The ITO, Ward-9(1), Ahmedabad V. M/s. Shridhar Associates, Ahmedabad

ITA 33/AHD/2011

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 6036 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 5 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-06-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 10-06-2014
• Assessment Year: 2007-2008
• Appeal Filed On: 06-01-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: J P JHANGID
• Assessee Lawyers: PRAMOD KEDIA
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, AHMEDABAD (BEFORE SHRI D.K. TYAGI, J.M. & SHRI ANIL CHATURVE DI, A.M.) I.T. A. NO. 33/AHD/2011 (ASSESSMENT YEAR: 2007-08) THE ITO WARD- 9(1), AHMEDABAD V/S SHRIDHAR ASSOCIATES SHIV DARSHAN SOCIETY OPP. SWASTI PARK NR. UMA BHAVANI ROAD, AHMEDABAD (APPELLANT) (RESPONDENT) PAN: AAUFS 0450 N APPELLANT BY : SHRI J.P. JHANGID, SR. D.R . RESPONDENT BY : SHRI PRAMOD KEDIA ( )/ ORDER DATE OF HEARING : 10-06-2014 DATE OF PRONOUNCEMENT : 27 -06-2014 PER SHRI ANIL CHATURVEDI,A.M. 1. THIS APPEAL IS FILED BY THE REVENUE AGAINST THE ORD ER OF CIT(A)-XV, AHMEDABAD DATED 19.11.2010 FOR A.Y. 2007-08. 2. THE FACTS AS CULLED OUT FROM THE MATERIAL ON RECORD ARE AS UNDER. 3. ASSESSEE IS A FIRM STATED TO BE ENGAGED IN THE CONS TRUCTION OF HOUSING PROJECTS. ASSESSEE FILED ITS RETURN OF INCOME FOR A.Y. 2007-08 ON 29.10.2007 DECLARING TOTAL INCOME OF RS. NIL AFTER CLAIMING DEDUCTION U/S. 80IB(10) OF RS. 37,97,409/-. THE CASE WAS SELECTED FOR SCRUTINY AND ITA NO 33/AH D/2011 . A.Y. 2007- 08 2 THEREAFTER THE ASSESSMENT WAS FRAMED U/S. 143(3) VI DE ORDER DATED 18,12,2009 AND THE TOTAL INCOME WAS DETERMINED AT R S. 37,97,410/-. AGGRIEVED BY THE ORDER OF A.O, ASSESSEE CARRIED THE MATTER BEFORE CIT(A). CIT(A) VIDE ORDER DATED 19.11.2010 ALLOWED THE APPEAL OF THE ASSESSEE. AGGRIEVED BY THE ORDER OF CIT(A), REVENUE IS NOW IN APPEAL BEFORE US AND HAS RAISED THE FOLLOWING GROUNDS:- 1. THE ID. COMMISSIONER OF INCOME-TAX (A)-XV, AHMEDABA D HAS ERRED IN LAW AND ON FACTS IN DIRECTING THE ASSESSING OFFICER TO ALLOW THE ASSESS EE'S CLAIM FOR DEDUCTION OF RS.37,97,409/- U.S. 80IB(10) OF THE ACT. 2. THE ID. COMMISSIONER OF INCOME-TAX (A)-XV, AHMEDABA D ERRED IN HOLDING THAT THE ASSESSEE FULFILLS THE CONDITIONS LAID DOWN FOR CLAIMING DEDUCTION U/S .80IB(10) EVEN WHEN THE LAND WAS IN THE NAME OF SHIVDARSHAN (TRAGAD) CO-OPERATIVE HOUSING SOCIET Y LTD., WHICH IS A SEPARATE LEGAL ENTITY IN THE EYE OF LAW AND THE ASSESSEE ENTERED INTO THE PROJEC T BY A DEVELOPMENT AGREEMENT WITH THE SOCIETY. THE ENTIRE RESPONSIBILITY TO EXECUTE THE HOUSING PR OJECT AND ABIDE BY THE TERMS AND CONDITIONS OF ITS APPROVAL RIGHT FROM THE INCEPTION OF THE PROJEC T TILL ITS COMPLETION RESTS WITH THE SOCIETY. ASSESSEE WAS JUST A CONTRACTOR OF THE LAND OWNER CO NSTRUCTING 96 RESIDENTIAL UNITS AND NOT A DEVELOPER 4. THOUGH REVENUE HAS RAISED TWO DIFFERENT GROUNDS BUT THE ONLY EFFECTIVE GROUND IS WITH RESPECT TO DELETION OF CLAIM OF DEDU CTION U/S. 80IB(10) OF THE ACT. 5. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, A.O NO TICED THAT ASSESSEE FIRM HAD CONSTRUCTED A HOUSING PROJECT AND SHOWN NE T PROFIT OF RS. 37,95,766/- AND THE ENTIRE PROFIT WAS CLAIMED AS DE DUCTION U/S. 80IB(10) OF THE ACT. A.O WAS OF THE VIEW THAT ASSESSEE IS N OT ELIGIBLE FOR DEDUCTION U/S. 80IB(10) FOR THE REASON THAT THE SOC IETY THAT IS SHIV DARSHAN (TRAGED) CO-OP. HOUSING SOCIETY HAD ACQUIRE D THE LAND AND WAS THE OWNER OF THE LAND AND IT HAD GOT THE PLAN FOR H OUSING PROJECT APPROVED FROM THE LOCAL AUTHORITY AND THE SOCIETY WAS THE PR INCIPAL AND ASSESSEE WAS A CONTRACTOR WHO HAD ENTERED INTO AN AGREEMENT WITH SOCIETY FOR THE CONSTRUCTION OF HOUSING PROJECT AS PER THE APPROVAL OBTAINED BY THE ITA NO 33/AH D/2011 . A.Y. 2007- 08 3 SOCIETY FOR CONSTRUCTION ON THE LAND OWNED BY THE S OCIETY. A.O WAS THEREFORE OF THE VIEW THAT SINCE THE ASSESSEE WAS N OT THE DEVELOPER OF THE PROJECT AS IT WAS NOT THE DESIGNER, CREATOR AND OWN ER OF THE HOUSING PROJECT, ASSESSEE DID NOT SATISFY THE PRIMARY REQUI REMENT OF SECTION 80IB(10) THAT THE ASSESSEE MUST DEVELOP AND BUILD A HOUSING PROJECT. HE THEREFORE CONCLUDED THAT ASSESSEE WAS NOT ELIGIB LE FOR DEDUCTION UNDER 80IB(10) AND ACCORDINGLY DENIED THE CLAIM OF DEDUCTION. AGGRIEVED BY THE ORDER OF A.O, ASSESSEE CARRIED THE MATTER BEFORE CIT(A). CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE ALLOWED THE CLAIM OF THE ASSESSEE BY HOLDING AS UND ER:- 9. AFTER GOING THROUGH RIVAL SUBMISSIONS IT IS SEEN THAT THE AO HAS NOT DISPUTED THAT THE APPELLANT DID NOT FULFILL ANY OF THE CONDITIONS SPECIFIED IN SECTION 80IB(10) FROM CLAUSE (A) TO (D) WITH RESPEC T TO APPROVALS FROM LOCAL AUTHORITY, COMPLETION OF PR OJECT WITHIN THE SPECIFIED TIME LIMITS, ONE ACRE OF LAND CONDITION, 1500 SQ. FT. BUILT-UP AREA CONDI TION OF EACH UNIT IN THE PROJECT, AND THAT OF PERCENTAGE OF CONSTRUCTION FOR COMMERCIAL USE. HIS OBJECTION IS THAT THE APPELLANT IS NOT THE OWNER OF THE LAND. THIS-OBJECTION OF THE AO HAS TO BE SEE N IN THE LIGHT OF THE TESTS LAID DOWN BY HON'BLE ITAT BENCH A AHMEDABAD DECISION DATED 7.11.2008 IN THE CASE OF M/S.SHAKTI CORPORATION, BARODA IN ITA NO.1503/AHD/2008 IN AY 2005-06. HERE THE APPELLANT HAS BEEN FOUND MEETING THE TESTS LAID DOWN IN HON'BLE ITAT BENCH A AHMEDABAD D ECISION IN THE CASE OF M/S.SHAKTI CORPORATION (PARA 16 OF THE DECISION) AS IT HAD PR ACTICALLY PURCHASED THE LAND (IN THIS CASE FIRST PAYMENT TOWARDS COST OF LAND OF RS.51,000 WAS MADE ON 4.7.2001 AND SECOND PAYMENT OF RS.1,00,000 ON 7.11.2001 BY THE PARTNERS DIRECTLY T O THE OWNER OF THE LAND SHRI DHYABHAI NATHLAL PATEL WHEREAS THE COOPERATIVE SOCIETY CAME INTO EXI STENCE ON 1.12.2001.THE ASSESSING OFFICER HAS NOTED IN PARA 2.21 OF THE ASSESSMENT ORDER THAT THE SOCIETY WAS PROPOSED AND CAME INTO EXISTENCE AT THE BEHEST OF THE FIRM IT IS ALSO SEEN THAT THE CHAIRMAN OF THE SOCIETY (PIYUSH HAPANI) IS THE HUSBAND OF ONE OF THE PARTNERS OF THE FIRM AND THE SECRETARY (SHRI KAMLESHBHAI B PATEL ) IS THE BROTHER OF ONE OF THE PARTNERS OF THE FIRM.) AND IT BORE THE ENTIRE COST AND RISK OF DEVELOPING THE PROJECT (CLAUSE 19, 21, 23, AND 25 OF THE DEVELOPME NT AGREEMENT INDICATE THAT) THEREFORE IN MY VIEW IT IS ELIGIBLE FOR DEDUCTION U/S.80IB(10) AND THE AO IS DIRECTED TO ALLOW THE SAME. 6. AGGRIEVED BY THE ORDER OF CIT(A), REVENUE IS NOW IN APPEAL BEFORE US. 7. BEFORE US, LD. D.R. TOOK US THROUGH THE ORDER OF A. O AND SUPPORTED THE ORDER OF A.O. ON THE OTHER HAND LD. A.R. SUPPORTED THE ORDER OF CIT(A). HE FURTHER SUBMITTED THAT ON IDENTICAL FACTS THE AS SESSEE HAS BEEN ALLOWED THE DEDUCTION UNDER 80IB(10) IN A.Y. 04-05 & 05-06 AFTER ITA NO 33/AH D/2011 . A.Y. 2007- 08 4 VERIFICATION OF THE CLAIM IN SCRUTINY ASSESSMENTS. HE ALSO PLACED ON RECORD THE COPY OF THE AFORESAID ASSESSMENTS ORDERS . HE THEREFORE SUBMITTED THAT SINCE THE PROJECT ON WHICH THE ASSES SEE HAD CLAIMED UNDER 80IB(10) WAS THE SAME PROJECT ON WHICH THE ASSESSEE HAS BEEN ALLOWED DEDUCTION IN EARLIER YEARS, CIT(A) HAS RIGHTLY ALLO WED THE CLAIM OF THE ASSESSEE. HE THUS SUPPORTED THE ORDER OF CIT(A). IN THE REJOINDER THE LD. D.R. SUBMITTED THAT WHILE FRAMING THE ASSESSMENT FO R A.Y 04-05 & 05- 06, THERE IS NO DISCUSSION BY THE A.O ABOUT THE FUL FILLING OF THE VARIOUS CONDITIONS FOR THE ELIGIBILITY OF DEDUCTION UNDER 8 0IB(10) BY THE ASSESSEE AS THE ORDER ARE NOT SPEAKING ORDERS. 8. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. WE FIND THAT CIT(A) WHILE GRANTING THE RELIEF HAS N OTED THAT ASSESSEE HAS MET THE TESTS LAID DOWN BY THE HONBLE ITAT AHMEDAB AD BENCH IN THE CASE OF SHAKTI CORPORATION FOR CLAIMING DEDUCTION U NDER 80IB(10). WE FURTHER FIND THAT IN THE ASSESSMENTS FRAMED U/S. 14 3(3) FOR A.Y. 04-05 & 05-06, THE ASSESSEES CLAIM FOR DEDUCTION UNDER 80I B(10) HAS BEEN ALLOWED BY REVENUE. BEFORE US LD. D.R. HAS SUBMITTE D THAT IN THE ORDERS PASSED BY A.O FOR EARLIER YEARS, THERE IS NO DISCUS SION ABOUT THE EXAMINATION OF CLAIM OF ASSESSEE WITH RESPECT TO 80 IB(10) AND THEREFORE IT CANNOT BE SAID THAT THE CLAIM OF ASSESSEE WAS EX AMINED AND ACCEPTED BY THE REVENUE. WE DO NOT AGREE WITH THE SUBMISSION OF THE LD. D.R. BECAUSE WHEN AN ORDER IS PASSED U/S. 143(3) OF THE ACT, A PRESUMPTION CAN BE RAISED THAT SUCH AN ORDER HAS BEEN PASSED AF TER AN APPLICATION OF MIND AND FOR THE AFORESAID VIEW, WE FIND SUPPORT BY THE FULL BENCH DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. KALVINATOR OF INDIA LTD. (2002) 256 ITR 1 (DEL.) (F.B). FURTH ER, BEFORE US REVENUE ITA NO 33/AH D/2011 . A.Y. 2007- 08 5 HAS NOT BROUGHT ANY MATERIAL ON RECORD TO CONTRADIC T THE SUBMISSIONS OF THE ASSESSEE THAT THE PROJECT FOR WHICH THE ASSESSE E HAS CLAIMED DEDUCTION UNDER 80IB(10) IN THE YEAR UNDER CONSIDER ATION WAS DIFFERENT THAN THAT OF EARLIER YEARS. IN VIEW OF THE AFORESAI D FACTS WE FIND NO REASON TO INTERFERE WITH THE ORDER OF CIT(A) AND THUS THIS GROUND OF REVENUE IS DISMISSED. 9. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISS ED. ORDER PRONOUNCED IN OPEN COURT ON 27 - 06 - 2014. SD/- SD/- (D.K.TYAGI) (ANIL CHATURVEDI) JUDICIAL MEMBER 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.REGISTRAR IT AT,AHMEDABAD