The ITO, Ward-9(2), Ahmedabad V. M/s. Aditya Corporation, Ahmedabad

ITA 2738/AHD/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 6407 (ITAT-AHMEDABAD)
• Duration Of Justice: 8 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-06-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2006-2007
• Appeal Filed On: 22-09-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B L YADAV
• Keywords: Scheme of amalgamation
• Section: 80IB; 10

Judgement Text

- 1 - IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH C AHMEDABAD BEFORE S/SHRI M.K. SHRAWAT, JM AND D.C.AGRAWAL, AM INCOME-TAX OFFICER, WARD- 9(2), AHMEDABAD. VS. ADITYA CORPORATION, MANSI TENAMENTS SECTOR-1, OPP. VIVEKANANDNAGAR, HATHIJAN, AHMEDABAD. (APPELLANT) .. (RESPONDENT) APPELLANT BY :- SHRI B. L. YADAV, SR. D.R. RESPONDENT BY:- NONE. O R D E R PER D.C. AGRAWAL, ACCOUNTANT MEMBER . THESE ARE TWO APPEALS FILED BY THE REVENUE FOR ASS T. YEARS 2006- 07 & 2007-08 AGAINST THE ORDERS OF LD. CIT(A) DATED 30/7/2010 WHEREIN HE HAS ALLOWED THE CLAIM OF THE ASSESSEE U/S 80IB(1 0) OF THE IT ACT, 2010. COMMON GROUNDS HAVE BEEN RAISED BY THE REVENUE IN B OTH THE APPEALS. THE CLAIM OF DEDUCTION FOR ASST. YEAR 2006-07 IS RS .8,26,270/- AND THAT FOR THE ASST. YEAR 2007-08 IS RS.31,16,840/-. THE G ROUND RAISED BY THE REVENUE FOR ASST. YEAR 2006-07 IS AS UNDER:- (1) THE LD. CIT(A)-XV, AHMEDABAD HAS ERRED IN LAW AND O N FACTS IN ALLOWING THE DEDUCTION U/S 80IB(10) OF THE ACT A MOUNTING TO RS.8,28,270/- WHICH WAS DISALLOWED BY THE AO. ITA NOS.2738 & 2739/AHD/2010 ASST. YEARS 2006-07 & 07-08 ITA NOS.2738 & 2739/AHD/2010 ASST. YEARS 2006-07 & 07-08 2 2. THE FACTS RELATING TO CLAIM OF DEDUCTION ARE THA T ASSESSEE CLAIMED ITSELF AS A DEVELOPER AND ACCORDINGLY CLAIMED DEDUC TION U/S 80IB(10). THE MAIN REASONS FOR DISALLOWING THE CLAIM BY THE AO AR E AS UNDER :- (1) THE ASSESSEE IS NOT THE OWNER OF THE LAND ON WH ICH THE PROJECT IS DEVELOPED. THIS LAND IS OWNED BY A SOCIETY WHICH HA S HANDED OVER THE LAND TO THE ASSESSEE FOR CONSTRUCTING THE FLATS /HOUSES. THE LAND HAS BEEN PURCHASED BY SMT. VIJAYABEN NANJIBHAI PATE L. A DEVELOPER AND BUILDER SHOULD BE THE PERSON WHO IS I NVOLVED IN THE PROJECT FROM THE PURCHASE OF THE LAND TO THE SALE O F THE FINAL PRODUCT I.E. HOUSES/FLATS. (2) APPROVAL HAS BEEN GRANTED TO SHRI RAVJIBHAI P. PATEL, POWER OF ATTORNEY HOLDER VIJAYABEN NANJIBHAI RANK (PATEL), T HE LAND OWNER. SINCE APPROVAL HAS NOT BEEN GRANTED TO THE ASSESSEE IT IS NOT ENTITLED FOR DEDUCTION U/S 80IB(10). (3) A CAREFUL READING OF THE DEVELOPMENT AGREEMENT ENTERED INTO BY THE LAND OWNER SHOWS THAT ASSESSEE ONLY ACTED AS AN AGE NT OF THE LAND OWNER AND HENCE HE IS NOT QUALIFIED FOR DEDUCTION U /S 80IB(10). 3. THE LD. CIT(A) ON THE OTHER HAND, ALLOWED THE CL AIM OF THE ASSESSEE BY HOLDING THAT ASSESSEE HAS ACQUIRED DOMINANT CONT ROL OVER THE LAND FOR DEVELOPMENT OF PROJECT, IT MEETS ALL THE TESTS LAID DOWN IN THE DECISION OF THE TRIBUNAL, AHMEDABAD BENCH A IN THE CASE OF M/ S SHAKTI CORPORATION, BARODA IN ITA NO.1503/AHD/2008 ASST. Y EAR 2005-06. IN RESPECT OF THE FACTS OF THE CASE LD. CIT(A) EXAMINE D THE DEVELOPMENT AGREEMENT AND REFERRED TO FOLLOWING CLAUSES THEREOF IN SUPPORT OF HER REASONING THAT ASSESSEE FULFILLS THE CONDITIONS LAI D DOWN U/S 80IB(10) :- CLAUSE 2 : M/S ADITYA CORPORATION AGREES TO ACT AS BUILDER-CUM- DEVELOPER TO DEVELOP THE LAND AND BUILD THE HOUSING PROJECT THEREON. ITA NOS.2738 & 2739/AHD/2010 ASST. YEARS 2006-07 & 07-08 3 CLAUSE 3: THE LAND OWNER SHALL NOT BE HELD RESPONSI BLE FOR ANY DELAY IN WORK AND /OR QUALITY OF THE WORK. EACH BUYER WIL L FREE TO INSPECT THE QUALITY OF THE WORK AND ON SATISFACTION ONLY, THE BUILDER FIRM WILL BE ENTITLED FOR THE CONSIDERATION OF WORK EXECUTED. ALL THE RISKS AND CONTROL OVER THE HOUSIN G PROJECT WOULD BE THAT OF M/S ADITYA CORPORATION. CLAUSE 5: M/S ADITYA CORPORATION HAS TO RAISE FUND FOR THE DEVELOPMENT AND CONSTRUCTION OF THE WORK ON THEIR O WN. THE NECESSARY EXPENSES SHALL ALSO BE BORNE BY THE PARTN ERSHIP FIRM FOR RAISING THE FUNDS. CLAUSE 7: THE APPELLANT FIRM WOULD BE SELLING THE F LATS AT THE RATE FIXED BY IT. CLAUSE 10: THE LAND OWNER HAS NO AUTHORITY TO INTER FERE IN THE PRICES QUOTED BY M/S ADITYA CORPORATION TO THE PROSPECTIVE