The ACIT, Circle-5, Baroda V. M/s. Shree Narayan Housing Corpn., Baroda

ITA 3442/AHD/2009

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 6423 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 5 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-06-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 02-06-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 31-12-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B L YADAV
• Section: 80IB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH C BEFORE SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER AND SHRI D.C. AGRAWAL, ACCOUNTANT MEMBER DATE OF HEARING : 02/06/2011 DRAFTED ON: 06 /06/2011 ITA NO.3442/AHD/2009 ASSESSMENT YEAR : 2006-07 THE ASST.CIT CIRCLE-5 BARODA 390 007 VS. M/S.SHREE NARAYAN HOUSING CORPORATION VAIKUNTH, NR.BIPOD JAKAT NAKA BARODA PAN/GIR NO. : AAFPS 6879J ( APPELLANT ) .. ( RESPONDENT ) APPELLANT BY : SHRI B. L. YADAV, SR. D.R. RESPONDENT BY: - NONE - O R D E R PER SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER : THIS IS AN APPEAL AT THE BEHEST OF THE REVENUE WHI CH HAS EMANATED FROM THE ORDER OF THE LEARNED CIT(APPEALS) -V BARODA DATED 20/10/2009 PASSED FOR ASSESSMENT YEAR 2006-07 ON TH E FOLLOWING GROUNDS: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) ERRED IN DIRECTING TO VERIFY WHETHER THE DEV ELOPER HAS DOMINANT CONTROL OVER THE PROJECT AND HAS DEVELOPED THE LAND AT ITS OWN COST AND RISK AND IF SO THE DEDUCTION U/ S.80IB (10) OF RS.26,44,967/- AS CLAIMED BY THE ASSESSEE HAS TO BE ALLOWED. 2. THE LEARNED CIT(A) ERRED IN NOT APPRECIATING TH AT THE APPROVAL FOR DEVELOPING AND BUILDING HOUSING PROJEC TS WAS GRANTED TO THE ORIGINAL OWNERS OF THE LAND AND NOT TO THE ITA NO.3442/AHD /2009 ACIT VS.M/S.SHREE NARAYAN HOUSING CORPORATION ASST.YEAR 2006-07 - 2 - ASSESSEE, WHO ACTED ONLY AS AN AGENT FOR EXECUTION OF THE PROJECT, WHICH RIGHTS WERE OBTAINED BY THE ASSESSEE FIRM FROM THE ORIGINAL OWNERS. 2. AS PER THE CORRESPONDING ORDERS PASSED U/S.143 (3) OF THE ACT DATED 24/12/2008 THE ASSESSEE-FIRM IS RUNNING A CON STRUCTION BUSINESS UNDER THE NAME AND STYLE OF M/S. SHREE NAR AYAN HOUSING CORPORATION AND DEVELOP A HOUSING PROJECT VAIKUNTH -1 VADODARA. IN RESPECT OF CLAIM OF DEDUCTION U/S.80IB(10) OF TH E ACT THE OBSERVATION OF THE AO WAS THAT ON VERIFICATION OF D OCUMENTS, IT WAS NOTICED THAT THE ASSESSEE-FIRM WAS NOT THE OWNER OF THE LAND. AS PER AO, VADODARA MUNICIPAL CORPORATION HAS GRANTED THE PERMISSION IN THE NAME OF ONE RAMANBHAI PATEL. IT WAS CONCLUDED BY THE AO THAT ASSESSEE BEING NOT THE OWNER AND THE APPROVAL OF HO USING PROJECT BEING NOT GRANTED TO THE ASSESSEE-FIRM, THEREFORE, NOT ENTITLED FOR 80IB(10) DEDUCTION AND THE SAID DEDUCTION COULD ONL Y BE GRANTED TO THE OWNER OF THE LAND. HOWEVER, IT WAS PLACED ON RECORD THAT THE ASSESSEE HAD EXECUTED A BANAKHAT-CUM-DEVELOPMENT AG REEMENT WITH THE LAND OWNER SHRI RAMANBHAI PATEL. BY REFERRING A DECISION OF GUJARAT INDUSTRIAL DEVELOPMENT CORPORATION VS. CIT REPORTED AT (1997)227 ITR 414 FOR THE LEGAL PROPOSITION THAT TH E OBJECT OF THE LEGISLATION HAS TO BE ADHERED TO THEREFORE THE DEDU CTION HAS TO BE ALLOWED ONLY TO THE OWNERS; ACCORDINGLY, THE 80IB( 10) CLAIM OF RS.26,44,967/- WAS DISALLOWED. THE MATTER WAS CARR IED BEFORE THE FIRST APPELLATE AUTHORITY. THE LD.CIT(A) HAS