEVELOPED THE HOUSING PROJECT. (B) NO LEGAL TITLE IS NECESSARY TO SHOW THE INTRODUCTIO N OF THE LAND AS STOCK IN TRADE IN THE HANDS OF THE PARTNERSHIP-F IRM. UNDER THE STAMP-DUTY ACT, THE STAMP-DUTY IS ATTRACTED ON TRAN SFERRING THE OWN LAND TO THE FIRM IN WHICH THE LAND OWNER IS A P ARTNER. THE BOOK-ENTRY PASSED IN THE BOOKS OF THE FIRM AS WELL AS IN THE BOOKS OF THE PARTNERS IS SUFFICIENT TO SHOW THE ASS ETS INTRODUCED AS CAPITAL IN THE BOOKS OF THE FIRM. (C) OF COURSE, THE LAND OWNER PARTNERS ARE THE PRIN CIPAL BUT LATER ON APPELLANT-FIRM BECOMES THE OWNER AND PRINCIPAL BY V IRTUE OF INTRODUCTION OF LAND AS CAPITAL CONTRIBUTION AND SA TISFYING ALL THE CRITERIA OF THE DEVELOPMENT OF THE HOUSING PROJECT. ITA NO. 493/AHD/2011 & 230 & 1783/AHD/2012 ASST.YEAR 2007-08, 2008-09 & 2009-10 - 19 - (D) THE HOUSING PROJECT WAS CONCEIVED AND DESIGNED BY THE PARTNERS OF THE APPELLANT-FIRM AND GOT IT APPROVED FROM COMPETENT AUTHORITY. SO INDIRECTLY, THE DEVELOPER A PPELLANT- FIRM HAS DEVELOPED ITS OWN 'BABY' I.E. THE HOUSING PROJECT AS PER THE APPROVED PLAN. IT IS A RULE THAT THE PLAN CAN B E APPROVED IN THE NAME OF LAND OWNER ONLY THEREFORE; THE PLAN WAS APPROVED IN THE NAME OF THE PREVIOUS LAND OWNER FROM WHOM TH E LAND WAS PURCHASED. SINCE THE LAND OWNED BY THE FIRM AND CONSTRUCTION AND ALL RELEVANT EXPENSES INCURRED FOR THE DEVELOPMENT, IT IS DEVELOPER'S WISH TO WHETHER TO S ALE THE RESIDENTIAL UNIT INCLUDING LAND OR TO SALE THE LAND SEPARATELY AND ENTERED INTO A CONTRACT FOR CONSTRUCTION. THE IMPOR TANT THING IS, THE LAND BELONG TO THE DEVELOPER-FIRM AND THE CONSTRUCTION/DEVELOPMENTAL EXPENSES ALSO INCURRED B Y THE DEVELOPER-FIRM. (E) THE APPELLANT-FIRM IS GENUINELY DEVELOPER OF THE PROJECT BECAUSE THE CONCEPTION OF THE HOUSING PROJECT IS TH AT OF PARTNERS OF THE APPELLANT-FIRM, THEY HAVE DESIGNED AND MAKE IT POSSIBLE AND TURN INTO REALITY. ONLY THING THAT; TH E LAND WAS BELONGING TO THE PREVIOUS LAND OWNER IN WHOSE NAME THE APPLICATION FOR APPROVAL OF PLAN WAS MADE. (F) IT IS VERY CLEAR THAT THE PARTNERS OF THE APPEL LANT-FIRM HAVE CONCEIVED THE HOUSING PROJECT IN THEIR MIND. THEY H AVE ITA NO. 493/AHD/2011 & 230 & 1783/AHD/2012 ASST.YEAR 2007-08, 2008-09 & 2009-10 - 20 - DESIGNED/GOT IT DESIGNED THROUGH APPROVED ARCHITECT THE PLAN AND GOT IT APPROVED FROM THE COMPETENT AUTHORITY. T HEY HAVE FUNDED THE LAND WHICH WAS PURCHASED IN THE HANDS OF THE SOCIETY. THUS, THEY HAVE COMPLETED HOUSING PROJECT IN EVERY RESPECT AND GOT THE B.U. PERMISSION FROM THE COMPET ENT AUTHORITY. THEY HAVE FULFILLED ALL THE CONDITIONS A CCORDING TO GDCR OF AUDA OF THE COMPLETION OF THE HOUSING PROJE CT AND THEN ONLY THE BU PERMISSION WAS GRANTED. THEREFORE, THE DEVELOPER APPELLANT-FIRM IS A DEVELOPER IN TRUE S ENSE. 9. LEARNED AO WAS NOT SATISFIED WITH THE CONTENTION OF THE ASSESSEE AND ACCORDING TO HIM ASSESSEE HAS FAILED TO SATISFY THE CONDITION OF SECTION 80IB(10). THEREFORE, NO DEDUCTION U/S.80IB( 10) IS ALLOWED AND DISALLOWANCE OF RS.46,92,729/- WERE MADE AGAINST TH E ASSESSEE. 