BUYERS/PURCHASERS/CUSTOMERS. CLAUSE 12: M/S ADITYA CORPORATION THE BUILDER FIRM IS ACCEPTING THE APPOINTMENT SUBJECT TO THE RESIDENTIAL UNITS SHALL BE WITHIN THE PARAMETERS OF CRITERIA GIVEN IN SUB-SECTION 10 OF SECTION 80IB OF THE IT ACT, 1961 AS THE MAIN OBJECT OF THE BUILDER FIRM IS TO DO THE WORK WITHIN THE SAID PARAMETERS O NLY. 4. WE HAVE HEARD THE LD. DR. NONE APPEARED ON BEHAL F OF THE ASSESSEE. AS PER UNDISPUTED FACTS THE LAND WAS INIT IALLY PURCHASED BY SMT. VIJAYABEN NANJIBHAI RANK (PATEL) WHO IS THE WIFE OF ONE OF THE PARTNERS OF ASSESSEE FIRM. THE LAND WAS AGRICULTURAL LAND WH ICH COULD BE PURCHASED ONLY BY AN AGRICULTURIST. THIS LAND WAS P URCHASED FROM SHRI SURESHBHAI CHUNIBHAI PATEL FOR RS.9,00,000/- VIDE P URCHASE AGREEMENT DATED 24.8.2005. THE MONEY TO PURCHASE THE LAND WAS GIVEN BY SHRI RAVJIBHAI PATEL WHO IS THE HUSBAND OF SMT. VIJAYABE N AND BY SHRI KISHOREBHAI PATEL. SHRI RAVJIBHAI PATEL AND SHRI KI SHOREBHAI PATEL ARE ITA NOS.2738 & 2739/AHD/2010 ASST. YEARS 2006-07 & 07-08 4 TWO PARTNERS IN THE ASSESSEE FIRM. THE MONEY WAS GI VEN THROUGH CHEQUES FROM BANK ACCOUNT OF TWO PARTNERS MAINTAINED IN BAP UNAGAR MAHILA CO- OPERATIVE BANK LTD. COPY OF THE BANK STATEMENT SHOW ING WITHDRAWAL OF THE MONEY BY THE TWO PARTNERS WERE EXAMINED BY LD. CIT(A) AND FOUND ENCLOSED AS ANNEXURE TO THE APPELLATE ORDER. TOTAL COST OF THE LAND WAS FINALLY WORKED OUT AT RS.12 LACS WHICH INCLUDED STA MP DUTY WHICH WAS PAID BY SHRI RAVJIBHAI PATEL PARTNER OF THE FIRM. H E ALSO PAID THE MONEY BEING CHARGES TO CONVERT THE AGRICULTURAL LAND INTO NON-AGRICULTURAL LAND. FURTHER THE DEVELOPMENT PERMISSION WAS GIVEN BY AH MEDABAD MUNICIPAL CORPORATION TO THE POWER OF ATTORNEY HOLD ER SHRI RAVJIBHAI PATEL. HE HELD THE POWER OF ATTORNEY FOR SMT. VIJYA BEN R. PATEL I.E. HIS WIFE. FURTHER THERE WAS NO DISPUTE AS TO THE AREA O F EACH FLAT TO BE BUILT UP ON THAT LAND. SECTION 80IB(10) REQUIRES FOLLOWING C ONDITIONS TO BE FULFILLED FOR GRANT OF DEDUCTION :- (I) THERE SHOULD BE PROFIT AND GAINS DERIVED BY AN UNDE RTAKING DEVELOPING AND BUILDING HOUSING PROJECT; (II) SUCH HOUSING PROJECT IS APPROVED BY THE LOCAL AUTHO RITIES; (III) THE DEVELOPMENT AND CONSTRUCTION OF HOUSING PROJECT HAS COMMENCED ON OR AFTER 1/10/1998; (IV) THE HOUSING PROJECT IS ON A SIZE OF A PLOT OF LAND WHICH HAS MINIMUM AREA 1 ACRE; (V) THE RESIDENTIAL UNIT DEVELOPED AND BUILT HAS A BUIL T UP AREA OF 1500 SQ.FT. ITA NOS.2738 & 2739/AHD/2010 ASST. YEARS 2006-07 & 07-08 5 (VI) THE ACCOUNT OF THE UNDERTAKING FOR THE PREVIOUS YEA R RELEVANT TO ASST. YEAR FOR WHICH THE DEDUCTION IS CLAIMED HAVE BEEN AUDITED BY AN ACCOUNTANT AND THE ASSESSEE SHALL FURNISHES A LONG WITH THE RETURN OF INCOME THE REPORT OF SUCH AUDIT IN THE PR ESCRIBED FORM DULY SIGNED AND VERIFIED BY THE SUCH ACCOUNTANT; (VII) THE BUILT UP AREA OF THE SHOP AND OTHER COMMERCIAL ESTABLISHMENT INCLUDED IN THE HOUSING PROJECT DOES NOT EXCEED 5% OF THE AGGREGATE BUILT UP AREA OF THE HOUSING PR OJECT OR 200 SQ.FT. WHICHEVER IS LESS. THE LD. CIT(A) HAS FOLLOWED THE DECISION OF THE TRI BUNAL IN THE CASE OF SHAKTI CORPORATION AND ALLOWED THE CLAIM OF DEDUCTI ON. RECENTLY THE TRIBUNAL IN THE CASE OF M/S NIKHIL ASSOCIATES VS. I TO IN ITA NO.328/AHD/2010 ASST. YEAR 2006-07 FURTHER CONSIDER ED THE DECISIONS OF THE TRIBUNAL IN THE CASE OF RADHE DEVELOPERS AND SH AKTI CORPORATION AND HAD TAKEN FOLLOWING DECISION:- 17. WE HAVE CONSIDERED ALL THESE SUBMISSIONS AND P ERUSED THE MATERIAL ON RECORD. IN OUR CONSIDERED VIEW ARGUMENTS OF LD. DR AND LD. CIT(A) ARE NOT TENABLE. IT IS QUITE APPARENT THAT ASSESSEE HAS MADE LEGAL ARRANGEMENTS WHEREBY SOCIETY IS ONLY A VEHICLE FOR REDUCING THE STAMP DUTY ON PURCHASE OF THE LAND. WE ARE INFORMED THAT IF LAND IS PURCHASED BY THE SOCIETY IT HAS TO INCUR VERY LOW OR NOMINAL STAMP DUTY WHEREAS IF ASSESSEE AS SUCH PURCHASES THE LAND IT HAS TO PAY H EAVY STAMP DUTY. KEEPING ALL THESE ASPECTS IN MIND WE HAVE TO EXAMIN E VARIOUS EVENTS THAT HAVE TAKEN PLACE INCLUDING AGREEMENT BETWEEN THE AS SESSEE AND THE SOCIETY AND TO SEE WHAT IS THE DE FACTO SITUATION. IT IS UNDISPUTED FACT THAT IT IS THE ASSESSEE WHO HAS PAID THE MONEY FOR PURCH ASE OF LAND TO THE SOCIETY WHICH HAS ON ITS PART PURCHASED THE LAND IN ITS NAME. IT