ITO 25(1)(4), MUMBAI V. BHOOMI DEVELOPERS, MUMBAI

ITA 5633/MUM/2010

• Counselvise Citation: 563319914 RSA 2010
• Duration Of Justice: 3 year(s) 6 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-01-2014
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 07-01-2014
• Assessment Year: 2007-2008
• Appeal Filed On: 12-07-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SU RENDRA KUMAR
• Assessee Lawyers: SANJIV M SHAH
• Keywords: Retrospective amendment; Additional evidence
• Section: 143(3)

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUMBAI . . , , , BEFORE SHRI P.M. JAGTAP , ACCOUNTANT MEMBER AND SHRI AMIT SHUKLA , JUDICIAL MEM BER . / ITA NO. 5633 / MUM./ 2010 ( / ASSESSMENT YEAR : 20 0 7 08 ) INCOME TAX OFFICER WARD 25(1)(4) C 10/308, PRATYAKSHAKAR BHAVAN BANDRA KURLA COMPLEX BANDRA (E), MUMBAI 400 051 .. / APPELLANT V/S BHOOMI DEV ELOPERS B 2 04 DARSHAN APARTMENT SIMPOLI ROAD, OPP. SONI WADI BORIVALI (W), MUMBAI 400 092 .... / RESPONDENT . / PERMANENT ACCOUNT NUMBER AADFB5005F / ASSESSEE BY : MR. SANJIV M. SHA H / REVENUE BY : MR. SURENDRA KUMAR / DATE OF HEARING 07 . 01 .201 4 / DATE OF ORDER 15.01.2014 / ORDER , / PER AMIT SHUKLA , J.M. THE PRESENT APPEAL HA S BEEN PREFERRED BY THE REVENUE, CHALLENGING THE IMPUGNED ORDER DATED 27 TH APRIL 2004 , PASSED BY THE COMMISSIONER (APPEALS) X X XV , MUMBAI, FOR THE QUANTUM OF ASSESSMENT PASSED UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961 (FOR SHORT THE BHOOMI DEVELOPERS 2 ACT ) FOR THE AS SESSMENT YEAR 20 07 08 . INITIALLY, THE REVENUE HAD RAISED FOLLOWING GROUNDS OF APPEAL: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE L D . CIT(A) HAS ERRED IN ADMITTING ADDITIONAL EVIDENCES IN THE FORM OF PROFIT AND LOSS ACCOUNT OF THE YEAR 199 9 - 2000 WITHOUT APPRECIATING THE FACTS THAT THE SAME WAS NOT PRODUCED BEFORE THE AO IN ASSESSMENT PROCEEDING . 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE I THE LEI. CIT (A) HAS ERRED IN ADMITTING THE ADDITIONAL EVIDENCE IN CONTRAVENTION OF RULE 46 A OF I . T RULES , 1962 AND THEREBY OVERLOOKED THE MANDATORY PROVISIONS CONTAINED IN THE STATUTE . 