10. THEREAFTER ASSESSEE PREFERRED FIRST STATUTORY A PPEAL BEFORE THE LEARNED CIT(A) AND HELD THAT TERRACE SHOULD BE INCL UDED BECAUSE AS PER DEFINITION OF BUILT-UP AREA GIVEN IN THE IT ACT IN CLAUSE (A) OF SECTION 80IB(14) WHICH INCLUDES THE MEASUREMENTS AT FLOOR L EVEL OF PROJECTIONS AND BALCONIES AS WELL. THE APPELLANT VIOLATES THE C ONDITION STIPULATED IN CLAUSE(C) OF SECTION 80IB(10) AND THE DISALLOWANCE OF THE DEDUCTION CLAIMED OF RS.46,92,729/- WAS UPHELD. 11. NOW APPEAL IS BEFORE US. ITA NO. 493/AHD/2011 & 230 & 1783/AHD/2012 ASST.YEAR 2007-08, 2008-09 & 2009-10 - 21 - 12. WE HAVE GONE THROUGH THE RELEVANT RECORD AND IM PUGNED ORDER AND DETAILED PAPER BOOK FILED BY THE ASSESSEE. LEARNED DR RELY ON AO AND CIT. ASSESSEE CITED A JUDGMENT [2011] 11 TAXMANN.COM 420 (AHMEDABAD) IN THE CASE OF AMALTAS ASSOCIATES VS. I NCOME TAX OFFICER, WARD-9(2), IN THIS CASE IT IS HELD AS UNDER: THE LOWER AUTHORITIES SHOULD NOT HAVE REJECTED THE CLAIM OF THE ASSESSEE AT LEAST AN ALTERNATE CONTENTION THAT THE ASSESSEE WOULD BE ENTITLED FOR DEDUCTION UNDER SECTION 80IB(10) ON PR O RATA BASIS. NO OTHER POINT WAS CONSIDERED AGAINST THE ASSESSEE FOR REFUSING RELIEF UNDER SECTION 80IB(10) BY THE LOWER AUTHORITIES. SI NCE THE OPEN TERRACE IS NOT PART OF BALCONY/VERANDAH, THEREFORE, ACCORDI NG TO THE SUBMISSIONS OF THE ASSESSEE, THE BUILT UP AREA OF THE ASSESSEE WAS WITHIN THE PRESCRIBED LIMIT. IT WAS FURTHER HELD THAT THE ASSESSEE FULFILLED THE CONDITIONS AND REQUIREMENT OF THE SECTION 80IB(10), THEREFORE, THE CLAIM OF THE ASSESSEE FOR DEDUCTION SHOULD NOT HAVE BEEN DENIED BY THE LO WER AUTHORITIES. ACCORDINGLY, THE ORDERS OF THE LOWER AUTHORITIES WA S TO BE SET ASIDE AND THE ASSESSING OFFICER WAS TO BE DIRECTED TO GRANT D EDUCTION UNDER SECTION 80IB(10) AS CLAIMED BY THE ASSESSEE AND ASS ESSEES APPEAL WAS ALLOWED . 12.2 LEARNED AR ALSO CITED A JUDGMENT [2015] 56 TAXMANN.COM 50 (BOMBAY) IN THE CASE OF CIT VS. HERMES DEVELOPERS , IN THIS CASE IT IS HELD AS UNDER: WHEN SUPER-BUILT UP AREA (WHICH INCLUDES COMMON AR EA OF STAIR-CASE AND BALCONY AREA) CANNOT BE EQUATED WITH BUILT-UP A REA TO DETERMINE AREA OF A RESIDENTIAL FLAT TO ALLOW DEDUCTION UNDER SECTION 80IB AND THIS CASE WAS ALSO DECIDED IN FAVOUR OF THE ASSESSEE. THESE JUDGMENTS WERE PRONOUNCED ON JANUARY 21, 2011 FOR ASST. YEAR 2006-07 AND NOVEMBER 27, 2014, RESPECTIVELY. IN VIE W OF THE ABOVE SAID JUDGMENTS, WE ALLOW APPEAL OF THE ASSESSEE BECAUSE AT THAT TIME WHEN ITA NO. 493/AHD/2011 & 230 & 1783/AHD/2012 ASST.YEAR 2007-08, 2008-09 & 2009-10 - 22 - LEARNED CIT PASSED THE ORDER THIS ABOVE SAID JUDGME NT WAS NOT PASSED. THEREFORE, WE ALLOW THE APPEAL OF THE ASSESSEE. 