The DCIT, Central Circle-1, Baroda V. M/s. Shree Narayan Enterprise, Baroda

ITA 3026/AHD/2010

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 72812 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 1 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-01-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 26-12-2013
• Assessment Year: 2008-2009
• Appeal Filed On: 04-11-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: O P BATHEJA SR
• Assessee Lawyers: K K PARIKH
• Section: 143(3); 80IB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD (BEFORE SHRI G.C.GUPTA VICE PRESIDENT & SHRI ANIL C HATURVEDI, A.M.) I.T. A. NO. 3026 /AHD/2010 (ASSESSMENT Y EAR: 2008-09) DCIT, CENTRAL CIRCLE-1, BARODA V/S M/S SHREE NARAYAN ENTERPRISE, C-201, TIME SQUARE, FATEHGUNJ, BARODA (APPELLANT) (RESPONDENT) PAN: AAPFS6878K APPELLANT BY : SHRI O.P. BATHEJA SR. A.R. RESPONDENT BY : SHRI K.K. PARIKH. A.R. ( )/ ORDER DATE OF HEARING : 26-12-2013 DATE OF PRONOUNCEMENT : 03-01-2014 PER SHRI ANIL CHATURVEDI,A.M. 1. THIS APPEAL IS FILED BY THE REVENUE AGAINST THE ORD ER OF CIT(A)-IV, AHMEDABAD DATED 12.08.2010 FOR A.Y. 2008-09. 2. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERIAL ON RECORD ARE AS UNDER. 3. ASSESSEE IS A PARTNERSHIP FIRM ENGAGED IN THE BUSIN ESS OF CONSTRUCTION AND DEVELOPMENT OF HOUSING PROJECT. IT ELECTRONICAL LY FILED ITS RETURN OF INCOME FOR A.Y. 2008-09 ON 29.09.2006 DECLARING TOT AL INCOME OF RS. 37,53,200/-. THE CASE WAS SELECTED FOR SCRUTINY AN D THEREAFTER THE ITA NO 302 6/AHD/2010 . A.Y. 2008- 09 2 ASSESSMENT WAS FRAMED UNDER SECTION 143(3) VIDE ORD ER DATED 23.12.2009 AND THE TOTAL INCOME WAS DETERMINED AT RS. 2,47,19, 930/-. AGGRIEVED BY THE ORDER OF A.O., ASSESSEE CARRIED THE MATTER BEFO RE CIT(A). CIT(A) VIDE ORDER DATED 12.08.2010 PARTLY ALLOWED THE APPE AL OF THE ASSESSEE. AGGRIEVED BY THE AFORESAID ORDER OF CIT(A), THE REV ENUE IS NOW IN APPEAL BEFORE US AND HAS RAISED THE FOLLOWING GROUN D:- 1. THE LEARNED CIT(A) ERRED IN LAW AND ON FACTS IN DELETING ADDITION OF RS. 2,09,66,731/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF DISALLOWANCE OF DED UCTION U/S. 80IB(10) OF THE I.T. ACT. 4. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE CL AIM OF ASSESSEE OF DEDUCTION UNDER 80IB(10) OF RS. 2,09,66,731/- WAS R EJECTED BY THE A.O FOR THE REASON THAT THE ASSESSEE WAS NOT THE OWNER OF THE LAND, THE APPROVAL OF LOCAL AUTHORITY WAS NOT IN THE NAME OF THE ASSESSEE BUT WAS IN THE NAME OF LAND OWNERS. THE A.O. WAS THEREFORE OF THE VIEW THAT CONDITIONS LAID DOWN UNDER SECTION 80IB(10) WERE NO T FULFILLED BY THE ASSESSEE AND THEREFORE THE ASSESSEE WAS NOT ENTITLE D TO DEDUCTION U/S. 80IB AND HE ACCORDINGLY REJECTED THE CLAIM OF DEDUC TION OF THE ASSESSEE. 5. AGGRIEVED BY THE ORDER OF A.O., ASSESSEE CARRIED TH E MATTER BEFORE CIT(A). CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE CAME TO THE CONCLUSION THAT ASSESSEE HAD ACQUIRED THE DO MINANCE OVER THE LAND AND THE LAND WAS IN THE POSSESSION OF THE ASSESSEE. CIT(A) ALSO NOTED THAT ASSESSEE WAS THE DE-FACTO OWNER FOR ALL PRACTI CAL PURPOSES AND HAD DEVELOPED THE HOUSING PROJECT BY INCURRING ALL THE EXPENSES AND TAKING ALL THE RISKS INVOLVED. HE HAD FURTHER NOTED THAT LAND OWNERS WERE ELIGIBLE TO GET ONLY THE PRICE OF THE LAND FIXED BY THE DEVELOP MENT AGREEMENTS AND NOT TO GET ANY SHARE IN THE DEVELOPMENT PROFITS OF THE PROJECT. CIT(A) ITA