The ACIT, 3(1), Bhopal V. M/s Soumya Homes Pvt. Ltd., Bhopal

ITA 464/IND/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 1513 (ITAT-INDORE)
• Duration Of Justice: 5 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-01-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 09-08-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R A VERMA
• Assessee Lawyers: ANIL KHAA
• Keywords: Assessment record

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL , INDORE BENCH, INDORE BEFORE SHRI JOGINDER SINGH, J.M. AND SHRI R.C.SHARM A, A.M. PAN NO. : AAFC53503C I.T.A.NO. 4 6 4/IND/2012 A.Y. : 2009 - 10 ACIT, 3(1), BHOPAL VS. M/S.SOUMYA HOMES PVT.LTD. 1, PRESS COMPLEX, ZONE I, M.P.NAGAR, BHOPAL. APPELLANT RESPONDENT APPELLANT BY : SHRI R. A. VERMA, SR. DR RESPONDENT BY : SHRI ANIL KHABYA, C. A. DATE OF HEARING : 30 . 01 .201 3 DATE OF PRONOUNCEMENT : 31 . 01 .201 3 O R D E R PER R. C. SHARMA, A.M. THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER PASSED BY THE CIT(A) DATED 18.5.2012, FOR THE ASSES SMENT YEAR 2009-10 IN THE MATTER OF DISALLOWANCE OF DEDUCTION CLAIMED U/S 80IB(10) OF THE INCOME-TAX ACT, 1961. -: 2: - 2 2. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORDS PERUSED. THE FACTS OF THE CASE IN BRIEF ARE THAT TH E ASSESSEE COMPANY HAS DEVELOPED A HOUSING PROJECT IN THE NAME AND STYLE OF SOUMYA ESTATE AT KHAJURI KALAN, BHOPAL. THE ASSESSING OFFICER DISALLOWED THE CLAIM U/S 80IB(10) AFTER HOLDING THAT THE ASSESSEE HAS NOT DEVELOPED AND BUI LT THE HOUSING PROJECT BUT HAS WORKED ONLY AS CONSTRUCTION CONTRACTOR. 3. BY THE IMPUGNED ORDER, THE LD. CIT(A) DELETED THE DISALLOWANCE AFTER HAVING THE FOLLOWING OBSERVATION S :- 2.3 I HAVE EXAMINED THE ISSUE. DURING THE APPELLATE PROCEEDINGS ASSESSMENT RECORDS HAVE ALSO BEEN EXAMINED. IT IS FOUND THAT THE APPELLANT HAS DEVELO PED AND BUILD A HOUSING PROJECT IN NAME OF 'SOURNYA ESTATE'. THE APPELLANT HAS CONSTRUCTED AND SOLD RESIDENTIAL UNITS UNDER A COMPOSITE AGREEMENT. THE AGREEMENT FOR TRANSFER WAS LAND IS SEPARATELY MADE WITH THE PURPOSE TO ENABLE THE BUYERS TO OBTAIN BAN K LOANS. IT IS FOUND THAT THE APPELLANT HAS SOLD A RESIDENTIAL UNIT AS WHOLE AND THE TOTAL CONSIDERATI ON -: 3: - 3 INCLUDES THE LAND SEGMENT FOR WHICH SEPARATE AGREEMENT IS EXECUTED. THE POSSESSION OF THE RESIDENTIAL UNIT IS GIVEN AFTER COMPLETION. THIS FA CT IS NOT DISPUTED. THE FACTS OF THE CASE CLEARLY SHOW TH AT THE APPELLANT COMPANY HAS NOT WORKED JUST AS A CONTRACTOR BUT HAS DEVELOPED AND BUILD RESIDENTIAL UNITS. IN VIEW OF THE ABOVE IT IS HELD THAT THE APP ELLANT HAS DEVELOPED AND BUILD AND PROJECT ELIGIBLE FOR DEDUCTION U/S 80 I B(10). THE A.O. IS DIRECTED TO G RANT DEDUCTION U/S 80IB(10) OF RS. 28,86,091/-. THIS GROUND OF APPEAL IS ALLOWED. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND HAVE GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AN D FOUND FROM RECORD THAT THE ISSUE UNDER CONSIDERATION IS S QUARELY COVERED BY THE DECISION OF THE I.T.A.T. IN THE CASE OF GAYATRI BUILDERS IN I.T.A.NO. 500/IND/2010 ORDER DATED 1 ST JUNE, 2012, WHEREIN FOLLOWING OBSERVATIONS AND CONCLUSION WERE DRAWN BY THE TRIBUNAL. -: 4: - 4 7. MERELY BECAUSE THE ASSESSEE HAD ENTERED INTO AGREEMENT FOR SALE OF PLOT SO AS TO ENABLE THE CUSTOMER TO HAVE A LOAN FACILITY FROM BANK AND OTHE R FINANCIAL INSTITUTIONS WILL NOT GO TO PROVE THAT TH E ASSESSEE HAS NOT UNDERTAKEN ANY CONSTRUCTION. AS PER THE AGREEMENT ENTERED INTO BY THE ASSESSEE WITH THE CUSTOMERS, THE ASSESSEE WAS REQUIRED TO UNDERTAKE CONSTRUCTION OF THE RESIDENTIAL UNIT AS A WHOLE. IT APPEARS THAT THE ASSESSING OFFICER HAS MIS-INTERPRETED VARIOUS AGREEMENTS ENTERED BY THE ASSESSEE WITH ITS CUSTOMERS. NOT ONLY AS PER PROJEC T APPROVAL LETTER BUT ALSO AS PER THE CERTIFICATE DAT ED 31 ST OCTOBER, 2009, ISSUED BY THE OFFICE OF SUB DIVISIONAL OFFICER, THE ASSESSEE HAS NOT ONLY CONCEIVED THE ENTIRE HOUSING SCHEME BUT ALSO EXECUTED THE WORK AS PER APPROVED PLAN. THE ASSESSEE HAD ENTERED INTO COMPREHENSIVE SALE AGREEMENT WITH THE CUSTOMERS FOR THE PURPOSE OF SALE OF COMPLETE RESIDENTIAL UNITS. IT IS A NORMAL TRADE PRACTICE TO RECEIVE PAYMENT IN INSTALMENTS AS -: 5: - 5 PER THE PROGRESS OF THE PROJECT, AS MOST OF THE CUSTOMERS GOT HOUSES FINANCED FROM THE BANK AND THE BANK RELEASE THE FUNDS AS PER PROGRESS OF THE WORK. FACILITY OF REGISTRATION OF STRUCTURE WAS MAD E AVAILABLE TO THE CUSTOMERS ONLY WITH A VIEW TO PROVIDE THEM MORTGAGEABLE SECURITIES TO AVAIL BANK FINANCE. AS PER THE AGREEMENT, THE POSSESSION OF RESIDENTIAL UNIT REMAINED WITH THE ASSESSEE TILL FI NAL INSTALMENT IS PAID. THE CUSTOMER HAS NO AUTHORITY T O GET CONSTRUCTION WORK DONE BY ANY OTHER PERSON OTHER THAN THE ASSESSEE. IN VIEW OF THESE FACTS, WE DO NOT FIND ANY MERIT ON THE PART OF ASSESSING OFFICERS ACTION FOR TREATING THE ASSESSEE MERELY A S A CONTRACTOR RATHER THAN A DEVELOPER. THUS, THE ASSESSEE IS NOT HIT ADVERSELY BY THE EXPLANATION TO SECTION 80IV(10), WHICH WAS MADE EFFECTIVE FROM 1 ST APRIL, 2001. 5. AS THE FACTS AND CIRCUMSTANCES IN THE INSTANT CASE IS PARI MATERIA, RESPECTFULLY FOLLOWING THE SAME IN TH E LIGHT OF -: 6: - 6 FINDINGS RECORDED BY THE LD.CIT(A) AT PARA 2.3 AS R EPRODUCED HEREINABOVE, WE DO NOT FIND ANY INFIRMITY IN THE OR DER OF CIT(A) FOR DELETING THE DISALLOWANCE OF DEDUCTION CLAIMED U/S 80IB(10 OF THE ACT. 6. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISS ED THIS ORDER HAS BEEN PRONOUNCED IN THE OPEN COURT ON 31 ST JANUARY, 2013. SD/ - SD/ - (JOGINDER SINGH) (R. C. SHARMA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 31 ST JANUARY, 2013. CPU* 3031