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE LEI. CIT(A) ERR 0 ED IN HOLDING THAT THE ASSESSEE IS A DEVELOPER AND THEREBY ALLOWING THE CLAIM OF DEDUCTION U / S 8018 OF THE IN C OME TAX - 1961 WITHOUT APPRECIATING THE FACTS HAT THE ASSESSEE WAS CONSTRUCTING THE BUILDING IN TERMS OF CONTRACT ENTERED INTO WITH THE MAIN DEVELOPER AND WAS TO RECEIVE THE SPECIFIED PERCENTAGE OF SALE PROCEEDS . LATER ON, THE REVENUE, V IDE LETTER DATED 6 TH JANUARY 2014, RAISED FOLLOWING AS ADDITIONAL GROUNDS OF APPEAL: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) IS NOT JUSTIFIED IN ALLOWING THE CLAIM OF DEDUCTION U/S 8018(10) OF THE I.T. ACT, 1961 IGNORING THE FACT THAT THERE IS NO MATERIAL BROUGHT ON RECORD BY THE ASSESSEE TO SHOW THAT THE CONSTRUCTION OF THE PROJECT WAS STARTED AFTER 01.10.1998. 2. ON FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD CIT(A) FAILED TO CONSIDER THE FACT THAT THE ASSESSEE IS NEITHER THE LAND OWNER NOR THE DEVELOPER AND IS A MERE CONTRACTOR BUILDING THE HOUSING PROJECT . 2 . FACTS IN BRIEF : THE ASSESSEE IS A PARTNERSHIP FIRM , ENGAGED IN THE BUSINESS OF BUILDERS AND DEVELOPERS AND HAS UNDERTAKEN DEVELOPMENT OF A PR OJECT AT NALASOPARA, DISTRICT THANE. THE ASSESSEE, IN ITS RETURN OF INCOME FILED FOR THE RELEVANT ASSESSMENT YEAR, HAS CLAIMED DEDUCTION OF ` 49,18,761 UNDER SECTION 80IB(10) OF THE ACT. IN THE COURSE OF SCRUTINY PROCEEDINGS, THE ASSESSING OFFICER REQUIRED THE ASSESSEE AS TO HOW IT HAS FULFILLED ALL THE CONDITIONS LAID DOWN UNDER BHOOMI DEVELOPERS 3 SECTION 80IB(10). IN RESPONSE, THE ASSESSEE SUBMITTED THAT THE APPROVAL LETTER FROM THE CIDCO WAS OBTAINED ON 12 TH JANUARY 1998 APPROVING THE PROJECT AS RESIDENTIAL WHICH WAS AME NDED ON 28 TH AUGUST 1998. A CERTIFICATE WAS ALSO FILED STATING THAT THE PLOT AREA WAS MORE THAN ONE ACRE AND RESIDENTIAL UNIT S HA VE A BUILT UP AREA OF LESS THAN 1,000 SQ.FT. BESIDES THIS, CERTIFICATE FROM LOCAL AUTHORITY I.E., NALASOPARA NAGAR PARISHAD WAS ALSO FILED , WHEREIN IT WAS CERTIFIED THAT THE PROJECT WAS COMPLETED BEFORE 31 ST MARCH 2007. HOWEVER, FROM THE DETAILS SUBMITTED BY THE ASSESSEE, THE ASSESSING OFFICER OBSERVED THAT FIRSTLY, IT IS NOT CLEAR AS TO WHETHER THE PROJECT HAS COMMENCED BEFORE 1 S T OCTOBER 1998, OR AFTER, SECONDLY, THE LAND WAS NOT OWNED BY THE ASSESSEE AS THE PROJECT WAS SANCTIONED BY THE CIDCO IN THE NAME OF RAJARAM MAHAPADI WHO IS THE POWER OF ATTORNEY HOLDER FROM THE LAND OWNER MR. NIPUN ISHWARDAS THAKKAR, AND LASTLY, THE ASSES SEE IS MERE A SUB DEVELOPER. ON THIS POINT, THE ASSESSING OFFICER FURTHER SOUGHT CLARIFICATION FROM THE ASSESSEE IN RESPONSE TO WHICH ASSESSEE SUBMITTED THAT FOR AVAILING THE BENEFIT UNDER SECTION 80IB(10) THE CLAIMANT NEED NOT BE THE OWNER OF THE PLOT AND IN SUPPORT OF THIS