HAS ENTERED INTO THE AGREEMENT WITH THE ASSESSEE FOR DE VELOPING THE PROJECT ITA NOS.2738 & 2739/AHD/2010 ASST. YEARS 2006-07 & 07-08 6 AND HANDED OVER COMPLETE POSSESSION OF THE LAND TO THE ASSESSEE AND HENCE ALSO GIVEN AUTHORITY TO DISPOSE OF THE FLATS TO THE PROSPECTIVE BUYERS, RECEIVE MONEY FROM SUCH BUYERS ADJUST IT AG AINST THE MONEY GIVEN TO THE SOCIETY FOR PURCHASE OF LAND, RECOMMEND NAME S OF THE BUYERS TO THE SOCIETY WHICH IN TURN HAS ISSUED MEMBERSHIP LETTERS . THE SOCIETY HAD IN FACT NO FUNDS OF ITS OWN TO PURCHASE THE LAND AND N O CONTROL OVER SELECTION OF THE ULTIMATE PURCHASERS EXCEPT ACTING ON THE RECOMMENDATION OF THE SOCIETY. THE RELEVANT CLAUSES FROM THE AGREE MENT BETWEEN THE SOCIETY AND THE ASSESSEE DATED 20 TH MARCH, 2005 ARE REFERRED TO AS UNDER (IN THIS AGREEMENT NAYANKUNJ CO-OPERATIVE HOUSING S OCIETY LTD. IS REFERRED TO A PARTY OF THE ONE PART AND THE ASSESSE E IS REFERRED TO AS PARTY OF THE OTHER PART). 18. THUS READING OF ABOVE CLAUSES OF THE AGREEMENT CLEARLY INDICATES THAT ASSESSEE HAS BEEN MADE DE FACTO OWNER OF THE E NTIRE LAND AND PROJECT TILL IT IS HANDED OVER TO THE MEMBERS AFTER RECEIPT OF NECESSARY SALE AMOUNT AND RECOMMENDING THEIR NAMES TO THE SOCIETY FOR ISSUING MEMBERSHIP LETTERS. IT IS NOT A CASE WHERE SOCIETY HAS ENTERED INTO AN AGREEMENT WITH THE ASSESSEE TO CONSTRUCT THE PROJEC T AT A PARTICULAR COST OR AT A PARTICULAR RATE WITH RESPECT OF AREA CONSTR UCTED HAVING ESCALATION CLAUSE, WITH OR WITHOUT PENALTY CLAUSE AND RETAININ G WITH IT THE RIGHTS TO DISPOSE OF THE FLATS, AND ENJOY THE BENEFIT OF PROF IT OR LOSS. WE ARE CONVINCED THAT SOCIETY IS FORMED ONLY AS A SPECIAL PURPOSE VEHICLE FOR SAVING STAMP DUTY OR OTHERWISE BUT SO FAR AS THE CO NTROL OVER THE LAND, PROJECT AND SALES IS CONCERNED IT REMAINED WITH THE ASSESSEE. NOW UNDER THESE FACTS IT HAS TO BE EXAMINED WHETHER ASSESSEE WOULD BE DEVELOPER OR A CONTRACTOR. THIS ISSUE HAS BEEN ELABORATELY DISCU SSED BY THE TRIBUNAL, AHMEDABAD BENCH IN RADHE DEVELOPERS VS. ITO (2008) 23 SOT 420 ITA NOS.2738 & 2739/AHD/2010 ASST. YEARS 2006-07 & 07-08 7 (AHMEDABAD). PARA 30 THEREOF HAS CLEARLY DEFINED WH O SHOULD BE THE DEVELOPER. IT READS AS UNDER :- 24. FURTHER, THE MEMO CONTAINED IN FINANCE BILL, 19 99 HAS EXPLAINED THE PROVISIONS BROUGHT BY THE LEGISLATURE WITH EFFE CT FROM 1-4-2000 AND THE SAME READS AS UNDER: TAX INCENTIVE FOR PROMOTION OF HOUSING.LIBERALIZA TION OF TAX HOLIDAY TO APPROVED HOUSING PROJECTS. UNDER SECTION 80-IA OF T HE INCOME-TAX ACT, PROFITS OF APPROVED HOUSING PROJECTS WHERE THE DEVELOPMENT AND CONSTRUCTION COMMENCES ON OR AFTER 1-10-1998 AND IS COMPLETED BY 31-3-2001 ARE FULLY DEDUCTIBLE. THE CONDITIONS NECESSARY FOR CLAIMING THE BENEFIT ARE T HAT THE APPROVED HOUSING PROJECT SHOULD BE ON MINIMUM AREA OF ONE ACRE AND S HOULD HAVE DWELLING UNITS WITH A MAXIMUM BUILT-UP AREA OF 1,000 SQ. FT. IT IS PROPOSED TO MODIFY THE EXISTING BENEFITS TO PROVIDE THAT IN AREAS OTHER THAN THOSE FALLING IN AND WITHIN 25 KMS. FROM THE MUNICIPAL LIMITS OF DELHI AND MUMBAI, THEB UILT-UP AREA OF DWELLING UNITS MAY BE UPTO A MAXIMUM LIMIT OF 1,500 SQ. FT. INSTEA D OF 1,000 SQ. FT. AT PRESENT TO MAKE THEM ENTITLED FOR BENEFIT. THE BUILT-UP AREA F OR AREAS FALLING IN DELHI AND MUMBAI AND WITHIN 25 KMS. OF THE MUNICIPAL LIMITS O F BOTH, HOWEVER, SHALL REMAIN THE SAME. THE PROPOSED AMENDMENT WILL TAKE EFFECT FROM 1-4-20 00, AND WILL, ACCORDINGLY, APPLY IN RELATION TO THE ASSESSMENT YEAR 2000-01 AN D SUBSEQUENT YEARS. 25. THE PROVISIONS OF SECTION 80-IB(10) THUS ARE SO UGHT TO PROVIDE THAT FOR APPROVED HOUSING PROJECT, THE PROFITS ARE FULLY DEDUCTIBLE IF THE PROJECT HAS THE BUILT-UP AREA FOR THE CITIES OF DELHI AND M UMBAI, AND THE AREA WITHIN 25 KMS. FROM THE MUNICIPAL LIMIT THEREOF DOE S NOT EXCEED 1,000 SQ. FT. AND FOR OTHER PLACES THE BUILT UP AREA OF RESID ENTIAL UNIT DOES NOT EXCEED 1,500 SQ. FT. A PROVISION IS ALSO MADE WHERE BY ANY UNDERTAKING OF AN INDIAN COMPANY, WHICH IS ENTITLED TO DEDUCTION U NDER THIS SECTION IS TRANSFERRED, BEFORE THE EXPIRY OF THE PERIOD SPECIF IED IN THIS SECTION, TO ANOTHER INDIAN COMPANY IN A SCHEME OF AMALGAMATION OR DEMERGER (A) NO DEDUCTION TO BE ADMISSIBLE UNDER THIS SECTION TO THE AMALGAMATING OR THE DEMERGED COMPANY