Shri Mukeshbhai V. Patel,HUF, Ahmedabad V. The Income tax Officer, Ward-3, Gandhinagar

ITA 3190/AHD/2011

• Counselvise Citation: 319020514 RSA 2011
• Duration Of Justice: 1 year(s) 8 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-08-2013
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 22-07-2013
• Assessment Year: 2000-2001
• Appeal Filed On: 16-12-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: P L KUREEL
• Assessee Lawyers: V P PATEL
• Section: 143(3); 32

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD B BENCH BEFORE: SRI D.K TYAGI, JUDICIAL MEMBER AND SHRI T.R. MEENA, ACCOUNTANT MEM BER MUKESHBHAI V. PATEL HUF PLOT NO. 588, SECTOR-22, GANDHINAGAR-382022 PAN: AABGP 8838 A (APPELLANT) VS INCOME TAX OFFICER, WARD-3 GANDHINAGAR (RESPONDENT) REVENUE BY: SRI PL KUREEL, SR.D.R. ASSESSEE BY: SRI VP PATEL, A.R. DATE OF HEARING : 22-07-2013 DATE OF PRONOUNCEMENT : 23-08-20 13 / ORDER PER : D.K. TYAGI, JUDICIAL MEMBER:- ALL THESE APPEALS BELONG TO SAME ASSESSEE AND HAVE BEEN FILED AGAINST THE ORDER OF LD. CIT(A), GANDHINAGAR DATED 01-09-20 11. THEY WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY PASSING A CON SOLIDATED ORDER BY TAKING THE FACTS OF ASSESSMENT YEAR 2000-01. ITA NOS. 3190,3191 &3192/AHD/2011 ASSESSMENT YEAR 2000-01,2001-02 & 2002-03 I.T.A NOS.3190,3191 &3192/AHD/2011 A.Y. 2000-01,01 -02,02-03 PAGE NO MUKESHBHAI V PATEL HUF VS. ITO 2 2. ASSESSEE HAS TAKEN FOLLOWING COMMON GROUNDS OF A PPEAL: 1. THE LD. CIT (A) ERRED ON FACTS AND IN LAW IN I GNORING THE DIRECTION GIVEN BY THE HON'BLE ITAT IN REGARD TO IN VESTMENT IN LAND AND DOMAIN OVER THE PROJECT, IN VIEW OF THE RATION OF SHAKTI CORPORATION. 2. THE LD. CIT (A) HAS GROSSLY ERRED IN DETERMIN ING THE LAND OWNER IS SOCIETY AND WHERE THE ASSESSEE HAD CLEARL Y ESTABLISHED THE ENTIRE LAND INVESTMENT MADE BY HIM AND ENTIRE PROFI T FROM THE HOUSING PROJECT WENT TO APPELLANT HAND ONLY. 3. THE ID. CIT (A) ERRED ON FACTS IN APPLYING THE D ECISION IN INCORRECT PERSPECTIVE, WHERE THE APPELLANT HAD CONS ISTENTLY FOLLOWED THE ACCOUNTING STANDARD (AS-7); SO THE SAME IS NOT TENABLE IN THE EYE OF LAW. 3. THE ISSUE INVOLVED IN ALL THESE APPEALS IS RESPE CT OF DISALLOWANCE OF THE CLAIM OF THE ASSESSEE FOR DEDUCTION U/S 80IB(1) R.W.S.80IB(10) OF THE INCOME TAX ACT. THIS CLAIM OF THE ASSESSEE WAS REJ ECTED BY THE AO IN THE ORIGINAL ORDERS PASSED U/S 143(3) OF THE ACT. IN A PPEAL, THIS ACTION OF THE AO WAS CONFIRMED. THE MATTER WAS THEN TAKEN BEFORE TH E HONBLE ITAT. WHILE DISPOSING THE APPEALS FOR ASSESSMENT YEAR 200 0-01,2001-02 & 2002- 03 VIDE A COMMON ORDER, HONBLE ITAT DISCUSSED THE ISSUE IN