The DCITBharuch Circle, Baroda V. M/s. Narayan Realty, Bharuch

ITA 2563/AHD/2012

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 6004 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 5 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-05-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 03-04-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 08-11-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S N SOPARKAR
• Assessee Lawyers: D R VAISHNAV
• Keywords: Capital asset; Gift
• Section: 143(3); 80IB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, AHMEDABAD (BEFORE SHRI G.C.GUPTA VICE PRESIDENT & SHRI ANIL C HATURVEDI, A.M.) I.T. A. NOS. 2293/AHD/2012 & 2095/AHD/13 (ASSESSMENT YEARS: 2009 -10 & 2010-2011) NARAYAN REALTY LTD., A-4, AMRAKUNJ SOCIETY-2, B/H SPANDAN APARTMENT URMI VACCINE ROAD, BARODA V/S DCTI, CIRCLE-4, BARODA (APPELLANT) (RESPONDENT) ITA NOS. 2944/AHD/2011 & 2563/AHD/2012 (ASSESSMENT YEARS: 200 8-09 & 2009-10) DCTI, CIRCLE-4, BARODA V/S NARAYAN REALTY LTD., A-4, AMRAKUNJ SOCIETY-2, B/H SPANDAN APARTMENT URMI VACCINE ROAD, BARODA (APPELLANT) (RESPONDENT) PAN: AACCN 7562 N APPELLANT BY : SHRI S.N. SOPARKAR RESPONDENT BY : SHRI D.R. VAISHNAV, CIT D.R. ( )/ ORDER DATE OF HEARING : 03-04-2014 DATE OF PRONOUNCEMENT : 02-05-2014 PER SHRI ANIL CHATURVEDI,A.M. 1. THESE ARE 4 APPEALS OF WHICH 2 APPEALS ARE OF ASSES SEE AND 2 APPEALS ARE OF REVENUE. BEFORE US AT THE OUTSET IT WAS SUBMITTE D THAT THOUGH THE APPEALS ARE OF DIFFERENT YEARS BUT THE ISSUE INVOLV ED IN ALL THE APPEALS ARE IDENTICAL AND THEREFORE THE SUBMISSIONS WOULD BE CO MMON TO ALL THE ITA NOS. 2944/A/11, 2293, 2563/A/2012 & 2095/A/2013 . A.YS. 2008-09, 2009 -10 & 2010- 2011 2 APPEALS AND THEREFORE ALL THE FOUR APPEALS CAN BE H EARD TOGETHER. WE THEREFORE PROCEED TO DISPOSE OF ALL THE APPEALS BY A CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. WE PROCEED WITH THE FACTS OF ITA NO 2293/AHD/2012 FOR AY 2009-10. (ASSESSEES APPEAL) 2. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERIAL ON RECORD ARE AS UNDER. 3. ASSESSEE IS A COMPANY STATED TO BE ENGAGED IN THE B USINESS OF CONSTRUCTION AND DEVELOPMENT OF HOUSING PROJECT. IT ELECTRONICALLY FILED ITS RETURN OF INCOME FOR AY 2009-10 ON 20.8.2009 DE CLARING TOTAL INCOME OF RS 64,93,620/-. THE CASE WAS SELECTED FOR SCRUTI NY AND THEREAFTER THE ASSESSMENT WAS FRAMED U/S 143(3) VIDE ORDER DATED 2 1.11.2011 AND THE TOTAL INCOME WAS DETERMINED AT RS 4,42,07,590/-. AG GRIEVED BY THE ORDER OF AO, ASSESSEE CARRIED THE MATTER BEFORE CIT(A). C IT(A) VIDE ORDER DATED 11.7.2012 DISMISSED THE APPEAL OF THE ASSESSE E. AGGRIEVED BY THE ORDER OF CIT(A), ASSESSEE IS NOW IN APPEAL BEFORE U S. THE EFFECTIVE GROUND RAISED BY THE ASSESSEE READS AS UNDER:- 1. LD. CIT(A) ERRED IN LAW AND ON FACTS IN CONFIRMI NG DISALLOWANCE OF DEDUCTION CLAIMED U/S 80IB(10) OF THE ACT HOLDING THAT THE CONDITIONS LAI D DOWN UNDER THE SECTION WERE NOT FULFILLED BY THE APPELLANT. THE ORDER OF LD. CIT(A) BEING BAD IN LAW DESERVED TO BE QUASHED. 4. THOUGH THE ASSESSEE HAS RAISED SEVERAL GROUNDS, THE ONLY EFFECTIVE GROUND IS WITH RESPECT TO ALLOWABILITY OF DEDUCTION U/S 80 IB(10) OF THE ACT. 5. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, AO NOT ICED THAT ASSESSEE HAD CLAIMED PROFIT EARNED ON THE PROJECT KNOWN AS N ARAYAN GARDENS AND SURYA NARAYAN AGGREGATING TO RS 3,77,13,968/- AS EX EMPT U/S 801B(10) OF THE ACT. A.O NOTICED THAT APPROVAL OF THE HOUSIN G PROJECT FROM THE ITA NOS. 2944/A/11, 2293, 2563/A/2012 & 2095/A/2013 . A.YS. 2008-09, 2009 -10 & 2010- 2011 3 LOCAL AUTHORITY WAS NOT IN THE NAME OF THE ASSESSEE , THE LAND OWNERS HAD SOLD THE PIECES OF LAND DIRECTLY TO UNIT HOLDERS AN D THE ASSESSEE HAD ACTED AS MERELY AS A CONFIRMING PARTY, ASSESSEE HAD ACTED AS A CONTRACTOR AND HAD ENTERED INTO CONSTRUCTION AGREEMENT WITH THE UN IT HOLDERS AND ASSESSEE HAD NOT SOLD THE HOUSE TO THE UNIT HOLDERS . A.O WAS THEREFORE OF THE VIEW THAT THE ASSESSEE WAS NOT ENTITLED TO DEDU CTION U/S 80IB(10) AND ACCORDINGLY REJECTED THE CLAIM OF THE ASSESSEE. AGG RIEVED BY THE ORDER OF THE AO, ASSESSEE CARRIED THE MATTER BEFORE CIT(A). CIT(A) HOWEVER NOTED THAT THE ISSUE REGARDING OWNERSHIP OF LAND AN D TRANSFER OF LAND TO UNIT HOLDERS BY THE LAND OWNERS AS WELL AS THE APPR OVAL OF THE PROJECT NOT BEING IN THE NAME OF THE ASSESSEE WAS COVERED IN AS SESSEES FAVOUR BUT HOWEVER HE DISALLOWED THE CLAIM OF THE ASSESSEE OF DEDUCTION U/S 801B(10) OF THE ACT FOR THE REASON THAT ASSESSEE HA D ENTERED INTO TWO DEALS NAMELY 'SALE DEED' AND 'CONSTRUCTION AGREEMEN T' FOR CONSTRUCTION OF UNIT AND THEREFORE THE ASSESSEE WAS DOING CONSTR UCTION AS PER THE TERMS OF CONTRACT AND THEREFORE WAS NOT ENTITLED TO DEDUCTION. HE THUS CONFIRMED THE ORDER OF AO BY HOLDING AS UNDER;- 5. I HAVE CONSIDERED THE APPELLANTS SUBMISSION AND TH E A.OS OBSERVATIONS. THE GROUNDS RELATING TO OWNERSHIP OF LAND AND TRANSFER OF LAND TO UNIT HOLD ERS BY THE LAND OWNERS AS WELL AS THE APPROVAL FOR THE PROJECT BEING NOT IN THE NAME OF THE APPELLANT, ON WHICH THE A.O HAS DISALLOWED THE DEDUCTION U/S 80IB(10) ARE COVERED IN FAVOUR OF THE APPELLANT BY THE DECISIONS OF CIT(A)-IV, AHMEDABAD IN THE APPELLANTS OWN CASE FOR THE ASSESSMENT YEAR 2008-0 9. BUT SO FAR AS THE FACT THAT APPELLANT IS WORKING AS CONTRACTOR OF THE PERSONS WHO HAVE PURCHASED THE PLOTS FROM THE APPELLANT, IS CONCERNED, THE APPELLANT IS NOT ELIGIBLE FOR DEDUCTION U/S 80IB(10 ) ON THIS ACCOUNT. IT IS NOTICED DURING APPELLATE PROCEEDINGS THAT THE ASSESSEE HAS ENTERED INTO THE FOLLOWING TWO DEALS WITH EACH ULTIMATE BUYER OF THE UNITS:- 1. SALE DEED FOR SALE OF LAND. 2. CONSTRUCTION AGREEMENT FOR CONSTRUCTING THE UN IT. THE 'SALE DEED' FOR SALE OF LAND HAS THE FOLLOWING FEATURES, AS NOTICED FROM THE COPY OF A 'SALE DEED' PROVIDED BY THE AUTHORIZED REPRESENTATIVE: - I) IT IS A TRIPARTITE AGREEMENT FOR THE SALE OF LAN D BY THE LANDOWNER TO THE PURCHASER, WITH THE APPEL LANT ACTING AS A CONFORMING PARTY. II) SALE CONSIDERATION FOR THE PLOT OF LAND SPECIFI ED. III) PLOT NO., LOCATION AND AREA OF THE LAND IS SPE CIFIED. IV) THE PURCHASER HAD BECOME THE ABSOLUTE OWNER AND OCCUPIER OF THE SAID PROPERTY AND ENTITLED TO TRANSFER THE SAID PROPERTY BY WAY OF SALE, MORTGAGE , GIFT OR OTHERWISE, AND THE VENDORS AND THE ITA NOS. 2944/A/11, 2293, 2563/A/2012 & 2095/A/2013 . A.YS. 2008-09, 2009 -10 & 2010- 2011 4 CONFORMING PARTY HAVE RELEASED AND RELINQUISHED ALL THEIR RIGHT, TITLE, AND INTEREST IN THE SAID PROPE RTY IN FAVOUR OF THE PURCHASER. V) THE PURCHASER IS TO PAY ALL TAXES ETC. IN RESPEC T OF THE LAND AFTER THE DATE OF SALE DEED. THE 'CONSTRUCTION AGREEMENT' FOR UNITS HAS THE FOLL OWING FEATURES, I) IT: STATES THAT THE EMPLOYER, WHO IS THE OWNER O F THE PLOT, IS CONSTRUCTING A RESIDENTIAL BUILDING IN THE PLOT AS PER THE PLAN AND SPECIFICATION ATTACHED TO THE CONTRACT. THE APPELLANT WHO HAS BEEN TERMED AS BUILDER, HAS AGREED TO EXECUTE SUCH CONSTRUCTION FO R A SPECIFIED AMOUNT. II) IT IS A BI-PARTITE AGREEMENT BETWEEN THE LAND O WNER (ULTIMATE PURCHASER OF THE UNITS) AND THE APPELLANT/ FOR THE CONSTRUCTION OF EACH UNIT INDIVI DUALLY. III) THE CONTRACTS PROVIDES FOR ANY WORK WHICH IS N OT INCLUDED IN THE PLAN OR SPECIFICATIONS, FOR WHIC H BUILDERS IS TO CHARGE ADDITIONAL PAYMENT TO THE EMP LOYER AT PREVAILING