FOR THE PREVIOUS YEAR IN WHICH THE AMALGAMATION OR THE DEMERGER TAKES PLACE; AND (B) THE PROVISIONS OF THIS SECTION TO APPLY TO THE AMALGAMATED OR RESULTING COMPANY AS TH EY WOULD HAVE APPLIED TO THE AMALGAMATING OR DEMERGED COMPANY AS IF THE AMALGAMATION OR DEMERGER HAD NOT TAKEN PLACE. ITA NOS.2738 & 2739/AHD/2010 ASST. YEARS 2006-07 & 07-08 8 26. THE SUB-SECTION (10) RELATING TO HOUSING PROJEC T WAS AMENDED FROM TIME TO TIME. FIRSTLY, BY FINANCE ACT, 2000, WITH E FFECT FROM 1-4-2000 EXTENDING THE OUTER LIMIT FOR COMPLETION OF THE HOU SING PROJECT ON OR BEFORE 31-3-2002 AS AGAINST 31-3-2001 ORIGINALLY EN ACTED. THIS SUB- SECTION WAS AGAIN AMENDED BY FINANCE ACT, 2003 REMO VING THE TIME-LIMIT FOR COMPLETION OF THE PROJECT MEANING THEREBY THAT FOR THE ASSESSMENT YEARS 2002-03, 2003-04 AND 2004-05, THE ASSESSMENT YEARS WITH WHICH WE ARE CONCERNED, THERE WAS NO OUTER TIME-LIMIT FOR COMPLETION OF THE PROJECT. THERE HAVE BEEN CERTAIN FURTHER AMENDMENTS IN THIS SECTION BY FINANCE (NO. 2) ACT, 2004 WITH EFFECT FROM 1-4-2005 , BUT WE ARE NOT CONCERNED WITH THESE AMENDMENTS INSOFAR AS ALL THES E APPEALS ARE CONCERNED. THEREFORE, WE ARE NOT DEALING WITH THE S AME. 27. A BARE READING OF THESE PROVISIONS OF SECTION 8 0-IB(10), AS THEY STOOD IN THE YEARS UNDER CONSIDERATION, THE REQUIREMENTS FOR CLAIMING DEDUCTION FOR HOUSING PROJECTS ARE THAT (I) THERE MUST BE AN UNDERTAKING DEVELOPING AND BUILDING HOUSING PROJECT; (II) SUCH HOUSING PRO JECT IS APPROVED BY THE LOCAL AUTHORITY; (III) THE DEVELOPMENT AND CONSTRUC TION OF HOUSING PROJECT HAS COMMENCED ON OR AFTER 1-10-1998; (IV) THE HOUSI NG PROJECT IS ON A SIZE OF A PLOT OF LAND WHICH HAS MINIMUM AREA OF ON E ACRE; AND (V) THE RESIDENTIAL UNIT DEVELOPED AND BUILT HAS A BUILT UP AREA OF 1,000 SQ. FT. IF IT IS SITUATED IN DELHI AND MUMBAI OR WITHIN 25 KMS OF MUNICIPAL LIMIT OF THESE CITIES AND 1,500 SQ. FT. AT ANY OTHER PLACE. THERE IS NO OTHER CONDITION, WHICH IS TO BE COMPLIED BY AN ASSESSEE F OR CLAIMING THE DEDUCTION ON PROFITS OF THE HOUSING PROJECT. 28. THE CONTENTION OF THE REVENUE AUTHORITIES THAT TO CLAIM DEDUCTION UNDER SECTION 80-IB(10), THERE IS A CONDITION PRECE DENT THAT THE ASSESSEE MUST BE OWNER OF THE LAND ON WHICH HOUSING PROJECT IS CONSTRUCTED HAS NO FORCE. WE DO NOT FIND ANY SUCH CONDITION AS APPEARI NG IN THE PROVISIONS OF THE SECTION EXTRACTED ABOVE. A PLAIN READING OF SUB -SECTION (10) OF SECTION 80-IB REVEALS AND MAKES IT EVIDENT THAT THERE MUST BE AN UNDERTAKING DEVELOPING AND BUILDING A HOUSING PROJECT AS APPROV ED BY A LOCAL AUTHORITY. IT DOES NOT HAVE ANY FURTHER CONDITION T HAT SUCH DEVELOPMENT AND BUILDING OF THE HOUSING PROJECT SHOULD ALSO BE ON A LAND OWNED BY AN ASSESSEE UNDERTAKING. IT MIGHT BE TRUE THAT THE LAN D BELONGS TO THE PERSON WHO HAS ENTERED INTO AN AGREEMENT WITH THE ASSESSEE TO DEVELOP AND BUILD HOUSING PROJECT BUT ON A PERUSAL OF THE AGREEMENT A S NARRATED ABOVE, IT IS EVIDENT THAT THE DEVELOPMENT AND BUILDING WORK HAS BEEN CARRIED OUT BY THE ASSESSEE IN PURSUANCE OF A TRIPARTITE AGREEMENT AND IT IS NOT BY THE LAND-OWNERS. THEREFORE, THE MERE FACT THAT THE LAND OWNER AND THE ITA NOS.2738 & 2739/AHD/2010 ASST. YEARS 2006-07 & 07-08 9 UNDERTAKING DEVELOPING AND BUILDING HOUSING PROJECT , ARE TWO DIFFERENT ENTITIES WOULD NOT MAKE ANY DIFFERENCE. THE DEDUCTI ON WOULD BE ELIGIBLE TO THE PERSON WHO IS DEVELOPING AND BUILDING HOUSIN G PROJECT AND NOT TO THE MERE OWNER THEREOF. 29. IT IS ALSO THE CASE OF THE REVENUE THAT THE ASS ESSEE WAS A MERE CONTRACTOR DEVELOPING AND BUILDING HOUSING PROJECT AND, THEREFORE, IT COULD NOT BE A DEVELOPER. WE FAIL TO UNDERSTAND AS TO HOW SUCH A SITUATION COULD EMERGE. A PERSON WHO ENTERS INTO A CONTRACT WITH ANOTHER PERSON IS NO DOUBT A CONTRACTOR. HAVING ENTERED INT O AGREEMENTS WITH LANDOWNERS FOR DEVELOPMENT AND BUILDING THE HOUSING PROJECT, ASSESSEE WAS OBVIOUSLY A CONTRACTOR BUT IT DOES NOT DEROGATE THE ASSESSEE FOR BEING A DEVELOPER, AS WELL. THE TERM CONTRACTOR IS NOT ESSENTIALLY CONTRADICTORY TO THE TERM DEVELOPER. AS STATED ABOV E, IT IS THE UNDERTAKING THAT DEVELOPS OR BUILDS THE HOUSING PROJECT THAT IS ENTITLED TO DEDUCTION IRRESPECTIVE OF THE FACT WHETHER THAT IT IS THE OWN ER OR NOT OR WHETHER IT IS THE CONTRACTOR THEREOF. THE