Desai Homes, Ernakulam V. The DCIT, Cochin

ITA 29/COCH/2014

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 7230 (ITAT-COCHIN)
• Duration Of Justice: 7 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-09-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 30-07-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 30-01-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: VIJAYAPRABHA
• Assessee Lawyers: T BHANUSEKHAR
• Keywords: Retrospective amendment
• Section: 80IB; 263

Judgement Text

1 ITA NO.29/COCH/2014 IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE SHRI N.R.S. GANESAN (JM) AND SHRI CHANDRA PO OJARI (AM) I.T.A NO. 29/COCH/2014 (ASSESSMENT YEAR 2008-09) DESAI HOMES VS DY.CIT, CIR.2(1) DD VASTRA MAHAL KOCHI MARKET ROD, ERNAKULAM 682 011 PAN : AACFD0390E (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI T BHANUSEKHAR RESPONDENT BY : SMT. VIJAYAPRABHA, JR DR DATE OF HEARING : 30-07-2014 DATE OF PRONOUNCEMENT : 24-09-2014 O R D E R PER N.R.S. GANESAN (JM) BEING AGGRIEVED BY THE ORDER OF CIT(A)-II, KOCHI D ATED 14-10-2013, THE ASSESSEE PREFERRED THE PRESENT APPEAL BEFORE TH IS TRIBUNAL. 2. SHRI T BHANUSEKHAR, THE LD.REPRESENTATIVE FOR TH E ASSESSEE SUBMITTED THAT THE ASSESSEE, A PARTNERSHIP FIRM, DE VELOPED A HOUSING PROJECT IN 159.685 CENTS OF LAND OWNED BY IT. REFE RRING TO PAGE 15 OF THE PAPER BOOK, THE LD.REPRESENTATIVE SUBMITTED THAT TH E ASSESSEE OBTAINED THE BUILDING PERMIT FROM COCHIN CORPORATION AND A REVIS ED PERMIT ALSO 2 ITA NO.29/COCH/2014 OBTAINED FROM COCHIN CORPORATION FOR DEVELOPMENT OF HOUSING PROJECT CONSISTING OF 168 FLATS. ACCORDING TO THE LD.REPRE SENTATIVE, IT IS NOT IN DISPUTE THAT THE ASSESSEE OWNED THE ENTIRE LAND AND OBTAINED THE BUILDING PERMISSION FROM COCHIN CORPORATION AND CONSTRUCTED THE BUILDING AS APPROVED. 3. THE ONLY OBJECTION OF THE DEPARTMENT, ACCORDING TO THE LD.REPRESENTATIVE, IS THAT THE ASSESSEE HAS UNDERTA KEN WORKS CONTRACT AND NOT DEVELOPED THE HOUSING PROJECT. ACCORDING TO T HE LD.REPRESENTATIVE, THE LAND IS OWNED BY THE ASSESSEE. THE PROJECT WAS CON CEIVED AND EXECUTED BY THE ASSESSEE. THE FLAT WAS SOLD TO INDEPENDENT PROSPECTIVE PURCHASERS. ACCORDING TO THE LD.REPRESENTATIVE, IF THE ASSESSEE IS NOT THE DEVELOPER OF THE HOUSING PROJECT, THEN IT IS NOT KN OWN, WHO ELSE DEVELOPED THE PROJECT. THE LD.REPRESENTATIVE SUBMITTED THAT A PROSPECTIVE PURCHASER OF A FLAT ON THE 16 TH FLOOR OF THE BUILDING CANNOT BE A DEVELOPER OF THE ENTIRE BUILDING. THE ASSESSEE CONSTRUCTED THE BUILDING AS PER THE PLAN APPROVED BY THE COCHIN