MARKET RATE. IV) THE AGREEMENT ALSO PROVIDES FOR QUALITY OF THE MATERIAL TO BE USED, CHARGING OF INTEREST IF THE EMPLOYER DEFAULTS IN MAKING PAYMENTS ETC. FROM THE TERMS OF SALE DEED OF LAND, IT BECOMES CLE AR THAT THE PURCHASER BECOMES THE ABSOLUTE OWNER OF THE LAND AND HAS THE RIGHT TO DEAL WITH IT IN AN Y MANNER WHATSOEVER, INCLUDING SALE, CONSTRUCTION E TC. ALL RISKS AND COSTS RELATING TO THE LAND GOT TRANSF ERRED TO THE PURCHASER FROM THE DATE OF SALE. FROM THE TERMS OF CONSTRUCTION AGREEMENT, IT BECOMES CLEAR T HAT THE APPELLANT IS DOING CONSTRUCTION AS PER TERM S OF THE CONTRACT. IT IS ONLY RENDERING A SERVICE. 5.1`UNDER SUCH CIRCUMSTANCES, THE APPELLANT IS ACTI NG AS A CONTRACTOR FOR THE OWNER OF THE PLOTS OF LAND AND HENCE IT IS NOT ENTITLED FOR DEDUCTION U/S 80IB (10) AS CLAIMED IN THE RETURN OF INCOME. THE PLEA THAT SUCH AGREEMENTS WERE ENTERED INTO IN ORDE R TO SAVE THE STAMP DUTY ALSO MAKES THE ACTIONS OF THE APPELLANT AGAINST LAW. THE APPELLANT WANTS TO E VADE STAMP DUTY CAUSING LOSS TO EXCHEQUER AND AT THE SAME TIME, WANTS TO AVAIL OF DEDUCTION U/S 80IB (10). 6. AGGRIEVED BY THE ORDER OF CIT(A), ASSESSEE IS NOW I N APPEAL BEFORE US. 7. BEFORE US, THE LD A.R. REITERATED THE SUBMISSIONS M ADE BEFORE CIT(A). HE FURTHER SUBMITTED THAT THE ISSUE IS COVERED IN F AVOUR OF THE ASSESSEE BY THE DECISION OF HONBLE AHMEDABAD TRIBUNAL IN TH E CASE OF SATSANG DEVELOPERS IN ITA NO 1011, 2498 AND 1221/AHD/2012. HE FURTHER SUBMITTED THAT THE FACTS OF THE CASE IN ASSESSEES CASE AND THE DECISION RELIED UPON ARE SIMILAR. HE POINTED TO THE RELEVANT FINDINGS OF TRIBUNAL AND ALSO PLACED ON RECORD THE COPY OF THE AFORESAID DECISION. THE LD. DR ON THE OTHER HAND RELIED ON THE ORDER OF AO AND CIT (A). 8. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. ON PERUSING THE ORDER OF CIT(A), IT IS SEEN THAT CI T(A) HAS HELD THAT THE ISSUE RELATING TO DISALLOWANCE OF DEDUCTION U/S 80I B(10) OF THE ACT ON THE ITA NOS. 2944/A/11, 2293, 2563/A/2012 & 2095/A/2013 . A.YS. 2008-09, 2009 -10 & 2010- 2011 5 GROUND THAT ASSESSEE IS NOT THE OWNER OF THE LAND A ND THE APPROVAL OF THE PROJECT NOT BEING IN THE NAME OF THE ASSESSEE IS CO VERED IN FAVOUR OF ASSESSEE BY THE DECISION OF HIS PREDECESSOR IN ASSE SSEES OWN CASE FOR AY 2008-09. WE FURTHER FIND THAT CIT(A) HAD DISALLOWED THE CLAIM OF THE ASSESSEE ON THE GROUND THAT ASSESSEE HAD ENTERED IN TO TWO AGREEMENTS NAMELY 'SALE DEED' FOR THE SALE OF LAND AND 'CONSTR UCTION AGREEMENT' FOR THE CONSTRUCTION THE UNIT AND THEREFORE ACCORDING T O HIM, THE ASSESSEE WAS A CONTRACTOR AND THEREFORE NOT ELIGIBLE FOR DED UCTION U/S 8018(10). WE ALSO FIND THAT ON IDENTICAL FACTS, THE CO-ORDINA TE BENCH OF THE TRIBUNAL IN THE CASE OF SATSANG DEVELOPERS (ITA NO 1011, 249 8 AND 1221 OF 2012 ORDER DATED 12.11.2013 HAS ALLOWED THE DEDUCTION TO ASSESSEE BY HOLDING AS UNDER:- 4.2. IN ADDITION TO ABOVE TWO OBJECTIONS, THE ID.CI T (A) HAS RAISED ONE MORE OBJECTION THAT THE ASSESS EE HAS SOLD THE LAND TO THE UNIT HOLDERS SEPARATELY AN D HAS DONE THE CONSTRUCTION OF UNITS UNDER SEPARATE AGREEMENT/CONTRACT AND, THEREFORE, THE ASSESSEE IS NOT ELIGIBLE FOR DEDUCTION U/S.80-IB(10) OF THE ACT BECAUSE AS PER LD.CIT(A), PROFIT EARNED BY THE ASSE SSEE IN RESPECT OF SALE OF LAND IS NOT ELIGIBLE FOR DEDUCTION U/S.80-IB(10) OF THE ACT AND SIMILARLY, T HE PROFIT EARNED BY THE ASSESSEE FOR CONSTRUCTION ACTIVITIES IS NOT ELIGIBLE FOR DEDUCTION U/S.80-IB( 10) BECAUSE THE ASSESSEE IS DOING THE CONSTRUCTION AS A CONTRACTOR FOR A WORK AND NOT AS A BUILDER OR DEVEL OPER AND, THEREFORE, THE ASSESSEE IS NOT ELIGIBLE F OR DEDUCTION U/S.80-IB(10) OF THE ACT. AGAINST THESE O