REQUIREMENT FOR CLAIMIN G DEDUCTION IS THAT SUCH AN UNDERTAKING MUST DEVELOP AND BUILD HOUSING PROJECT, BE IT ON THEIR OWN LAND OR ON THE LAND OF OTHERS AND FOR WHI CH A TRIPARTITE AGREEMENT HAS BEEN ENTERED INTO FOR DEVELOPMENT AND BUILDING HOUSING PROJECT; OR BE THE ASSESSEE A CONTRACTOR FOR DEVELO PING AND BUILDING HOUSING PROJECT OR AN OWNER OF THE LAND. 32. IN THESE CIRCUMSTANCES, IN OUR OPINION, THE ASS ESSEE IS ENTITLED TO DEDUCTION UNDER SECTION 80-IB(10) AS IT HAD DEVELOP ED AND BUILT THE HOUSING PROJECT; IT HAD STARTED CONSTRUCTION AFTER 1-4-1998; THE PROJECT IS ON THE SIZE OF A PLOT OF LAND WHICH HAS A MINIMUM A REA OF ONE ACRE AND THE MAXIMUM BUILT-UP AREA OF THE RESIDENTIAL UNITS IS NOT MORE THAN 1,500 SQ. FT. THE PROPERTY BEING SITUATED IN BARODA, A CI TY OTHER THAN DELHI AND MUMBAI. 19. FURTHER WHO SHOULD BE DEVELOPER HAS BEEN DISCUS SED BY HON. SUPREME COURT IN GUJARAT INDUSTRIAL DEVELOPMENT COR PORATION VS. CIT (1997) 229 ITR 414 (SC) WHERE IN PARA 7 THEREOF THE ISSUE HAS BEEN DISCUSSED. THE TRIBUNAL IN RADHE DEVELOPERS CASE H AS REFERRED TO THAT JUDGMENT AND HAS OBSERVED AS UNDER :- ITA NOS.2738 & 2739/AHD/2010 ASST. YEARS 2006-07 & 07-08 10 31. THE SUPREME COURT IN THE CASE OF GUJARAT INDUS TRIAL DEVELOPMENT (SUPRA), CONSIDERING THE MEANING OF DEVELOPER HEL D THAT THE WORD DEVELOPMENT APPEARING IN THE PROVISIONS SHOULD BE UNDERSTOOD IN ITS WIDER SENSE AND, THEREFORE, GRANTED EXEMPTION EVEN THOUGH THE GUJARAT INDUSTRIAL DEVELOPMENT CORPORATION WAS ENGA GED IN THE INDUSTRIAL DEVELOPMENT. THE DEVELOPMENT MEANS THE R EALIZATION OF POTENTIALITIES OF LAND OR TERRITORY BY BUILDING OR MINING. ACCORDINGLY, IT CAN BE SAFELY SAID THAT A PERSON WHO UNDERTAKES TO DEVELOP REAL ESTATE BY DEVELOPING AND CONSTRUCTING A HOUSING PROJECT IS AN ELIGIBLE UNDERTAKING; DEVELOPING AND BUILDING OF HOUSING PRO JECTS WITHIN THE MEANING OF SECTION 80-IB(10) OF THE ACT. IN THE PRE SENT CASE IN HAND, THE LANDOWNER HAS NOT MADE ANY CONSCIOUS ATTEMPT TO DEV ELOP THE PROPERTY EXCEPT ENSURING THEIR RIGHTS AS LANDOWNER SO THAT T HE SALE VALUE OF THE LAND COULD BE REALIZED TO THEM AS PER THE TERMS OF AGREEMENT TO SALE AND THE DEVELOPMENT AGREEMENT. THE LANDOWNERS, NO DOUBT, HAVE NOT THROWN THEMSELVES INTO DEVELOPMENT OF PROPERTY. IT IS ONLY THE ASSESSEE WHO IS DEVELOPING THE PROPERTY. THROWING ITSELF INT O THE BUSINESS OF DEVELOPMENT AND BUILDING OF HOUSING PROJECTS BY TAK ING ALL RISKS ASSOCIATED WITH THE BUSINESS BY ENGAGING ARCHITECTS , STRUCTURAL CONSULTANTS, DESIGNING AND PLANNING OF THE HOUSING SCHEMES, PAYMENT OF DEVELOPMENT CHARGES, OBTAINING NECESSARY PERMISSION S, APPROVING PLANS, HIRING MACHINERY AND EQUIPMENTS, HIRING ENGINEERS, APPOINTING CONTRACTORS, ETC. NO DOUBT, THE PERMISSION HAS BEEN OBTAINED IN THE NAME OF THE REGISTERED LANDOWNERS, BUT THE SAME HAVE BEE N OBTAINED BY THE ASSESSEE-FIRM THROUGH ITS PARTNERS WHO ARE HOLDING POWER OF ATTORNEY OF THE RESPECTIVE LANDOWNERS. IT IS A FACT THAT THE AS SESSEE IS A DEVELOPER AND NOT A CONTRACTOR AS HELD BY THE LOWER AUTHORI TIES. THE DEVELOPER IS NOT WORKING ON REMUNERATION FOR THE LANDOWNERS, BUT DEVELOPER IS WORKING FOR HIMSELF IN ORDER TO EXPLOIT THE POTENTI AL OF ITS BUSINESS IN HIS OWN INTEREST AND, THEREFORE, OPTED FOR ALL BUSINESS RISKS ASSOCIATED WITH THE BUSINESS OF DEVELOPMENT OF REAL ESTATE INCLUDIN G DEVELOPING AND BUILDING OF HOUSING PROJECTS. AS PER THE PROVISIONS OF SECTION 2(1)(G) OF REGULATION OF EMPLOYMENT AND CONDITIONS OF SERVICE ACT (27 OF 1996), THE TERM CONTRACTOR MEANS A PERSON WHO UNDERTAKES TO PRODUCE A GIVEN RESULT FOR ANY ESTABLISHMENT, OTHER THAN A MERE SUP PLY OF GOODS OR ARTICLES OF MANUFACTURE, BY THE EMPLOYMENT OF BUILD ING WORKERS OR WHO SUPPLIES BUILDING WORKERS FOR ANY WORK OF THE ESTAB LISHMENT; AND INCLUDES A SUB-CONTRACTOR. 