CORPORATION BY PROVIDING ALL INFRASTR UCTURE FACILITIES LIKE CAR PARK, DRAINAGE SYSTEM, WATER SUPPLY, COMMON SPACE, LIFT AND OTHER FACILITIES TO THE ENTIRE OCCUPANTS OF THE BUILDING. THE LD.REPRESENTATIVE BY CITING AN EXAMPLE POINTED OUT THAT SUPPOSE A PROSPE CTIVE PURCHASER BUYS A FLAT ON THE 16 TH FLOOR FROM THE ASSESSEE AND WANTS TO CONSTRUCT THE SAME BY HIMSELF, CAN HE CONSTRUCT THE FLAT AT 16 TH FLOOR, WITHOUT FOUNDATION AND 3 ITA NO.29/COCH/2014 CONSTRUCTION OF 15 TH FLOOR IS COMPLETED? IN THAT CASE, WHO WILL CONSTR UCT THE BUILDING UPTO 15 TH FLOOR? THE ASSESSEE SOLD ONLY THE CONSTRUCTED BUI LDING AS PER THE APPROVED PLAN. THE DEVELOPMENT AND CONS TRUCTION WORK WERE UNDERTOOK BY THE ASSESSEE. THE PURCHASER OF A FLAT CANNOT OFFER ANY WORKS CONTRACT TO THE ASSESSEE. THEREFORE, THE ASSESSEE BEING AN OWNER AND DEVELOPER OF THE HOUSING PROJECT CONSTRUCTED THE EN TIRE BUILDING AS PER THE APPROVED PLAN AND SOLD THEM TO THE INDEPENDENT PROS PECTIVE BUYERS. 4. REFERRING TO THE PARTNERSHIP DEED, MORE PARTICUL ARLY, PAGE 10 OF THE PAPER BOOK, THE LD.REPRESENTATIVE SUBMITTED THAT TH E PARTNERSHIP FIRM WAS CONSTITUTED FOR THE PURPOSE OF CARRYING ON BUSINESS OF CONSTRUCTION OF FLATS AND RESIDENTIAL BUILDING ON WORKS CONTRACT BASIS AN D ALSO ON AN OWNERSHIP BASIS TO BE SOLD AND LET OUT TO INTENDING LESSEES A ND PROSPECTIVE PURCHASERS. ACCORDING TO THE LD.REPRESENTATIVE, AN ENABLING CLAUSE IN THE PARTNERSHIP DEED FOR CARRY THE WORK OF WORK CONTRAC T, IN ADDITION TO DEVELOPMENT OF HOUSING PROJECT, WOULD NOT CHANGE / ALTER THE NATURE OF TRANSACTION WHEN THE ASSESSEE CONCEIVED AND DEVELOP ED THE HOUSING PROJECT. REFERRING TO PAGE 31 OF THE PAPER BOOK, T HE LD.REPRESENTATIVE SUBMITTED THAT THE ASSESSEE SHOWED RECEIPTS FROM PR OJECT CALLED DD NEST IN RESPECT OF WHICH DEDUCTION U/S 80IB WAS CLAIMED AS SALES AND CONTRACT INCOME. ACCORDING TO THE LD.REPRESENTATIVE, MERELY BECAUSE THE ASSESSEE HAS SHOWN THE RECEIPT AS CONTRACT INCOME, THE DEPAR TMENT CANNOT TAKE THE 4 ITA NO.29/COCH/2014 DEVELOPMENT WORK OF THE ASSESSEE AS WORKS CONTRACT. ACCORDING TO THE LD.,REPRESENTATIVE, NO ONE HAS AWARDED ANY WORKS CO NTRACT TO THE ASSESSEE. FOR THE PURPOSE OF WORKS CONTRACT, THERE SHOULD BE AN AWARD OF WORK TO THE ASSESSEE BY SOMEBODY. IN THIS CASE, NO BODY HAS AWARDED ANY WORK CONTRACT TO THE ASSESSEE. THE ASSESSEE IT SELF CONCEIVED THE IDEA OF DEVELOPMENT OF PROJECT AND CONSTRUCTED OF FLAT I N THE LAND OWNED BY IT. THEREFORE, THE HOUSING PROJECT DEVELOPED BY THE ASS ESSEE IS IN ITS CAPACITY AS DEVELOPER OF THE HOUSING PROJECT AND NOT WORKS C ONTRACT. 