BJECTIONS OF LD.CIT (A), THE ASSESSEE IS IN APPEAL BEFORE US. 5.2 REGARDING THE 3 R OBJECTION THAT THE ASSESSE HAS SOLD LAND TO THE UN IT HOLDERS SEPARATELY AND HAS DONE THE CONSTRUCTION UNITS UNDER A PROJECT AGREEME NT/CONTRACT, IT WAS SUBMITTED THAT IT IS A JOINT ACTIVITY ALTHOUGH THE AGREEMENT AND LAND SALE-DEED ARE EXECUTED SEPARATELY, BUT FOR THIS REASON ALONE, IT CANNOT BE SAID THAT THE ASSESSEE IS NOT A BUILDE R OR A DEVELOPER. HE PLACED RELIANCE ON THE FOLLOWI NG TRIBUNAL DECISIONS:- SL.NO(S) DECISION IN THE CASE OF. ... REPORTED IN.... 1. DCIT VS. SMR BUILDERS (P.)LTD. (2012)24 TAXMAN.COM 194 (HYD.) 2. SKY BUILDERS & DEVELOPERS VS. ITO (2011)14 TAXMAN.COM 78 (INDORE) 3. M/S.VARDHMAN BUILDERS AND DEVELOPERS VS. ITO ITA NO.559/IND/2010 DATED 09/05/20 12 4. RAGHAVA ESTATES VS. DY.CIT ITA NOS.248 & 49/VIZAG/2009 DATED 04/08/2011 ITA NOS. 2944/A/11, 2293, 2563/A/2012 & 2095/A/2013 . A.YS. 2008-09, 2009 -10 & 2010- 2011 6 5.2. HE SUBMITTED THAT IN THE CASE OF VARDHMAN BUIL DERS & DEVELOPERS (SUPRA) ALSO, THE ASSESSEE HAD ENTERED INTO A SEPARATE AGREEMENT FOR SALE OF LAND AND SEPARATE AGREEMENT FOR CONSTRUCTION OF HOUSING ON SUCH LAND AND UNDER THESE FACTS, IT WAS HELD BY THE TRIBUNAL IN THAT CASE THAT MERELY BECAUSE OF TW O SEPARATE AGREEMENTS, THE CLAIM OF THE ASSESSEE FOR DEDUCTION U/S.80-IB (10) OF THE ACT CANNOT BE DECLINED IF OTHER CONDITIONS ARE BEING SATISFIED. 5.3. HE FURTHER SUBMITTED THAT IN THE CASE OF DCIT VS. SMR BUILDERS (P) LTD. (SUPRA) ALSO, THE FACTS WERE THAT THE ASSESSEE HAD SOLD FLATS IN A SEMI-FIN ISHED STAGE. IN THAT CASE, THE AO HAD NOTED THAT AS PER THE SALE-DEED, THE ASSESSEE-COMPANY HAS SOLD UN DIVIDED SHARE OF LAND WITH SUPER-STRUCTURE OF SEMI- FINISHED BUILT-UP AREA FOR A CERTAIN CONSIDERATION. THE AO HELD THAT THE SEMI-FINISHED STRUCTURE HAS NEVER BEEN CONSIDERED AS A RESIDENTIAL UNIT. IT WAS ALSO NOTED BY THE AO IN THAT CASE THAT ON THE SAME DATE WHEN THE SALE DEED WAS EXECUTED, A CONSTRUCTIO N AGREEMENT WAS ALSO ENTERED INTO WITH THE TRANSFEREE FOR FURTHER CONSTRUCTION OF THE SAME FLA TS BY THE BUILDER COMPANY ITSELF. HE SUBMITTED THAT THE FACTS IN THE PRESENT CASE ARE SIMILAR. HE ALSO POINTED OUT THAT IN THAT CASE, IT WAS HELD BY THE TRIBUNAL THAT THE STAND OF THE REVENUE WITH REGARD TO THE SEMIFINISHED CONDITION OF THE FLATS IS DEVOI D OF ANY MERIT IN AS MUCH AS WHAT IS SOUGHT TO BE CONSTR UCTED AND SOLD BY THE ASSESSEE IS A RESIDENTIAL UNI TS AND WHAT IS SOUGHT TO BE PURCHASED BY THE BUYER IS THE OWNERSHIP OF THE SPECIFIED UNIT AND REGISTRATIO N OF FLAT IN SEMI-FINISHED CONDITION IS ONLY TO FACIL ITATE THE CONVENIENCE OF THE PARTIES AND AGREEMENT FOR DEVELOPMENT AND COMPLETION OF BALANCE WORK IN RELAT ION TO THE FLATS IS ONLY AN INCIDENTAL FORMALITY AN D THIS CANNOT BE VIEWED AS FATAL TO THE CLAIM OF THE ASSESSEE FOR DEDUCTION U/S.80-IB(10) OF THE ACT. IT WAS ALSO HELD BY THE TRIBUNAL THAT THE ENTIRE WORK FROM THE STAGE OF THE COMMENCEMENT TO THE STAGE OF MAKING THE RESIDENTIAL UNIT HABITABLE HAVE BEEN CAR RIED OUT BY THE ASSESSEE ONLY AND, THEREFORE, ASSESSEE IS ELIGIBLE FOR DEDUCTION U/S.80-IB(L 0) O F THE ACT. 9.2. NOW WE TAKE UP THE THIRD AND LAST OBJECTION OF ID.CIT (A) THAT THE ASSESSE HAD SOLD THE LAND SEPARATELY AND UNDERTOOK THE CONSTRUCTION WORK AS P ER A SEPARATE AGREEMENT AND, THEREFORE THE ASSESSEE IS NOT A BUILDER OR A DEVELOPER BUT A LAND DEALER AND CONTRACTOR. IN THIS REGARD, IN OUR CONSIDERED OPINION, THE ISSUE INVOLVED IS SQUARELY COVERED IN FAVOUR OF ASSESSEE BY THE DECISION OF ITAT INDORE BENCH RENDERED IN THE CASE OF M/S.VARDH MAN BUILDERS AND DEVELOPERS VS. ITO (SUPRA). IT IS NOTED BY THE TRIBUNAL IN THAT