20. WHILE INTRODUCING SECTION 80IB(10) BY FINANCE B ILL 1999 W.E.F. 1.4.2000 THE MEMORANDUM EXPLAINED THE PROVISIONS AS UNDER :- ITA NOS.2738 & 2739/AHD/2010 ASST. YEARS 2006-07 & 07-08 11 24. FURTHER, THE MEMO CONTAINED IN FINANCE BILL, 1 999 HAS EXPLAINED THE PROVISIONS BROUGHT BY THE LEGISLATURE WITH EFFE CT FROM 1-4-2000 AND THE SAME READS AS UNDER: TAX INCENTIVE FOR PROMOTION OF HOUSING.LIBERALIZA TION OF TAX HOLIDAY TO APPROVED HOUSING PROJECTS. UNDER SECTION 80-IA OF T HE INCOME-TAX ACT, PROFITS OF APPROVED HOUSING PROJECTS WHERE THE DEVELOPMENT AND CONSTRUCTION COMMENCES ON OR AFTER 1-10-1998 AND IS COMPLETED BY 31-3-2001 ARE FULLY DEDUCTIBLE. THE CONDITIONS NECESSARY FOR CLAIMING THE BENEFIT ARE T HAT THE APPROVED HOUSING PROJECT SHOULD BE ON MINIMUM AREA OF ONE ACRE AND S HOULD HAVE DWELLING UNITS WITH A MAXIMUM BUILT-UP AREA OF 1,000 SQ. FT. IT IS PROPOSED TO MODIFY THE EXISTING BENEFITS TO PROVIDE THAT IN AREAS OTHER THAN THOSE FALLING IN AND WITHIN 25 KMS. FROM THE MUNICIPAL LIMITS OF DELHI AND MUMBAI, THE BUILT-UP AREA OF DWELLING UNITS MAY BE UPTO A MAXIMUM LIMIT OF 1,500 SQ. FT. INSTEA D OF 1,000 SQ. FT. AT PRESENT TO MAKE THEM ENTITLED FOR BENEFIT. THE BUILT-UP AREA F OR AREAS FALLING IN DELHI AND MUMBAI AND WITHIN 25 KMS. OF THE MUNICIPAL LIMITS O F BOTH, HOWEVER, SHALL REMAIN THE SAME. THE PROPOSED AMENDMENT WILL TAKE EFFECT FROM 1-4-20 00, AND WILL, ACCORDINGLY, APPLY IN RELATION TO THE ASSESSMENT YEAR 2000-01 AN D SUBSEQUENT YEARS. 21. SUB-SECTION (10) WAS AMENDED FROM TIME TO TIME. THE LAST RELEVANT AMENDMENT WAS MADE BY FINANCE ACT, 2004 W.E.F. 1.4. 2005 WHICH MODIFIED THE DEFINITION OF BUILT-UP AREA WITH WHICH WE ARE CONCERNED AND WITH WHISH WE WILL DEAL SUBSEQUENTLY. THE CONDITION S REQUIRED TO BE SATISFIED FOR AVAILING DEDUCTION UNDER SECTION 80IB (10) ARE - (I) THERE MUST BE AN UNDERTAKING DEVELOPING AND BU ILDING HOUSING PROJECT; (II) SUCH HOUSING PROJECT IS APPROVED BY THE LOCAL AUTHORITY; (III) THE DEVELOPMENT AND CONSTRUCTION OF HOUSING P ROJECT HAS COMMENCED ON OR AFTER 1-10-1998; (IV) THE HOUSING PROJECT IS ON A SIZE OF A PLOT OF LAND WHICH HAS MINIMUM AREA OF ONE ACRE; AND (V) THE RESIDENTIAL UNIT DEVELOPED AND BUILT HAS A BUILT UP AREA OF 1,000 SQ. FT. IF IT IS SITUATED IN DELHI AND MUMBAI OR WITHIN 25 KMS OF MUNICIPAL LIMIT OF THESE CITIES AND 1,500 SQ. FT. AT ANY OTHER PLACE. 22. A PLAIN READING OF SECTION 80IB(10) REVEALS THA T THIS DEDUCTION IS ITA NOS.2738 & 2739/AHD/2010 ASST. YEARS 2006-07 & 07-08 12 AVAILABLE TO AN UNDERTAKING WHICH IS DEVELOPING AND BUILDING HOUSING PROJECT AS APPROVED BY A LOCAL AUTHORITY. IT DOES N OT LAY DOWN ANY FURTHER CONDITION THAT SUCH DEVELOPMENT OF HOUSING PROJECT SHOULD ALSO BE ON THE LAND OWNED BY THE ASSESSEE UNDERTAKING. IN OTHER WO RDS AN ASSESSEE CAN DEVELOP A HOUSING PROJECT EVEN ON THE LAND BELONGIN G TO ANOTHER PERSON IF HE ENTERS INTO AGREEMENT WITH THE ASSESSEE TO DEVEL OP AND BUILD SUCH HOUSING PROJECT. A PERUSAL OF THE AGREEMENT OF THE SOCIETY AND NCHSL WITH THE ASSESSEE CLEARLY INDICATES THAT THE SOCIET Y HAS ENTERED INTO AN AGREEMENT WITH THE ASSESSEE TO DEVELOP THE HOUSING PROJECT ON THE LAND IN THE NAME OF THE SOCIETY TO BE HANDED OVER TO THE AS SESSEE FOR CARRYING OUT THE DEVELOPMENT. THE TRIBUNAL, A BENCH, CHENNAI I N ACIT VS. C. RAJINI [2011] 9 TAXMANN.COM 115 (CHENNAIITAT) IN I TA NOS. 1239/MDS/2008 AND 1666/MDS/2007 PRONOUNCED ON DECEM BER, 10, 2010 HELD THAT A DEVELOPER AND BUILDER IS NOT REQUI RED TO BE OWNER OF THE LAND ON RECORD FOR THE PURPOSE OF DEDUCTION UNDER S ECTION 80IB(10). WHAT IS REQUIRED TO BE SEEN IS THAT ASSESSEE SHOULD BE D E FACTO OWNER OF THE LAND. THE TRIBUNAL, CHENNAI BENCH IN THE CASE OF C. RAJINI (SUPRA) OBSERVED IN THIS REGARD AS UNDER :- 7. FROM THE ABOVE DISCUSSION, WHAT IS REQUIRED IS THAT IF THE ASSESSEE IS A BENEFICIAL OWNER OR TO PUT IT IN A LEGAL TERM IF SHE IS A DE F ACTO OWNER OF THE LAND, ANY DEVELOPER BECOMES ELIGIBLE FOR THIS DEDUCTION. IT IS NOT AT A LL NECESSARY THAT THE DEVELOPER SHOULD BE A DE JURE OWNER OF THE LAND. IT IS QUITE POSSIBL E TO DEVELOP THE PROPERTY WITH CONSENT OF THE OWNER. IT TRANSPIRES FROM THE PERUSA L OF THE RECORDS THAT ASSESSEE WAS DE FACTO OWNER OF THE PROPERTY WHEN THE ENTIRE ALLO TMENT PROCEDURE WAS EXECUTED BY HER ONLY. IT WAS THE ASSESSEE WHO INCURRED ALL THE EXPENSES CONNECTED WITH THE DEVELOPMENTS OF THE PROPERTY RIGHT FROM FILING APPL ICATION FOR PLANNING PERMISSION AND PAYING NECESSARY FEES FOR THE SAME. THE MARKETI NG OF THE SITE WAS ALSO DONE BY THE ASSESSEE THROUGH ADVERTISEMENT, ETC. WE HAVE CA REFULLY PERUSED THE AGREEMENTS AND OTHER RELEVANT DOCUMENTS. WE ARE CONVINCED THAT THIS IS NOT, AT ALL, A WORKS- CONTRACT. 