5. IN RESPECT OF THE VERY SAME PROJECT, ACCORDING T O THE LD.REPRESENTATIVE, THE ASSESSING OFFICER ALLOWED TH E CLAIM OF DEDUCTION U/S 80IB FOR THE ASSESSMENT YEAR 2007-08. THE ASSESSEE HAS FILED THE COPY OF THE ORDER PASSED BY THE ASSESSING OFFICER IN PURSUA NCE TO REVISIONAL ORDER PASSED BY THE ADMINISTRATIVE COMMISSIONER U/S 263 O F THE ACT. 6. THE LD.REPRESENTATIVE PLACED HIS RELIANCE ON THE JUDGMENT OF THE KERALA HIGH COURT IN KERALA BUILDERS FORUM VS STATE OF KERALA (2009) (4) KLT 658 AND SUBMITTED THAT ON IDENTICAL CIRCUMSTANC ES, THE KERALA HIGH COURT FOUND THAT IT IS THE RESPONSIBILITY OF THE BU ILDER / LAND OWNER TO COMPLETE THE APARTMENT IN ACCORDANCE WITH BUILDING PERMIT OBTAINED FROM THE LOCAL AUTHORITY; THEREFORE, IT IS NOT THE WORKS CONTRACTOR. THE LD.REPRESENTATIVE HAS ALSO PLACED HIS RELIANCE ON T HE DECISION OF THE 5 ITA NO.29/COCH/2014 CHENNAI BENCH OF THIS TRIBUNAL IN THE CASE OF SANGH VI & DOSHI ENTERPRISE VS ITO (2011) 131 ITD 151 (CHEN). THE LD.REPRESENT ATIVE FURTHER SUBMITTED THAT THE MADRAS HIGH COURT CONFIRMED THE DECISION OF THE CHENNAI BENCH OF THIS TRIBUNAL IN SANGHVI & DOSHI E NTERPRISE (2013) 29 TAXMANN.COM 386 (MADRAS). REFERRING TO THE COPIES OF THE SAMPLE AGREEMENTS SAID TO BE EXECUTED BETWEEN THE ASSESSEE AND THE PROSPECTIVE PURCHASERS, THE LD.REPRESENTATIVE SUBMI TTED THAT ONLY AFTER COMPLETION OF CONSTRUCTION, THE ASSESSEE HAS TO HAN DOVER THE POSSESSION OF THE FLAT TO THE PROSPECTIVE PURCHASER. IN CASE THE ASSESSEE FAILS TO EXECUTE THE SALE DEED IN RESPECT OF THE PROPORTIONA TE UNDIVIDED SHARE OF THE LAND TO THE PROSPECTIVE BUYER THE RIGHT OF SPEC IFIC PERFORMANCE WAS GIVEN TO THE PURCHASER UNDER THE AGREEMENT. IN VIE W OF THE ABOVE, ACCORDING TO THE LD.REPRESENTATIVE, THE ENTIRE PROJ ECT WAS DEVELOPED BY THE ASSESSEE IN MORE THAN 1 ACRE OF LAND, THEREFORE, TH E ASSESSEE IS ENTITLED FOR DEDUCTION U/S 80IB OF THE ACT. 7. ON THE CONTRARY, SMT. S VIJAYAPRABHA, THE LD.DR SUBMITTED THAT THE PARLIAMENT HAS INTRODUCED AN EXPLANATION TO SECTION 80IB(10) WITH RETROSPECTIVE EFFECT FROM 01-04-2001. IN VIEW OF T HIS EXPLANATION, ACCORDING TO THE LD.DR, THE PROVISIONS OF SECTION 8 0IB IS NOT APPLICABLE IN RESPECT OF A HOUSING PROJECT EXECUTED BY THE ASSESS EE AS A WORKS CONTRACT. ACCORDING TO THE LD.DR, SINCE THE ASSESS EE EXECUTED THE PROJECT 6 ITA NO.29/COCH/2014 AS WORKS CONTRACT, THE ASSESSEE IS NOT ENTITLED FOR DEDUCTION U/S 80IB OF THE ACT. ON A QUERY FROM THE BENCH, AS TO WHO AWARDED WORKS CONTRACT TO THE ASSESSEE, THE LD.DR SUBMITTED THAT THE PROSPECTIVE PURCHASERS OF THE FLATS AWARDED THE WORKS CONTRACT FOR CONSTRUCTION OF FLAT TO THE ASSESSEE. ACCORDING TO THE LD.DR, IN VIEW OF THE EXPLANATION INTRODUCED BY PARLIAMENT WITH RETROSPECTIVE EFFECT FROM 01-04-200 1, THE ASSESSEE IS NOT ENTITLED FOR DEDUCTION U/S 80IB OF THE ACT. 8. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. IT IS NO T IN DISPUTE THAT THE ASSESSEE OWNED 159.685 CENTS OF LAND. THE ASSESSEE OBTAINED THE BUILDING PERMISSION FROM THE RESPECTIVE LOCAL BODIE S. THE ASSESSEE CONCEIVED THE PROJECT OF HOUSING AND CONSTRUCTED TH E SAME. AS A DEVELOPER OF THE HOUSING PROJECT, THE FLATS WERE SO LD TO THE PROSPECTIVE INDIVIDUAL BUYERS. THE QUESTION ARISES FOR CONSIDE RATION IS IN THE FACTS AND CIRCUMSTANCES OF THE CASE, WHETHER ANY WORKS CO NTRACT IS INVOLVED? THE CONTENTION OF THE REVENUE IS THAT THE PROSPECTI VE PURCHASERS AWARDED THE WORKS TO THE ASSESSEE. WE ARE UNABLE TO ACCEPT THE CONTENTION OF THE REVENUE. WHEN THE LAND WAS OWNED BY THE ASSESSEE A ND THE BUILDING PERMISSION WAS OBTAINED BY THE ASSESSEE FROM THE LO CAL BODY, AN INDIVIDUAL PURCHASER OF A FLAT CANNOT ALLOT ANY WOR K TO THE ASSESSEE. IT IS FOR THE ASSESSEE TO CONSTRUCT THE BUILDING AS PER T HE APPROVED PLAN AND 7 ITA NO.29/COCH/2014 THEREAFTER HAND OVER THE PHYSICAL POSSESSION OF THE PROPERTY TO THE PROSPECTIVE PURCHASER. AS RIGHTLY SUBMITTED BY THE LD.REPRESENTATIVE FOR THE ASSESSEE WHEN A PROSPECTIVE PURCHASER INTENDS TO PU RCHASE THE FLAT ON THE 16 TH FLOOR OF THE BUILDING, THE ASSESSEE COULD NOT HAND OVER THE FLAT ON SIXTEENTH FLOOR UNLESS THE SIXTEENTH FLOOR OF THE B UILDING WAS CONSTRUCTED. SOME OF THE FLATS IN SOME OF THE FLOORS MAY REMAIN TO BE SOLD ALSO. BUT THE ASSESSEE HAS TO CONSTRUCT THE ENTIRE BUILDING AS PE R THE APPROVED PLAN AND CREATE INFRASTRUCTURE FACILITIES LIKE PARKING AREA, DRAINAGE FACILITY, DRINKING WATER FACILITY, FIRE EXTINGUISHMENT, LIFT, ETC. TH ESE FACILITIES CANNOT BE PROVIDED BY THE INDIVIDUAL PURCHASER OF A PARTICULA R FLAT. THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE ASSESSEE BEING THE OWNER OF THE LAND AND DEVELOPER OF THE HOUSING PROJECT CONSTRUCTED THE FL AT BY CREATING ALL INFRASTRUCTURE FACILITIES AND SOLD THE SAME TO THE INDIVIDUAL PURCHASERS. THE INDIVIDUAL PURCHASERS CANNOT AWARD ANY WORK TO THE ASSESSEE. IN FACT, IT IS NOT THE CHOICE OF THE INDIVIDUAL PURCHASERS TO AWAR D WORK TO THE ASSESSEE. THE INDIVIDUAL PURCHASER HAS TO PURCHASE THE FLAT O NLY FROM THE CONSTRUCTION MADE BY THE ASSESSEE. WHEN THE PURCHA SERS HAVE NO CHOICE