CASE THAT THE ASSE SSEE HAD ENTERED INTO AN AGREEMENT FOR A SALE OF LA ND AND A SEPARATE AGREEMENT FOR CONSTRUCTION OF THE HO USE ON THE LAND AND, THEREFORE, THE FACTS ARE SIMILAR. UNDER THESE FACTS, IT WAS HELD BY THE TRIB UNAL IN THAT CASE THAT THE CLAIM OF THE ASSESSEE FO R DEDUCTION U/S.80-IB (10) OF THE ACT CANNOT BE DECLI NED IF OTHER CONDITIONS ARE BEING SATISFIED. SIMILA RLY, IN THE CASE OF DCIT VS. SMR BUILDERS (P.) LTD. (SUP RA) ALSO, THE ASSESSEE SOLD THE LAND ALONG WITH SEMI-FINISHED STRUCTURE TO THE BUYERS AND AS PER SE PARATE AGREEMENT, AGREED FOR CONSTRUCTION FOR COMPLETION OF BALANCE WORK. HENCE, THE FACTS OF THI S CASE ARE ALSO SIMILAR BECAUSE IN THAT CASE ALSO, THE LAND WAS SOLD SEPARATELY ALONG WITH PARTIAL AND UNF INISHED CONSTRUCTION OF FLATS AND, THEREAFTER, CONSTRUCTION AGREEMENT WAS ENTERED INTO TO CARRY OU T THE BALANCE CONSTRUCTION WORK AND UNDER THESE FACTS, IT WAS HELD BY THE TRIBUNAL IN THAT CASE THA T SUCH AGREEMENT FOR CONSTRUCTION TO COMPLETE THE BALANCE WORK IS ONLY AN INCIDENTAL FACILITATION TO PROTECT INTEREST OF THE PARTIES AND THEREFORE, THE ASSESSEE IS ELIGIBLE FOR DEDUCTION U/S.80-IB(10) OF THE ACT. SIMILARLY, IN THE CASE OF RAGHAVA ESTATES VS. DY.CIT (SUPRA) ON WHICH RELIANCE WAS PLACED BY THE ID.AR OF THE ASSESSEE, THE FACTS ARE SIMILAR. IN TH AT CASE ALSO, THE ASSESSEE HAD SOLD THE PLOTS SEPARATE LY AND THEREAFTER, CONSTRUCTED THE HOUSES AND UNDER THESE FACTS, THE REVENUE HELD THAT THE ASSESSEE HAS TO BE CONSIDERED AS A MERE CONTRACTOR AND, THEREFORE, THE ASSESSEE IS NOT ELIGIBLE FOR DEDUCTI ON U/S.80-IB (10) OF THE ACT. THIS GOES TO SHOW THA T THE FACTS IN THAT CASE WERE IDENTICAL. IN THAT CASE, IT WAS NOTED BY THE TRIBUNAL THAT THE ASSESSEE HAD CH OSEN TO REGISTER THE PLOT IN THE NAME OF THE BUYER ON PA YMENT OF SPECIFIED AMOUNT IN ORDER TO ACHIEVE COST SAVING AND TO ENSURE RELIABILITY AND THEREAFTER, TH E ASSESSEE HAD PROCEEDED TO CONSTRUCT THE HOUSE AS PER BUILDING PLAN OBTAINED IN THE NAME OF THE PLOT- OWNERS ON PAYMENT OF SUBSEQUENT INSTALLMENTS. IT IS ALSO NOTED THAT THE ASSESSEE HAD ALSO DEVELOPED VAR IOUS PUBLIC AMENITIES WITHIN THE PROJECT. THEREAFTE R, IT WAS HELD BY THE TRIBUNAL THAT ON A TOTALITY OF A FACT, THE TRIBUNAL IS OF THE VIEW THAT THE ASSESSE E HAS UNDERTAKEN DEVELOPING AND BUILDING HOUSING PROJECTS AS PER THE SCHEME PROVIDED IN SECTION 80-IB (10) OF THE ACT. 9.3. SINCE THE FACTS IN THE PRESENT CASE ARE SIMILA R TO THE FACTS IN ABOVE NOTED THREE TRIBUNAL DECISI ONS, WE DO NOT FIND ANY DEFECT IN THE CONSTRUCTION IN TH E PRESENT CASE AND HENCE RESPECTFULLY FOLLOWING THE SE DECISIONS, WE DECIDE THE ISSUE IN FAVOUR OF THE ASS ESSEE. THERE IS NO OTHER OBJECTION OF THE LD. CIT(A ) ITA NOS. 2944/A/11, 2293, 2563/A/2012 & 2095/A/2013 . A.YS. 2008-09, 2009 -10 & 2010- 2011 7 REGARDING ALLOWABILITY OF DEDUCTION TO THE ASSESSEE U/S. 80IB(10) OF THE ACT. HENCE, WE DIRECT THE A. O TO GRANT THE DEDUCTION TO THE ASSESSEE U/S. 80IB(10 ) OF THE ACT. 9. BEFORE US, THE REVENUE COULD DID NOT PLACE ANY CONT RARY DECISION ON RECORD NOR COULD DISTINGUISH THE FACTS OF THE CASE WHICH WAS RELIED BY THE ASSESSEE. IN VIEW OF THE AFORESAID FACTS, WE RESPEC TFULLY FOLLOWING THE AFORESAID DECISION OF THE CO-ORDINATE BENCH OF THE TRIBUNAL, IN THE CASE OF SATSANG DEVELOPERS (SUPRA) HOLD THAT ASSESSEE IS E LIGIBLE FOR DEDUCTION U/S 80IB(10). THUS THIS GROUND OF ASSESSEE IS ALLOW ED. 10. THIS THE APPEAL OF ASSESSEE IS ALLOWED. ITA NO 2095/AHD/2013 (AY 2010-11) (ASSESSEES APPEA L). 