NO 302 6/AHD/2010 . A.Y. 2008- 09 3 THEREFORE CONCLUDED THAT ASSESSEE HAD NOT EXECUTED THE WORK OF HOUSING PROJECT FOR THE LAND OWNERS AS CONTRACTOR BUT HAS D EVELOPED THE HOUSING PROJECT ON ITS OWN. HE HAD FURTHER GIVEN A FINDING THAT THE ISSUE IN THE CASE OF THE ASSESSEE WAS SQUARELY COVERED BY THE DE CISION OF AHMEDABAD TRIBUNAL IN THE CASE OF SHAKTI CORPORATION IN ITA N O. 1503/AHD/2008. HE THUS ALLOWED THE DEDUCTION UNDER 80IB(10). AGGR IEVED BY THE ORDER OF CIT(A), THE REVENUE IS NOW IN APPEAL BEFORE US. 6. BEFORE US, ATT THE OUTSET THE LD. D.R. FAIRLY CONCE DED THAT THE ISSUE OF DEDUCTION UNDER 80IB(10) IS COVERED AGAINST THE REV ENUE BY THE DECISION OF THE TRIBUNAL IN THE ASSESSEES OWN CASE FOR EARL IER YEARS. THE LD. A.R. ON THE OTHER HAND AGREED WITH THE SUBMISSION OF LD. A.R. AND PLACED ON RECORD THE COPY OF CONSOLIDATED ORDER OF TRIBUNAL D ATED 12.10.2010 IN THE CASE OF ASSESSEE FOR A.Y. 03-04 TO 07-08. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. WE FIND THAT ON IDENTICAL FACTS IN THE ASSESSEES O WN CASE IN IT(SS)A NOS. 163 TO 167/AHD/2010 FOR A.Y. 03-04 TO 07-08 (O RDER DATED 12.10.2012) THE ISSUE OF DEDUCTION U/S. 80IB HAS BE EN DECIDED IN FAVOUR OF THE ASSESSEE BY THE CO-ORDINATE BENCH OF TRIBUNA L BY HOLDING AS UNDER:- 6. AFTER HEARING BOTH THE PARTIES AND PERUSING THE RECORD WE FIND THAT DURING THE ASSESSMENT PROCEEDINGS THE A.O. HAS DISALLOWED THE DEDUCTION U /S 80IB(10) OF THE ACT CLAIMED BY THE ASSESSEE ONLY ON THE GROUND THAT ASSESSEE IS NOT THE OWNER OF THE LAND AND THE APPROVAL OF LOCAL AUTHORITY IS NOT IN THE NAME OF THE ASSESSEE BUT IN THE NAME OF THE LAN D OWNERS AND THUS THE CONDITIONS LAID DOWN U/S 80IB(10) AR4E NOT FULFILLED. HOWEVER, IN APPELLATE PROCEEDINGS, LD. CIT(A) FOUND AFTER CAREFULLY GOING THROUGH THE RELEVANT CLAUSES OF DEVELOPMENT AGREEME NTS AND OTHER DOCUMENTS FILED BEFORE THE A.O. AS WELL AS BEFORE HIM THAT THE ASSESSEE HAD ACQUIRED D OMINANCE OVER THE LAND AND THE LAND WAS UNDER THE POSSESSION OF THE ASSESSEE. THE ASSESSEE FIRM WAS D E-FACTO LAND OWNER FOR ALL PRACTICAL PURPOSES AND ITA NO 302 6/AHD/2010 . A.Y. 2008- 09 4 HAS ALSO DEVELOPED HOUSING PROJECT BY INCURRING ALL THE EXPENSES AND TAKING ALL THE RISK INVOLVED THEREIN. THUS, THE ASSESSEE FIRM WAS NOT MERELY CON TRACTOR OF THE LAND OWNERS WERE TO GET ONLY THE PRICE OF LAND FIXED BY THE DEVELOPMENT AGREEMENT AN D NOT TO GET ANY PROFIT OF THE PROJECT. HE, THEREFO RE, WAS OF THE VIEW THAT ASSESSEE HAD FULFILLED ALL THE CONDITIONS AS LAID DOWN U/S 80IB(10) OF THE ACT. T HIS VIEW OF LD. CIT(A) IS IN CONFORMITY WITH THE PRINCI PLES LAID DOWN IN THE CASE OF RADHE DEVELOPERS AND OTHERS VS. ITO AND M/S SHAKTI CORPORATION AND OTHER S DECIDED BY AHMEDABAD TRIBUNAL. WE FURTHER FIND THAT THE DECISION OF THE TRIBUNAL IN THE CASE OF RADHE DEVELOPERS AND OTHERS VS. ITO HAS BEEN CONFIRMED BY JURISDICTIONAL HIGH COURT REPORTED IN 341 ITR 347. 8. SINCE THE FACTS OF THE CASE IN THE YEAR UNDER APPEA L ARE IDENTICAL TO THAT OF EARLIER YEARS AND IN THE ABSENCE OF ANY CONTRARY MA TERIAL ON RECORD, WE RESPECTFULLY FOLLOWING THE ORDER OF THE CO-ORDINATE BENCH OF TRIBUNAL FIND NO REASON TO INTERFERE WITH THE ORDER OF CIT(A ) AND THUS UPHOLD HIS ORDER. 9. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISS ED. ORDER PRONOUNCED IN OPEN COURT ON 03 - 01 - 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.REGISTR AR ITAT, AHMEDABAD