OF SELECTING THE BUILDERS FOR CONSTRUCTION ON A PRO JECT BEING DEVELOPED BY THE ASSESSEE, THIS TRIBUNAL IS OF THE CONSIDERED OP INION THAT THE PURCHASER CANNOT AWARD ANY WORK TO THE ASSESSEE. THEREFORE, THE CONTENTION OF THE LD.DR HAS NO MERIT AT ALL. 8 ITA NO.29/COCH/2014 9. WE HAVE ALSO CAREFULLY GONE THROUGH THE COPIES O F THE AGREEMENT AND SALE DEED EXECUTED BY THE ASSESSEE AND THE PURC HASERS OF THE FLAT. THE COPY OF THE AGREEMENT FOR SALE AND CONSTRUCTION BETWEEN THE ASSESSEE AND ONE MR. ANEES IS AVAILABLE IN PAPER BO OK. THE CLAUSE IN THE AGREEMENT MORE PARTICULARLY T PAGE 3 OF THE AGREEME NT READS AS FOLLOWS: AND WHEREAS FOR THE AFORESAID PURPOSE OF ULTIMATEL Y TRANSFERRING PROPORTIONATE UNDIVIDED SHARES IN THE TOTAL 151.253 CENTS IN RESPECT OF THE SPECIFICALLY EAR MA RKED RESIDENTIAL APARTMENTS IN THE MULTI-STORIED BUILDIN G TO PERSONS INTENDING TO CONSTRUCT THE SAID APARTMENT THROUGH T HE OWNERS AND PROMOTERS & BUILDERS ONLY AS CONTRACTOR FOR EAC H ALLOTTEE. AND WHEREAS THE OWNERS AND PROMOTERS & BUILDERS HAV E DEVISED A PROJECT TO CONSTRUCT A SIXTEEN STORIED RE SIDENTIAL APARTMENT BUILDING, NAMELY DD NEST IN THE SAID A SCHEDULE PROPERTIES AFTER LEAVING PROVISIONS FOR COMMON PASS AGE, STAIRCASE, LIFT, TOILET, ETC. AND THE SAID BUILDING CONSIST OF GROUND FLOOR PARKING, FIRST FLOOR, PARKING AND ANOT HER FOURTEEN FLOORS FOR TWO AND THREE BEDROOM APARTMENTS. IN TH E GROUND FLOOR THERE WILL BE CAR PARKING, RECREATION AREA, W ATER TANK, ELECTRICAL ROOM, ETC. ABOVE GROUND FLOOR THERE WIL L BE ONE FLOOR FOR CAR PARKING. ABOVE THAT THERE ARE FOURTEEN FLO ORS CONSISTS OF TWO AND THREE BEDROOM APARTMENTS. THERE WILL BE TWO TOWERS IN THIS PROJECT WITH SIX APARTMENTS IN EACH TOWER AND THERE WILL BE TWELVE APARTMENTS IN EACH FLOOR. A R OUGH SKETCH OF THE SAID SIXTEEN FLOORS OF THE AID RESIDENTIAL B UILDING WILL GIVE 9 ITA NO.29/COCH/2014 AN IDEA OF THE LOCATION OF THE APARTMENT IN EACH FL OOR, CAR PARKING AREA, PROVISIONS FOR PASSAGE, STAIRCASE, LI FT, TOILETS, AND OTHER RECREATIONAL AREA, PLINTH AREA AND SUPER BUIL T-UP AREA OF THE APARTMENT, ETC. AND IT IS GIVEN UNDER B SCHEDUL E HERETO. THE ASSESSEE ALSO FILED A COPY OF THE REGISTERED SA LE DEED EXECUTED BY ASSESSEE IN FAVOUR OF ONE MR. P.K. RANJITH KUMAR WH ICH CLEARLY SHOWS THAT WHATEVER SOLD IS UNDIVIDED LAND AND BUILDING. 10. IN VIEW OF THE ABOVE, IT IS OBVIOUS THAT THE AS SESSEE DEVELOPED THE HOUSING PROJECT AS A DEVELOPER AND NOT AS A WORKS C ONTRACT. 