23. SIMILAR VIEW WAS TAKEN BY THE TRIBUNAL, CHENNAI BENCH IN ACIT V. M/S SASHWATH CONSTRUCTIONS PVT. LTD. IN I.T.A. NO. 1069 (MDS.)/2008 FOR THE ASSESSMENT YEAR 2005-06 DATED 25 FEBRUARY, 2009 , WHEREIN IT WAS ITA NOS.2738 & 2739/AHD/2010 ASST. YEARS 2006-07 & 07-08 13 HELD AS FOLLOWS:- 'IN OUR OPINION IT IS NOT SINCE QUA NON FOR A DEVEL OPER TO BECOME THE DE JURE OWNER OF THE LAND. IT IS QUITE POSSIBLE TO DEVELOP THE PROPERTY WITH THE CONSENT OF THE OWNER. IT TRANSPIRES FROM THE PERUSAL OF THE RE CORDS THAT THE ASSESSEE WAS THE DE FACTO OWNER OF THE PROPERTY, AS THE ENTIRE ALLOT MENT PROCEDURE WAS EXECUTED BY THE ASSESSEE COMPANY ONLY. WE HAVE NOTED THAT THE A SSESSEE DID INCUR ALL THE EXPENSES CONNECTED WITH THE DEVELOPMENT OF THE PROP ERTY. APPLICATION FOR PLANNING PERMISSION WAS ALSO MADE BY THE ASSESSEE. NECESSARY FEE FOR THE SAME WAS PAID BY IT. ROAD FORMATION WAS ALSO DONE BY THE ASSESSEE. BESIDES, FOR MARKETING THE FLATS THE ASSESSEE DID ADVERTISE THE PROPERTY ALSO. WE HAVE PERUSED THE REASONINGS ADDUCED BY THE COMMISSIONER (APPEALS ) IN THE IMPUGNED ORDER. IN OUR OPINION HE TOOK A CORRECT VIEW IN THE MATTER AN D HIS ORDER CALLS FOR NO INTERFERENCE ON THIS COUNT. ACCORDINGLY WE UPHOLD T HE SAME.' 24. NOW WE REFER TO SECTION 80IB(10) SO AS TO FIND OUT WHETHER THE CONDITION OF LEGAL OWNERSHIP OF THE LAND IS AN ESSE NTIAL INGREDIENT UNDER THAT SECTION. SECTION 80IB(10) READS AS UNDER :- [(10) THE AMOUNT OF DEDUCTION IN THE CASE OF AN UND ERTAKING DEVELOPING AND BUILDING HOUSING PROJECTS APPROVED BEFORE THE 3 1ST DAY OF MARCH, 2007 BY A LOCAL AUTHORITY SHALL BE HUNDRED PER CENT OF THE PROFITS DERIVED IN THE PREVIOUS YEAR RELEVANT TO ANY ASSESSMENT YEA R FROM SUCH HOUSING PROJECT IF, (A) SUCH UNDERTAKING HAS COMMENCED OR COMMENCES DE VELOPMENT AND CONSTRUCTION OF THE HOUSING PROJECT ON OR AFTER THE 1ST DAY OF OCTOBER, 1998 AND COMPLETES SUCH CONSTRUCTION, (I) IN A CASE WHERE A HOUSING PROJECT HAS BEEN APP ROVED BY THE LOCAL AUTHORITY BEFORE THE 1ST DAY OF APRIL, 2004, ON OR BEFORE THE 31ST DAY OF MARCH, 2008; (II) IN A CASE WHERE A HOUSING PROJECT HAS BEEN, O R, IS APPROVED BY THE LOCAL AUTHORITY ON OR AFTER THE 1ST DAY OF APRI L, 2004, WITHIN FOUR YEARS FROM THE END OF THE FINANCIAL YEAR IN WH ICH THE HOUSING PROJECT IS APPROVED BY THE LOCAL AUTHORITY. [(III) IN A CASE WHERE A HOUSING PROJECT HAS BEEN A PPROVED BY THE LOCAL AUTHORITY ON OR AFTER THE 1ST DAY OF APRIL, 2 004 [BUT NOT LATER THAN THE 31ST DAY OF MARCH, 2005], WITHIN FIV E YEARS FROM THE END OF THE FINANCIAL YEAR IN WHICH THE HOUSING PROJECT IS APPROVED BY THE LOCAL AUTHORITY.] EXPLANATION.FOR THE PURPOSES OF THIS CLAUSE, (I) IN A CASE WHERE THE APPROVAL IN RESPECT OF THE HOUSING PROJECT IS OBTAINED MORE THAN ONCE, SUCH HOUSING PROJECT SHALL BE DEEMED ITA NOS.2738 & 2739/AHD/2010 ASST. YEARS 2006-07 & 07-08 14 TO HAVE BEEN APPROVED ON THE DATE ON WHICH THE BUIL DING PLAN OF SUCH HOUSING PROJECT IS FIRST APPROVED BY THE LOCAL AUTHORITY; (II) THE DATE OF COMPLETION OF CONSTRUCTION OF THE HOUSING PROJECT SHALL BE TAKEN TO BE THE DATE ON WHICH THE COMPLETI ON CERTIFICATE IN RESPECT OF SUCH HOUSING PROJECT IS ISSUED BY THE LOCAL AUTHORITY; (B) THE PROJECT IS ON THE SIZE OF A PLOT OF LAND W HICH HAS A MINIMUM AREA OF ONE ACRE: PROVIDED THAT NOTHING CONTAINED IN CLAUSE (A) OR CL AUSE (B) SHALL APPLY TO A HOUSING PROJECT CARRIED OUT IN ACCORDANCE WITH A SCHEME FRAMED BY THE CENTRAL GOVERNMENT OR A STATE GOVERNMENT FOR RECONSTRUCTION OR REDEVELOPMENT OF EXISTING BUILDINGS IN AREAS DEC LARED TO BE SLUM AREAS UNDER ANY LAW FOR THE TIME BEING IN FORCE AND SUCH SCHEME IS NOTIFIED BY THE BOARD IN THIS BEHALF; (C) THE RESIDENTIAL UNIT HAS A MAXIMUM BUILT-UP AR EA OF ONE THOUSAND SQUARE FEET WHERE SUCH RESIDENTIAL UNIT IS SITUATED WITHIN THE CITY OF DELHI OR MUMBAI OR WITHIN TWENTY-FIVE KILOMETRES FR OM THE MUNICIPAL LIMITS OF THESE CITIES AND ONE THOUSAND AND FIVE HU NDRED SQUARE FEET AT ANY OTHER PLACE; AND (D) THE BUILT-UP AREA OF THE SHOPS AND OTHER COMME RCIAL ESTABLISHMENTS INCLUDED IN THE HOUSING PROJECT DOES NOT EXCEED [TH REE PER CENT OF THE AGGREGATE BUILT-UP AREA OF THE HOUSING PROJECT OR [ FIVE THOUSAND SQUARE FEET, WHICHEVER IS HIGHER];] (E) NOT MORE THAN ONE RESIDENTIAL