DETAIL REGARDING ALLOWABILITY OF CLAIM OF THE ASSESSEE U/S 80IB(10) AND FOLLOWING THE DECISION OF ITAT, AHMEDABAD IN THE CASE OF ITO VS. SHAKTI CORPORATION DIRECTED THE AO AS UNDER:- 'WE THEREFORE IN THE INTEREST OF JUSTICE AND FAIR P LAY TO BOTH THE PARTIES SET ASIDE THE ORDER OF THE CIT(A) AND RESTORE ALL T HE OTHER APPEALS TO THE FILE OF THE AO WITH THE DIRECTION THAT THE AO S HALL LOOK INTO THE AGREEMENT ENTERED INTO BY EACH OF THE ASSESSEE WITH THE LAND OWNER AND DECIDE WHETHER THE ASSESSEE HAS IN FACT PURCHAS ED THE LAND FOR A FIXED CONSIDERATION FROM THE LAND OWNER AND HAS DEV ELOPED THE HOUSING PROJECT AT ITS OWN COST AND RISKS INVOLVED IN THE PROJECT. IN I.T.A NOS.3190,3191 &3192/AHD/2011 A.Y. 2000-01,01 -02,02-03 PAGE NO MUKESHBHAI V PATEL HUF VS. ITO 3 CASE THE AO FINDS THAT PRACTICALLY THE LAND HAS BEE N BROUGHT BY THE DEVELOPER AND DEVELOPER HAS ALL DOMINANT CONTROL OV ER THE PROJECT AND HAS DEVELOPED THE LAND AT HIS OWN COST AND RISK S, THE AO SHOULD ALLOW THE DEDUCTION TO THE ASSESSEE U/S. 80IB(10). IN CASE THE AO FINDS THAT THE DEVELOPER HAS ACTED ON BEHALF OF THE LANDOWNER AND HAS GOT THE FIXED CONSIDERATION FROM THE LAND OWNER FOR THE DEVELOPMENT OF THE HOUSING PROJECT, THE ASSESSEE SHOULD NOT BE ALLOWED DEDUCTION U/S. 80IB(10) TO THE ASSESSEE. IN PURSUANCE TO THE ABOVE DIRECTION OF HONBLE ITAT , THE AO OBTAINED THE COPY OF AGREEMENT DATED 26-03-1999 AND AFTER PERUSI NG THE DETAILS/ DOCUMENTS/CLARIFICATIONS REGARDING DEDUCTION U/S 80 IB(10) OF THE ACT REJECTED THE CLAIM OF THE ASSESSEE BY OBSERVING AS UNDER:- THE HON'BLE ITAT HAS DIRECTED THAT THE A.O. SHALL LOOK INTO THE AGREEMENT ENTERED INTO BETWEEN THE ASSESSEE AND THE GREEN CITY GANDHINAGAR /CO-OPERATIVE SOCIETY LTD. AS PER THE D IRECTIONS OF THE HON'BLE ITAT. 1 HAVE CAREFULLY LOOKED INTO 'AGREEME NT DATED 26.03.1999 BETWEEN THE ASSESSEE AND THE GREEN CITY GANDHINAGAR CO. OPERATIVE SOCIETY LTD., GANDHINAGAR. THE GREEN CITY GANDHINAGAR CO. OPERATIVE SOCIETY LTD. IS REGISTERE D CO. OPERATIVE HOUSING SOCIETY REGISTERED UNDER CO. OPERATIVE SOCI ETY'S ACT, 1961 AT SR. NO.16619 ON 24.03.1999. 8. THE CAREFULLY STUDY OF AGREEMENT DATED 20 .03.1999 REVEALS THAT: AS PER CLAUSE 9 OF AGREEMENT, ALL AMOUNTS RECEIVED BY THE ASSESSEE FROM MEMBERS ON BEHALF OF THE SOCIETY AND THE SAID AMOUNTS ARE TO BE CREDITED TO THE SOCIETY. IN THE SIMILAR MANNER ALL EXPENSES INCURRED BY THE ASSESSEE WITH REFERENCE TO THE PROJECTS ON BEHA LF OF THE SOCIETY HAVE TO BE DEBITED TO THE ACCOUNT OF THE SOCIETY. F URTHER AS PER CLAUSE 18 PF AGREEMENT THE ASSESSEE HAS A RIGHT TO RECEIVE REMUNERATION OF 18 % OF TOTAL PROJECT COST FROM THE