13. NOW WE TAKE UP THE DEPARTMENTS APPEALS IN ITA NOS.230/AHD/2012 FOR ASST. YEAR 2008-09 AND ITA NO. 1783/AHD/2012 FOR ASST. YEAR 2009-10. FOLLOWING GROUNDS OF APPEAL HAS TAKEN BY THE DEPARTMENT: I. THE LEARNED CIT(A)-XV, AHMEDABAD HAS ERRED IN LAW A ND ON FACTS IN DIRECTING THE ASSESSING OFFICER TO ALLOW T HE ASSESSEES CLAIM FOR DEDUCTION OF RS.1,45,89,254/- FOR ASST. Y EAR 2008-09 AND RS.2,61,59,095/- FOR ASST. YEAR 2009-10 U/S.80 IB(10) OF THE IT ACT. II. THE LEARNED CIT(A)-XV, AHMEDABAD HAS ERRED IN HOLDI NG 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 VIKEN NARANBHAI & OTHERS (ONE OF THE ORIGINAL LAND OWNER AND POWER OF ATTORNEY HOLDER OF OTHER ORIGINAL LAND OWN ERS), WHICH IS A SEPARATE LEGAL ENTITY IN THE EYE OF LAW AND TH E ASSESSEE ENTERED INTO THE PROJECT BY A DEVELOPMENT AGREEMENT WITH VIKEN NARANBHAI. THE ENTIRE RESPONSIBILITY TO EXECUTE THE HOUSING PROJECT AND ABIDE BY THE TERMS AND CONDITIONS OF IT S APPROVAL RIGHT FROM THE INCEPTION OF THE PROJECT TILL ITS CO MPLETION RESTS WITH VIKEN NARANBHAI. THE LOCAL AUTHORITY HAD GRANT ED PERMISSION FOR DEVELOPMENT TO VIKEN NARANBHAI. ASSE SSEE WAS JUST A CONTRACTOR OF THE LAND OWNERS CONSTRUCTING 1 13 RESIDENTIAL UNITS OF THE SCHEME TITLED VED BUNGALOWS (OUT OF WHICH TERRACE WAS ATTACHED WITH 62 UNITS) AND NOT A DEVELOPER. III. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A)-XV, AHMEDABAD OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESSING OFFICER. ITA NO. 493/AHD/2011 & 230 & 1783/AHD/2012 ASST.YEAR 2007-08, 2008-09 & 2009-10 - 23 - IV. IT IS THEREFORE, PRAYED THAT THE ORDER OF THE LEARN ED CIT(A)-XV, AHMEDABAD MAY BE SET-ASIDE AND THAT OF THE ASSESSIN G OFFICER BE RESTORED. 14. SINCE WE HAVE ALREADY ALLOWED THE APPEAL OF THE ASSESSEE IN VIEW OF THE AMALTAS ASSOCIATES VS. INCOME TAX OFFICER AND CIT V S. HERMES DEVELOPERS JUDGMENTS, WE ARE NOT INCLINED TO GIVE ANY RELIEF T O THE DEPARTMENT. THEREFORE, WE DISMISS BOTH THE APPE ALS OF DEPARTMENT. 15. IN THE RESULT, APPEAL OF THE ASSESSEE IN ITA NO .493/AHD/2011 FOR ASST. YEAR 2007-08 IS ALLOWED AND APPEALS OF THE DE PARTMENT IN ITA NOS.230 & 1783/AHD/2012 FOR ASST. YEARS 2008-09 & 2 009-10 ARE DISMISSED. THIS ORDER PRONOUNCED IN OPEN COURT ON 08 / 08 /201 7 SD/- SD/- ( ) 4 5 ( N. K. BILLAIYA ) ( MAHAVIR PRASAD ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 08/08/2017 PRITI YADAV, SR.PS ITA NO. 493/AHD/2011 & 230 & 1783/AHD/2012 ASST.YEAR 2007-08, 2008-09 & 2009-10 - 24 - ! '!# # COPY OF THE ORDER FORWARDED TO : 1. !$' / THE APPELLANT 2. ($' / THE RESPONDENT. 3. 67- + 8- / CONCERNED CIT 4. + 8- 4!5 / THE CIT(A)-XV, AHMEDABAD. 5. 9:;-67 !.!672 ! / DR, ITAT, AHMEDABAD 6. ;<=, # GUARD FILE. $ % / BY ORDER, (9-- //TRUE COPY// &/% '( ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD TRUE COPY 1. DATE OF DICTATION 02/08/2017 (DICTATION-PAD 3 PAGES ATTACHED AT THE END OF THIS APPEAL-FILE) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 04/08/2017 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. 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 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