UNIT IN THE HOUS ING PROJECT IS ALLOTTED TO ANY PERSON NOT BEING AN INDIVIDUAL; AND (F) IN A CASE WHERE A RESIDENTIAL UNIT IN THE HOUS ING PROJECT IS ALLOTTED TO A PERSON BEING AN INDIVIDUAL, NO OTHER RESIDENTIAL UNIT IN SUCH HOUSING PROJECT IS ALLOTTED TO ANY OF THE FOLLOWING PERSONS, NAMELY:- (I) THE INDIVIDUAL OR THE SPOUSE OR THE MINOR CHIL DREN OF SUCH INDIVIDUAL, (II) THE HINDU UNDIVIDED FAMILY IN WHICH SUCH INDI VIDUAL IS THE KARTA. (III) ANY PERSON REPRESENTING SUCH INDIVIDUAL, THE SPOUSE OR THE MINOR CHILDREN OF SUCH INDIVIDUAL OR THE HINDU UNDIVIDED FAMILY IN WHICH SUCH INDIVIDUAL IS THE KARTA.] EXPLANATION - FOR THE REMOVAL OF DOUBTS, IT IS HERE BY DECLARED THAT NOTHING CONTAINED IN THIS SUB-SECTION SHALL APPLY T O ANY UNDERTAKING WHICH EXECUTES THE HOUSING PROJECT AS A WORKS CONTR ACT AWARDED BY ANY PERSON (INCLUDING THE CENTRAL OR STATE GOVERNME NT).] ITA NOS.2738 & 2739/AHD/2010 ASST. YEARS 2006-07 & 07-08 15 25. AS OBSERVED ABOVE, ONLY FIVE CONDITIONS ARE NE CESSARY FOR CLAIMING DEDUCTIONS UNDER SECTION 80IB(10). APART FROM THESE FIVE (A) TO (E), ONE MORE CONDITION HAS BEEN LAID DOWN IN THIS SECTION. IF ASSESSEE FULFILLS THESE CONDITIONS IT BECOMES ENTITLED FOR THE DEDUCT ION. IN THE PRESENT CASE, IT IS UNDISPUTED FACT THAT MONEY FOR PURCHASE OF LA ND WAS GIVEN BY THE ASSESSEE TO THE SOCIETY AND THEREAFTER LAND WAS HAN D OVER TO THE ASSESSEE FOR DEVELOPMENT OF THE PROJECT. THUS ASSESSEE IS A DE FACTO OWNER OF THE LAND AND EVEN AS PER PROVISION OF SECTION 53A OF TH E TRANSFER OF PROPERTY ACT ASSESSEE WOULD BE OWNER OF THE LAND AS FIRSTLY IT HAS PAID THE CONSIDERATION AND SECONDLY IT HAS THE POSSESSION OF THE LAND. IN ANY CASE, LEGAL OWNERSHIP OVER THE LAND HAS NEVER BEEN ANY RE LEVANT CRITERIA FOR ALLOWING OR NOT ALLOWING DEDUCTION UNDER SECTION 80 IB(10). WHAT IS NECESSARY IS THAT ASSESSEE SHOULD HAVE COMPLETE CON TROL, DOMINANCE AND RIGHT TO CARRY ON THE PROJECT AS SANCTIONED BY THE LOCAL AUTHORITY, SUCH AS AUDA IN THE PRESENT CASE. THEREFORE, WE REJECT THE ARGUMENTS OF THE REVENUE THAT ASSESSEE IS NOT ENTITLED TO DEDUCTION U/S 80IB(10) MERELY BECAUSE ASSESSEE IS NOT THE LEGAL OWNER OF THE LAND . 29. AS A RESULT, WE HOLD THAT ASSESSEE IS ENTITLED TO DEDUCTION UNDER SECTION 80IB(10) AS A DEVELOPER. ACCORDINGLY, THE A PPEAL FILED BY THE ASSESSEE IS ALLOWED. 5. THUS NOW IT IS SETTLED THAT IT IS NOT NECESSARY THAT ASSESSEE SHOULD BE LEGAL OWNER OF THE LAND. IT IS SUFFICIENT THAT H E SHOULD BE BENEFICIAL OWNER AND HAS TAKEN ALL THE RISKS AND BENEFITS OF D EVELOPING THE PROJECT. A CONTRACTOR ONLY WORKS AT A FIXED PROFIT AND AS PER AGREEMENT BETWEEN THE OWNER OF THE PROJECT AND HIMSELF. THE RISKS AND BEN EFITS GOES TO THE OWNER OF THE PROJECT BUT IN THE PRESENT CASE THE RISKS AN D BENEFITS OF THE PROJECT ITA NOS.2738 & 2739/AHD/2010 ASST. YEARS 2006-07 & 07-08 16 GO TO THE ASSESSEE AND, THEREFORE, HE IS A DEVELOPE R. THE APPROVAL GRANTED IN THE NAME OF THE LAND OWNER DOES NOT REALLY MAKE ANY DIFFERENCE BECAUSE IT IS NOT PRESCRIBED THAT SUCH APPROVAL SHO ULD ALWAYS BE GRANTED IN THE NAME OF THE ASSESSEE. IT IS SUFFICIENT THAT PROJECT IS APPROVED. AS A RESULT, FOLLOWING ABOVE THREE DECISIONS, WE ALLOW T HE CLAIM OF THE ASSESSEE HOLDING THAT IT IS A DEVELOPER U/S 80IB(10 ). AS A RESULT, BOTH THE APPEALS FILED BY THE REVENUE ARE DISMISSED. 6. IN THE RESULT, BOTH THE APPEALS FILED BY THE REV ENUE ARE DISMISSED. ORDER WAS PRONOUNCED IN OPEN COURT ON 17.06.2011. SD/- SD/- (M. K. SHRAWAT) (D.C. AGRAWAL) JUDICIAL MEMBER ACCOUNTANT MEMB ER AHMEDABAD, DATED : 17.06.2011. MAHATA/- COPY OF THE ORDER FORWARDED TO :- 1. THE ASSESSEE. 2. THE REVENUE. 3. THE CIT(APPEALS)- 4. THE CIT CONCERNS. 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER, DEPUTY / ASSTT.REGISTRAR ITAT, AHMEDABAD ITA NOS.2738 & 2739/AHD/2010 ASST. YEARS 2006-07 & 07-08 17 1.DATE OF DICTATION 6/6 /2011 2.DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE TH E DICTATING MEMBER 13/6/11. /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 DICTATING MEMBER FOR PRONOUNCEMENT.. 5.DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR .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 ASSTT. REG ISTRAR FOR SIGNATURE ON THE ORDER 9.DATE OF DESPATCH OF THE ORDER..