11. THE GROUNDS RAISED BY ASSESSEE READS AS UNDER:- 1. LD. CIT (A) ERRED IN LAW AND ON FACTS IN CONFIRMING DISALLOWANCE OF DEDUCTION CLAIMED U/S 80IB (10) OF THE ACT HOLDING THAT THE CONDITIONS LAID DO WN UNDER THE SECTION WERE NOT FULFILLED BY THE APPELLANT. THE ORDER OF LD. CIT (A) BEING BAD IN LA W DESERVES TO BE QUASHED. 2. LD. CIT (A) ERRED IN LAW AND ON FACTS IN HOLDING TH E APPELLANT AS A CONTRACTOR RENDERING SERVICE TO THE PURCHASER OF THE PLOT OF LAND AS PER THE TERMS OF CONSTRUCTION AGREEMENT AND NOT A DEVELOPER OF 'HOUSING PROJECT'. LD. CIT (A) FURTHER ERRED TO HOL D THAT ALL RISK AND COST RELATING TO THE LAND GOT TRANSFERRED TO THE PURCHASER ON DATE OF SALE OVERLO OKING THE FACT THAT ALL THE RISK AND COSTS OF DEVELOPING HOUSING PROJECT IS ENTIRELY OF THE APPEL LANT, AND TWO SEPARATE AGREEMENTS OF LAND AND CONSTRUCTION DOES NOT RENDER IT 'CONTRACT FOR WORK' . THIS ACTION OF LD. CIT (A) ON ERRONEOUS INTERPRETATION OF FACTS BE QUASHED AND DEDUCTION CL AIMED BE GRANTED TO THE APPELLANT. 3. LD. CIT (A) ERRED IN LAW AND ON FACTS IN REJECTING THE CLAIM OF THE APPELLANT ON ENTIRELY DIFFERENT INTERPRETATION OF FACTS THOUGH HOLDING THE APPELLAN T ELIGIBLE TO CLAIM DEDUCTION AS HELD BY JURISDICTIONAL HIGH COURT JUDGMENT IN RADHE DEVELOP ERS (341ITR 403) IDENTICAL TO THE FACTS BEFORE HIM. 12. BOTH THE PARTIES BEFORE US SUBMITTED THAT THE FACTS OF THE CASE IN THE YEAR UNDER APPEAL ARE IDENTICAL TO THAT OF AY 2009-10 EX CEPT FOR THE AMOUNTS. WE ALSO FIND THAT CIT(A) WHILE UPHOLDING THE DISALL OWANCE MADE BY A.O HAS HELD THAT THE ISSUE INVOLVED IN THE YEAR UNDER APPEAL ARE IDENTICAL TO THAT OF AY 2009-10. ITA NOS. 2944/A/11, 2293, 2563/A/2012 & 2095/A/2013 . A.YS. 2008-09, 2009 -10 & 2010- 2011 8 13. WHILE DECIDING THE ISSUE IN APPEAL FOR AY 2009-10 H EREINABOVE, WE HAVE HELD THAT ASSESSEE IS ELIGIBLE FOR DEDUCTION U/S 80 IB(10). WE FOR THE SIMILAR REASONS STATED HEREINABOVE, WHILE DECIDING THE APPEAL FOR A.Y. 09-10 HOLD THAT ASSESSEE IS ELIGIBLE FOR DEDUCTION U/S 80IB(10) AND THUS ALLOW THIS GROUND OF ASSESSEE. 14. IN THE RESULT THIS APPEAL OF THE ASSESSEE IS ALLOWED. ITA NO 2563/AHD/2012 (AY 2009-10) (REVENUES APPEAL ) 15. THE GROUNDS RAISED BY REVENUE REDS AS UNDER:- 1. THE LEARNED CIT(A) ERRED IN LAW IN ALLOWING DEDUCT ION OF RS. .73,91,264/- U/S 80IB(10) OF THE IT ACT WITHOUT APPRECIATING THAT THE LEGAL RELATIONSHI P BETWEEN THE ASSESSEE AND THE END USER OF THE UNIT S WAS THAT OF 'WORK CONTRACT'. 16. IN THE PRESENT CASE, THE ASSESSEE WAS DENIED THE DE DUCTION BY THE AO U/S 80IB(10) FOR THE REASON THAT THE ASSESSEE WAS NOT T HE OWNER OF THE LAND AND THE APPROVAL FOR THE PROJECT WAS NOT IN THE NAM E OF THE ASSESSEE BUT IN THE NAME OF THE LAND OWNERS. A.O WAS THEREFORE OF T HE VIEW THAT THE CONDITIONS LAID DOWN IN S. 801B(10) RWS 801B (10) W AS NOT FULFILLED BY THE ASSESSEE AND THEREFORE THE ASSESSEE WAS NOT ELI GIBLE FOR DEDUCTION. IN THE FIRST APPEAL AGAINST THE ORDER OF AO, CIT(A) FO LLOWING THE DECISION OF HON'BLE GUJARAT HIGH COURT IN THE CASE OF RADHE DEV ELOPERS (2017) 17 TAXMANN.COM 156 (GUJ) AND THE DECISION OF AHMEDABAD TRIBUNAL IN THE CASE OF SHAKTI CORPORATION (ITA NO 1503/AHD/2008) D ELETED THE ADDITION BY HOLDING AS UNDER:- 7.1 IT IS A FACT THAT THE APPELLANT HAS FULFILLED A LL THE CONDITIONS REQUIRED FOR AVAILING DEDUCTION U /S 80IB(10). THE ONLY DISPUTE, BASED ON WHICH THE DEDU CTION AS CLAIMED BY THE APPELLANT HAS BEEN DISALLOWED BY THE AO, IS REGARDING OWNERSHIP OF THE LAND. THE OWNERSHIP OF LAND ON WHICH THE HOUSING PROJECT HAS BEEN DEVELOPED IS LEGALLY NOT IN THE NA ME OF THE APPELLANT AND ACCORDINGLY APPROVAL HAS ITA NOS. 2944/A/11, 2293, 2563/A/2012 & 2095/A/2013 . A.YS. 2008-09, 2009 -10 & 2010- 2011 9 BEEN GRANTED BY THE LOCAL AUTHORITY IN THE NAME OF THE LAND OWNERS AND NOT IN THE