DCIT, CHENNAI V. Kgeyes Residency P Ltd., CHENNAI

ITA 404/CHNY/2015

• Counselvise Citation: [2015] 120 COUNSELVISE.COM (IT) 9878 (ITAT-CHENNAI)
• Duration Of Justice: 4 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-06-2015
• Appeal Filed By: Department
• Bench Allotted: D
• Assessment Year: 2007-2008
• Appeal Filed On: 25-02-2015
• Court: TRIBUNAL
• Department Lawyers: N MADHAVAN
• Assessee Lawyers: PRATAPKARAN PA UL

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH : CHENNAI . . . , . !' , # $ % [ BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ] ./ I.T.A.NO.404/MDS/2015 / ASSESSMENT YEAR : 2007-08 THE DY. COMMISSIONER OF INCOME-TAX CORPORATE CIRCLE 4(2) CHENNAI VS. M/S KGEYES RESIDENCY P. LTD NO.10, SECOND CROSS STREET R.A PURAM, CHENNAI 600 287 [PAN AAACK 3004 D ] ( &' / APPELLANT) ( ()&' /RESPONDENT) / APPELLANT BY : SHRI N. MADHAVAN, JCIT /RESPONDENT BY : SHRI PRATAPKARAN PAUL, CA / DATE OF HEARING : 20 - 05 - 2015 ! / DATE OF PRONOUNCEMENT : 26 - 0 6 - 2015 / O R D E R PER N.R.S.GANESAN, JUDICIAL MEMBER THIS APPEAL OF THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-II, CHENNA I, DATED 10.10.2014 AND PERTAINS TO ASSESSMENT YEAR 2007-08 . 2. THE ONLY ISSUE ARISES FOR CONSIDERATION IS DEDUCTIO N CLAIMED BY THE ASSESSEE U/S 80IB(10) OF THE ACT. ITA NO.404/15 :- 2 -: 3. SHRI N. MADHAVAN, LD. DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT THE CIT(A) ALLOWED THE CLAIM OF THE ASSESSEE ON THE BASIS OF THE JUDGMENT OF THE HON'BLE MADRAS HIGH CO URT IN THE CASE OF CIT VS SANGHVI AND DOSHI ENTERPRISE [2013] 214 TAXM AN 463. ACCORDING TO THE LD. DR, THE ASSESSEE IS NOT THE O WNER OF THE LAND. THE INTENTION OF THE LEGISLATURE IS TO PROVIDE RELI EF ONLY TO THE OWNER OF THE LAND WHO IS DEVELOPING THE SAME. ACCORDING TO THE LD. DR, IN THIS CASE, THE ASSESSEE UNDERTOOK THE PROJECT ONLY AS A CONTACTOR AND NOT AS A DEVELOPER. SINCE THE ISSUE IS PENDING BEFORE THE HON'BLE SUPREME COURT, ACCORDING TO THE LD. DR, THE CIT(A) OUGHT NO T TO HAVE ALLOWED THE CLAIM OF THE ASSESSEE. 4. ON THE CONTRARY, SHRI PRATAPKARAN PAUL, LD. REPRESE NTATIVE FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE IS A DEVELOPER AND IT ENTERED INTO A JOINT VENTURE AGREEMENT WITH M/S AST ORIA LEATHERS. AS PER THE JOINT VENTURE AGREEMENT, THE DEVELOPER HAS TO OBTAIN PLANNING PERMISSION AND CONSTRUCT THE BUILDING. THE LAND OW NER IS ENTITLED ONLY FOR 34% OF THE BUILT-UP AREA. THEREFORE, THE CIT(A ) HAS RIGHTLY ALLOWED THE CLAIM OF THE ASSESSEE. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITHER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. WE HAVE CAREFULLY GONE THROUGH THE JOINT VENTURE AGREEMENT ENTERED INTO BE TWEEN THE ITA NO.404/15 :- 3 -: ASSESSEE AND M/S ASTORIA LEATHERS. AS PER THIS AGR EEMENT, THE OWNER HAS AGREED TO RETAIN 34% OF THE UNDIVIDED SHARE IN THE LAND IN EXCHANGE OF 34% OF THE SUPER BUILT UP AREA IN THE P ROPOSED BUILDING. BOTH PARTIES AGREED THAT THE DEVELOPER AT THEIR COS T SHALL OBTAIN NECESSARY SANCTION/PERMIT FOR CONSTRUCTION OF THE P ROPOSED BUILDING. IN VIEW OF THIS AGREEMENT, IT IS OBVIOUS THAT THE ASSESSEE DEVELOPED THE PROJECT AS A DEVELOPER AND NOT AS A MERE CONT RACTOR. THEREFORE, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE ASSESSEE IS ELIGIBLE FOR DEDUCTION U/S 80IB(10) OF THE ACT. THE CIT(A) HAS RIGHTLY ALLOWED THE CLAIM OF THE ASSESSEE BY FOLLOWING THE JUDGMEN T OF THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF SANGHVI AN D DOSHI ENTERPRISE (SUPRA). ACCORDINGLY, THE ORDER OF THE CIT(A) IS CO NFIRMED. 6. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISS ED. ORDER PRONOUNCED IN THE OPEN COURT ON 26 TH OF JUNE, 2015, AT CHENNAI. SD/- SD/- ( . !' ) (A. MOHAN ALANKAMONY) # / ACCOUNTANT MEMBER ( . . . ' ) (N.R.S. GANESAN) / JUDICIAL MEMBER #$ / CHENNAI %& / DATED: 26 TH JUNE, 2015 RD &' ()*) / COPY TO: 1 . / APPELLANT 3. +,' / CIT(A) 5. )-. / / DR 2. / RESPONDENT 4. + / CIT 6. .01 / GF