RELIANCE WAS PLACED ON THE DECISION OF THE TRIBUNAL, AHMEDABAD BENCH, IN RADHE DEVELOPERS & ORS. V/S ITO, ITA NO. 2482/AHD . /2006 , ETC., ORDER DATED 29 TH JUNE 2007 . IT WAS FURTHER SUBMITTED THAT THOUGH THE CIDCO HAD ISSUED CERTIFICATE TO COMMENCE THE CONSTRUCTION ACTIVITIES MUCH PRIOR TO 1 ST OCTOBER 1998, BUT THE CONSTRUCTION WORK STARTED ONLY AFTER 1 ST OCTOBER 1998. 3 . THE ASSESSING OFFICER REJECTED THE ASSESSEES CONTENTION AND NOTED THAT THE CIDCO HAVE ORIGINALLY GRANTED DEVELOPMENT PERM ISSION FOR THE PROJECT VIDE LETTER DATED 20 TH NOVEMBER 1995. SUBSEQUENTLY, THE APPROVAL OF AMENDED PLAN WAS GIVEN ON 14 TH MAY 1996, 12 TH BHOOMI DEVELOPERS 4 JANUARY 1998 AND 28 TH AUGUST 1998. THUS, ONE OF THE CONDITIONS THAT SUCH AN UNDERTAKING HAD COMMENCED ON/OR AFTER 1 ST O CTOBER 1998 HAS NOT BEEN FULFILLED AS THE ASSESSEE COULD NOT BROUGHT ANYTHING ON THE RECORD IN SUPPORT OF ITS CONTENTION. BESIDES THIS, HE ALSO HELD THAT THE DEDUCTION UNDER SECTION 80IB(10) IS ALSO NOT ALLOWABLE TO THE ASSESSEE AS THE LAND IS OWNED BY MR. NIPUN ISHWARDAS THAKKAR AND HE HAS GIVEN AUTHORITY TO A DEVELOPER , MR. RAJARAM MAHAPADI FOR THE DEVELOPMENT OF THE SAID LAND TO CONSTRUCT BUILDING THEREON. THE SAID DEVELOPER HAS OBTAINED VARIOUS PERMISSIONS AND THE PROPERTY WAS LATER ON DEVELOPED BY THE ASSESSEE WHO HAS BEEN REFERRED TO AS SUB DEVELOPER IN THE AGREEMENT . OUT OF THE SALE PROCEEDS, 1% BELONG TO THE DEVELOPER AND 3% BELONG TO THE OWNER AND THE BALANCE 95% WOULD BE THAT OF THE ASSESSEE. FROM THIS, HE CONCLUDED THAT THE ASSESSEE IS NEITHER A LAND OWNER NOR THE DEVELOPER AND IN FACT IS MERELY A CONTRACTOR FOR BUILDING THE HOUSING PROJECT. IN VIEW OF THE EXPLANATION INSERTED IN SECTION 80IB(10) BY THE FINANCE ACT, 2009 WITH RETROSPECTIVE EFFECTIVE FROM 1 ST APRIL 2000, THE BENEFIT OF SECTION 80I B(10) SHALL NOT BE GIVEN TO A PERSON WHO EXECUTED A CONTRACT ENTERED INTO WITH THE ELIGIBLE ENTERPRISE. ACCORDINGLY, HE DISALLOWED THE CLAIM OF THE ASSESSEE. 4 . BEFORE THE LEARNED COMMISSIONER (APPEALS), IT WAS CONTENDED BY THE ASSESSEE THAT IT HAS COMMENCED THE PROJECT ONLY AFTER 1 ST OCTOBER 1998 , THOUGH THE PROJECT WAS APPROVED BY THE CIDCO ON 12 TH JANUARY 1998 AND 28 TH AUGUST 19 98, T HERE IS NO PROVISION IN THE SECTION TO INFER THAT COMMENCEMENT OF THE HOUSING PROJECT WOULD BE THE DATE OF ISSUE OF COMMENCEM ENT CERTIFICATE BY THE LOCAL AUTHORITIES. THE ASSESSEE HAS COMPLETED THE PROJECT BEFORE 31 ST MARCH 2007 AND THIS IS A SUFFICIENT REQUIREMENT BECAUSE IN ANY CASE, THE PROJECT WAS APPROVED BEFORE 1 ST APRIL 200 4 AND WAS COMPLETED BEFORE 31 ST MARCH 2008. THE BHOOMI DEVELOPERS 5 A SSESSEE SUBMITTED COPIES OF PROFIT & LOSS ACCOUNT AND B ALANCE S HEET FILED ALONG WITH THE RETURN OF INCOME , FOR THE ASSESSMENT YEAR 2000 01 , TO SHOW THAT FOR THE FIRST TIME THE ASSESSEE HAS CLAIMED EXPENDITURE IN RESPECT OF THIS PROJECT DURING THE FINANCIAL YEAR 1999 WHICH, INTER ALIA, MEANS THAT EXPENDITURE HAD BEEN INCURRED ONLY FROM 1 ST APRIL 1999 ON WARDS. 5 . REGARDING THE SECOND ISSUE THAT THE ASSESSEE CANNOT BE HELD TO BE THE DEVELOPER , THE ASSESSEE SUBMITTED THAT IT HAD A SUBSTANTIAL RIGHT TO SELL THE FLAT S ON HIS OWN AND THE DEVELOPER AND THE OWNER WERE PAID 1% AND 3% OF THE SALE PROCEEDS. FURTHER, THE ASSESSEE NEED NOT BE OWNER OF THE LAND FOR CLAIMING DEDUCTION UNDER SECTION 80IB(10). IT IS SUFFICIENT THAT THE ASSESSEE IS A DEVELOPER. 6 . THE LEARNED COMMISSIONER (APPEALS) HELD THAT THE PROVISIONS OF SECTION 80IB(10) PROVIDES THAT THE UNDERTAKING SHOULD HAVE COMMENCED THE DEVELOPMENT / CONSTRUCTION OF THE HOUSING PROJECT AND/OR AFTER 1 ST OCTOBER 1998 AND COMPLETED SUCH CONSTRUCTION BEFORE 31 ST MARCH 20 08 , IN A CASE WHERE THE HOUSING PROJECT HAS BEEN APPROVED BY THE LOCAL AUTHORITY BEFORE 1 ST APRIL 2004. THERE IS NO DEEMED PROVISION FOR DETERMINING THE COMMENCEMENT OF DEVELOPMENT AND CONSTRUCTION. HE ALSO GAVE A FINDING THAT IN CASE OF THE ASSESSEE, THE APPROVAL WAS GRANTED BY CIDCO ON 12 TH JANUARY 1998 WHICH WAS REVISED ON 28 TH AUGUST 1998 AND THE HOUSING PROJECT WAS ACTUALLY COMMENCED ONLY DURING THE PERIOD RELEVANT FOR ASSESSMENT YEAR 2000 01 I.E., AFTER 1 ST APRIL 1999. THIS CONCLUSION WAS DRAWN ON THE BASIS OF PROFIT & LOSS ACCOUNT FILED ALONG WITH THE RETURN OF INCOME FOR THE ASSESSMENT YEAR 2000 01 ( WHICH MEANS AFTER 1 ST APRIL 1999 ) AS THERE WAS NO OPENING WORK IN PROGRESS IN RESPECT OF THIS PROJECT AND BHOOMI DEVELOPERS 6 WHATEVER EXPENDITURE WERE INCURRED DURING THE Y EAR HAS BEEN TAKEN AS CLOSING WORK IN PROGRESS. OTHERWISE ALSO, HE ACCEPTED THE ASSESSEES CONTENTION THAT , EVEN WHERE THE PROJECT HAS BEEN APPROVED BEFORE 1 ST APRIL 2004, THE CONSTRUCTION HAS TO BE COMPLETED BEFORE 31 ST MARCH 2008 WHICH HAS BEEN DONE IN T HIS CASE. ACCORDINGLY, HE HELD THAT THE ASSESSEE HAS COMMENCED THE PROJECT AFTER 1 ST APRIL 1999 , EVEN THOUGH THE PROJECT WAS APPROVED PRIOR TO 1 ST OCTOBER 1998 AND, ACCORDINGLY, REJECTED THE ASSESSING OFFICERS REASONING FOR DISALLOWANCE OF THE DEDUCTION. 