NAME OF THE APPELLANT BEING DEVELOPER OF THE HOUSING PROJECT. T HE ISSUE THAT NEEDS TO BE DECIDED IS AS TO WHETHER THE OWNERSHIP OF LAND IS AN ESSENTIAL CONDITION FOR THE PURPOSE OF DEDUCTION U/S 80IB(10). THE SECTION 80IB(10) DOES NOT SPECIFICALLY MENTION SUCH CONDITI ON TO BE FULFILLED. THE A.O HAS CONCLUDED THAT FOR CLAIM OF SUCH DEDUCTION, THE ASSESSEE MUST BE THE L EGAL OWNER OF THE LAND. SUCH CONCLUSION IS NOT CORRECT IN ABSENCE OF ANY SPECIFIC CONDITION MENTIO NED IN THE SAID SECTION. THE CONDITION REGARDING OWNERSHIP OF LAND HAS NOT BEEN INCORPORATED IN THE STATUTE WITH A CLEAR CUT OBJECTIVE OF PROVIDING LOW COST HOUSING TO MIDDLE CLASS INVESTORS WHICH IS THE PRIME OBJECTIVE OF SECTION 80IB(10). IF WE MAKE TH E LEGAL OWNERSHIP COMPULSORY FOR DEDUCTION U/S 80IB(1 0), THIS WILL SIMPLY OBSTRUCT THE DEVELOPMENT OF HOUSING PROJECTS MAINLY BECAUSE THE LEGAL LAND OWNE R MAY NOT HAVE THE EXPERTISE TO DEVELOP HOUSING PROJECTS ON THE SAID LAND AND THE DEVELOPER MAY NOT HAVE SUFFICIENT FUNDS TO PURCHASE THE LAND AND THE N DEVELOP THE PROJECTS. THEREFORE, THE, CONDITION OF LEGAL OWNERSHIP OF LAND HAS BEEN DELIBERATELY NOT BROUGHT INTO THE STATUTE SO THAT THE PURPOSE OF U/S 80IB(10) TO PROVIDE LOW COST HOUSING TO MIDDLE CLA SS INVESTORS DOES NOT GET DEFEATED SINCE INCEPTION ITS ELF. FURTHER, THIS ISSUE HAS ALREADY BEEN DECIDED B Y THE HON'BLE ITAT, AHMEDABAD IN THE CASE OF RADHE DE VELOPERS & OTHERS IN [2008J23SOT420. THE GIST OF THE FINDINGS ARE REPRODUCED AS UNDER FOR TH E SAKE OF CONVENIENCE:.. 7.2 IN VIEW OF THE ABOVE, OWNERSHIP OF LAND IS NOT A NECESSARY CONDITION FOR CLAIMING DEDUCTION U/S 80IB(10) OF THE ACT. MOREOVER, THE HONBLE HIGH COU RT OF GUJARAT IN THE ABOVE CASE CIT VS. RADHE DEVELOPERS [2012] 17 TAXMAN.COM 156 (GUJ) HAS HELD THAT THE TRIBUNAL COMMITTED NO ERROR IN HOLDING THAT THE ASSESSEE WAS ENTITLED TO THE BENEFIT UNDER SECTION 80-IB (10) EVEN WHERE THE TITLE OF THE LAN DS HAD NOT PASSED ON TO THE ASSESSEE AND IN SOME CASES , THE DEVELOPMENT PERMISSIONS MAY ALSO HAVE BEEN OBTAINED IN THE NAME OF THE ORIGINAL LAND OWNER. 7.3 FURTHER THE HON'BLE ITAT, AHMEDABAD IN THE CASE OF M/S SHAKTI CORPORATION AND OTHERS IN ITA NO.1503/AHD/2008 HAS DECIDED THAT DECISION IN THE C ASE OF RADHE DEVELOPERS WILL NOT APPLY IN SUCH CASES WHERE THE ASSESSEE HAS ENTERED INTO AGREEMENT FOR FIXED REMUNERATION MERELY AS A CONTRACTOR TO CONSTRUCT OR DEVELOP THE HOUSING PROJECT ON BEHALF OF THE LAND OWNER. IT IS NECESSARY THAT THE DEVELOP ER SHOULD HAVE DOMINANT CONTROL OVER THE PROJECT AND A LL THE RISK INVOLVED THEREIN SHOULD VEST WITH THE DEVELOPER ONLY. FOR THE SAKE OF CONVENIENCE, THE F INDINGS OF THE HONBLE ITAT, AHMEDABAD IN THE CASE OF M/S SHAKTI CORPORATION AND OTHERS IS REPRODUCED AS UNDER:. 7.4 SO FAR AS THE PRESENT CASE IS CONCERNED, ON PER USAL OF RELEVANT CLAUSES OF THE DEVELOPMENT AGREEMENTS, IT IS QUITE CLEAR THAT THE APPELLANT HA S ACQUIRED DOMINANT CONTROL OVER THE LAND. THE LAND OWNER IS BEING PAID PRICE CONSIDERATION FOR THE LAN D OVER A PERIOD OF TIME. THE APPELLANT IS RESPONSIB LE FOR INCURRING ALL EXPENSES AND TAKING ALL RISKS INV OLVED THEREIN. THE APPELLANT FIRM IS NOT MERELY A CONTRACTOR OF THE LAND OWNER FOR FIXED REMUNERATION , FOR THE LAND OWNERS ARE ELIGIBLE TO GET PRICE OF THE LAND FIXED BY THE DEVELOPMENT AGREEMENTS AND DO NOT GET ANY SHARE IN THE DEVELOPMENT PROFITS OF THE LAND. THUS THE FIRM HAS DOMINANT CONTROL OVER LAND WITH ALL RISKS AND LIABILITIES AND ALL PROFIT AND RELATION TO THE DEVELOPMENT OF THE PROJECT IS VESTE D WITH THE APPELLANT FIRM. 7.5 IN VIEW OF THE ABOVE, THE APPELLANT FIRM HAS FU LFILLED ALL CONDITIONS AS-REQUIRED U/S 