The ITO, Ward-5(1), Baroda V. M/s. Pooja Enterprise, Baroda

ITA 3174/AHD/2009

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 50666 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 9 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-09-2011
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 06-09-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 26-11-2009
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: S K GUPTA
• Assessee Lawyers: NONEWRITTEN SUBMISSION
• Keywords: Competent authority
• Section: 80IB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH AHMEDABAD (BEFORE SHRI G. D. AGARWAL, VP AND SHRI BHAVNESH SA INI, JM) ITA NO.3174/AHD/2009 A. Y.: 2006-07 THE INCOME TAX OFFICER, WARD -5 (1), 5 TH FLOOR, AAYAKAR BHAVAN, R. C. CIRCLE, BARODA VS M/S. POOJA ENTERPRISE, TIRTHAK TENEMENT, DABHOI, WAGHODIA RING ROAD, BARODA PA NO. AAGFP 8099 J (APPELLANT) (RESPONDENT) APPELLANT BY SHRI S. K. GUPTA, CIT DR RESPONDENT BY NONE(WRITTEN SUBMISSION) DATE OF HEARING: 06-09-2011 DATE OF PRONOUNCEMENT: 09 -09-2011 O R D E R PER BHAVNESH SAINI: THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE LEARNED CIT(A)-V, BARODA DATED 18 TH SEPTEMBER, 2009 FOR THE ASSESSMENT YEAR 2006-07, C HALLENGING THE ORDER OF THE LEARNED CIT(A) IN ALLOWING DEDUCTION U /S 80IB (10) OF THE IT ACT. 2. WE HAVE HEARD THE LEARNED DR AND PERUSED THE FIN DINGS OF THE AUTHORITIES BELOW. ITA NO. 3174/AHD/2009 THE ITO, WARD 5(1), BARODA VS M/S. POOJA ENTERPRISE 2 3. THE AO WHILE FINALIZING THE ASSESSMENT PRO CEEDINGS OBSERVED THAT THE ASSESSEE FIRM HAS ACTED MERELY AS AN AGENT FOR COLLECTION OF THE LAND CONSIDERATION ON BEHALF OF THE LAND OWNER AND ACTED AS CONTRACTOR FOR CONSTRUCTION OF THE HOUSE ON BEHALF OF THE UNIT HOLDERS WHO HAVE PURCHASED PIECE OF LAND FROM THE LAND OWNE R. THEREFORE, THE AO HAS OPINED THAT THE ASSESSEE FIRM IS NOT ENT ITLED TO DEDUCTION U/S 80 IB (10) OF THE IT ACT. FURTHER, THE THRUST O N WHICH THE AO HAS MAINLY RELIED FOR DISALLOWANCE OF ASSESSEES CLAIM UNDER SECTION 80 IB (10) OF THE IT ACT ARE THAT - (I) OWNERSHIP OF LAND IS AN ESSENTIAL ELEMENT WHIC H CARRIES WITH IT THE RIGHT TO DEVELOP THE LAND AND BUILD HOU SING PROJECTS THEREON. THE AO SAYS THAT THE DEVELOPER FI RST SHOULD PURCHASE THE LAND AND THEN TAKE NECESSARY PERMISSION TO CONSTRUCT. (II) APPELLANT IN THE INSTANT CASE HAS ACTED MERELY AS AN AGENT FOR COLLECTION OF THE LAND CONSIDERATION ON B EHALF OF THE LAND OWNER AND A CONTACTOR FOR THE CONSTRUCTION OF THE HOUSE ON BEHALF OF THE UNIT HOLDERS. (III) THE APPROVAL FOR THE PROJECT IS GRANTED BY TH E COMPETENT AUTHORITY IN THE NAME OF THE LAND OWNER ONLY. (IV) THE APPELLANT IS NOT A BUILDER OR DEVELOPER BU T A CONTRACTOR AND THE APPELLANT IS NOT ELIGIBLE FOR DE DUCTION U/S 80 IB. IN APPEAL, IT WAS CONTENDED THAT THE ASSESSEE IS EN GAGED IN DEVELOPING HOUSING PROJECT AND THAT ALL THE CONDITI ONS REGARDING AREA ETC., AS LAID DOWN U/S 80 IB(10) OF THE IT ACT ARE SATISFIED. IT WAS ALSO STATED THAT ITAT, IN ASSESSEES OWN CASE FOR ASSESS MENT YEAR 2005- 06 IN ITA NO.281/AHD/2009 DATED 27-03-2009, ON IDEN TICAL ISSUE, ITA NO. 3174/AHD/2009 THE ITO, WARD 5(1), BARODA VS M/S. POOJA ENTERPRISE 3 RELYING ON THE DECISION IN THE CASE OF M/S. SHAKTI CORPORATION HAS SET ASIDE THE MATTER TO THE FILE OF THE AO. IT WAS IMPR ESSED THAT ALL THE RISK AND RETURN IN THE SAID PROJECT ARE BORNE BY THE DEV ELOPER AND THAT THE DEDUCTION U/S 80 IB (10) OF THE IT ACT WAS WRONGLY DENIED BY THE AO. 4. THE LEARNED CIT(A) CONSIDERING THE EXPLANAT ION OF THE ASSESSEE