7 . REGARDING ASSESSING OFFICERS OBJECTION THAT THE ASSESSEE IS ONLY A CONTRACTOR, HE HELD THAT THE ASSESSEE HAD THE RIGHT TO APPROPRIATE THE SALE PROCEEDS AGAINST THE WORK DONE BY IT, SUBJECT TO PAYMENT OF 1% TO THE DEVELOPER AND 3% TO THE OWNER. AS PER T HE AGREEMENT, THE ASSESSEE HAS TO DISCHARGE HIS OBLIGATION AS THE DEVELOPER WHICH HAS BEEN DONE AND IN VIEW OF THE PROVISIONS OF SECTION 80IB(10), THE ASSESSEE IS ENTITLED FOR DEDUCTION AS THE AS SESSEE HAS RETAINED 95% OF THE G ROSS RECEIPTS. ACCORDINGLY, T HE CLAIM FOR DEDUCTION UNDER SECTION 80IB(10) WAS FULLY ALLOWED. 8 . BEFORE US, THE LEARNED DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT THE LEARNED COMMISSIONER (APPEALS) HAS GIVEN A FINDING THAT THE ASSESSEE HAD COMMENCED HIS PROJECT AFTER 1 ST APRIL 1999 , BAS ED ON THE ADDITIONAL EVIDENCE WHICH HAS NEITHER BEEN EXAMINED NOR CONFRONTED TO THE ASSESSING OFFICER. HIS ENTIRE FINDING IS BASED ON PROFIT & LOSS ACCOUNT FOR THE ASSESSMENT YEAR 2000 01. HE SUBMITTED THAT ON A PERUSAL OF THE SAID ACCOUNT, IT WOULD BE SEE N THAT THERE IS NO PROPER BIFURCATION OF WORK IN PROGRESS IN THE ASSESSMENT YEARS 1999 2000 AND 2000 01, AS THE ASSESSEE ALSO HAD OPENING WORK IN PROGRESS BHOOMI DEVELOPERS 7 WHICH IS EVIDENT FROM PAGE 42 AND 43 OF THE PAPER BOOK. HE ALSO DREW OUR ATTENTION TO PAGE 15 AND 16 OF THE PAPER BOOK WHICH IS A COPY OF THE BALANCE SHEET AND THE PROFIT & LOSS ACCOUNT AS ON 31 ST MARCH 1999 WHEREIN THERE IS A CLOSING WORK IN PROGRESS. FROM THIS, IT CANNOT BE INFERRED THAT THERE IS NO OPENING WORK IN PROGRESS IN THE ASSESSMENT YEAR 2000 0 1 IN RESPECT OF THIS PROJECT. THUS, THE FINDING OF THE LEARNED COMMISSIONER (APPEALS) CANNOT BE BLINDLY RELIED UPON. HE ALSO SUBMITTED THAT THE LEARNED COMMISSIONER (APPEALS) HAS NOT CONSIDERED THE EXPLANATION TO SECTION 80IB(10) WHILE ADJUDICATING THE ISS UE AS TO WHETHER THE ASSESSEE IS A CONTRACTOR OR A DEVELOPER. THUS, THE ORDER OF THE LEARNED COMMISSIONER (APPEALS) SHOULD BE SET ASIDE AND/OR THE MATTER SHOULD BE RESTORED BACK TO THE FILE OF THE LEARNED COMMISSIONER (APPEALS) TO GIVE OPPORTUNITY TO THE A SSESSING OFFICER ON THE ADDITION AL EVIDENCE FILED BY THE ASSESSEE BEFORE THE LEARNED COMMISSIONER (APPEALS) TO BE PROPERLY EXAMINED. 