SOCIETY. I THER EFORE FIND THAT IN ACCORDANCE WITH THE AGREEMENT THE ASSESSEE HAS TO W ORKED OUT THE COST OF PROJECT AT THE END OF EACH FINANCIAL YEAR. ON SUCH PROJECT COST THE ASSESSEE HAS TO WORK OUT REMUNERATION AT 18 % O F PROJECT COST. SUCH REMUNERATION INCOME HAS TO BE OFFERED TO TAX B Y THE ASSESSEE ON I.T.A NOS.3190,3191 &3192/AHD/2011 A.Y. 2000-01,01 -02,02-03 PAGE NO MUKESHBHAI V PATEL HUF VS. ITO 4 ACCRUAL BASIS. THIS IS BECAUSE EVEN IF THE SOCIETY DOES NOT PAY ANYTHING TO THE ASSESSEE, THE ASSESSEE HAS RIGHT TO RECEIVE THE SAID AMOUNT AS PER CLAUSE OF THE AGREEMENT AND AS PER TH IS CLAUSE THE ASSESSEE HAS TO DEBIT THE SOCIETY, FOR REMUNERATION AT 18 % OF PROJECT COST. I FIND THAT THE FINAL ACCOUNTS PREPARED BY T HE ASSESSEE ARE NOT IN TUNE WITH THE AGREEMENT AS THERE IS NO INDICATION O F ANY REMUNERATION RECEIVABLE IN THE P&L ACCOUNT PREPARED. I FURTHER F IND THAT THE P&L ACCOUNT PREPARED BY THE ASSESSEE IS BASICALLY WITH REFERENCE TO EXPENSES INCURRED ON BEHALF OF THE SOCIETY AND THE AMOUNTS RECEIVED ON BEHALF OF THE SOCIETY. THEREFORE THE P&L ACCOUN T PREPARED BY THE ASSESSEE DOES NOT REFLECT THE PROFIT. I ALSO FIND THAT AS PER THIS AGREEMENT THE ASSESSEE WAS NOT ENGAGED IN ANY BUSIN ESS VENTURE BECAUSE THE ASSESSEE WAS ENGAGED BY THE CO. OPERATI VE SOCIETY TO RENDER PROFESSIONAL SKILL AND MANAGE THE CONSTRUCTI ONS FOR A FIXED REMUNERATION OF 18 % OF PROJECT COST. THE ASSESSEE DID NOT EARN ANY RISK OF INCURRING LOSS. I THEREFORE FIND THAT AS P ER THIS AGREEMENT THE ASSESSEE WAS ONLY ENGAGED IN PROFESSIONAL WORK AND 18 % OF THE PROJECT COST WAS TAXABLE IN THE HANDS OF ASSESSEE A S PROFESSIONAL INCOME. OWNERSHIP OF LAND IT IS CLEAR FROM CLAUSE 1 OF AGREEMENT THAT THERE W AS BANAKHAT (AGREEMENT TO PURCHASE) DATED 03.03.1999 FOR PURCHA SE OF LAND ADMEASURING 7487 SQR. MTR. OUT OF WHICH 4100 SQR. M TR. LAND HAS BEEN PURCHASED BY THE GREEN CITY GANDHINAGAR CO OPERATIV E SOCIETY LTD. VIDE REGISTERED SALE / PURCHASE DEED, REGISTRATION NO. 1622 DATED 26.03.1999. FOR REMAINING LAND I.E. 3387 SQR. MTR, THE CONSIDERATION IS TO BE PAID TO THE LAND OWNER. HOWEVER ON REQUEST , THE LAND OWNER HAS HANDED OVER THE POSSESSION OF REMAINING PART OF LAND ADMEASURING 3387 SQR. MTR. TO THE GREEN CITY GANDHI NAGAR CO. OPERATIVE SOCIETY LTD. THE GREEN CITY GANDHINAGAR C O. OPERATIVE SOCIETY LTD. IS LAND OWNER ADMEASURING 4100 SQR. MT RS AS PER PURCHASE SALE DEED DATED 26.03.1999 ON WHICH THE PR OJECT WAS CARRIED OUT. THIS CLEARLY INDICATES THAT THE LAND IS PURCHASED B Y GREEN CITY GANDHINAGAR CO. OPERATIVE SOCIETY LTD. THE ASSESSEE HAS NOT PURCHASED THE LAND OR THE ASSESSEE HAS