HEARD THE CASE AND ITA NO.3442/AHD /2009 ACIT VS.M/S.SHREE NARAYAN HOUSING CORPORATION ASST.YEAR 2006-07 - 3 - THEREAFTER FOLLOWING THE DECISION OF THE TRIBUNAL A LLOWED THE CLAIM AS PER THE FOLLOWING PARAGRAPH:- 4.3. I HAVE CAREFULLY EXAMINED THE FACTS OF THE CA SE AND PERUSED THE ARGUMENTS OF THE ASSESSING OFFICER. TH E ISSUE OF DEDUCTION U/S.80IB(10) WAS DECIDED IN FAVOUR OF THE APPELLANT AND AGAINST REVENUE BY THE ORDER OF THE JURISDICTIO NAL ITAT, IN THE CASE OF RADHE DEVELOPERS VS ITO WARD 3(2) BAROD A NO.2482/AHD/2006 A BENCH AHMEDABAD, HOWEVER THE DEC ISION WAS PARTLY MODIFIED BY THE SUBSEQUENT DECISION IN T HE CASE OF ITO VS M/S.SHAKTI CORPORATION ITA NO.1503/AHD/2008 DATED 07/11/2008 WHEREIN, THE HONBLE ITAT HAS INDICATED THT THE BENEFIT UNDER 80IB (10) WOULD BE AVAILABLE IF THE D EVELOPER HAS DOMINANT CONTROL OVER THE PROJECT AND HAS DEVEL OPED THE LAND AT ITS OWN COST AND RISK AND THE BENEFIT WOULD BE DENIED IF THE ASSESSEE HAD ENTERED INTO AN AGREEMENT FOR A FI XED REMUNERATION AS A CONTRACTOR TO CONSTRUCT OR DEVELO P THE PROJECT ON BEHALF OF THE LAND OWNER. THE AO IS AC CORDINGLY, DIRECTED TO VERIFY THE AGREEMENT AND OTHER DETAILS IN THE LIGHT OF THE DECISION OF THE TRIBUNAL IN THE CASE OF M/S. SHAKTI DEVELOPERS. THE GROUND IS ALLOWED SUBJECT TO VERIF ICATION. 3. ON THE DATE OF HEARING, NO ONE IS APPEARED FROM THE SIDE OF THE RESPONDENT-ASSESSEE, HOWEVER, WE HAVE HEARD THE LD. DR MR.B.L. YADAV AND SINCE THE ISSUE INTER-ALIA IS COVERED BY THE DECISION OF THIS VERY TRIBUNAL THEREFORE, PROCEED TO DECIDE THI S APPEAL WITHOUT KEEPING PENDING ANYMORE EX-PARTE QUA THE ASSESSEE AFTER HEARING THE LD.DR. THE LD.DR HAS CONTESTED THAT THE ISSUE OF GRANT OF DEDUCTION U/S.80IB(10) IN RESPECT OF A BUILDER NOT AN OWNER, IS SUBJUDICE, THEREFORE, LD.CIT(A) SHOULD NOT HAVE ALL OWED THE CLAIM. ITA NO.3442/AHD /2009 ACIT VS.M/S.SHREE NARAYAN HOUSING CORPORATION ASST.YEAR 2006-07 - 4 - 4. ON HEARING THE SUBMISSIONS, WE ARE NOT INCLINED TO INTERFERE WITH THE FINDINGS OF THE FIRST APPELLATE AUTHORITY WHO HAS SIMPLY FOLLOWED AN ORDER OF THE RESPECTED COORDINATE BENCH . EVEN IF THE LEGALITY OF THE ISSUE IS SUBJUDICE, AS FAR AS THIS FORUM IS CONCERNED, THE MATTER HAS BEEN SETTLED AND WE ARE EXPECTED TO FOLLOW A DECISION OF THE COORDINATE BENCH IF PRONOUNCED ON SIMILAR FA CTS. WE ACCORDINGLY, UPHOLD THE VERDICT OF LD.CIT(A) AND DI SMISS THE GROUNDS OF THE REVENUE. 5. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER SIGNED, DATED AND PRONOUNCED IN THE COURT ON 17 TH JUNE, 2011. SD/- SD/- ( D.C. AGRAWAL) ( MUKUL KR. SH RAWAT ) ACCOUNTANT MEMBER JUDICIAL MEMBE R AHMEDABAD; DATED 17/ 06 /2011 T.C. NAIR, SR. PS COPY OF THE ORDER FORWARDED TO : 1. THE ASSESSEE. 2. THE DEPARTMENT. 3. THE CIT CONCERNED 4. THE LD. CIT(APPEALS)-V, BARODA 5. THE DR, AHMEDABAD BENCH 6. THE GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT.REGISTRAR), ITAT, AHMEDABAD ITA NO.3442/AHD /2009 ACIT VS.M/S.SHREE NARAYAN HOUSING CORPORATION ASST.YEAR 2006-07 - 5 - 1. DATE OF DICTATION..02/06/2011 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 06/06/2011 OTHER MEMBER 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S17/6/2011 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 17/6/2011 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 9. DATE OF DESPATCH OF THE ORDER