DIRECTED THE AO TO VERIFY THE AGREEMENT AND OTHER D ETAILS AND ALLOWED THE APPEAL OF THE ASSESSEE SUBJECT TO VERIFICATION. HIS FINDINGS IN PARA 4.3 AND 5 OF THE IMPUGNED ORDER ARE REPRODUCED AS U NDER: 4.3 I HAVE CAREFULLY EXAMINED THE FACTS OF THE CAS E, SUBMISSIONS OF THE APPELLANT AND PERUSED THE ARGUME NTS OF THE ASSESSING OFFICER. EARLIER, THE ISSUE WAS DE CIDED IN FAVOUR OF THE APPELLANT AND AGAINST REVENUE BY THE ORDER OF THE JURISDICTIONAL ITAT, IN THE CASE OF RADHE DEVELOPERS VS ITO WARD 3(2) BARODA NO.2482/AHD/2006 A BENCH AHMEDABAD, HOWEVER THE DECISION WAS PARTLY MODIFIED BY THE SUBSEQUENT DECISION IN THE CASE OF ITO VS M/S. SHAKTI CORPORATION ITA NO.1503/AHD/2008 DATED 07/11/2008 WHEREIN, THE HONBLE ITAT HAS INDICATED THAT THE BENEFIT UNDER 80 IB(10) WOULD BE AVAILABLE IF T HE DEVELOPER HAS DOMINANT CONTROL OVER THE PROJECT AND HAS DEVELOPED THE LAND AT ITS OWN COST AND RISK AND THE BENEFIT WOULD BE DENIED IF THE ASSESSEE HAD ENTERED INTO AN AGREEMENT FOR A FIXED REMUNERATION AS A CONTRACT OR TO CONSTRUCT OR DEVELOP THE PROJECT ON BEHALF OF THE L AND OWNER. THE AO IS ACCORDINGLY DIRECTED TO VERIFY THE AGREEMENT AND OTHER DETAILS IN THE LIGHT OF THE DEC ISION OF THE TRIBUNAL IN THE CASE OF M/S. SHAKTI DEVELOPERS. THE GROUND IS ALLOWED SUBJECT TO VERIFICATION. 5. IN THE RESULT, THE APPEAL IS ALLOWED. ITA NO. 3174/AHD/2009 THE ITO, WARD 5(1), BARODA VS M/S. POOJA ENTERPRISE 4 5. THE LEARNED DR RELIED UPON THE ORDER OF THE AO AND SUBMITTED THAT AFTER AMENDMENT IN SECTION 251 OF THE IT ACT, THE COMMISSIONER (APPEALS) HAS NO POWER TO SET ASIDE ANY ASSESSMENT, THEREFORE, THOUGH THE MATTER IS RESTORED TO THE FILE OF THE AO , FRESH DIRECTION IS REQUIRED AS HAS BEEN GIVEN BY THE TRIBUNAL IN THE C ASE OF THE SAME ASSESSEE IN PRECEDING ASSESSMENT YEAR 2005-06 DATED 27-03-2009 (SUPRA) COPY OF WHICH IS ALSO FILED ALONG WITH THE WRITTEN SUBMISSION OF THE ASSESSEE. 6. CONSIDERING THE ABOVE FACTS WE ARE OF THE VIEW T HE MATTER REQUIRES RECONSIDERATION AT THE LEVEL OF THE AO. TH E ASSESSEE SUBMITTED BEFORE THE LEARNED CIT(A) THAT THE TRIBUN AL IN THE PRECEDING ASSESSMENT YEAR IN THE CASE OF THE SAME ASSESSEE RE LYING UPON THE DECISION IN THE CASE OF SHAKTI DEVELOPERS AND OTHER S (SUPRA) SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW AND RESTO RED THE MATTER TO THE FILE OF THE AO WITH DIRECTION TO RE-DECIDE THE ISSUE IN THE LIGHT OF THE DECISION IN THE CASE OF SHAKTI DEVELOPERS AND OTHERS (SUPRA). THE DIRECTION OF THE LEARNED CIT(A) IS SIMILAR IN THIS CASE BUT LEGALLY THE LEARNED CIT(A) HAS NO POWER TO SET ASIDE THE ASSESS MENT AND TO DIRECT THE AO TO PASS THE ORDER AFRESH. HOWEVER, TH E FACTS REMAIN THAT IN EARLIER YEAR THE TRIBUNAL RESTORED THE MATTER TO THE FILE OF THE AO FOR DECISION AFRESH ON THE IDENTICAL ISSUE. THEREFORE, SUBJECT TO ABOVE FINDING THAT THE LEARNED CIT(A) HAS NO POWER TO SET ASIDE THE ASSESSMENT TO THE FILE OF THE AO, WE SET ASIDE THE IMPUGNED ORDERS AND RESTORED THE SAME ISSUE TO THE FILE OF THE AO W ITH DIRECTION TO RE- DECIDE THE ISSUE AFRESH IN THE LIGHT OF THE DECISIO N ALREADY GIVEN IN THE CASE OF THE SAME ASSESSEE IN ASSESSMENT YEAR 2005-0 6 DATED ITA NO. 3174/AHD/2009 THE ITO, WARD 5(1), BARODA VS M/S. POOJA ENTERPRISE 5 27-03-2009 (SUPRA). IN TERMS OF ABOVE, THE DEPARTME NTAL APPEAL STANDS DISPOSED OF. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (G. D. AGARWAL) VICE PRESIDENT (BHAVNESH SAINI) JUDICIAL MEMBER LAKSHMIKANT/- COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE BY ORDER DY. REGISTRAR, ITAT, AHMEDABAD