The ITO, Ward-9(1), Ahmedabad V. M/s. Sahjanand Land Corporation, Ahmedabad

ITA 2526/AHD/2012

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 94739 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-12-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 30-11-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 07-11-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 80IB

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, AHMEDABAD BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER AND SHRI RAJESH KUMAR, ACCOUNTANT MEMBER ./ ITA NO. 2526/AHD/2012 / ASSESSMENT YEAR: 2008-09 ITO, WARD 9 (1), AHMEDABAD .. APPELLANT VS SAHJANAND LAND CORPORATION, 208, PIPAL PLAZA, NR. MEMNAGAR FIRE STATION, NAVRANGPURA AHMEDABAD .. RESPONDENT PAN : ABDFS 3395 N REVENUE BY : MS. SANYOGITA NAGPA L , SR - DR ASSESSEE(S) BY : NONE / DATE OF HEARING 30/11/2015 /DATE OF PRONOUNCEMENT 04/12/2015 / O R D E R PER SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER: THIS APPEAL FILED BY THE REVENUE IS AGAINST THE OR DER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-XV, AHMEDA BAD DATED 01.08.2012 FOR ASSESSMENT YEAR 2008-09, ON TH E FOLLOWING GROUNDS:- 1A). THE LD. COMMISSIONER OF INCOME-TAX (APPEALS) -XV, AHMEDABAD HAS ERRED IN LAW AND ON FACTS IN DIRECTIN G THE ITA NO. 2526/AHD/2012 ITO VS. SAHJANAND LAND CORPORATION AY 2008-09 - 2 - ASSESSING OFFICER TO ALLOW THE ASSESSEE'S CLAIM FOR DEDUCTION OF RS.13,88,218/- U/S 80IB(10) OF THE IT ACT. 1B). THE LD. COMMISSIONER OF INCOME-TAX (APPEALS )-XV, AHMEDABAD HAS DECIDED THE ISSUE NO.1 ON THE GROUND IN HOLDING THAT THE ASSESSEE FULFILLS THE CONDITIONS L AID DOWN FOR CLAIMING DEDUCTION U/S.80IB(10) EVEN WHEN THE L AND WAS IN THE NAME OF SHRI ATUL BALUBHAI PATEL, POWER OF ATTORNEY OF SHRI BALUBHAI MANILAL PATEL & OTHERS, W HO ARE SEPARATE LEGAL LEGAL ENTITY IN THE EYE OF LAW AND T HE ASSESSEE ENTERED INTO THE PROJECT BY A DEVELOPMENT AGREEMENT WITH THEM. THE ENTIRE RESPONSIBILITY TO E XECUTE THE HOUSING PROJECT AND ABIDE BY THE TERMS AND CONDITIONS OF ITS APPROVAL RIGHT FROM THE INCEPTION OF THE PROJECT TILL ITS COMPLETION RESTS WITH THEM. THE LO CAL AUTHORITY HAD GRANTED PERMISSION FOR DEVELOPMENT TO THEM. ASSESSEE WAS JUST A CONTRACTOR OF THE LAND OW NERS 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. 3) IT IS THEREFORE, PRAYED THAT THE ORDER OF THE L D. COMMISSIONER OF INCOME-TAX (APPEALS)-XV, AHMEDABAD MAY BE SET-ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS ENGAGED IN THE BUSINESS OF BUILDING AND CONSTRUCTION OF HOU SING PROJECTS. DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE CLAIMED DEDUCTION U/S 80IB(10) AMOUNTING TO RS.13,8 8,218/- WHICH WAS DENIED BY THE ASSESSING OFFICER HOLDING T HAT THE ASSESSEE WAS ONLY A WORK CONTRACTOR AND NOT THE ITA NO. 2526/AHD/2012 ITO VS. SAHJANAND LAND CORPORATION AY 2008-09 - 3 - BUILDER/DEVELOPER/OWNER OF THE PROPERTY AND THEREFO RE, THE ASSESSEE NOT FULFILLED THE CONDITIONS LAID DOWN FOR CLAIMING DEDUCTION U/S 80IB(10) OF THE ACT. 2.1. MATTER WAS CARRIED BEFORE THE FIRST APPELLATE AUTHORITY, WHEREIN VARIOUS CONTENTIONS WERE RAISED ON BEHALF O F THE ASSESSEE AND HAVING CONSIDERED THE SAME, CIT(A) GRA NTED RELIEF TO THE ASSESSEE, MAINLY FOLLOWING THE DECISION OF H ONBLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. RADHE DEV ELOPERS IN TAX APPEAL NO.546 OF 2008, REPORTED IN (2012) 341 ITR 0403. 2.2. SIMILAR ISSUE AROSE BEFORE US IN THE CASE OF ITO VS. M/S. H. PATEL & COMPANY IN ITA NO. 2522 & 2523/AHD/2012 FOR AYS 2003-04 & 2004-5, WHEREIN VIDE PARAGRAPH NO.4, UNDER THE SIMILAR FACTS AND CIRCUMSTANCES, ITAT HAS UPHEL D THE ORDER OF THE CIT(A) BY OBSERVING AS UNDER:- 4. AFTER GOING THROUGH THE ARGUMENTS AND MATERIAL O N RECORD, WE FIND THAT THE ISSUE BEFORE US REGARDING THE DISALLOWANCE OF CLAIM U/S 80IB(10) OF THE ACT AMOUN TING TO RS.10,66,495/- WAS ALLOWED IN THE ORIGINAL ASSES SMENT, WHICH WAS REJECTED BY THE ASSESSING OFFICER IN THE RE- OPENING PROCEEDINGS. AS DISCUSSED ABOVE, THE DISALLOWANCE WITH REGARD TO 80IB(10) WAS MADE ON ACCOUNT OF THE FACT THAT THE ASSESSEE WAS NOT THE O WNER OF THE LAND, BUT THE OWNER WAS SUVIDHA PARK CO. OP. HOUSING SOCIETY LTD. WHO WAS PERMITTED TO DEVELOP T HE LAND BY WAY OF CONSTRUCTING THE HOUSING PROJECT. W E FIND THAT IN THE CASE OF CIT VS. RADHE DEVELOPERS IN TAX APPEAL NO.546 OF 2008, REPORTED IN (2012) 341 ITR 0403, T HE ITA NO. 2526/AHD/2012 ITO VS. SAHJANAND LAND CORPORATION AY 2008-09 - 4 - HONBLE GUJARAT HIGH COURT HAS DECIDED A SIMILAR IS SUE IN FAVOUR OF THE ASSESSEE, WHEREIN IT HAS BEEN HELD TH AT IT IS NOT NECESSARY THAT THE ASSESSEE MUST BE THE OWNER O F THE LAND AND SECONDLY LOOKING TO THE PROVISIONS CONTAIN ED IN SECTION 2(4) OF THE ACT READ WITH SECTION 53A OF TH E TRANSFER OF PROPERTY ACT, BY VIRTUE OF THE DEVELOPM ENT AGREEMENT AND THE AGREEMENT TO SELL, THE ASSESSEE H AD, FOR THE PURPOSE OF INCOME TAX, BECOME THE OWNER OF THE LAND. A CO-ORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF ITO VS. SHAKTI CORPORATION, REPORTED IN (2009) 32 S OT 0438 (AHD TRIB.) ALSO HELD THAT CONSIDERING THE TER MS AND CONDITIONS OF DEVELOPMENT AGREEMENT AND OTHER DOCUMENTS ON RECORD, THE ASSESSEE HAD ACQUIRED DOMINION OVER THE LAND WHICH HE HAD DEVELOPED BY CONSTRUCTING HOUSING PROJECT INCURRING EXPENSES AND ALSO TAKING RISKS. 4.1 THE ESSENCE OF SUB-SECTION (10) OF SECTION 80IB REQUIRES INVOLVEMENT OF AN UNDERTAKING IN DEVELOPIN G AND BUILDING HOUSING PROJECTS APPROVED BY THE LOCAL AUT HORITY. APPARENTLY, SUCH PROVISION WOULD BE AIMED AT GIVING ENCOURAGEMENT TO PROVIDING HOUSING UNITS IN THE URB AN AND SEMI-URBAN AREAS, WHERE THERE IS PERENNIAL AND ACUTE SHORTAGE OF HOUSING, PARTICULARLY, FOR THE MIDDLE I NCOME GROUP CITIZENS. TO ENSURE THAT THE BENEFIT REACHES THE PEOPLE, CERTAIN CONDITIONS WERE PROVIDED IN SUB-SEC TIONS (10) SUCH AS SPECIFYING DATE BY WHICH THE UNDERTAKI NG MUST COMMENCE AND DEVELOPING THE CONSTRUCTION WORK AS ALSO PROVIDING FOR THE MINIMUM AREA OF PLOT OF LAND ON WHICH SUCH PROJECT WOULD BE PUT UP AS WELL AS MAXIM UM BUILT UP AREA OF EACH OF THE RESIDENTIAL UNITS TO B E LOCATED THEREON. THE PROVISIONS NOWHERE REQUIRED THAT ONLY THOSE DEVELOPERS WHO THEMSELVES OWN THE LAND WOULD RECEIV E THE DEDUCTION UNDER SECTION 80IB(10) OF THE ACT. U NDER THESE FACTS AND CIRCUMSTANCES, WE ARE OF THE VIEW T HAT CIT(A) HAS NOT COMMITTED ANY ERROR WHILE DELETING T HE DISALLOWANCE MADE BY THE ASSESSING OFFICER U/S 80IB (10) AMOUNTING TO RS.10,66,495/- AS THE ASSESSEE FULFILL S THE CONDITIONS LAID DOWN FOR CLAIMING DEDUCTION U/S 80I B(10). UNDER THESE FACTS, THE CIT(A) WAS JUSTIFIED IN GRAN TING RELIEF TO THE ASSESSEE BY DELETING THE DISALLOWANCE OF RS.10,66,495/- MADE BY THE ASSESSING OFFICER U/S ITA NO. 2526/AHD/2012 ITO VS. SAHJANAND LAND CORPORATION AY 2008-09 - 5 - 80IB(10) OF THE ACT. THIS REASONED FINDING OF THE CIT(A) NEEDS NO INTERFERENCE FROM OUR SIDE WHICH IS CONFIR MED. 5. THIS APPEAL OF THE REVENUE IS DISMISSED. 2.3. NOTHING CONTRARY WAS BROUGHT TO OUR KNOWLEDGE ON BEHALF OF REVENUE. THEREFORE, FACTS BEING SIMILAR, SO FOLLOWING SAME REASONING, WE ARE NOT INCLINED TO IN TERFERE IN THE FINDINGS OF CIT(A) WHO HAS RIGHTLY DIRECTED THE ASSESSING OFFICER TO ALLOW THE DEDUCTION U/S 80IB(10) OF THE ACT; ACCORDINGLY, THE ORDER OF THE CIT(A) IS UPHELD. 3. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE COURT ON 4TH OF DECEMBER, 2 015 AT AHMEDABAD. SD/- SD/- ( RAJESH KUMAR ) ACCOUNTANT MEMBER ( SHAILENDRA KUMAR YADAV ) JUDICIAL MEMBER AHMEDABAD; DATED 04/12/2015 *BT / COPY OF THE ORDER FORWARDED TO : 1. '# / THE APPELLANT 2. $%'# / THE RESPONDENT. 3. && ' / CONCERNED CIT 4. ' ( ) / THE CIT(A), 5. ()* $++ , , / DR, ITAT, AHMEDABAD 6. *, / GUARD FILE. / BY ORDER, //TRUE COPY// / (DY./ASSTT.REGISTRAR) ! , / ITAT, AHMEDABAD