NOT BROUGHT THE LAND FOR PROJECT. THE POSSESSION HAS BEEN HANDED OVER TO THE ASSESSEE FOR I.T.A NOS.3190,3191 &3192/AHD/2011 A.Y. 2000-01,01 -02,02-03 PAGE NO MUKESHBHAI V PATEL HUF VS. ITO 5 CONSTRUCTION AND DEVELOPMENT WORK. THE POSSESSION OF LEND DOES NOT AMOUNTS TO OWNERSHIP. PAYMENT OF REMUNERATION AT 18 % OF TOTAL COST OF P ROJECT TO THE ASSESSEE CLAUSE 18 OF AGREEMENT THE ASSESSEE HAS RIGHT TO RECEIVE REMUNERATION OF 1 8% OF TOTAL PROJECT COST FROM THE CO. OPERATIVE HOUSING SOCIETY, IT IS DEAR FROM CLAUSE 18 OF AGREEMENT THAT ASSESSEE HAS ACTED ON BEHALF OF T HE GREEN CITY GANDHINAGAR CO. OPERATIVE SOCIETY LTD AND WAS ENTIT LED TO GET FIXED CONSIDERATION FROM THE GREEN CITY GANDHINAGAR CO. O PERATIVE SOCIETY LTD FOR DEVELOPMENT OF HOUSING PROJECT. HOW EVER, THE ASSESSEE HAS PREPARED ACCOUNTS IN HIS OWN WAY. THE FINAL ACCOUNTS PREPARED BY THE ASSESSEE DOES NO T HAVE INDICATION OF ANY REMUNERATION RECEIVED IN P&L ACCOUNT. THE P& L ACCOUNT PREPARED IS BASICALLY WITH REFERENCE TO THE EXPENSE S INCURRED ON BEHALF OF THE CO OPERATIVE HOUSING SOCIETY. THEREFO RE, THE P&L ACCOUNT DOES NOT REFLECT THE ASSESSEE'S PROFIT. AS PER AGREEMENT THE ASSESSEE WAS NOT ENGAGED IN BUSINESS VENTURE BECAUS E THE ASSESSEE WAS ENGAGED BY COOPERATIVE HOUSING SOCIETY TO RENDE R ASSESSEE'S PROFESSIONAL SKILL AND MANAGE THE CONSTRUCTION WORK FOR A FIXED CONSIDERATION AT 18% OF PROJECT COST. THE REMUNERAT ION AS PER AGREEMENT IS TAXABLE. IN VIEW OF WHAT IS DISCUSSED ABOVE IT IS CLEAR THAT OWNER OF LAND IS CO. OPERATIVE SOCIETY AS PER PARA. L OF AGREEMENT AND T HE PAYMENT OF REMUNERATION AT 18% OF TOTAL COST OF PROJECT IS PAY ABLE TO THE ASSESSEE AS PER PARA. 18 OF AGREEMENT. THESE TWO IMPORTANT P OINTS ARE AS UNDER: 1. OWNERSHIP OF LAND IT IS DEAR FROM CLAUSE 1 OF AGREEMENT THAT AS PER PURCHASE DEED REGISTERED ON 26.03.1999 THE OWNER OF THE LAND AT GANDHINAGAR SURVEY NO. 331 PAR T 11 IS GREEN CITY GANDHINAGAR CO-OPERATIVE SOCIETY L TD., GANDHINAGAR. I.T.A NOS.3190,3191 &3192/AHD/2011 A.Y. 2000-01,01 -02,02-03 PAGE NO MUKESHBHAI V PATEL HUF VS. ITO 6 2. PAYMENT OF REMUNERATION AT 18% OF TOTAL COST OF PROJECT PAYABLE TO THE ASSESSEE. THE GREEN CITY GANDHINAGAR CO-OPERATIVE SOCIETY LTD HAS TO PAY AN AMOUNT EQUAL TO 18% OF TOTAL COST OF PROJECT TO THE ASSESSEE AS REMUNERATION FOR CARRYIN G OUT ALL PROJECT WORK AS PER CLAUSE 18 OF AGREEMENT. THE ASSESSEE WAS NOT ENGAGED IN ANY BUSINESS ACTIVI TY AND THEREFORE THE QUESTION OF DERIVING AN INCOME FROM E LIGIBLE BUSINESS AS PER PROVISIONS OF SECTION 8OIB(1) R.W.S 80IB(10) OF IT ACT, 1961 DOES NOT ARISE. ACCORDINGLY, THE CLAIM OF THE ASSESSEE F OR DEDUCTION U/S.80IB(L) R.W.S 80IB(10) OF THE IT ACT, 1961 IS N OT TENABLE AND AS SUCH REJECTED. 