11. WE HAVE ALSO CAREFULLY GONE THROUGH THE JUDGMEN T OF THE KERALA HIGH COURT IN KERALA BUILDERS FORM (SUPRA). BEFORE THE KERALA HIGH COURT, THE CONSTITUTIONAL VALIDITY OF THE KERALA STAMP ACT , 1959 AS AMENDED BY KERALA FINANCE ACT, 2007 WAS CHALLENGED. THE KERAL A LEGISLATURE BY KERALA FINANCE ACT, 2007, HAS AMENDED THE STAMP ACT , 1959 WHICH PROVIDED LEVY OF STAMP DUTY ON THE FLAT FULLY CONST RUCTED AND SOLD BY THE BUILDERS TO THE PROSPECTIVE PURCHASERS. THE PROSPE CTIVE PURCHASERS HAS TO ENTER INTO AN AGREEMENT FOR PURCHASE OF UNDIVIDED S HARE OF LAND AND SIMULTANEOUSLY HAS TO ENTER INTO CONSTRUCTION OF FL AT ALSO. THE CONTENTION OF THE STATE GOVERNMENT WAS THAT WHEN THE BUILDERS SOL D THE FULLY CONSTRUCTED FLATS THEN STAMP DUTY HAS TO BE PAID FOR THE LAND A S WELL AS THE FLAT. AND TO 10 ITA NO.29/COCH/2014 AVOID STAMP DUTY ON THE VALUE OF THE BUILDING, THE INDIVIDUALS, WHO PURCHASED THE FLAT ENTERED INTO AN AGREEMENT OF SAL E OF UNDIVIDED SHARE OF LAND AND SIMULTANEOUSLY ENTERED INTO AN AGREEMENT F OR CONSTRUCTION OF FLAT FOR HIM. THEREFORE, IT WAS CONTENDED BEFORE THE KE RALA HIGH COURT THAT IT WAS A WORKS CONTRACT. THE KERALA HIGH COURT, AFTER CONSIDERING AN IDENTICAL AGREEMENT AS ENTERED INTO IN THE CASE BEF ORE US FOUND THAT IT IS NOT A WORKS CONTRACT. THE KERALA HIGH COURT FURTHE R FOUND THAT THE AGREEMENTS WERE SO MADE TO APPEAR THE TRANSACTION I S ONE OF WORKS CONTRACT, BUT IN FACT IT IS NOT A WORKS CONTRACT. 12. IN THE CASE BEFORE US ALSO, THE ASSESSEE ENTERE D INTO AGREEMENT FOR SALE OF PROPORTIONATE SHARE OF UNDIVIDED LAND AND A LSO AGREED TO CONSTRUCT THE FLAT ON BEHALF OF THE PROSPECTIVE PURCHASER. I T HAS TO BE NECESSARILY KEPT IN MIND THAT PROSPECTIVE PURCHASER OF A FLAT H AS NO CHOICE OF GIVING THE WORK TO ANY OTHER BUILDER. THEREFORE, WHEN THE PUR CHASER PURCHASES THE UNDIVIDED SHARE OF AND HE HAS TO NECESSARILY AGREE FOR CONSTRUCTION OF THE BUILDING BY THE ASSESSEE AS PER THE BUILDING PLAN S ANCTIONED BY RESPECTIVE LOCAL AUTHORITY. THEREFORE, WHEN WE LOOK INTO THE ENTIRE TRANSACTION AS SUCH IT IS A DEVELOPMENT OF HOUSING PROJECT BY THE ASSES SEE ITSELF AND NO ONE AWARDED ANY WORK TO THE ASSESSEE. MERELY BECAUSE, THERE IS AN ENABLING CLAUSE IN THE PARTNERSHIP DEED TO DO THE WORKS CONT RACT, THAT CANNOT BE A REASON TO CONCLUDE THAT THE ASSESSEE UNDERTOOK WORK S CONTRACT. ON THE 11 ITA NO.29/COCH/2014 FACTS OF THIS CASE AND THE NATURE OF TRANSACTIONS E NTERED INTO BY THE ASSESEE CLEARLY SHOW THAT THE ASSESSEE EXECUTED THE HOUSING PROJECT AS A DEVELOPER. THEREFORE, IT IS NOT A CASE OF WORKS CO NTRACT. IN VIEW OF THE ABOVE, THIS TRIBUNAL IS OF THE CONSIDERED OPINION T HAT THE ASSESSEE IS ENTITLED FOR DEDUCTION U/S 80IB(10) OF THE ACT. 13. FOR THE ASSESSMENT YEAR 2007-08, ORIGINALLY, TH E ASSESSING OFFICER GRANTED DEDUCTION U/S 80IB(10) OF THE ACT. HOWEVER , THE ADMINISTRATIVE COMMISSIONER REVISED THE ORDER AND DIRECTED THE ASS ESSING OFFICER TO REDO THE ASSESSMENT. THE ASSESSEE CHALLENGED THE ORDER OF THE ADMINISTRATIVE COMMISSIONER BEFORE THIS TRIBUNAL. THIS TRIBUNAL F OUND THAT THE ASSESSING OFFICER HAS NOT APPLIED HIS MIND TO THE FACTS OF TH E CASE. THEREFORE, THIS TRIBUNAL CONFIRMED THE ORDER OF THE ADMINISTRATIVE COMMISSIONER. CONSEQUENT TO THE ORDER OF THE ADMINISTRATIVE COMMI SSIONER AS CONFIRMED BY THIS TRIBUNAL, THE ASSESSING OFFICER AGAIN EXAMI NED THE MATTER FOR THE ASSESSMENT YEAR 2007-08 AND FOUND THAT THE ASSESSEE HAS EXECUTED A HOUSING PROJECT AS A DEVELOPER AND ACCORDINGLY GRAN TED DEDUCTION U/S 80IB OF THE ACT. IN VIEW OF THE ORDER OF THE ASSESSING OFFICER FOR THE ASSESSMENT YEAR 2007-08, THE DEPARTMENT CANNOT NOW CONTEND THA T THE ASSESSEE IS NOT ENTITLED FOR DEDUCTION U/S 80IB(10) OF THE ACT. TH EREFORE, THE CIT(A) IS NOT JUSTIFIED IN REJECTING THE CLAIM OF THE ASSESSEE ME RELY BECAUSE THERE IS AN ENABLING CLAUSE IN THE PARTNERSHIP DEED TO DO WORKS CONTRACT IN ADDITION TO 12 ITA NO.29/COCH/2014 DEVELOPMENT OF HOUSING PROJECT. THIS TRIBUNAL IS O F THE CONSIDERED OPINION THAT THE ASSESSEE EXECUTED THE HOUSING PROJECT AS A DEVELOPER AND NOT AS WORKS CONTRACT. 14. IN VIEW OF THE ABOVE, THE ORDERS OF THE LOWER A UTHORITIES ARE SET ASIDE AND THE ASSESSING OFFICER IS DIRECTED TO GRANT DEDU CTION U/S 80IB OF THE ACT IN RESPECT OF D.D. NEST PROJECT. 15. THE ASSESSEE HAS RAISED SOME OTHER GROUNDS AS W ELL IN THE GROUNDS OF APPEAL. HOWEVER, THE LD.REPRESENTATIVE FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE IS NOT PRESSING GROUNDS 4 TO 14. THE LD.REPRESENTATIVE HAS ALSO MADE ENDORSEMENT TO THAT EFFECT IN THE APPEAL FOLDER. IN VIEW OF THIS, GROUNDS 4 TO 14 ARE DISMISSED AS NOT PRESSED. 14. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PA RTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 24 TH SEPTEMBER, 2014. SD/- SD/- (CHANDRA POOJARI) (N.R.S. GANESAN) ACCOUNTANT MEMBER JUDICIAL MEMBER COCHIN, DT : 24 TH SEPTEMBER, 2014 PK/- 13 ITA NO.29/COCH/2014 COPY TO: 1. DESAI HOMES, DD VASTRA MAHAL, MARKET ROAD, ERNAK ULAM 2. THE DY.CIT, CIR.2(1), KOCHI 3. THE COMMISSIONER OF INCOME-TAX, KOCHI 4. THE COMMISSIONER OF INCOME-TAX(A)-II, KOCHI 5. THE DR (TRUE COPY) BY ORDER ASSTT. REGISTRAR, INCOME-TAX APPELLATE TRIBUNAL, COCHIN BENCH