9 . ON THE OTHER HAND, THE LEARNED COUNSEL SUBMITTED THAT FIRST OF ALL THE ADDITION AL GROUND NO.1, SHOULD NOT BE ADMITTED AS I T WAS NOT PART OF THE ORIGINAL GROUND OF APPEAL A S IT IS BASED ON FACTUAL BASIS WHICH REQUIRES EXAMINATION OF FACTS. REGARDING ADDITIONAL EVIDENCE, HE SUBMITTED THAT WHAT THE ASSESSEE HAS SUBMITTED IS THE AUDITED BALANCE SHEET AND PROFIT & LOSS ACCOUNT FO R THE ASSESSMENT YEARS 2000 01 AND 1999 2000 , WHICH ARE PART OF THE INCOME TAX RECORDS WHICH THE ASSESSEE HAD FILED ALONG WITH THE RETURN OF INCOME. SUCH A RECORD CANNOT BE HELD TO BE ADDITIONAL EVIDENCE. MOREOVER, THE LEARNED COMMISSIONER (APPEALS) WAS WI THIN HIS JURISDICTION TO EXAMINE THIS RECORD TO COME TO HIS OWN CONCLUSION AND SUCH AN EXERCISE OF POWER IS WITHIN THE PROVISION OF SECTION 250 R/W SECTION 251. HE ALSO RELIED UPON THE DECISION OF THE HON'BLE JURISDICTIONAL HIGH COURT IN MRS. PRABHAVATI BHOOMI DEVELOPERS 8 S. SHAH V/S CIT, [1998] 231 ITR 001 ( BOM. ). HE FURTHER SUBMITTED THAT THE ASSESSEE HAS GIVEN THE DETAILS OF WORK IN PROGRESS , RIGHT FROM THE ASSESSMENT YEAR 1999 2000 TILL THE ASSESSMENT YEAR 2007 08 , FROM WHERE IT CAN BE INFERRED THAT THE CONSTRUCTION OF TH E PROJECT STARTED ONLY FROM THE ASSESSMENT YEAR 2000 01. INSOFAR AS THE FINDING OF THE LEARNED COMMISSIONER (APPEALS) THAT ALL THE PROJECTS APPROVAL HAS BEEN GIVEN PRIOR TO 1 ST APRIL 2005 AND IT HAS BEEN COMPLETED BEFORE 31 ST MARCH 2008 IS ABSOLUTELY CORRE CT AND THE SAME SHOULD BE UPHELD. HE ALSO DREW OUR ATTENTION TO THE VARIOUS BALANCE SHEETS AND PROFIT & LOSS ACCOUNT FILED IN THE PAPER BOOK FOR THE EARLIER ASSESSMENT YEAR. REGARDING THE SECOND ISSUE THAT THE ASSESSEE IS A CONTRACTOR AND NOT A DEVELOPER A S RAISED BY THE DEPARTMENT, HE DREW OUR ATTENTION TOWARDS VARIOUS CLAUSES OF THE AGREEMENT TO SHOW THAT THE ASSESSEE HAD SUBSTANTIAL RIGHT FOR DEVELOPING THE PROPERTY AND THE AGREEMENT WAS ON PRINCIPAL TO PRINCIPAL BASIS. THE ASSESSEE HAS ACQUIRED SUBSTANT IAL RIGHT TO DEVELOP THE PROPERTY ALONG WITH THE RISK AND RESPONSIBILITY UPON THE ASSESSEE. THE ENTIRE SALE PROCEEDS BELONG TO THE ASSESSEE, THEREFORE, THE ASSESSEE CANNOT BE TERMED AS A CONTRACTOR. IN ANY CASE, HE SUBMITTED THAT THIS ISSUE IS SQUARELY COV ERED BY THE DECISION OF THE HONBLE GUJARAT HIGH COURT IN CIT V/S RADHE DEVELOPERS , [2012] 341 ITR 403 ( GUJ. ). 10 . WE HAVE HEARD THE RIVAL CONTENTION, PERUSED THE RELEVANT FINDINGS OF THE AUTHORITIES BELOW AND THE MATERIAL AVAILABLE ON RECORD. THE FIRST ISSUE WHICH REQUIRES OUR ADJUDICATION IS, WHETHER THE PROJECT OF THE ASSESSEE HAD COMMENCED BEFORE 1 ST OCTOBER 1998 OR AFTER THE SAID DATE. BEFORE THE ASSESSING OFFICER, THE ASSESSEE HAD STATED THAT THE PROJECT WAS SANCTIONED / APPROVED BY THE CIDCO ON 12 TH JAN UARY 1998 AND LATER ON AMENDED ON 28 TH AUGUST 1998 AND THEREFORE, THE BHOOMI DEVELOPERS 9 CONSTRUCTION OF THE PROJECT HAD STARTED MUCH AFTER THE SAID DATE. HOWEVER, THE ASSESSING OFFICER HAS CATEGORICALLY NOTED THAT THE ASSESSEE COULD NOT SUBMIT ANY DOCUMENT TO SUBSTANTIATE T HAT THE ASSESSEE HAD COMMENCED THE PROJECT AFTER 1 ST OCTOBER 1998. THE LEARNED COMMISSIONER (APPEALS), ON A PERUSAL OF THE AUDITED BALANCE SHEET AND PROFIT & LOSS ACCOUNT FOR THE ASSESSMENT YEAR 2000 01, HAS GIVEN A FINDING THAT THE PROJECT HAD STARTED AFT ER 1 ST APRIL 1999 I.E., MUCH AFTER 1 ST OCTOBER 1998, THEREFORE, BENEFIT OF SECTION 80IB(10) CANNOT BE DENIED. ON A PERUSAL OF THESE AUDITED BALANCE SHEET FOR THE ASSESSMENT YEARS 1999 2000 AND 2000 01, WHICH WERE FILED FOR THE FIRST TIME BEFORE THE LEARNED COMMISSIONER (APPEALS), IT IS SEEN THAT PRIMA FACIE IT CANNOT BE INFERRED THAT THERE WAS NO OPENING WORK IN PROGRESS WITH REGARD TO THESE PARTICULAR PROJECT AS APPARENTLY THERE IS NO CLEAR CUT DEMARCATION OF WORK IN PROGRESS OF OLD AND NEW PROJECTS. FROM THE COLUMN OF WORK IN PROGRESS GIVEN IN THE ASSET ASIDE OF THE BALANCE SHEET AS ON 31 ST MARCH 2000, THERE IS CLOSING BALANCE OF ` 12,72,403 AND ` 4,41,565 UNDER THE HEAD WORK IN PROGRESS NEW PROJECT . PROFIT & LOSS ACCOUNT SHOWS THAT THERE IS AN OPENI NG WORK IN PROGRESS OF 2,48,50,382. WITHOUT ANY BIFURCATION, IT IS VERY DIFFICULT TO INFER ABOUT THE CONCLUSION DRAWN BY THE LEARNED COMMISSIONER (APPEALS), THEREFORE, THIS MATTER REQUIRES EXAMINATION AND VERIFICATION OF THE RECORDS WHICH HAS BEEN SUBMITTE D BY THE ASSESSEE BEFORE THE LEARNED COMMISSIONER (APPEALS). THUS, IT DOES CONSTITUTE ADDITIONAL EVIDENCE WHICH REQUIRES OPPORTUNITY FOR VERIFICATION AND EXAMI NATION BY THE ASSESSING OFFICER . THEREFORE, WE ARE OF THE CONSIDERED OPINION THAT INSOFAR AS THE LEARNED COMMISSIONER (APPEALS)S FINDING THAT THE PROJECT HAD COMMENCED AFTER 1 ST OCTOBER 1998 REQUIRES TO BE EXAMINED BASED ON THE ADDITION AL EVIDENCE S FILED BEFORE THE LEARNED COMMISSIONER (APPEALS) BY THE ASSESSING OFFICER. ACCORDINGLY, WE SET BHOOMI DEVELOPERS 10 ASIDE THE IMPUGNED ORDER PASSED BY THE LEARNED COMMISSIONER (APPEALS) AND RESTORE THIS MATTER BACK TO THE FILE OF THE ASSESSING