4. IN APPEAL, THIS ACTION OF THE AO WAS AGAIN CONFI RMED BY LD. CIT(A) AFTER TAKING INTO CONSIDERATION THE SUBMISSION OF T HE ASSESSEE REPRODUCED BY HIM IN PARA 4.2 OF HIS ORDER BY OBSERVING AS UNDER: - 5. I HAVE CAREFULLY GONE THROUGH THE ORDER OF THE HON'BLE 1TAT IN THE CASE OF THIS ASSESSEE AND ORDER OF HON'BLE ITAT IN THE CASE OF M/S. SHAKTI CORPORATION, BARODA DATED 07.11.2008 - 32 SO T 438, AND SUBMISSIONS MADE BY THE ASSESSEE, THE COPY OF AGREE MENT DATED 26.03.1999. I WOULD LIKE TO REPRODUCE THE PERTINENT OBSERVATIONS MADE BY THE HON'BLE ITAT, AHMEDABAD IN THE CASE OF M/S. S. SHAKTI CORPORATION (SUPRA) ON THE ISSUE: ' WE MAY MENTION HERE THAT, IN OUR OPINION,. THE DE CISION IN THE CASE OF RADHE DEVELOPERS & ORS (SUPRA) WILL NOT APP LY IN A CASE WHERE THE ASSESSEE HAS ENTERED INTO THE AGREEM ENT FOR A FIXED REMUNERATION MERELY AS A CONTRACTOR TO CONSTR UCT OR DEVELOP THE HOUSING PROJECT ON BEHALF OF THE LANDOW NER ONLY. THE AGREEMENT ENTERED INTO IN THAT CASE WILL NOT EN TITLE THE DEVELOPER TO HAVE THE DOMINANT CONTROL OVER THE PRO JECT AND ALL THE RISKS INVOLVED THEREIN WILL VEST WITH THE LANDO WNER ONLY. THE INTEREST OF THE DEVELOPER WILL BE RESTRICTED ONLY F OR THE FIXED REMUNERATION FOR WHICH HE WOULD BE RENDERING THE SE RVICES.' IN THIS PARTICULAR CASE, NOT ONLY IS THE ASSESSEE N OT OWNER OF THE LAND ON WHICH THE PROPERTY IS DEVELOPED BUT ALSO TH E AGREEMENT DATED 20.03.1999 REVEALS THAT: I.T.A NOS.3190,3191 &3192/AHD/2011 A.Y. 2000-01,01 -02,02-03 PAGE NO MUKESHBHAI V PATEL HUF VS. ITO 7 A) AS PER CLAUSE 9 OF AGREEMENT, ALL AMOUNTS RECEIV ED BY THE ASSESSEE FROM MEMBERS ON BEHALF OF THE SOCIETY AND THE SAID AMOUNTS ARE TO BE CREDITED TO THE SOCIETY. IN THE SIMILAR MANNER ALL EXPENSES INCURRED BY THE ASSESSEE WITH REFERENC E TO THE PROJECTS ON BEHALF OF THE SOCIETY HAVE TO BE DEBITE D TO THE ACCOUNT OF THE SOCIETY. B) FURTHER AS PER CLAUSE 18 OF AGREEMENT THE ASSESS EE HAS A RIGHT TO RECEIVE REMUNERATION OF 18 % OF TOTAL PROJ ECT COST FROM THE SOCIETY. I THEREFORE FIND THAT IN ACCORDANCE WITH THE AGREEM ENT THE ASSESSEE WAS ENTITLED TO RECEIVE REMUNERATION AT 18 % OF PROJECT COST IRRESPECTIVE OF THE ACTUAL PROFIT OR LOSS INCURRED ON THE PROJECT. THERE IS NO CLAUSE PUTTING ANY RESTRICTION ON THIS ENTITL EMENT IN THE ENTIRE AGREEMENT IN ANY EVENTUALITY. THEREFORE, AS PER THE CRITERIA LAID DOWN BY THE HON 'BLE ITAT, IT CAN BE SAID THAT ALL THE RISKS INVOLVED_THEREIN WIL L VEST WITH LAND OWNER ONLY (IN THIS CASE GREEN CITY GANDHINAGAR CO- OP. SOC. LTD). THE INTEREST OF THE