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

ITA 2824/AHD/2011

• Counselvise Citation: 282420514 RSA 2011
• Duration Of Justice: 4 year(s) 1 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-12-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 27-11-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 15-11-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 143(3); 80IB

Judgement Text

ITA NO . 2824 /AHD/ 20 1 1 & C.O. NO.264/AHD/2011 ASSESSMENT YEAR: 2 0 0 8 - 09 PAGE 1 OF 4 IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD A BENCH, AHMEDABAD BEFORE SHRI PRAMOD KUMAR , ACCOUNTANT MEMBER AND SHRI S.S. GODARA , JUDICIAL MEMBER ITA NO. 2 824 / AHD /201 1 ASSESSMENT YEAR: 200 8 - 09 INCOME TAX OFFICER, VS. M/S. SIDDHI VINYAK DEVEL OPERS, WARD 9 ( 1 ), AHMEDABAD. KARNAVATI APARTMENT - III, NR. MAN S I PARK, MANINAGAR, AHMEDABAD. [PAN A BFFS 1439 P ] C.O. NO. 264/AHD/2011 (IN ITA NO. 2824 / AHD /201 1 ) ASSESSMENT YEAR: 2008 - 09 M/S. SIDDHI VINYAK DEVELOPERS, VS. INCOME TAX OFFICER, KARNAVATI APARTMENT - III, WARD 9(1), AHMEDABAD. NR. MANSI PARK, MANINAGAR, AHMEDABAD. [PAN A BFFS 1439 P ] (APPELLANT S ) (RESPONDENT S ) REVENUE BY : SHRI DINESH SINGH, SR.D.R. ASSESSEE : SHRI S.N. SOPARKAR WITH SHRI PARIN SH AH, A.R S . DATE OF HEARING : 27 .1 1 .2015 DATE OF PRONOUNCEMENT : 17 . 1 2 .2015 O R D E R PER S.S. GODARA , J.M. THIS REVENUE S APPEAL AND ASSESSEE S C ROSS O BJECTION FOR ASSESSMENT YEAR 2008 - 09, ARISE FROM ORDER OF THE C IT(A) - XV , AHMEDABAD DATED 1 5.09.2011 PASSED IN CASE NO.CIT(A) - XV/9(1)/291/10 - 11 , IN PROCEEDINGS UNDER SECTION 143(3) OF THE INCOME T AX ACT, 1 961 ; IN SHORT THE ACT . ITA NO . 2824 /AHD/ 20 1 1 & C.O. NO.264/AHD/2011 ASSESSMENT YEAR: 2 0 0 8 - 09 PAGE 2 OF 4 2. THE R EVENUE RAISES TWO SUBSTANTIVE GROUNDS, INTER ALIA , CHALLENGING THE LOWE R APPEL LATE ORDER DELETING DISALLOWAN CE OF RS.4,99,28,360/ - U NDER SECTION 80IB(10) AND THAT OF RS.1,20,000/ - UNDER SECTION 40 (A)(IA) OF THE ACT MADE IN THE COURSE OF A REGULAR ASSESSMENT FRAMED ON 15.11.2010. 3. F ACTS OF THE CASE ARE IN A NARROW COMPA SS. THE ASSESSEE FIRM ENTERED INTO A D EVELOPMENT AGREEMENT DATED 04.04.2006 WITH M/S . RONAK PARK ( M ANINAGAR) CO - OPERATIVE HOUSING SOCIETY QUA DEVELOPMENT OF A RESIDENTIAL PRO JECT NAMELY KARNAVATI APARTMENT - III , N EAR M ANSI P ARK, BHAIRAVNATH R OAD , M ANINAGAR, AH MEDABAD , MEASURING AREA OF 11689 SQ . METERS OF FP N O.400 PAIKI OF TP S CHEM E N O.24. IT WOULD CLAIM THE IMPUGNED SECTION 80IB(10) DEDUCTI O N QUA THE SAME. T HE ASSESSING OFFICER WAS OF THE VIEW THAT THE ASSESSEE WAS ONLY A WORK CONTRACTOR AS AGAINST BUILDER/DEVELOPER NOT ENTITLED FOR THE SAME IN VIEW OF EXPLANATION INTRODUCED VIDE FINANCE ACT, 2009 TO SECTION 80IB(10) , S INCE IT WAS NOT OWNER OF THE LAND IN QUESTI O N NOR HAD IT SOUGHT APPROVAL FOR CONSTRUCTION O F RESIDENTIAL UNITS OR HAVING SOLD THE UNITS SINCE IT HAD ONLY PARTICIPATED THE REIN A S A CONF O RMING PARTY. 