The ITO, Ward-9(1), Ahmedabad V. Shri Sanjaybhai Himatbhai Dobaria, Ahmedabad

ITA 414/AHD/2011

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 50654 (ITAT-AHMEDABAD)
• Duration Of Justice: 6 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-09-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 02-09-2011
• Assessment Year: 2005-2006
• Appeal Filed On: 14-02-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D C SHARMA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, D BENCH, AHMEDABAD BEFORE SHRI MUKUL KUMAR SHRAWAT, JUDICIAL MEMBER AND SHRI A. K. GARODIA, ACCOUNTANT MEMBER I.T.A. NO.414 / AHD/2011 (ASSESSMENT YEAR 2005-06) ITO, WARD 9(1), AHMEDABAD VS. SHRI SANJAYBHAI HIMATBHAI DOBARIA, A/2/9, PANCHRATNA APARTMENT, NR. ASHIMA TOWER, VASTRAPUR, AHMEDABAD PAN/GIR NO. : (APPELLANT) .. (RESPONDENT) APPELLANT BY: SHRI D C SHARMA, SR. DR RESPONDENT BY: NONE DATE OF HEARING: 02.09.2011 DATE OF PRONOUNCEMENT: 09.09.2011 O R D E R PER SHRI A. K. GARODIA, AM:- THIS IS THE REVENUES APPEAL DIRECTED AGAINST THE ORDER OF LD. CIT(A) XV, AHMEDABAD DATED 16.12.2010 FOR THE ASSES SMENT YEAR 2005- 06. THE GROUNDS RAISED BY THE REVENUE ARE AS UNDER : 1). THE ID. COMMISSIONER OF INCOME-TAX (A)-XV , AHMEDABAD HAS ERRED IN LAW AND ON FACTS IN DIRECTING THE ASSE SSING OFFICER TO ALLOW THE ASSESSEE'S CLAIM FOR DEDUCTION OF RS.40,4 8,812/- U/S. 80IB(10) OF THE ACT. 2). THE ID. COMMISSIONER OF INCOME-TAX (A)-XV, AHMEDABAD HAS ERRED IN HOLDING THAT THE ASSESSEE FULFILLS THE CONDITIONS LAID DOWN FOR CLAIMING DEDUCTION U/S. 80IB(10) EVEN WHEN THE LAND WAS NOT OWNED BY THE ASSESSEE FIRM, BUT THE LAND WAS OW NED BY KRISHNA (VASTRAL) CO.-OP. HOUSING SOCIETY LTD., WHICH IS A SEPARATE LEGAL ENTITY IN THE EYE OF LAW AND THE ASSESSEE ENTERED I NTO THE PROJECT BY I.T.A.NO.414 /AHD/2011 2 A DEVELOPMENT AGREEMENT WITH THE SOCIETY. AN ASSESS EE IS A WORK CONTRACTOR WHO WAS AWARDED THE CONTRACT BY THE SOCI ETY AND NOT ENTITLED FOR THE DEDUCTION. THE ENTIRE RESPONSIBILI TY TO EXECUTE THE HOUSING PROJECT AND ABIDE BY THE TERMS AND CONDITIO NS OF ITS APPROVAL RIGHT FROM THE INCEPTION OF THE PROJECT TI LL ITS COMPLETION RESTS WITH THE SOCIETY. ASSESSEE WAS JUST A CONTRAC TOR OF THE LAND CONSTRUCTING 102 RESIDENTIAL UNITS AND NOT A DEVELO PER. 3). ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE, THE LD. COMMISSIONER OF INCOME-TAX (A)-XV, AHMEDABAD OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESSING OFFICER. 4). IT IS THEREFORE, PRAYED THAT THE ORDER OF THE ID. COMMISSIONER OF INCOME-TAX(A)-XV, AHMEDABAD MAY BE SET-ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED. 2. NONE APPEARED ON BEHALF OF THE ASSESSEE IN SPITE OF NOTICE SENT BY REGD. A.D. AND HENCE, WE PROCEED TO DECIDE THIS AP PEAL OF THE REVENUE EX-PARTE QUA THE ASSESSEE. 3. THE LD. D.R. SUPPORTED THE ASSESSMENT ORDER. 4. WE HAVE CONSIDERED THE SUBMISSIONS OF THE LD. D. R. AND HAVE GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. WE FIND T HAT IN THE PRESENT CASE, THE A.O. HAS DISALLOWED THE CLAIM OF THE ASSESSEE F OR DEDUCTION U/S 80IB(10) OFRS.40,48,810/- ON THE BASIS THAT LAND WA S NOT OWNED BY THE ASSESSEE FIRM AND THE ASSESSEE FIRM CARRIED THE CON STRUCTION AS PER THE DEVELOPMENT AGREEMENT ENTERED WITH THE LAND OWNER A ND WAS, THEREFORE, MERELY A CONTRACTOR. LD. CIT(A) HAS DECIDED THIS ISSUE IN FAVOUR OF THE ASSESSEE BY FOLLOWING THE TRIBUNAL DECISION OF A BENCH ITAT, AHMEDABAD DATED 07.11.2008 IN THE CASE OF SHAKTI CO RPORATION IN I.T.A.NO. 1503/AHD/2008. IT IS NOTED BY THE LD. CI T(A) ON PARA 7 OF HIS ORDER THAT ACCORDING TO THIS TRIBUNAL DECISION, DEV ELOPMENT AGREEMENT HAS TO BE REFERRED AND IF IT IS FOUND THAT THE ASSE SSEE HAS PRACTICALLY PURCHASED THE LAND AND ACQUIRED DOMINANT CONTROL AN D HAS DEVELOPED THE I.T.A.NO.414 /AHD/2011 3 PROJECT AT HIS OWN RISK, HE IS ENTITLED FOR DEDUCTI ON. LD. CIT(A) HAD REPRODUCED THE RELEVANT CLAUSES OF THE DEVELOPMENT AGREEMENT DATED 28.09.2003 AND THEREAFTER FINDING IS GIVEN BY HIM T HAT THE COST OF LAND WAS PAID BY THE ASSESSEE TO THE LAND OWNER AS PER T HE DEVELOPMENT AGREEME4NT AND THE ASSESSEE ACQUIRED DOMINANT CONTR OL OVER THE LAND AND DEVELOPED THE HOUSING PROJECT AT HIS OWN RISK AND P ROFITS. HE FOLLOWED THE TRIBUNAL DECISION RENDERED IN THE CASE OF SHAKT I CORPORATION (SUPRA) AND DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE. L D. D.R. COULD NOT POINT OUT ANY SPECIFIC DEFECT IN THESE FINDINGS OF LD. CI T(A) THAT THE ASSESSEE ACQUIRED DOMINANT CONTROL OVER THE LAND AND DEVELOP ED THE HOUSING PROJECT AT HIS OWN RISK AND PROFITS. HENCE, WE DO NOT FIND ANY REASON TO INTERFERE IN THE ORDER OF LD. CIT(A) BECAUSE THE SA ME IS IN LINE WITH THE DECISION OF THE COORDINATE BENCH OF THE TRIBUNAL RE NDERED IN THE CASE OF SHAKTI CORPORATION (SUPRA). WE, THEREFORE, UPHOLD THE SAME. 5. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D. 6. ORDER PRONOUNCED IN THE OPEN COURT ON 09 TH SEP., 2011. SD./- SD./- (MUKUL KUMAR SHRAWAT) (A. K. GARODIA) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD; DATED : 09.09.2011 SP COPY OF THE ORDER FORWARDED TO: 1. THE APPLICANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE LD. CIT (APPEALS) 5. THE DR, AHMEDABAD BY ORDER 6. THE GUARD FILE AR,ITAT,AHMEDABAD I.T.A.NO.414 /AHD/2011 4 1. DATE OF DICTATION 5/9 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 6/9 OTHER MEMBER 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P .S./P.S.7/9 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 09.09.2011 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. P.S./P.S. 9/9 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 09.09.2011 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. ..