DEVELOPER IS RESTRICTED ONLY FO R THE FIXED REMUNERATION I.E. 18% FOR WHICH HE HAD RENDERED THE SERVICES. AS THE RISK INVOLVED AND THE BENEFIT OF ENHANCED PR OFITABILITY IF ANY IS NOT WITH THE ASSESSEE HE IS A MERE CONTRACTO R AND CANNOT BE SAID TO BE THE DEVELOPER IN ANY SENSE. ALTHOUGH, THE ACCOUNTS PREPARED BY THE ASSESSEE ARE NOT IN TUNE WITH THE AGREEMENT AS THERE IS NO INDICATION OF ANY REMUNERATION RECEIVABLE IN THE P&L ACCOUNT PREPARED; STILL ERRON EOUS PREPARATION OF ACCOUNTS BY THE ASSESSEE CANNOT IN ANY WAY EFFEC T THE TERMS OF A VALID WRITTEN AGREEMENT WITH THE LANDOWNER. I FUR THER FIND THAT THE P&L ACCOUNT PREPARED BY THE ASSESSEE IS BASICALLY W ITH REFERENCE TO EXPENSES INCURRED ON BEHALF OF THE SOCIETY AND THE AMOUNTS RECEIVED ON BEHALF OF THE SOCIETY. THEREFORE THE P & L ACCOU NT PREPARED BY THE ASSESSEE DOES NOT REFLECT ITS ACTUAL PROFIT AS PER AGREEMENT TO WHICH IT IS ENTITLED. I ALSO FIND THAT AS PER THIS AGREEME NT THE ASSESSEE WAS NOT ENGAGED IN ANY DEVELOPMENT VENTURE BECAUSE THE ASSE SSEE WAS ENGAGED BY THE CO. OPERATIVE SOCIETY TO RENDER PROF ESSIONAL SKILL AND MANAGE THE CONSTRUCTIONS FOR A FIXED REMUNERATION O F 18 % OF PROJECT I.T.A NOS.3190,3191 &3192/AHD/2011 A.Y. 2000-01,01 -02,02-03 PAGE NO MUKESHBHAI V PATEL HUF VS. ITO 8 COST. THE ASSESSEE DID NOT RUN ANY RISK OF INCURRIN G LOSS OR EVEN DIMINUTION OF PROFIT. I THEREFORE FIND THAT AS PER THIS AGREEMENT THE ASSESSEE WAS ONLY ENGAGED IN WORK AS A CONTRACTOR A T BEST (WITHOUT EVEN NORMAL RISK WHICH IS THERE IN CASE OF CONTRACT ON FIXED RECEIPT FOR A WORK) AND WAS ENTITLED TO A FIXED REMUNERATION O 18% OF THE PROJECT COST. THEREFORE, AS PER THE DIRECTIONS OF THE HON BLE ITAT IN THE ASSESSEES OWN CASE AND THEREBY FOLLOWING THE JUDGM ENT AND GUIDELINES GIVEN IN THE CASE OF M/S. SHAKTI CORPORA TION (SUPRA) I UPHOLD THE DECISION OF THE AO AND CONFIRM THE DISAL LOWANCE OF THE CLAIM OF THE ASSESSEE HUF FOR DEDUCTION U/S. 80IB(1 ) R.W.S. 80IB(10) OF IT ACT, 1961. THEREFORE, THE GROUND NO. 1 IS IN ALL THE 3 APPEALS ARE DISMISSED. 5. FURTHER AGGRIEVED NOW ASSESSEE IS BEFORE US. 6. AT THE TIME OF HEARING LEARNED COUNSEL OF THE AS SESSEE REITERATED THE SUBMISSION MADE BEFORE LD. CIT(A). ON THE OTHER HA ND, LD. DR RELIED ON THE ORDER OF ASSESSING OFFICER. 