80IB(10) OF THE ACT IN VIEW OF THE DECISIONS OF HON'BLE ITAT, AHMED ABAD IN THE CASE OF RADHE DEVELOPERS AS WELL AS SUBSEQUENT DECISION IN-THE CASE OF M/S SHAKTI CORPO RATION AND OTHERS AND THE DECISION OF HON'BLE HIGH COURT OF GUJARAT IN THE CASE OF RADHE DEVELOPE RS. THEREFORE, I AM OF THE CONSIDERED OPINION THAT THE APPELLANT FIRM HAVING FULFILLED THE CONDITIONS AS LAID DOWN U/S 80IB(10) OF THE ACT, IS ENTITLED T O DEDUCTION U/S 80IB(10) OF THE ACT. THE ADDITION MAD E ON ACCOUNT OF DISALLOWANCE OF DEDUCTION OF RS.73,91,264/- U/S 80IB(10) OF THE ACT BY THE AO IS , ACCORDINGLY, NOT JUSTIFIED AND IS, THEREFORE, DEL ETED. THIS GROUND OF APPEAL IS ACCORDINGLY ALLOWED. 17. AGGRIEVED BY THE ORDER OF CIT(A), REVENUE IS NOW IN APPEAL BEFORE US. BEFORE US, LD. D.R. RELIED ON THE ORDER OF A.O AND ON THE OTHER HAND LD. A.R. SUPPORTED THE ORDER OF CIT(A). ITA NOS. 2944/A/11, 2293, 2563/A/2012 & 2095/A/2013 . A.YS. 2008-09, 2009 -10 & 2010- 2011 10 18. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. IN THE PRESENT CASE, ASSESSEE WAS DENIED THE DEDUCT ION BY THE AO U/S 801B(10) FOR THE REASON THAT THE ASSESSEE WAS NOT T HE OWNER OF LAND AND HAD ACTED AS A CONTRACTOR. CIT(A) WHILE DELETING TH E DENIAL OF DEDUCTION AND RELYING ON THE DECISION OF RADHE DEVELOPERS (SU PRA) HAS NOTED THAT OWNERSHIP OF LAND IS NOT A NECESSARY CONDITION FOR CLAIMING THE DEDUCTION U/S 80IB(10). HE HAS FURTHER NOTED THAT ASSESSEE HA S ACQUIRED DOMINANT CONTROL OVER THE LAND, ASSESSEE IS RESPONSIBLE FOR INCURRING ALL THE EXPENSES AND TAKING ALL THE RISKS INVOLVED THEREIN. FURTHER HE HAS GIVEN A FINDING OF FACT THAT ASSESSEE IS NOT A CONTRACTOR. BEFORE US REVENUE COULD NOT CONTROVERT THE FINDINGS OF CIT(A) NOR HAS BROUG HT ANY CONTRARY BINDING DECISION IN ITS SUPPORT. IN VIEW OF THE AFO RESAID FACTS, WE FIND NO REASON TO INTERFERE WITH THE ORDER OF CIT(A) AND TH US THIS GROUND OF REVENUE IS DISMISSED. 19. IN THE RESULT THE APPEAL OF THE REVENUE IS DISMISSED . ITA NO 2944/AHD/2011 (AY 2008-09) (REVENUES APPEAL ) 20. THE GROUNDS RAISED BY REVENUE READS AS UNDER:- 1. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS AND CI RCUMSTANCES OF THE CASE BY DELETING ADDITION MADE OF RS.4,69,61,875/- ON ACCOUNT OF DISALLOWANCE OF THE CLAIM OF DEDUCTION U/S.80IB(10) OF THE IT. ACT. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESSING OFFICER ON THE ABOVE POINT. 21. BOTH THE PARTIES BEFORE US SUBMITTED THAT THE FACTS OF THE CASE IN THE YEAR UNDER APPEAL ARE IDENTICAL TO THAT OF AY 2009-10 EX CEPT FOR THE AMOUNTS AND THE SUBMISSIONS MADE FOR A.Y. 09-10 ARE ALSO AP PLICABLE TO THE ITA NOS. 2944/A/11, 2293, 2563/A/2012 & 2095/A/2013 . A.YS. 2008-09, 2009 -10 & 2010- 2011 11 PRESENT APPEAL. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. WE FIND THAT CIT(A) WHILE DELET ING THE DEDUCTION U/S 80IB(10) HAS FOLLOWED THE DECISION OF THE HONBLE T RIBUNAL IN THE CASE OF SHAKTI CORPORATION (SUPRA) AND RADHE DEVELOPERS (SU PRA). 22. WHILE DECIDING THE ISSUE IN APPEAL FOR AY 2009-10 H EREINABOVE, WE HAVE HELD THAT ASSESSEE IS ELIGIBLE FOR DEDUCTION U/S 80 IB(10). WE FOR THE SIMILAR REASONS STATED WHILE DECIDING THE APPEAL FO R AY 2009-10, ALSO HOLD THAT ASSESSEE IS ELIGIBLE FOR DEDUCTION U/S 80 IB(10) AND THUS DISMISS THIS GROUND OF REVENUE. 23. IN THE RESULT THIS APPEAL OF THE REVENUE IS DISMIS SED. 24. IN THE RESULT THE APPEALS OF THE ASSESSEE ARE ALLOW ED AND THE APPEALS OF THE REVENUE ARE DISMISSED ORDER PRONOUNCED IN OPEN COURT ON 02 - 05 - 2014. SD/- SD/- (G.C.GUPTA) (ANIL CHATURVEDI) VICE PRESIDENT ACCOUNTANT MEMBER AHMEDABAD. TRUE COPY RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AH MEDABAD