4. THE ASSESSEE PREFERRED APPEAL. THE CIT ( A ) REPRODUCES RELEVANT CLAUSES OF ITS DEVELOPMENT AGREEMENT I.E. C LAUSE 5.3 ENTRUSTING ENTIRE DEVELOPMENT WORK TO BE CARRIED OUT AT ITS OWN RISK, COST AND EXPENSES FOLLOWED BY ITS AUTHORIT Y IN ADMITTING OR ENRO L LING MEMBERS IN THIS RESIDENTIAL PROJECT. IT HAD FURTHER TO BEAR COST OF THE PROJECT AS A ITA NO . 2824 /AHD/ 20 1 1 & C.O. NO.264/AHD/2011 ASSESSMENT YEAR: 2 0 0 8 - 09 PAGE 3 OF 4 DEVELOPER QUA PAYMENTS TOWARDS PURC HASE OR ACQUISITION OF THE LAND , COST AND EXPENDITURE OF THE LAND, CONSTRUCTION COST OF FLATS AS WELL AS TH E EXPENDITURE INCURRED FOR WATER SUPPLY , DRAINAGE , ELECTRICITY ETC. T HE CIT ( A ) ACCORDINGLY HOLDS THAT THE ASSESSEE IS IN FACT THE DEVELOPER OF THE PROJECT IN QUESTION ENTITLED FOR THE IMPUGNED SEC TION 80IB(10) DEDUCTION. T HIS LEAVES THE REV ENUE AGGRIEVED . 5. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE CASE FILE. RELEVANT FACTS NA RRA T ED IN PRECEDING PARA GRAPHS ARE NOT REITERATED FOR THE SAKE OF BREVITY. SUFFICE TO SAY, ONCE THE ASSESSEE HAS BORN E WITH ALL FACETS OF ENTREPRENEUR RISK IN DEVELOPING THE RESIDENTIAL PROJECT IN QUESTION , MERE OWNERSHIP OF THE LAND OR APPROVAL NOT TAKEN BY ITSELF DO NOT COME IN THE WAY OF ITS DEDUCTION CLAIM RAISED UNDER 80IB(10) . W E RELY ON HON BLE JURISDICTIONAL HIGH COURT DECISION IN THE CASE OF CIT VS. RADHEY D EVELOPER S ( 2012 ) 341 ITR 403 (GUJ A RAT) IN HOLDING SO. IT IS MADE CLEAR THAT THE REV ENUE FAIL S IN REBUT T ING THE LOWER APPELLATE FINDING S AS PER CLAUSES FORMING PART OF DEVELOPMENTAL AGREEMENT (SUPRA). W E HOLD , IN THE S E FACTS AND CIRCUMSTANCES, THAT TH E CIT ( A ) HA S RIGHTLY ACCEPTED ASSES SEE S DEDUCTION CLAIM. TH U S , FIRST SUB STANTIOVE GROUND FAILS. 6. THIS LEAVES US WITH REVENUE S SECOND SUB STANTIVE GROUND SEEKING TO RESTORE SECTION 40(A)(IA) DISALLOWANCE OF RS.1,20,000/ - . THE HON BLE JURISDICTIONAL H IGH C OURT IN THE CASE OF ITO VS. KEVAL CONSTRUCTION (2013) 33 TAXMANN.COM 277 (GUJARAT) HOLDS THAT EVEN IF AN EXPENDITURE INCURRED FOR THE PURPOSE OF DEVELOPING A HOUSING PROJECT IS HELD ITA NO . 2824 /AHD/ 20 1 1 & C.O. NO.264/AHD/2011 ASSESSMENT YEAR: 2 0 0 8 - 09 PAGE 4 OF 4 NOT ALLOWABLE FOR NON - DED UCTION OF TDS, THE CONSEQ UENTIAL DISALLOWANCE WOULD U LTIMATELY INCREASE BUSINESS PROFITS OTHERWISE QUALIFYING FOR SECTION 80IB DEDUCTI O N. THE SAME RENDERS THIS REV ENUE S ARGUMENT TO BE MERE ACADEMIC IN NATURE. THIS SECOND SUB STANTIVE G ROUND STANDS DECLINED. TH US, REVENUE S APPEAL FAILS. 7. WE COME TO ASSE SS EE S CROSS OBJECTION , INTER ALIA , PLEADING THAT EVEN IF THE ABOVE ST A TED SECTION 40 ( A )( IA ) DISALLOWANCE IS SUS TAINED, THE SAME ULTIMATELY INCREASES ITS PROFIT OTHERWISE ELIGIBLE FOR SECTION 80IB DEDUCTION. WE HAVE ALREADY ADJUDICATED UPON THE ISSUE HERE INABOVE. THE SAME RENDERS THIS C ROSS OBJECTION INFRUCTUOUS. 8. IN THE RESULT, T H E REVENUE S A PPEAL ITA NO.2824/AHD/2011 IS DISMISSED . ASSESSEE S CROSS OBJECTION NO.264/AHD/2011 IS DISMISSED AS HAVING BECOME IN FRUCTUOUS . SD/ - SD/ - PRAMOD KUMAR S.S. GODARA ( ACCOUNTANT MEMBER) ( JUDICIAL MEMBER) AHMEDABAD , THE 17TH DAY OF DECEMBER , 201 5 PBN/* COPIES TO: (1) THE APPELLANT (2) THE RESPONDENT (3) COMMISSIONER (4) CIT(A) (5) DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCHES, AHMEDABAD