7. AFTER HEARING BOTH THE PARTIES AND PERUSING THE RECORD, WE FIND THAT THE ONLY ISSUE TO BE DECIDED BY US IS WHETHER THE LOWER AUTHORITIES HAVE CONSIDERED THE CLAIM OF THE ASSESSEE U/S 80IB(1) R. W.S. 80IB(10) OF THE ACT FOLLOWING THE DIRECTION OF THE HONBLE ITAT IN THE ORIGINAL PROCEEDINGS. AS PER THE DIRECTIONS OF THE TRIBUNAL THE ASSESSING OF FICER WAS TO LOOK INTO THE DEVELOPMENT AGREEMENT AND DECIDE WHETHER THE ASSESS EE HAS PURCHASED THE LAND FOR A FIXED CONSIDERATION FROM THE LAND OWNER AND HAS DEVELOPED THE HOUSING PROJECT AT ITS OWN RISKS AND COST INVOLVED IN THE PROJECT. IN CASE THE AO FINDS THAT PRACTICALLY THE LAND HAS BEEN BOUGHT BY THE DEVELOPER AND THE DEVELOPER HAS ALL DOMINANT CONTROL OVER THE PROJECT AND HAS DEVELOPED THE LAND AT HIS COST AND RISKS, THE AO SHOULD ALLOW THE DEDUCTION TO THE ASSESSEE I.T.A NOS.3190,3191 &3192/AHD/2011 A.Y. 2000-01,01 -02,02-03 PAGE NO MUKESHBHAI V PATEL HUF VS. ITO 9 U/S 80IB(10). IN CASE THE AO FINDS THAT THE DEVEL OPER HAS ACTED ON BEHALF OF THE LAND OWNER AND GOT THE FIXED CONSIDERATION FROM THE LAND OWNER FOR THE DEVELOPMENT OF THE HOUSING PROJECT, THE ASSESSEE SH ALL NOT BE ALLOWED DEDUCTION U/S 80IB(10) OF THE ACT TO THE ASSESSEE. THE AO PLACING RELIANCE ON CLAUSE 18 OF THIS AGREEMENT WHICH READS AS UNDER : AS PER THIS AGREEMENT FOR ALL THIS WORK DONE FIRST PARTY HAS TO PAY THE REMUNERATION OF 18% OF THE TOTAL PROJECT COST TO TH E SECOND PARTY AND SECOND PARTY HAS A RIGHT TO RECEIVE IT. HELD THAT ASSESSEE WAS NOT ENGAGED IN BUSINESS VENT URE AND WAS ENGAGED BY THE COOPERATIVE SOCIETY TO RENDER PROFESSIONAL SKIL L AND MANAGED THE CONSTRUCTION FOR A FIXED REMUNERATION OF 18 % OF PR OJECT COST. THERE WAS NO RISK OF INCURRING LOSS TO THE ASSESSEE AS PER THIS AGREEMENT. THE ASSESSEE WAS ENGAGED ONLY IN PROFESSIONAL BUSINESS AND 18% P ROJECT COST WAS TAXABLE IN HIS HAND AS PROFESSIONAL INCOME AND SINCE ASSESS EE WAS NOT ENGAGED IN BUSINESS ACTIVITY, THEREFORE QUESTION OF DERIVING I NCOME FROM ELIGIBLE BUSINESS AS PER PROVISION OF SECTION 80IB(10) OF TH E ACT DID NOT ARISE. THIS ACTION OF AO HAS RIGHTLY BEEN CONFIRMED BY LD. CIT( A) AS WE FIND THAT AS PER THE DEVELOPMENT AGREEMENT, THE ASSESSEE WAS NOT ENGAGED IN ANY DEVELOPMENT VENTURE AND WAS ONLY ENGAGED IN WORK AS A CONTRACTOR AND WAS ENTITLED TO A FIXED REMUNERATION OF 18 % OF THE PRO JECT COST. THEREFORE IN VIEW OF THE DIRECTION OF THE HONBLE ITAT IN THE OR IGINAL PROCEEDINGS WE ARE NOT INCLINED TO INTERFERE WITH THE ORDER PASSED BY LD. CIT(A) AND THE SAME IS HEREBY UPHELD. I.T.A NOS.3190,3191 &3192/AHD/2011 A.Y. 2000-01,01 -02,02-03 PAGE NO MUKESHBHAI V PATEL HUF VS. ITO 10 9. IN THE RESULT, ASSESSEES APPEALS ARE DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON THE DATE MENTIONE D HEREINABOVE AT CAPTION PAGE SD/- SD/- (T.R. MEENA) ( D.K. TYAGI) ACCOUNTANT MEMBER J UDICIAL MEMBER AHMEDABAD : DATED 23/08/2013 AK / COPY OF ORDER FORWARDED TO:- 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER/ , / ,