OFFICER AND DIRECT HIM TO EXAMINE THE SAME IN THE LIGHT OF THE ADDITION AL EVIDENCE FILED BEFORE THE LEARNED COMMISSIONER (APPEALS). THUS, THE GROUND NO.1 AND 2 RAISED BY THE REVENUE IN THE ORIGINAL GROUND OF APPEAL ARE TREATED AS ALLOWED FOR STATISTICAL PURPOSES. RESULTANTLY, GROUND NO.1 , AS RAISED IN ADDITIONAL GROUNDS OF APPEAL BY THE REVENUE, IS ALSO TREATED AS ALLOWED FOR STATISTICAL PU RPOSES. 11 . INSOFAR AS GROUND NO.3 IN THE ORIGINAL GROUND AND GROUND NO.2 IN THE ADDITIONAL GROUND ARE CONCERNED I.E., THE ASSESSEE IS NEITHER THE LAND OWNER NOR THE DEVELOPER BUT A CONTRACTOR, WE ARE OF THE CONSIDERED OPINION THAT THE CONCLUSION AND THE FIND ING OF THE LEARNED COMMISSIONER (APPEALS) IN THIS REGARD IS FACTUAL LY AND LEGALLY CORRECT. ON A PERUSAL OF THE AGREEMENT, IT IS SEEN THAT THE ASSESSEE HAS GOT SUBSTANTIAL RIGHT FOR DEVELOPING THE LAND AS A DEVELOPER AND THERE IS ENTIRE TRANSFER OF RIGHT TO THE ASSESSEE FOR DEVELOPMENT OF THE PROPERTY . THE ASSESSEE IS ALSO SUBSTANTIALLY ENTITLED TO SELL THE ENTIRE UNITS AND WILL ALSO APPROPRIATE ALL THE SALE PROCEEDS. OUT OF THE SAID SALE PROCEEDS, THE ASSESSEE WAS ENTITLED FOR 95% OF THE RECEIPTS. THUS, THE ASSESSEE CAN BE VERY WELL BE HELD TO BE A DEVELOPER. THE ASSESSEE NEED NOT BE A LAND OWNER BUT SHOULD HAVE SUBSTANTIAL RIGHT TO DEVELOP THE PROPERTY WITH ALL THE RISK AND RESPONSIBILITY AND ONCE THAT IS SO, THE ASSESSEE CAN BE HELD TO BE A DEVELOPER FOR T HE PURPOSE OF CLAIMING DEDUCTION UNDER SECTION 80IB(10). THIS CONTENTION OF THE ASSESSEE IS ALSO FULLY SUPPORTED BY THE HONBLE GUJARAT HIGH COURT IN CIT V/S RADHE DEVELOPERS (SUPRA). THUS THIS ISSUE IS DECIDED AGAINST THE REVENUE. THUS, GROUND NO.2 AS RAI SED IN THE ADDITIONAL GROUND AND BHOOMI DEVELOPERS 11 GROUND NO.3 RAISED IN THE ORIGINAL GROUND OF APPEAL ARE TREATED AS DISMISSED. 12 . 12 . IN THE RESULT, REVENUES APPEAL IS TREATED AS PARTLY ALLOWED FOR STATISTICAL PURPOSES. 15 TH JANUARY 2014 ORDER PRONOUNCED IN THE OPEN COURT ON 15 TH JANUARY 2014 SD / - . . P.M. JAGTAP ACCOUNTANT MEMBER SD / - AMIT SHUKLA JUDICIAL MEMBER MUMBAI, DATED : 15 TH JANUARY 2014 / COPY OF THE ORDER FORWARDED TO : ( 1 ) / THE ASSESSEE ; ( 2 ) / THE REVENUE; ( 3 ) ( ) / THE CIT(A ) ; ( 4 ) / THE CIT, MUMBAI CITY CONCERNED ; ( 5 ) , , / THE DR, ITAT, MUMBAI ; ( 6 ) / GUARD FILE . / TRUE COPY / BY ORDER . / PRADEEP J. CHOWDHURY / SR. PRIVATE SECRETARY / / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI