The ITO, Ward-5(2), Baroda V. M/s. Abhay Associates, Baroda

ITA 2552/AHD/2010

• Counselvise Citation: 255220514 RSA 2010
• Duration Of Justice: 1 year(s) 9 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-05-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 25-08-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S P TALATI
• Keywords: Competent authority
• Section: 143(3); 80IB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH AHMEDABAD (BEFORE SHRI D. K. TYAGI, JM AND A. MOHAN ALANKAMON Y, AM) ITA NO.2552/AHD/2010 A. Y.: 2007-08 THE INCOME TAX OFFICER, WARD -5(2), 5 TH FLOOR, AAYAKAR BHAVAN, RACE COURSE CIRCLE, BARODA VS M/S. ABHAY ASSOCIATES, 3-RBG COMPLEX, NEAR GUJARAT SAMACHAR PRESS, KARELIBAG, BARODA PA NO. AAGFA 6771 N (APPELLANT) (RESPONDENT) APPELLANT BY SHRI S. P. TALATI, SR. DR RESPONDENT BY SHRI MUKUND BAKSHI, AR DATE OF HEARING: 24-05-2012 DATE OF PRONOUNCEMENT:31-05-2012 O R D E R PER A. MOHAN ALANKAMONY: THE REVENUE HAS FILED THIS APPEAL AGGRIEVED BY THE ORDER OF THE LEARNED CIT(A) -V, BARODA IN APPEAL NO. CAB(A)/V/211/09-10 DATED 10-06-2010, FOR ASSESSMENT YEAR 2007-08. 2. THOUGH THE REVENUE HAS RAISED THREE GROUNDS IN I TS APPEAL, THE CRUX OF THE ISSUE IS THAT THE REVENUE IS AGGRIEVED BY THE ORDER OF THE LEARNED CIT(A) IN GRANTING DEDUCTION TO THE ASSESSE E U/S 80 IB (10) OF THE IT ACT FOR RS.14,41,999/- CLAIMED BY THE ASSESS EE. ITA NO.2552/AHD/2010 (AY: 2007-08) ITO WARD -5 (2)BARODA VS M/S. ABHAY ASSOCIATES 2 3. THE ASSESSEE IS A FIRM ENGAGED IN THE BUSINESS OF C ONSTRUCTION OF HOUSING PROJECT FILED ITS RETURN OF INCOME FOR A SSESSMENT YEAR 2007-08 ON 29-10-2007 DECLARING TOTAL INCOME OF NIL AFTER CLAIMING DEDUCTION U/S 80 IB (10) OF THE ACT FOR RS.14,41,99 9/-. INITIALLY THE RETURN WAS PROCESSED U/S 143(1) OF THE ACT AND SUBS EQUENTLY TAKEN UP FOR SCRUTINY AND THE ASSESSMENT WAS CONCLUDED AN D ORDER WAS PASSED U/S 143(3) OF THE ACT ON 24-12-2009 WHEREIN THE LEARNED AO DISALLOWED THE DEDUCTION OF RS.14,41,999/- CLAIMED BY THE ASSESSEE U/S 80 IB (10) OF THE ACT. THE LEARNED AO CAME TO S UCH CONCLUSION DUE TO THE FOLLOWING REASONS: (1) THE ASSESSEE IS NOT THE ACTUAL OWNER OF THE LAN D ON WHICH THE HOUSING PROJECT SHIVASHIV DUPLEX IS BUILT. (2) THE ASSESSEE WAS A MERE CONTRACTOR FOR CONSTRUC TION OF THE PROJECT ENGAGED BY UNIT HOLDERS. (3) THE ASSESSEE ACTED AS A MERE AGENT AND CONFORMI NG PARTY FOR COLLECTION OF THE LAND CONSIDERATION ON BEHALF OF T HE LANDOWNERS. (4) THE APPROVAL OF THE HOUSING PROJECT GRANTED BY THE COMPETENT AUTHORITY STOOD IN THE NAME OF THE LANDOWNERS. 4. THE ASSESSEE CARRIED THE MATER BEFORE THE LEARNE D CIT(A). THE LEARNED CIT(A) CAME TO THE CONCLUSION THAT THE ASSE SSEE HAD PURCHASED THE LAND FOR A FIXED CONSIDERATION AND HA D DEVELOPED THE HOUSING PROJECT AT ITS OWN COST AND RISK WHICH IS EVIDENT FROM CLAUSE 3 AND 5 OF THE DEVELOPMENT AGREEMENT. HE HAS ALSO O BSERVED THAT THERE WAS NO JOINT VENTURE TRANSACTION BY THE ASSES SEE WITH THE LANDOWNERS AND THEREFORE, THE DECISION OF THE HONB LE APEX COURT IN THE CASE OF FAQIR CHAND GULATI VS UPPAL AGENCIES PV T. LTD. & ANR. ITA NO.2552/AHD/2010 (AY: 2007-08) ITO WARD -5 (2)BARODA VS M/S. ABHAY ASSOCIATES 3 (CIVIL APPEAL NO.3302 OF 2005) DATED 10-07-2008 SQU ARELY APPLIES TO THE CASE OF THE ASSESSEE. THE LEARNED CIT(A) FURTHE R RELIED IN THE DECISION OF ITAT AHMEDABAD A BENCH IN THE CASE RA DHE DEVELOPERS VS ITO, WARD 3 (2) BARODA IN ITA NO.2482 /AHD/2006 AND ITO VS M/S. SHAKTI CORPORATION IN ITA NO.1503/AHD/2 008 DATED 07-11-2008 AND DECIDED THE ISSUE IN FAVOUR OF THE A SSESSEE BY GRANTING DEDUCTION TO THE ASSESSEE FOR RS.14,41,999 /- U/S 80 IB (10) OF THE ACT. 5. AGGRIEVED BY THE ORDER OF THE LEARNED CIT(A), TH E REVENUE IS IN APPEAL BEFORE US. 6. THE LEARNED DR RELIED UPON THE ORDER OF THE AO A ND URGED THAT THE SAME MAY BE CONFIRMED. 7. THE LEARNED AR ON THE OTHER HAND, SUBMITTED BEFO RE US THAT THE CASE OF THE ASSESSEE IS SQUARELY COVERED BY THE DEC ISIONS RENDERED IN THE CASES WHICH WERE RELIED UPON BY THE LEARNED CIT(A) IN ARRIVING AT HIS CONCLUSION. HE FURTHER ARGUED BY FURNISHING COPY OF THE SALE CUM DEVELOPMENT AGREEMENT BETWEEN THE ASSESSEE AND THE OWNERS OF THE LAND DATED 28-03-2001 THAT THE ASSESSEE ACTE D AS A DEVELOPER OF THE PROJECT UNDERTAKING THE COST AND RISK IN THE PROJECT. HE, THEREFORE, PRAYED THAT THE DECISION OF THE LEARNED CIT(A) IS JUST AND THE SAME MAY BE CONFIRMED. 8. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND EXAMINED THE SALE CUM DEVEL OPMENT AGREEMENT FURNISHED BY THE APPELLANT. FROM THE DOCU MENTS IT ITA NO.2552/AHD/2010 (AY: 2007-08) ITO WARD -5 (2)BARODA VS M/S. ABHAY ASSOCIATES 4 EMERGES THAT THE ASSESSEE HAD MADE AN AGREEMENT FOR PURCHASE OF THE LAND WITH THE LAND OWNER AND UNDERTOOK TO MAKE COMPLETE PAYMENT WITHIN THREE YEARS FROM THE DATE OF THE EXE CUTION OF THE AGREEMENT. FURTHER, FROM THE FACTS IT IS APPARENT AS FOUND BY THE LEARNED CIT(A) THAT FOR DEVELOPMENT OF THE ENTIRE P ROJECT THE ASSESSEE HAD UNDERTAKEN THE ENTIRE RISK AND REWARD AND STOOD IN A POSITION AS THAT OF THE DEVELOPER. THEREFORE, THE L EARNED CIT(A) HAD RIGHTLY RELIED ON THE DECISION RENDERED IN THE CASE (1) RADHE DEVELOPERS VS ITO, (2) ITO VS M/S. SHAKTI CORPORATI ON (3) FAQIR CHAND FULATI VS UPPAL AGENCIES PVT. LTD. & ANR. AND ALLOWED THE DEDUCTION U/S 80IB (10) OF THE ACT FOR RS.14,41,999 /-. HAVING CONSIDERED THE FACTS AND CIRCUMSTANCES OF THE CASE, WE ARE OF THE VIEW THAT NO INTERFERENCE WITH THE DECISION OF THE LEARNED CIT(A) IS REQUIRED TO BE MADE AND THE DECISION RENDERED BY TH E LEARNED CIT(A) DESERVES TO BE CONFIRMED. IT IS ORDERED ACCORDINGLY . 9. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 31-05-2012 SD/- SD/- (D. K. TYAGI) JUDICIAL MEMBER (A. MOHAN ALANKAMONY) ACCOUNTANT MEMBER LAKSHMIKANT DEKA/ LAKSHMIKANT DEKA/ LAKSHMIKANT DEKA/ LAKSHMIKANT DEKA/ ITA NO.2552/AHD/2010 (AY: 2007-08) ITO WARD -5 (2)BARODA VS M/S. ABHAY ASSOCIATES 5 COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE BY ORDER D Y. REGISTRAR, ITAT, AHMEDABAD 1. DATE OF DICTATION: 24-05-12 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE T HE DICTATING MEMBER: 25-05-12 OTHER MEMBER: 3. DATE ON WHICH APPROVED DRAFT COMES TO THE SR.P.S ./P.S.: 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE TH E DICTATING MEMBER FOR PRONOUNCEMENT: 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE S R. P.S./P.S.: 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK: 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK: 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER: 9. DATE OF DESPATCH OF THE ORDER: