M/s. Dangat Brothers Developers, Pune V. Deputy Commissioner of Income-tax,

ITA 742/PUN/2014

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 9279 (ITAT-PUNE)
• Duration Of Justice: 3 year(s) 2 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-06-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 09-06-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 15-04-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: DR SUBHASH CHANDRA
• Assessee Lawyers: AJAY R SINGH SRI RAMESH RAO
• Keywords: Capital asset; Business income; Opportunity of being heard; Principle of natural justice; Rule of consistency; Additional evidence; Revised return
• Section: 80IB; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE . , , BEFORE SHRI D.KARUNAKARA RAO, AM & SHRI VIKAS AWAST HY, JM . / ITA NOS. 742/PUN/2014 & 1326/PUN/2015 / ASSESSMENT YEARS : 2010-11 & 2011-12 M/S.DANGAT BROTHERS DEVELOPERS MANJALI NAGAR, A/P NARHE GAON, VADGAON BK., TAL. HAVELI, PUNE-411041. PAN: AAGFD6634H .. APPELLANT VS. DY. COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE-2(3), PUNE. .. RESPONDENT ASSESSEE BY : SHRI AJAY R. SINGH / SRI RAMESH RAO DEPARTMENT BY : SHRI DR. SUBHASH CHANDRA CIT-DR DATE OF HEARING : 18-05-2017 DATE OF PRONOUNCEMENT : 28-06-2017 / ORDER PER D.KARAUNAKARA RAO, AM : THERE ARE TWO APPEALS UNDER CONSIDERATION INVOLVING TWO ASSESSMENT YEARS NAMELY 2010-11 & 2011-12. THESE APPEALS ARE FILED BY THE ASSESSEE AGAINST THE TWO DIFFERENT ORDERS OF THE CIT(A) DATED 08-01-2014 & 15-07-2015 FOR THE SAID ASSESSMENT YEARS RESPECTIVELY. THE FACTS RELATING TO THE ASSESSEE, CONTENTIONS OF THE AO AND THE ASSESSEE, THE CONCLUSIONS OF THE AO AND ISSUES RAISED IN THE APPEALS ARE SIMILAR FOR BOTH THE YEARS. THEREFORE, BOTH THE APPEALS ARE CLUBBED AND ARE BEING ADJUDICATED IN THIS COMPOSITE ORDER. TO START WITH, FOR WANT OF FACTS, FIGURES AND ISSUES, WE SHALL TAKE UP THE ISSUE RAIS ED BY THE ASSESSEE FOR THE ASSESSMENT YEAR 2010-11. 2 ITA NOS.742/PUN/2014 & 1326/PUN/2015 M/S. DANGAT BROTHERS DEVELOPERS. 2. BEFORE US, AT THE OUTSET, REFERRING TO THE ADDIT IONAL EVIDENCES, LD. COUNSEL FOR THE ASSESSEE BROUGHT OUR ATTENTION TO THE LETTE R DATED 17-10-2016 AND SUBMITTED THAT ASSESSEE PROPOSED TO FILE ADDITIONA L EVIDENCES CONTAINED IN A PAPER BOOK CONTAINING 41 PAGES. ACCORDING TO HIM, THESE P APERS REVOLVE AROUND THE FUNCTIONS AND RESPONSIBILITIES OF THE ASSESSEE-FIRM AS A LAND OWNER WHO CONTRIBUTED THE LAND FOR DEVELOPMENT OF A HOUSING PROJECT, RELE VANT DOCUMENTS IN SUPPORT OF TRANSFER OF SAID LAND, A CIVIL SUIT INSTITUTED BY T HE FLAT OWNERS, LETTER OF DEMAND OF REVENUE SHARE TO THE OWNERS, INDEMNITY BOND, LEASE DEALS ETC. ACCORDING TO AR, THESE PAPERS ARE ALSO REQUIRED IN CONNECTION WITH T HE CLAIM THAT TRANSACTIONS ARE ENTERED INTO ON A PRINCIPLE TO PRINCIPLE BASIS AN D ALSO TO SUPPORT THE ASSESSEES CLAIM THAT THE TRANSACTION INVOLVED CONSTITUTES THE BUSINESS ONE AS THEY SUPPORTS THE CLAIM THERE IS RISK ELEMENT ATTACHED TO IT. IN PRINCIPLE THAT THE RISK ELEMENT IS PART OF ANY BUSINESS. FURTHER, IT IS SUBMITTED THAT THESE DOCUMENTS SUPPORTS THE ASSESSEES CLAIM THAT THE PROFITS ARE ASSESSABLE TO TAX AT THE END OF COMPLETION OF THE HOUSING PROJECT AND NOT ON THE BASIS OF THE YEA R OF RECEIPT OF THE SHARE OF RECEIPTS OUT OF SALE PROCEEDS OF THE FLATS. ASSES SEE-FIRM CLAIMS THAT THE PROJECT COMPLETION METHOD (PCM) OF ACCOUNTING IS FOLLOWED. IN THE LETTER, RELYING ON THE ITAT RULES 1963, IT IS PRAYED THAT THE SAID EVIDENC E MAY BE ADMITTED AS THEY ARE REQUIRED FOR THE ADJUDICATION OF THE APPEAL. IN TH IS REGARD, ASSESSEE RELIED ON JUDGMENT IN THE CASE OF PRABHAVATI S. SHAH VS CIT ( 231 ITR 1) (BOMBAY) FOR ADMISSION OF THE ADDITIONAL EVIDENCE. AFTER HEARIN G THE BOTH THE PARTIES ON THIS PRELIMINARY ISSUE AND ON FINDING RELEVANCE OF THE P APERS AND THE NEED THEREOF, WE PROCEED TO ADMIT THE SAME IN THE INTEREST OF ADMINI STRATION OF JUSTICE. HAVING ADMITTED, WE SHALL NOW TAKE UP THE ADJUDICATION OF THE ISSUE RAISED IN THE GROUNDS OF THE APPEAL. 3 ITA NOS.742/PUN/2014 & 1326/PUN/2015 M/S. DANGAT BROTHERS DEVELOPERS. 3. BEFORE US, LD AUTHORISED REPRESENTATIVE FOR THE A SSESSEE SUBMITTED THAT THE GROUNDS OF APPEAL NO. 1 TO 3 REVOLVE AROUND A JURIS DICTION ISSUE AND THEY ARE NOT PRESSED. ACCORDINGLY, AFTER HEARING BOTH PARTIES, THE GROUNDS 1 TO 3 ARE DISMISSED AS NOT PRESSED. THE OTHER GROUNDS/ISSUE WHICH IS R EQUIRED TO BE ADJUDICATED ARE EXTRACTED AS UNDER: II. FAILURE TO APPRECIATE THE TRANSACTION 4. WITHOUT PREJUDICE TO THE ABOVE, THE LD. CIT (A) FAILED TO APPRECIATE THAT THERE WAS NO SEPARATE ENTITY BY WAY OF A JOINT VENT URE(JV) TO WHICH THE APPELLANT COULD HAVE TRANSFERRED DEVELOPMENT RIGHTS/LAND AS A LLEGED BY THE LD. CIT (A). IN FACT, THE APPELLANT ONLY CAME TOGETHER WITH M/S DAR ODE JOB ASSOCIATES TO DEVELOP THE PROJECT ON A PRINCIPAL-TO-PRINCIPAL BASIS AND T O SHARE REVENUES THEREFROM. THEREFORE, THE LD. CIT(A) FAILED TO APPRECIATE THAT THE APPELLANT AND M/S DARODE JOG ASSOCIATES HAVE BEEN PAYING TAXES ON THEIR RESPECTI VE INCOMES, AND THERE WAS NO JV ENTITY (I.E. TAXABLE ENTITY). 5. THE LD. CIT (A) ERRED IN CONCLUDING THAT THE IMP UGNED TRANSACTION WAS A TRANSACTION OF SALE OF LAND/ DEVELOPMENT RIGHTS AND THAT OF DEVELOPMENT OF REAL ESTATE PROJECT, WITHOUT APPRECIATING THAT THERE WAS NO TRANSFEREE IN THE PRESENT CASE. III. NO ACCRUAL OF INCOME DURING THE YEAR 6. WITHOUT PREJUDICE TO THE ABOVE, THE LD. CIT (A) FAILED TO APPRECIATE THAT THE RECEIPTS FROM THE REAL ESTATE DEVELOPMENT PROJECT O UGHT TO BE TAXED ONLY UPON THE COMPLETION METHOD CONSISTENTLY FOLLOWED BY THE APPE LLANT AND ACCEPTED BY THE REVENUE, AND HENCE, NO INCOME CAN BE SAID TO HAVE A CCRUED DURING THE YEAR. 7. THE LD. CIT (A) FAILED TO APPRECIATE THAT THE AP PELLANT, BEING ENGAGED IN THE BUSINESS OF REAL ESTATE DEVELOPMENT, WAS ENTITLED T O FOLLOW PROJECT COMPLETION METHOD AND THAT AO WAS NOT JUSTIFIED IN DEVIATING F ROM THIS METHOD OF ACCOUNTING IN THE CURRENT YEAR WITHOUT CITING ANY REASON. 8. THE LD. CIT (A) FAILED TO APPRECIATE THAT THE RE CEIPTS FROM THE PROJECT HAVE BEEN SUBSEQUENTLY OFFERED TO TAX BY THE APPELLANT A ND ACCEPTED BY THE DEPARTMENT IN AY 2011-12 AND IN AY 2012-13. THEREFORE, TAXING TH E SAME RECEIPTS IN THE CURRENT YEAR WOULD LEAD TO DOUBLE TAXATION. IV. ERRONEOUS COMPUTATION OF PROFITS 9. WITHOUT PREJUDICE TO THE ABOVE, THE LD. CIT (A) FAILED TO APPRECIATE THAT THE AO OUGHT TO HAVE REDUCED RS. 10,10,88,391/- AS THE COST OF DEVELOPMENT FROM THE RECEIPTS AND WAS NOT JUSTIFIED IN ARBITRARILY CONSI DERING SUCH COST AS RS.5,08,94,010/- THE APPELLANT IS NOT AWARE OF THE MANNER OF ARRIVING AT THIS FIGURE OFRS.5,08,94,010/- 10. THE LD. CIT (A) FAILED TO APPRECIATE THAT RECEI PTS OF FY 2008-09 OF RS.27,23,121/- CANNOT BE TAXED IN THE CURRENT YEAR. 4 ITA NOS.742/PUN/2014 & 1326/PUN/2015 M/S. DANGAT BROTHERS DEVELOPERS. V. DEDUCTION U/S 80-IB(10) 11. WITHOUT PREJUDICE TO THE ABOVE, THE LD.CIT (A) FAILED TO APPRECIATE THAT THE APPELLANT IS ENTITLED TO DEDUCTION U/S 80-IB(10) IN RESPECT OF RECEIPTS OF FROM THE AFORESAID PROJECT. 12. THE LD. CIT (A) FAILED TO APPRECIATE THAT EVEN IF THE INCOME IS HELD TO HAVE ACCRUED DURING THE YEAR, SAME IS ELIGIBLE FOR DEDUC TION U/S.80-IB(10), AND THAT THERE WOULD BE NO TAX IMPACT DURING THE YEAR. 13. THE LD. CIT(A) FAILED TO APPRECIATE THAT ASSESS EE WAS A DEVELOPER IN THE PROJECT AND HAD FULFILLED ALL THE CONDITIONS PRESCR IBED U/S. 80IB(10) OF THE ACT INCLUDING APPROVAL AND COMMENCEMENT OF THE PROJECT, SANCTIONS BY LOCAL AUTHORITY, SIZE OF PLOT OF LAND, EXTEND OF COMMERCIAL AREA, MA XIMUM BUILT UP AREA OF RESIDENTIAL, COMPLETION OF PROJECT ETC. 4. BRIEFLY STATED RELEVANT FACTS ARE THAT THE ASSES SEE IS A FIRM AND OWNS LAND ADMEASURING AROUND 4.68 HECTARES. ASSESSEE ACQUIRE D THE LANDS FROM 25 DIFFERENT AGRICULTURISTS. ASSESSEE-FIRM AND M/S. DARODE JOG ASSOCIATES (DJA) WHO IS A DEVELOPER OF THE PROJECT, ENTERED INTO A JOINT VENT URE AGREEMENT DATED 22-05-10- 2008 WITH DJA AND FLOATED A JOINT VENTURE NAMED DAR ODE JOG DANGAT VENTURE (IN SHORT DJDV) BEARING THE REGISTERED DOCUMENT NO.42 61/2008 WHICH IS PLACED AT (PAGE 36-62) OF THE PAPER BOOK. ACCORDING TO THE A SSESSEE, THE JOINT VENTURE (DJDV), BEING OF STATUS OF AOP, DID NOT OFFER ANY INCOME FOR TAXATION IN ITS HANDS. AS PER THE JOINT VENTURE AGREEMENT, BOTH THE AOP ME MBERS I.E., THE ASSESSEE AND THE DJA, ARE REQUIRED TO SHARE THE REVENUE RECEIPTS IN A SPECIFIED RATIO. THERE IS NO PROFIT AND LOSS-SHARING-ARRANGEMENTS (PLSA) WH ICH IS DIFFERENT FROM REVENUE RECEIPTS SHARING ARRANGEMENTS MENTIONED IN THE SAID AGREEMENT. THE PERCENTAGES OF REVENUE SHARING ARRANGEMENTS DIFFER FROM THE REC EIPTS EARNED OUT OF SALE OF RESIDENTIAL FLATS AND THE PARKING AREAS. AS PER TH E AGREEMENT, AS PART OF ASSESSEES SHARE OF 45% RELATING TO THE RESIDENTIAL PORTION, T HE DJA IS UNDER OBLIGATION TO PAY AN INTEREST FREE DEPOSIT IN ADVANCE AMOUNTING TO RS .5 CRORES. OTHERWISE, THE COST OF THE ACQUISITION OF THE SAID LANDS WORKS OUT TO A ROUND RS.10 CRORES. THE SAID LANDS ARE OWNED BY ASSESSEE AND HIS BROTHER. THE A MOUNT OF RS 5 CRORES PAID BY THE DJA IS NON-REFUNDABLE IN NATURE. HOWEVER, AS P ER THE AO, THE SAID ADVANCE 5 ITA NOS.742/PUN/2014 & 1326/PUN/2015 M/S. DANGAT BROTHERS DEVELOPERS. CONSTITUTES PART OF THE COMPENSATION RECEIVED BY TH E ASSESSEE IN LIEU OF THE LANDS GIVEN TO THE JOINT VENTURE/DJA FOR HOUSING PROJECT. THE DUTIES AND RESPONSIBILITIES OF BOTH THE PARTIES OF THE JOINT VENTURE ARE DEFINE D IN THE JOINT VENTURE AGREEMENT (SUPRA). OBTAINING PERMISSIONS/SANCTIONS, REMOVAL OF ANY ENCUMBRANCE, IF ANY, ON THE SAID LAND ARE THE DUTIES OF THE ASSESSEE. CON STRUCTING THE REQUIRED AREA AS PER THE PLAN AT HIS COST IS THE DUTY OF THE DJA, THE OT HER PARTY OF THE JOINT VENTURE. CONSIDERING THE ABOVE FACTS OF THE CASE, ASSESSEE F ILED THE RETURN OF INCOME FOR ASSESSMENT YEAR 2010-11 DECLARING THE RS.97,49,120/ -. SUBSEQUENTLY, ASSESSEE REVISED THE RETURN OF INCOME SHOWING NIL INCOME. 5. DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTICED THAT NEITHER THE ASSESSEE-FIRM NOR THE JOINT VENTURE (DJ DV) HAS OFFERED ANY INCOME TO TAX IN THE YEARS UNDER CONSIDERATION AS THEY FOLLOW THE PROJECT COMPLETION METHOD AND THE PROJECT IS INCOMPLETE IN THESE YEARS UNDER CONSIDERATION. AFTER EXAMINING THE JOINT VENTURE AND THE DETAILS FURNISHED BEFORE HIM, THE ASSESSING OFFICER CAME TO THE CONCLUSION THAT THE TRANSFER OF LANDS TO THE JOINT VENTURE/DJA FOR CONSIDERATION CONSTITUTES A SALE TRANSACTION OF LAN D/DEVELOPMENT RIGHTS. FURTHER, THE INITIAL ADVANCE PAYMENT OF CONSIDERATION OF RS. 5 CRORES RECEIVED BY THE ASSESSEE, BEING INTEREST FREE REFUNDABLE ADVANCE, C ONSTITUTES PART OF SALE CONSIDERATION OR COMPENSATION IN LIEU OF THE SAID L AND. THE SAME WAS TREATED AS A BUSINESS RECEIPT. CONTENTS OF PARA 8.4 OF THE ASSE SSING OFFICER PROVIDES FOR THE ASSESSMENT YEAR WISE DETAILS OF REVENUE RECEIPTS AN D THE SHARE OF THE ASSESSEE IN THE SAID PARA READS AS UNDER:- A.Y. AMOUNT RECEIVED 2009 - 10 27,23,121 2010 - 11 15,82,30,130 2011 - 12 11,42,14,808 2012 - 13 60,00,000 TILL 17/05/2012 1,56,23,741 TOTAL 29,67,91,800 6 ITA NOS.742/PUN/2014 & 1326/PUN/2015 M/S. DANGAT BROTHERS DEVELOPERS. 6. THE ASSESSING OFFICER COMPUTED THE REVENUE RECEI PTS OF RS.16,09,53,251/- RELATABLE TO THE ASSESSEE AS ON 31-03-2010. ASSESS ING OFFICER ALSO DETERMINED THE COST OF DEVELOPMENT AT RS.5,08,94,010/-. THUS, THE DIFFERENCE WORKS OUT TO RS.56,780/- AND AO BROUGHT THE BALANCE OF RS.11,00, 02,461/- TO TAX. THE CLAIM OF DEDUCTION U/S 80IB(10) OF THE ACT IS DENIED. FROM T HE ABOVE, IT IS EVIDENT THAT THE SHARE OF THE ASSESSEE IN THE REVENUE RECEIPTS RECEI VED FROM THE CUSTOMERS OF PREMISES/CONSTRUCTION AREA/PARKING PLACES WAS ALSO TREATED AS THE REVENUE RECEIPTS OF THE ASSESSEE. OUT OF THE SAID REVENUE RECEIPT, ASSESSING OFFICER, ALLOWED THE DEDUCTION OF AMOUNT OF RS.5.09 CRORES (ROUNDED OFF) . THE BALANCE AMOUNT OF RS.11 CRORES (ROUNDED OFF) IS SUBJECTED TO TAX IN T HE HANDS OF THE ASSESSEE. IN THE PROCESS, THE ASSESSING OFFICER DISHONORED THE ASSES SEES METHOD OF ACCOUNTING IN MATTERS OF RECOGNITION OF INCOME I.E. THE PROJECT C OMPLETION METHOD. ASSESSING OFFICER ALSO DISHONORED THE ACCRUAL METHOD OF ACCOUN TING ADOPTED BY THE ASSESSEE I.E. INCOME ACCRUED TO ASSESSEE WHEN THE PROJECT IS COMPLETED. THUS, THE ASSESSING OFFICER ADDED EXCESS RECEIPTS AMOUNTING T O RS.11.00 CRORES (ROUNDED OFF) AGAINST THE RETURNED INCOME OF RS.97.49 LAKHS IN OR IGINAL RETURN OF INCOME OR NIL AS IN REVISED RETURN OF INCOME. ASSESSING OFFICER ALS O DENIED THE ALTERNATIVE CLAIM OF DEDUCTION U/S 80IB(10) OF THE ACT TOO. IN THIS REG ARD, ASSESSING OFFICER IS OF THE VIEW THAT THE ASSESSEE IS NOT THE DEVELOPER OF HOUS ING PROJECT AND THE ASSESSEE- FIRM IS MERELY A OWNER OF THE LAND AND HANDING OVER OF THE LAND CLEARED OF ALL LITIGATIONS AND DISPUTES TO THE DEVELOPER, IS THE D UTY OF THE ROLE OF ANY LAND OWNER. 7. AGGRIEVED WITH THE ABOVE CONCLUSIONS OF THE ASSE SSING OFFICER, ASSESSEE FILED AN APPEAL BEFORE THE CIT(A). ASSESSEE FILED WRITTE N SUBMISSIONS. AS PER DISCUSSION GIVEN IN PARA 9.3 OF THE ORDER OF THE CIT(A), THE A PPEAL WAS DISMISSED AND AGAINST THE ASSESSEE. DURING THE PROCEEDINGS BEFORE THE CI T(A), ASSESSEE FILED WRITTEN SUBMISSIONS STATING THAT THERE WAS ACTION U/S 132 O F THE ACT ON M/S.DARODE JOG 7 ITA NOS.742/PUN/2014 & 1326/PUN/2015 M/S. DANGAT BROTHERS DEVELOPERS. ASSOCIATE, THE OTHER CONSTITUENT OF THE JOINT VENTU RE. CIT(A), DEALT WITH THE CORE ISSUE UNDER CONSIDERATION IN PARA 7 OF HIS ORDER. 8. ASSESSEE FILED WRITTEN SUBMISSIONS COVERING VARI OUS ASPECTS OF THE ISSUE I.E. NAMELY CORRECTNESS OF THE PROJECT COMPLETION METHOD OF ACCOUNTING, ACCEPTANCE OF THE SAME BY THE REVENUE OVER THE YEARS, THE FACT OF FLOATING A JOINT VENTURE FOR DEVELOPMENT OF HOUSING PROJECT, DETAILS REGARDING T HE COST OF THE PROJECT, THE DETAILS OF SALE PROCEEDS, DETAILS OF ADVANCE AND EA RNING OF SHARE OF SALE PROCEEDS EARNED IN A.Y. 2009-10, THE TAXATION OF INCOME IN TH E ASSESSMENT YEARS UNDER CONSIDERATION, ISSUING OF NOTICE U/S.148 FOR REOPEN ING OF THE ASSESSMENT OF ASSESSMENT YEARS 2008-09/2010-11 AND DROPPING OF T HE SAME ETC. ASSESSEE ALSO RELIED ON JUDGMENTS IN THE CASE OF HUNDAI HEAVY IND USTRIES CO. LTD 210 CTR 178 (SC) AND BILAHARI INVESTMENTS P. LTD 215 CTR 201 ( SC) REGARDING METHOD OF ACCOUNT RECOGNIZING THE INCOME. 9. ASSESSEE ALSO OBJECTED TO THE TAXATION OF RECEIP TS OF RS.27,23,121/- ACTUALLY RECEIVED AS HIS SHARE OF REVENUE RECEIPTS RELATABLE TO THE SALE OF FLATS IN A.Y. 2009- 2010. AS PER THE ASSESSEE, ASSESSING OFFICER ERRED IN TAXING THEM IN A.Y. 2010-11 WHEN HE HELD THAT SALE OF DEVELOPMENT RIGHTS TOOK P LACE IN A.Y. 2009-10. REFERRING TO THE ASSESSEES CLAIM AS DEVELOPER/BUILDER, IT IS SUBMITTED THAT A FIRM IS ENGAGED IN CIVIL CONSTRUCTION BUSINESS AND EARNED HIS SHARE OF FLATS ON SALE OF THE SAME. HE ALSO SUBMITTED THAT THE RELEVANT INCOME IS RECOGNIZ ED IN THE YEAR OF PROJECT COMPLETION. HE RELIES ON THE CITATION OF THE HIGH COURT JUDGMENT IN CASE OF MOTILAL C PATEL & CO 173 ITR 666 IN SUPPORT OF HIS METHOD O F INCOME RECOGNITION. 10. ON CONSIDERING THE ABOVE, CIT(A) DECIDED ISSUE AGAINST THE ASSESSEE. THE CONTENTS OF PARA 7.5 OF HIS ORDER IS RELEVANT. RECE IPTS RECEIVED FROM JOINT VENTURE ARE PROFITS FROM SALE OF UNITS OF HOUSING PROJECT O F THE ASSESSEE. METHOD OF 8 ITA NOS.742/PUN/2014 & 1326/PUN/2015 M/S. DANGAT BROTHERS DEVELOPERS. ACCOUNT OF NOT OFFERING THE SAID PROFITS TO TAX IN THE YEARS UNDER CONSIDERATION IS PROPER QUA THE PROJECT COMPLETION METHOD (PCM) FOLL OWED BY THE ASSESSEE. 11. PER CONTRA, ASSESSING OFFICER OF THE VIEW, THE RECEIPTS/ADVANCES RECEIVED CONSTITUTES THE COMPENSATION FOR INTRODUCTION OF LA ND/SALE OF DEVELOPMENT RIGHTS TO JOINT VENTURE. ASSESSEES ROLE IN DEVELOPMENT IN T HE HOUSING PROJECT IS VERY LITTLE. THE OPERATIONAL SENTENCES FROM THE SAID PARA ARE RE LEVANT AND THE SAME ARE EXTRACTED AS FOLLOWS: 7.5 HOWEVER, IN THE PRESENT CASE SUCH A VIEW O F THE MATTER WOULD GO AGAINST THE FACTS ON RECORD. THE MOST CRITICAL OF THESE IS THE FACT THAT IT IS AN ADMITTED POSITION IN PRESENT CASE THAT WHAT THE APP ELLANT WAS ENTITLED TO WAS A SHARE OF THE GROSS PROCEEDS FROM SALES AND NOT A SH ARE OF THE PROFITS FROM THE PROJECT. IN FACT THE APPELLANT WAS ENTITLED TO ITS SHARE OF THE GROSS PROCEEDS REGARDLESS OF WHETHER THE OVERALL RESULTS FROM THE PROJECT (AFTER TAKING INTO ACCOUNT CONSTRUCTION AND OTHER COSTS WHICH WERE TO BE MET E NTIRELY BY THE OTHER CO- VENTURER) WERE A PROFIT OR A LOSS. THE APPELLANTS ENTITLEMENT TO ITS SHARE WAS FORTIFIED BY TERMS OF THE AGREEMENT UNDER WHICH A S TANDING INSTRUCTION WAS ISSUED TO THE BANK TO TRANSFER THE APPELLANTS SHARE DIREC TLY TO ITS BANK ACCOUNT REGARDLESS OF THE END RESULTS FROM THE VENTURE WHEN THE FINAL ACCOUNTS ARE DRAWN. THE APPELLANT WAS ALSO ENTITLED TO HAVE CONTROL OVER TH E SALE TRANSACTIONS AND RECORDS OF THE JV SO AS TO ENSURE THAT ITS SHARE OF THE GROSS PROCEEDS WERE DULY PAID. IT IS ALSO NOTEWORTHY THAT THE PARTNER OF THE FIRM HAS CA TEGORICALLY ADMITTED IN HIS SWORN STATEMENT THAT THE FIRM WAS NOT INVOLVED IN ANY ACT IVITY DIRECTLY OR INDIRECTLY IN THE CONSTRUCTION OF THE PROJECT. IN FACT THE ACTIVITIE S THE APPELLANT CLAIMS TO HAVE UNDERTAKEN, INCLUDING ULC AND NA CLEARANCE, ETC. AR E ACTIVITIES WHICH ANY LANDOWNER IS EXPECTED TO PERFORM EVEN IN CASE OF AN OUTRIGHT SALE. CONSIDERING ALL THESE FACT, I HAVE NO HESITATION IN HOLDING THAT TH E AOS VIEW THAT WHAT THE APPELLANT HAD RECEIVED UNDER THE JV WAS THE COMPENS ATION FOR THE LAND WHICH HAD CLEARLY ACCRUED TO IT DURING THE YEAR AND THERE WAS NO ROOM FOR APPLICATION OF AS-9 IN RESPECT OF THE SAID AMOUNTS. ACCORDINGLY, THESE THREE GROUNDS OF APPEAL ARE HEREBY DISMISSED. 12. FROM THE ABOVE, IT IS THE SUMMARY OF THE ORDER OF THE CIT(A) THAT THE ASSESSEE IS INTERESTED IN HIS SHARE OF GROSS RECEIP TS OUT OF THE SALE PROCEEDS OF THE HOUSING PROJECT. THE JOINT VENTURE IS FLOATED TO D EVELOP THE SAID PROJECT AND ALSO TO REMIT THE SHARE OF SALE PROCEEDS TO BOTH THE AOP -MEMBERS ON SALE OF THE FLATS. ASSESSEE CONTROLS THE SALE TRANSACTIONS OF THE JOIN T VENTURE SUBSTANTIALLY. ASSESSEE IS NOT INVOLVED IN DAY TO DAY CONSTRUCTION ACTIVITY OF THE HOUSING PROJECT. LIKE ANY LAND OWNER, THE FIRM TOOK UP THE RESPONSIBILITY OF GETTING CLEARANCES ULC/NA ETC. 9 ITA NOS.742/PUN/2014 & 1326/PUN/2015 M/S. DANGAT BROTHERS DEVELOPERS. THUS, AS PER CIT(A), IT IS CASE OF (1) THE SALE OF LAND/SALE OF DEVELOPMENT RIGHTS; (2) THE AMOUNTS RECEIVED CONSTITUTES THE BUSINESS R ECEIPTS BY WAY OF COMPENSATION; & (3) THE SHARE OF RECEIPTS BY THE AS SESSEE TILL THE END OF YEAR ARE TAXABLE IN THE YEAR UNDER CONSIDERATION AND THE PRO JECT COMPLETION METHOD IS NOT RELEVANT. 13. REGARDING THE ALTERNATE CLAIM OF DEDUCTION U/S 80IB(10) OF THE ACT, THE CIT(A) EXTRACTED FIVE MAJOR CONTENTIONS AT PARA 8.3 OF HIS ORDER AND RELIED HEAVILY ON HIS ORDER IN THE CONTEXT OF ANOTHER ENTITY NAMED M/S. LAGAD BROTHERS VENTURES LBV AND DISMISSED THIS ALTERNATE CLAIM. THIS IS TH E CASE WHERE DJA IS THE COMMON PARTY IN THE JOINT VENTURES AND THE TRIBUNAL PASSED ANOTHER ORDER IN THAT CASE. 14. FURTHER, ON THE ALLOWABILITY OF DEDUCTION U/S 80IB(10) OF THE ACT, THE CIT(A) DISCUSSED THE ISSUE IN PARA 10 AND IN ITS SUB-PARAG RAPH OF HIS ORDER BEFORE THE SAID CLAIM OF DEDUCTION WAS DENIED. IT IS THE OPINION O F THE REVENUE AUTHORITIES THAT THE LAND OWNER IS NOT ENTITLED TO CLAIM SUCH DEDUCT ION AND IT IS FOR THE DEVELOPER TO MAKE THE CLAIM NOT THE LAND OWNER. IN OTHER WORDS, IT IS THE AOP-THE DEVELOPER WHO SHOULD ELIGIBLE TO CLAIM DEDUCTION. IN THE PROC ESS, THE CIT(A) RELIED ON HIS ORDER IN THE CASE OF JOINT VENTURES; DARODE JOG LAG AD VENTURES (DJLV) AND LAGAD BROTHERS DEVELOPERS (THE LAND OWNER) ITA NO.2038/PN /2013 AND ITA NO.310 TO 312/PN/2014 DATED 09-03-2016. 15. AGGRIEVED WITH THE ABOVE, ASSESSEE RAISED THE G ROUND NO. 4 TO 13. IT WAS DEMONSTRATED THAT ALL THESE GROUNDS RAISED IN APPEA L REVOLVE AROUND THE ABOVE CONCLUSION OF THE AO/CIT(A) IN ONE FORM OR OTHER. WE SHALL TAKE UP THE ISSUE WISE ADJUDICATION IN THE FOLLOWING PARAGRAPHS. 16. AGGRIEVED WITH THE ABOVE CONCLUSION OF THE CIT( A) THE ASSESSEE IS IN APPEAL BEFORE US WITH THE GROUNDS NARRATED ABOVE. IN THIS REGARD, THE ARGUMENTS OF SRI 10 ITA NOS.742/PUN/2014 & 1326/PUN/2015 M/S. DANGAT BROTHERS DEVELOPERS. AJAY R. SINGH AND SHRI RAMESH RAO INCLUDE THAT: I)J OINT VENTURE AGREEMENT BEING DATED 22-05-2008, THE RELEVANT YEAR FOR TAXATION OF THE SALE PROCEEDS OF TRANSFER OF DEVELOPMENT RIGHTS, IF ANY, SHOULD HAVE BEEN A.Y. 2 009-10 AND NOT THE A.Y. 2010- 11 OR LATER YEARS. NEITHER THE ASSESSING OFFICER N OR THE CIT(A) HAS GIVEN ANY SUSTAINABLE REASON IN THEIR RESPECTIVE ORDER ON THI S ASPECT. IT IS NOT MENTIONED WHY THE ADVANCES OF RS.5 CRORES AS WELL AS ADVANCES REC EIVED FROM THE CUSTOMERS IN THE A.Y. 2009-10 AND ALSO IN THE ASSESSMENT YEARS UNDER CONSIDERATION WERE NOT TAXED IN THE SAID YEAR OF TAXABILITY, I.E. A.Y. 2009-10. II) IF THE SAID AMOUNTS ARE TAXABLE IN PRINCIPLE, AS PER THE LD. AUTHORISED REPRESENTAT IVE, THE AOP IS THE RIGHT PERSON AND NOT THE ASSESSEE. ASSESSING OFFICER DID NOT APP RECIATE THE FACT THAT THE ASSESSEES SHARE OF RECEIPTS FROM THE CUSTOMERS REA CH THE BANK ACCOUNT OF THE ASSESSEE VIA THE BANK ACCOUNT OF THE JOINT VENTURE. THEREFORE, IT IS THE CASE OF DIVISION OF SALES PROCEEDS AT THE GROSS ROOT LEVEL. HENCE, THE MEMBERS OF THE JOINT VENTURE ARE INDEPENDENT IN MATTERS OF EXECUTION OF THE HOUSE PROJECT AND INDEPENDENTLY ENTITLED TO THE SHARE OF RECEIPTS. T HEREFORE, THE SHARE RECEIPTS ARE TAXABLE IN THE HANDS OF ASSESSEE AND ALSO ELIGIBLE FOR DEDUCTION U/S.80IB OF THE ACT. ASSESSEE RIGHTLY OFFERED THE RECEIPTS TO TAX AS AND WHEN THE RECEIPTS ARE RECEIVED FROM YEAR TO YEAR. HOWEVER, THE AUTHORISED REPRESE NTATIVE HAS NOTHING TO ARGUE ON WHY THE RECEIPTS RECEIVED IN A.Y. 2009-10 ARE NO T OFFERED TO TAX ON PERCENTAGE COMPLETION METHOD EXCEPT STATING THAT THE PROFITS A RE OFFERED TO TAX IN YEAR OF COMPLETION OF PROJECT IN A.Y. 2014-15. (III) ASSES SING OFFICER DID NOT REJECT THE BOOKS OF ACCOUNTS FORMALLY BEFORE ASSESSEES METHOD OF ACCOUNTING OF REVENUE IS REJECTED. FURTHER, THE ASSESSING OFFICER HAS NOT C ONSIDERED THE FACT THAT THE PROJECT ON HAND CONSTITUTES AN ELIGIBLE HOUSING PROJECT AND CONDITIONS SPECIFIED IN THE SUB- SECTION 10 OF SECTION 80IB OF THE ACT ARE MET BY TH E ASSESSEE. IN THAT CASE, THE ENTIRE REVENUE EARNED BY THE ASSESSEE AS PER THE JO INT VENTURE AGREEMENT SHOULD HAVE BEEN ALLOWED AS DEDUCTION. 11 ITA NOS.742/PUN/2014 & 1326/PUN/2015 M/S. DANGAT BROTHERS DEVELOPERS. 17. FURTHER RELYING ON THE ORDER OF THE TRIBUNAL IN THE CASE OF DARODE JOG LAGAD VENTURES (DJLV) AND LAGAD BROTHERS DEVELOPERS (THE LAND OWNER) ITANO.2038/PN/2013 AND ITA NO.310 TO 312/PN/2014 D ATED 09-03-2016, LD. COUNSEL SUBMITTED, IN THAT CASE, THE ASSESSING OFFI CER TREATED THE JOINT VENTURE AGREEMENT AS DEVELOPMENT AGREEMENT AND REJECTED THE SUPPLEMENTARY AGREEMENT. THE SUPPLEMENTARY AGREEMENT PROVIDES FOR SHARING OF THE PROFIT/LOSS AND NOT THE SALE RECEIPTS. TRANSACTION OF CONVEYANCE OF LAND WA S TREATED BY THE AO AS SALE OF DEVELOPMENT RIGHTS. HOWEVER, IN THAT CASE, HON'BLE TRIBUNAL RESTORED THE CLAIM OF THE ASSESSEE AND THE JOINT VENTURE AGREEMENT WAS TR EATED AS AOP AND UPHELD ITS VALIDITY. FURTHER, THE JOINT VENTURE (DJLV) WAS C ONSIDERED AS DEVELOPER OF THE HOUSING PROJECT FOR THE RELEVANT TAX BENEFITS. FUR THER, THE TRIBUNAL HELD THAT THE JOINT VENTURE IS ENTITLED TO THE CLAIM OF DEDUCTION U/S.80IB(10) OF THE ACT AS THE JOINT VENTURE-AOP IS THE DEVELOPER OF HOUSING PROJE CT. THE CONTENTS OF PARA NO. 31 AND OTHERS OF THE ORDER OF TRIBUNAL (SUPRA) ARE RELEVANT. FURTHER, THE TRIBUNAL CAME TO THE CONCLUSION THAT THE JOINT VENTURE CONST ITUTES A DEVELOPER OF THE HOUSING PROJECT FOR THE PURPOSE OF DEDUCTION U/S.80 IB(10) OF THE ACT. (CONTENTS OF PARA 31) OF THE ORDER OF THE TRIBUNAL). FURTHER, T HE TRIBUNAL HELD THAT THE LAND OWNER (M/S. LAGAD BROTHERS DEVELOPER) IS DECLARED I NELIGIBLE FOR CLAIM OF DEDUCTION (PARA 45 TO 50 OF THE ORDER OF THE TRIBUNAL). RELE VANT LINES FROM PARA 50 OF THE TRIBUNALS ORDER RELATING TO UNSUSTAINABILITY OF TH E CLAIM OF DEDUCTION IN THE HANDS OF MEMBER OF THE JOINT VENTURE-AOP, IS EXTRACTED AS UNDER : 50. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BOTH THE SIDES, PERUSED THE ORDERS OF THE AO & CIT(A) AND THE PAPER BOOK FI LED ON BEHALF OF THE ASSESSEE. WE HAVE ALSO CONSIDERED THE VARIOUS DECISIONS CITED BEFORE US. WE FIND IN THE CASE OF DARODE JOG LAGAD VENTURES WE HAVE ALREADY ACCEPT ED THE GROUNDS RAISED BY THE ASSESSEE BY HOLDING THAT THE AGREEMENT BETWEEN THE DARODE JOG AND ASSOCIATES AND LAGAD BROTHERS DEVELOPERS CONSTITUTE AN AOP AND NOT A DEVELOPMENT AGREEMENT. ONCE IT IS HELD THAT THE AGREEMENT CONS TITUTES AOP ANY AMOUNT DRAWN FROM THE AOP CANNOT BE TAXED IN THE HANDS OF THE AS SESSEE MEMBER. IT IS ONLY THE JOINT VENTURE THAT HAS TO PAY THE TAX AND THE ASSES SEE IS NOT LIABLE TO PAY ANY TAX ON THE AMOUNT WITHDRAWN FROM THE JOINT VENTURE. TH E ASSESSEE IS ALSO NOT ENTITLED FOR ANY DEDUCTION U/S. 80IB(10) AND IT IS THE JOIN T VENTURE THAT IS ELIGIBLE 12 ITA NOS.742/PUN/2014 & 1326/PUN/2015 M/S. DANGAT BROTHERS DEVELOPERS. FOR THE DEDUCTION U/S.80IB(10). WE THEREFORE SET A SIDE THE ORDER OF THE CIT(A) AND DIRECT THE AO TO ACCEPT THE RETURN OF INCOME FILED. 18. (A). HONBLE KARNATAKA HIGH COURT HELD IN CASE OF SHRAVANEE CONSTRUCTIONS ( 81 CCH 253) THAT THE CLAIM OF DEDUCTION U/S.80IB (10) OF THE ACT IS ALLOWABLE WHEN THAT ASSESSEE IN THE STATUS OF A CONSENTING WITNESS IN RESPECT OF HIS SHARE IN THE BUILT-UP AREA OF THE PROJECT. IN THIS CASE, THERE IS MEMORANDUM OF UNDERSTANDING WITH THE LAND OWNER AND THE PROMOT ER TO DEVELOP A HOUSING PROJECT. IN CASE OF ABDUL KHADER (ITA NO.57/BANG/2 011 ORDER DATED 30-04-2012 FOR A.Y. 2006-07, BANGALORE BENCH OF THE TRIBUNAL H ELD THAT THE LAND OWNER WHO CONTRIBUTED LAND TOWARDS HIS SHARE OF CAPITAL, IS E LIGIBLE FOR DEDUCTION U/S.80IB(10) OF THE ACT. IN THIS CASE ALSO, THERE IS NO JOINT V ENTURE FLOATED THOUGH THERE IS A DEVELOPMENT AGREEMENT. (B). IN CASE OF BOMBAY REAL ESTATE DEVELOPMENT COMPANY PVT. LTD. (64 DTR 137) BOMBAY TRIBUNAL HELD THAT LAND OWNER VIDE THE AGREEMENT IS ELIGIBLE FOR THE SAID DEDUCTION U/S.80IB(10) OF THE ACT. THERE IS NO JOINT VENTURE AGREEMENT FLOATED IN THIS CASE TOO. (C). IN THE CASES OF M/S DARODE JOG LAGAD VENTURES AND M/S LAGAD BROTHERS DEVELOPERS VIDE ITA NO. 2038 TO 2041/PN/2013 R.W. ITA NOS. 3 10 TO 312/PN/2014 FOR A.YRS. 2007-08 TO 2010-11 AND OTHER S, ON THE GIVEN FACTS OF THAT CASE, THE TRIBUNAL HELD THAT THE JOINT VENTURE ALON E CONSTITUTES A DEVELOPER AND THE SAME IS ELIGIBLE FOR DEDUCTION U/S.80IB(10) OF THE ACT. THE INDIVIDUALS- MEMBERS OF THE AOP-JOINT VENTURE IS NOT ENTITLED TO CLAIM DEDUCTION. 19. THEREFORE, IT IS SUMMARY OF THE ABOVE DECISI ONS THAT THE LAND CONTRIBUTOR TO AN UNDERTAKING OF A HOUSING PROJECT IS ELIGIBLE FO R CLAIM OF DEDUCTION U/S 80IB(10) WHEN THERE IS NO ENTITY CALLED AOP-JOINT VENTURE E NTITY IN THE SCHEME OF 13 ITA NOS.742/PUN/2014 & 1326/PUN/2015 M/S. DANGAT BROTHERS DEVELOPERS. DEVELOPMENT OF A HOUSING PROJECT. FURTHER, IT IS T HE DECISION OF THE PUNE TRIBUNAL, THAT THE INDIVIDUAL MEMBER OF AOP-JOINT VENTURE IS NOT ELIGIBLE FOR THE SAID DEDUCTION SO LONG AS THE JOINT VENTURE IS FLOATED A ND JOINT VENTURE DOES THE ACTIVITIES OF THE DEVELOPMENT OF THE HOUSING PROJEC T. 20. HOWEVER, THERE IS ANOTHER ANGLE TO THE ISSUE IN THIS CASE AND IT RELATES TO CORRECTNESS OF DENYING THE CLAIM OF DEDUCTION IN TH E CASE OF INDIVIDUAL MEMBERS OF AOP-JOINT VENTURE, WHEN AOP DID NOT MAKE A CLAIM OF DEDUCTION. WE ARE APPREHENSIVE THAT IT SHOULD NOT BE THE CASE OF DEN IAL OF DEDUCTION IN PRINCIPLE IN RESPECT OF ALL THESE ENTITLES, I.E. (1) INDIVIDUAL MEMBERS OF AOP-JOINT VENTURE, (2) THE JOINT VENTURE ITSELF. IN OUR VIEW, SUBJECTED T O THE CONDITIONS SPECIFIED IN THE STATUTE, THE AO SHALL GRANT DEDUCTION AS PER THE LA W CONSIDERING THE FACTS OF THE PRESENT CASE. AO SHALL NOTE THAT LAW PROVIDES FOR CLAIM OF DEDUCTION IN RESPECT OF THE ASSESSEE WHO DEVELOPS THE HOUSING PROJECT AND I T MAY BE THE INDIVIDUAL MEMBERS OF THE AOP OR THE AOP-JOINT VENTURE ITSELF. AO NEEDS TO APPLY THE RATIO OF THE SAID JUDGMENTS TO THE FACTS IN THIS CASE AND AL SO IN THE LIGHT OF THE LAW DISCUSSED ABOVE. 21. REFERRING TO THE PRESENT CASE ON HAND, LD. AUTHORISED REPRESENTATIVE SUBMITTED THAT THE SAID DECISIONS OF THE TRIBUNAL A RE REQUIRED TO BE APPLIED CAUTIOUSLY. FAIRLY, HE ALSO SUBMITTED THAT THE FAC TS OF ASSESSEES CASE ARE DIFFERENT. LISTING THE DIFFERENT FACTS, LD. AUTHORISED REPRESE NTATIVE SUBMITTED THAT (1) THERE IS NO SUPPLEMENTARY AGREEMENT HERE, (2) SALE PROCEEDS OF THE FLATS SOLD ARE SHARED BY THE JOINT VENTURE-AOP MEMBERS; NOT THE PROFITS/GAIN S OF THE JOINT VENTURE, (3) JOINT VENTURE-AOP IS NOT LIABLE TO TAX UNLIKE THE D JLV, WHO FILED THE RETURN OF INCOME AND CLAIMED DEDUCTION U/S.80IB(10) OF THE AC T, (5) THE MEMBERS OF THE AOP (LAGAD BROTHERS DEVELOPERS) ARE NOT TO PAY TAXE S ON THEIR SHARE OF PROFITS AND NOT TO CLAIM DEDUCTION U/S.80IB(10) UNLIKE THE PRES ENT CASE, WHERE ONLY THE FIRM- 14 ITA NOS.742/PUN/2014 & 1326/PUN/2015 M/S. DANGAT BROTHERS DEVELOPERS. ASSESSEE (M/S. DANGAT BROTHERS DEVELOPERS) IS THE M EMBER. OTHERS ARE A TAXABLE ENTITY AND ARE ALSO ELIGIBLE TO CLAIM DEDUCTION U/S .80IB(10) OF THE ACT. 22. LD. AUTHORISED REPRESENTATIVE, FURTHER, SUBMI TTED THE SAID ORDER OF THE TRIBUNAL IS NOT AVAILABLE TO THE CIT(A) AT THE RELE VANT POINT OF TIME. THE CIT(A) OF THE PRESENT CASE RELIED HEAVILY ON THE ORDER OF THE CIT(A) IN THE SAID CASE. REFERRING TO THE ORDER OF THE TRIBUNAL, LD. COUNSEL SUBMITTED THAT THE CONCLUSIONS OF THE SAID ASSESSING OFFICER IN THAT CASE STANDS REVE RSED. 23. PER-CONTRA, LD. DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE SUPPORTED ORDER OF THE ASSESSING OFFICER AND CIT(A) DUTIFULLY AND VEHEMENTLY. AS PER LD. DEPARTMENTAL REPRESENTATIVE, THE ASSESSEE DID NOT D EMONSTRATE THE RISK ELEMENT IN MATTERS OF EARNING REVENUE SHARE OUT OF THE PAID TR ANSACTION AND THEREFORE, SUGGESTS THE AMOUNT RECEIVED BY HIM BEING ADVANCE O F RS. 5 CRORES AND ALSO HIS SHARE IN THE REVENUE RECEIPTS FROM THE CUSTOMERS, C ONSTITUTES SALE CONSIDERATION/COMPENSATION IN LIEU OF THE LAND TRAN SFERRED BY THE ASSESSEE. AS PER LD. DEPARTMENTAL REPRESENTATIVE, THE RISK ELEMENT I S ESSENTIAL IN ANY BUSINESS. THE SAME IS ABSENT IN THE CASE OF M/S. DANGAT BROTHERS DEVELOPERS. OTHERWISE, DEPARTMENTAL REPRESENTATIVE RELIED ON THE FINDING O F THE ASSESSING OFFICER AND CIT(A). 24. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE ORDERS OF THE REVENUE AUTHORITIES ALONG WITH THE PAPER BOOKS FILED BEFORE US. THE CORE ISSUE RELATES TO THE NATURE OF THE TRANSACTION IF THE TRANSFER OF LA ND BY THE ASSESSEE TO THE AOP, THE JOINT VENTURE CONSTITUTES A SALE OF LAND/DEVELOPMEN T RIGHTS OR OTHERWISE? OTHER CONNECTED ANCILLARY ISSUES INCLUDES (1) IF THE JOINT VENTURE AGREEMENT CONSTIT UTES A DEVELOPMENT AGREEMENT, (2) IF THE JOINT VENTURE C ONSTITUTES AN AOP, A TAXABLE ENTITY; (3) IF A FIRM, THE TRANSFEROR OF LAND CONST ITUTES A DEVELOPER, (4) IF THE FIRM IS ELIGIBLE FOR DEDUCTION U/S.80IB(10) OF THE ACT, WHEN THE JOINT VENTURE NEITHER 15 ITA NOS.742/PUN/2014 & 1326/PUN/2015 M/S. DANGAT BROTHERS DEVELOPERS. OFFERED THE SALE RECEIPTS TO TAX NOR IT CLAIMED ANY DEDUCTION U/S 80IB(10) OF THE ACT, (5) IF THE AO IS JUSTIFIED IN REJECTING THE PR OJECT COMPLETION METHOD OF THE ASSESSEE AND TAXING THE SHARE OF SALE RECEIPTS RECE IVED TILL DATE ALONG WITH ADVANCE IN THE YEARS UNDER CONSIDERATION? 25. ON THE SAID CORE AND ANCILLARY ISSUES, THE CASE OF THE REVENUE IS WHEN THE ASSESSEE RECEIVED ADVANCE OF RS.5 CRORES FOR THE VE RY FIRST YEAR OF THE TRANSFER, THE SAME CONSTITUTES COMPENSATION FOR LAND COST. THERE FORE, IT IS A CASE OF SALE OF LAND FOR CONSIDERATION/COMPENSATION. THEREFORE, THE SAM E IS TAXABLE AS BUSINESS INCOME OF THE ASSESSEE ALONG WITH THE SHARE OF REVE NUE RECEIPTS OUT OF THE ADVANCES GIVEN BY THE LAND/FLAT BUYERS IN ACCORDANC E WITH THE TERMS AND CONDITIONS OF THE JOINT VENTURE. FURTHER, ASSESSING OFFICER O PINED THAT ALL THE RECEIPTS RECEIVED TILL DATE MUST BE CHARGEABLE TO TAX IN THI S YEAR. FURTHER, HE OPINES THAT THE ASSESSEE IS NOT ENTITLED TO EXEMPTION U/S.80IB( 10) OF THE ACT AS THE FIRM IS NOT THE DEVELOPER OF THE HOUSING PROJECT. IN PRINCIPLE, THE AO REJECTED THE PROJECT COMPLETION METHOD AND RESORTED TO TAX THE SHARE OF SALES RECEIPTS AND LAND ADVANCES RECEIVED TILL THE END OF THE YEAR(S). IT I S NOT CLEAR WHY THE PORTION OF THE RECEIPTS RELATABLE TO AY 2009-10, I.E. RS.27,23,121 /- IS TAXED IN THE CURRENT ASSESSMENT YEARS. AO HAS NOT APPLIED THE RATIOS OF ABOVE JUDICIAL DECISIONS TO THE FACTS OF THE PRESENT CASE BEFORE DENYING THE ALTERN ATE CLAIM OF DEDUCTION U/S 80IB(10) OF THE ACT. 26. ON THE OTHER HAND, THE CASE OF THE ASSESSEE IS T HAT THE TRANSFER OF LAND BY THE FIRM IS DONE IN ACCORDANCE WITH THE TERMS AND C ONDITIONS OF THE SAID JOINT VENTURE, WHERE THE ASSESSEE IS MEMBER OF AOP WHO CO NTRIBUTED THE LAND AS PER THE CONDITIONS IN JOINT VENTURE. THE JOINT VENTURE IS A NON-TAXABLE ENTITY AS THE SALE RECEIPTS ARE DIVIDED BETWEEN THE AOP MEMBERS AS PER THE JOINT VENTURE AGREEMENT. IT IS NOT THE CASE OF SHARE OF PROFITS AND LOSSES OF THE AOP. INDIVIDUAL 16 ITA NOS.742/PUN/2014 & 1326/PUN/2015 M/S. DANGAT BROTHERS DEVELOPERS. MEMBERS OF AOP HAVE OFFERED TO TAX THE SAID RECEIPT S IN YEAR OF COMPLETION OF THE HOUSING PROJECT. REGARDING THE METHOD OF ACCOUNTIN G, THE POLICY OF THE ASSESSEE IN THIS REGARD IS THAT THE ASSESSEE OFFERED TO TAX THE INCOME ONLY ON THE COMPLETION OF THE HOUSING PROJECT FOLLOWING THE PROJECT COMPLETIO N METHOD OF ACCOUNTING. IT IS ALSO CASE OF THE ASSESSEE THAT THE JUDGMENTS IN THE CASE OF LAGAD BROTHER AND DEVELOPERS (SUPRA) FROM THE TRIBUNAL, PUNE BENCH WA S NOT AVAILABLE TO THE CIT(A) AT THE RELEVANT POINT OF TIME. THE CIT(A) IN THE I NSTANT CASE RELIED ON PREDECESSORS DECISION IN THE SAID CASE, WHICH NOW STANDS REVERSE D ON MANY CONTENTIONS ISSUES. FURTHER, IT IS ALSO A CASE OF THE ASSESSEE THAT THE FIRM IS BURDENED WITH CERTAIN DUTIES AND RESPONSIBILITIES WITH REGARD TO THE BUSI NESS OF HOUSING PROJECT I.E. OBTAINING PERMISSIONS/APPROVALS AND REMOVAL OF THE ENCUMBRANCE IF ANY ETC. IN SUCH CIRCUMSTANCES, THE TRANSACTION IN QUESTION CAN NOT BE TREATED BY ASSESSING OFFICER AS A CASE OF SALE OF LAND/DEVELOPMENT RIGHT S FOR TAXING ENTIRE AMOUNT IN THE YEAR UNDER CONSIDERATION. THE SAME CONSTITUTES A BU SINESS OF HOUSING PROJECT. ASSESSING OFFICER SHOULD HAVE WAITED TILL THE HOUSI NG PROJECT IS COMPLETED. 27. WITHOUT PREJUDICE, AS PER ASSESSEE, THE A.Y . 2009-10 IS RELEVANT ASSESSMENT YEAR FOR TAXATION OF THE SAID ADVANCES/SALE CONSIDE RATION/COMPENSATION AS THE JOINT VENTURE WAS SIGNED IN THE YEAR RELEVANT TO THE SAID ASSESSMENT YEAR. ASSESSEE IS ALSO CRITICAL OF ASSESSING OFFICERS ORDER FOR NOT TAXING THE SHARE OF RECEIPTS OF THE ASSESSEE RECEIVED IN THE A.Y. 2009-10. ASSESSEE DE SIRES THAT THE ASSESSEE IS ELIGIBLE FOR DEDUCTION U/S.80IB(10) OF THE ACT. HE RELIED ON VARIOUS DECISIONS ON THIS ISSUE. 28. OTHER BASIC FACTS INCLUDE THAT IT IS AN UNDISPU TED FACT THAT THE ASSESSEE ENTERED INTO DEVELOPMENT AGREEMENT WITH 29 LAND OWN ERS (5 GROUPS) ON 22-05-2008 FOR TOTAL CONSIDERATION OF RS. 10 CRORES . EACH OF THESE FIVE (5) GROUPS IS TO BE PAID RS.2 CRORES EACH. AN AMOUNT OF RS.5 CRORES WAS PAID IN A.Y. 2009-10, 17 ITA NOS.742/PUN/2014 & 1326/PUN/2015 M/S. DANGAT BROTHERS DEVELOPERS. RS.2.5 CRORES WAS PAID IN A.Y.2010-11 AND ANOTHER R S.2.5 CRORES WAS PAID IN ASSESSMENT YEAR 2011-12 FOR THE TOTAL LAND OF 4.68 HECTARES. ON THE SAME DAY, ASSESSEE ALSO ENTERED INTO ANOTHER DEVELOPMENT AGRE EMENT WITH DJA, THE BUILDER WITH WHOM THERE IS A JOINT VENTURE ARRANGEMENT BY T HE ASSESSEE. THE TRANSFER OF LAND BY THE ASSESSEE TO THE JOINT VENTURE/DJA WAS C ONSIDERED AS A SALE OF LAND/DEVELOPMENT RIGHTS BY THE ASSESSING OFFICER. HOWEVER, THE TAXATION OF THE SAID INTEREST FREE ADVANCES AND ALSO THE SHARE OF R EVENUE EARNING BY THE ASSESSEE AS PER THE TERMS AND CONDITIONS OF THE JOINT VENTUR E, THE ASSESSING OFFICER DID NOT TAX THE SAME IN THE YEAR OF TRANSFER OF LAND OF 4.6 8 HECTARES I.E A.Y. 2009-10. NORMALLY, THE TIMING FOR ACCRUAL OF INCOME IS THE Y EAR OF TRANSFER OF THE ASSET/DEVELOPMENT RIGHTS. DEVIATING FROM THE ABOVE PRINCIPLE, THE REVENUE RECEIPTS OF RS.27,23,121/- AND THE ADVANCES OF RS.5 CRORES WERE NOT TAXED IN THE SAID ASSESSMENT YEAR IN 2009-10. THUS, THERE IS AN INCO NSISTENCY FROM THE ASSESSING OFFICER SIDE IN TAXATION OF THE ADVANCES AND EARNIN GS RECEIVED BY THE ASSESSEE. ASSESSING OFFICER DID NOT TAX THEM ON CASH BASIS EI THER. THERE IS NO CLARITY ON THE DATE OF ACCRUAL OF INCOME RELATABLE TO THE TRANSACT ION OF LAND/RIGHTS. WE ARE NOT IN A POSITION TO GIVE A FINDING AS TO THE YEAR OF ASSE SSABILITY OF THE TAXABLE PROFITS. THEREFORE, IN OUR VIEW RELEVANT GROUNDS ARE REQUIRE D TO BE REMANDED TO THE FILE OF THE ASSESSING OFFICER FOR FRESH ADJUDICATION. ASSE SSING OFFICER SHALL GRANT REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESS EE. THUS, THE RELEVANT GROUNDS ARE ALLOWED FOR STATISTICAL PURPOSE. IT CANNOT BE THE CASE THAT THE ASSETS ARE TRANSFERRED IN MAY 2008 AND COMPENSATION IS PARTLY RECEIVED IN THAT YEAR A.Y. 2009- 10 WHERE AS THE COMPENSATION IS TAXED IN MULTIPLE A SSESSMENT YEARS. IN OUR VIEW, ASSESSING OFFICER DOES NOT HAVE CLARITY IN THE MATT ER. THIS APPROACH OF THE ASSESSING OFFICER IS NOT IN HARMONY WITH THE PRINCI PLE OF RECOGNITION OF INCOME ON ACCRUAL BASIS. HOWEVER, IT IS NOT THE CASE OF THE REVENUE THAT ASSESSEE SHOULD 18 ITA NOS.742/PUN/2014 & 1326/PUN/2015 M/S. DANGAT BROTHERS DEVELOPERS. FOLLOW CASH SYSTEM OF COUNTING. THUS, FROM THIS PO INT OF VIEW, ASSESSMENTS UNDER CONSIDERATION CONSTITUTES BLOTCHED UP ONES. 29. ON OBSERVING THE ABOVE STANDS ON THE PARTIES IN LITIGATION, WE FIND THAT THERE IS NEED FOR PERUSAL OF THE ORDERS AS WELL AS THE DO CUMENTS PLACED BEFORE US ALONG WITH DECISIONS CITED ABOVE. FURTHER, WE FIND THERE IS NO DISPUTE ON FACTS. HOWEVER, THE DISPUTE IS ONLY ON THE ISSUE IF THE TRANSACTION OF TRANSFER OF LANDS FOR DEVELOPMENT OF HOUSING PROJECT BY VIRTUE OF THE JOI NT VENTURE, CONSTITUTES THE TRANSACTION OF SALE OF LAND OR DEVELOPMENT RIGHTS A ND THE DETAILS OF OTHER ANCILLARY ISSUES ARE ALREADY LISTED OUT IN THE PARAGRAPHS ABO VE. 30. THE AFORE-MENTIONED CORE ISSUE FOR ADJUDICATION RELATES TO THE NATURE OF THE TRANSACTION; IF THERE IS A TRANSFEROR AND TRANSFERE E RELATIONSHIPS AT ALL IN THE IMPUGNED TRANSACTION AND IF THERE IS ONE, IF THE SA ID CONVEYANCE OF LAND BY THE ASSESSEE TO THE AOP, THE JOINT VENTURE, CONSTITUTES A SALE OF LAND/DEVELOPMENT RIGHTS WHEREBY THE ADVANCES AND THE SHARE OF SALE P ROCEEDS CONSTITUTES TAXABLE COMPENSATION. REST OF THE ISSUES MERELY ARE CONNECT ED ISSUES AND THE DETAILS ARE GIVEN IN THE PARA NO.24 ABOVE. 31. REGARDING THE SAID CORE ISSUE, WE FIND THAT TH E AO AND THE CIT(A) HAVE MERELY RELIED ON THE ORDER OF THE CIT(A) IN THE CASES OF M/S. DARODE JOG LAGAD VENTURES AND M/S. LAGAD BROTHERS DEVELOPERS. BUT THE FACT IS THAT THE SAID ORDER OF THE CIT (A) STANDS PARTLY REVERSED BY THE T RIBUNAL VIDE ITA NO. 2038 TO 2041/PN/2013 R.W. ITA NOS. 310 TO 312/PN/2014 FOR A .YRS. 2007-08 TO 2010-11 AND OTHERS AND MOST OF THE FINDINGS OF THE CIT (A) STAND REVERSED NOW BY THE ORDER OF THE TRIBUNAL. IN THESE CASES, HON'BLE TRIBUNAL C AME TO THE FINDING THAT THE JOINT VENTURE AGREEMENT (SUPRA) DOES NOT CONSTITUTE A DEV ELOPMENT AGREEMENT. IN OTHER WORDS, ON THE FACTS OF THAT CASE, BUSINESS NATURE O F THE TRANSACTION WAS AFFIRMED. 19 ITA NOS.742/PUN/2014 & 1326/PUN/2015 M/S. DANGAT BROTHERS DEVELOPERS. BUT IN THE INSTANT CASE, THE PRESENT JOINT VENTURE IS NOT OWNING UP THE HOUSING PROJECT DEVELOPED BY IT AND ITS ELIGIBILITY FOR CLA IM OF DEDUCTIONS IF ANY. THEREFORE, CONSIDERING THE ADDITIONAL EVIDENCES ON ONE SIDE A ND ALSO THE SAID ORDER OF THE TRIBUNAL ON THE OTHER, WE FIND THERE IS NEED FOR US TO REMANDING IN VIEW OF THE SET PRINCIPLES OF NATURAL JUSTICE. AO IS DIRECTED TO CO NSIDER THE SAME AND DECIDE THE SAID CORE ISSUE AFRESH AFTER GRANTING REASONABLE OP PORTUNITY OF BEING HEARD TO THE ASSESSEE. ACCORDINGLY, THE CORE ISSUE IS ALLOWED FO R STATISTICAL PURPOSE. 32. FURTHER, WE FIND THAT THE ORDER OF TRIBUNAL IN THE CASE OF JAGAD BROTHERS DEVELOPERS BEING DATED 09-03-2016 WAS NOT AVAILABLE TO THE CIT(A) BEING DATED 08-01-2014 FOR THE A.Y. 2010-11 AND 15-07-2015 FOR THE A.Y. 2011-12. TRIBUNAL PARTLY REVERSED THE FINDING OF THE CIT(A) ON WHICH THE PRESENT CIT(A) HAS RELIED HEAVILY. IT IS THE FINDING OF THE TRIBUNAL THE SAID ORDER THAT THE SAID JOINT VENTURE AGREEMENT DOES NOT CONSTITUTE A DEVELOPMENT AGREEM ENT. IN THE PROCESS, TRIBUNAL DISAPPROVED THE AOS FINDINGS ON MANY COUNTS IN THA T CASE. ONE NEEDS TO EXAMINE THE FACTS OF THE PRESENT CASE BEFORE BORROWING THE RATIO OF THE SAID DECISION FOR THE PRESENT CASE OF APPEALS. AS DISCUSSED ABOVE, THE VI EWS OF THE ASSESSING OFFICER CANNOT BE CONFIRMED BY US NOW IN THE PRESENT FORM. THE FACT OF ASSESSEE RECEIVING COMPENSATION IN THE A.Y. 2009-10 BY WAY OF INTEREST FREE ADVANCE OF RS.5 CRORES AND SHARE IN REVENUE RECEIPTS AND TAXING THE SAME I N THE CURRENT ASSESSMENT YEARS OR ASSESSMENT YEARS UNDER CONSIDERATION SUBSTANTIAL LY CONTRADICTS THE STAND OF THE AO IN SO FAR AS HIS STAND REGARDING THE NATURE OF C ONVEYANCE OF LAND AS A CASE OF OUTRIGHT SALE TRANSACTION OF LAND/DEVELOPMENT RIGHT S. THEREFORE, WE ARE OF THE VIEW THE MATTER HAS TO BE REMANDED TO THE FILE OF THE AS SESSING OFFICER FOR FRESH ADJUDICATION OF THE ABOVE REFERRED GROUNDS MAINTAIN ING THE CONSISTENCY IN THE EXISTING RATIO OF THE TRIBUNAL IN THE OTHER GROUP C ASES (SUPRA). AO SHALL CONSIDER THE ABOVE REFERRED ADDITIONAL EVIDENCES WHILE ADJUD ICATING THE ISSUE ON HAND. 20 ITA NOS.742/PUN/2014 & 1326/PUN/2015 M/S. DANGAT BROTHERS DEVELOPERS. 33. HOWEVER, DURING THE REMAND PROCEEDINGS, THE ASS ESSING OFFICER SHALL NOTE THAT PRIMA FACIE, WE FIND DECISION OF THE TRIBUNAL IN THE CASE OF JAGAD BROTHERS AND DEVELOPERS(SUPRA) IS ON DIFFERENT FACTS. THE DETAI LS OF SUCH DIFFERENCES INCLUDE THAT THE CONCERNED JOINT VENTURE, OFFERED THE INCOME AND PAID RELEVANT TAXES IN THAT CASE, THE PARTIES OF THE SAID JOINT VENTURE BEING A TAXABLE ENTITY SHARE THE PROFIT UNLIKE THE ASSESSEE, WHERE THE SHARE IN THE RECEIPT S OF SALE OF FLATS IS EARNED BY THE MEMBERS OF THE JOINT VENTURE. JOINT VENTURE IS NOT A TAXABLE ENTITY IN THIS CASE. AS SUCH, THE JOINT VENTURE IS FLOATED TO DEVELOP TH E PROJECT. ASSESSING OFFICER SHALL ALSO NOTE THAT THE DECISION OF TRIBUNAL IN THE CASE OF BOMBAY REAL ESTATE DEVELOPMENT COMPANY PVT. LTD. (64 DTR 137) AND OTHE RS ARE DECIDED ON THE FACTUAL MATRIX WHERE, THERE IS NO JOINT VENTURES. THE SAME IS THE CASE OF JUDGMENT IN THE CASE OF SHRAVANEE CONSTRUCTIONS (81 CCH 253) . THESE DIFFERENCES CONSTITUTE DISTINGUISHABLE FACTS OF MAJOR MAGNITUDE. THE ASSE SSING OFFICER SHALL RE-EXAMINE THE ISSUE AND CONSIDER THE ABOVE ARGUMENTS OF THE A SSESSEE AS WELL AS THE DECISION CITED ABOVE (SUPRA) IN ACCORDANCE WITH THE PRINCIPL ES OF NATURAL JUSTICE AND PASS A SPEAKING ORDER IN ACCORDANCE WITH PROCESS OF LAW. THUS, THE GROUNDS 4 TO 5 ARE ALLOWED FOR STATISTICAL PURPOSES. 34. GROUND NO.6 TO 8 RELATES TO ACCRUAL OF INCOME D URING YEAR. WE HAVE DEALT WITH THIS ISSUE IN THE PRECEDING PARAGRAPHS OF THIS ORDER UNDERLYING THE INCONSISTENCIES ON PART OF THE AO IN TAXING CERTAIN RECEIPTS/ADVANCES. THESE GROUNDS ARE RAISED IN CONTEXT OF ASSESSING OFFICER S FINDING THAT THE ADVANCES AND THE ASSESSEES SHARE OF THE SALE RECEIPTS IS ASSESS ABLE TAX IN THESE YEARS A.YRS.2010-11, 2011-12 & 2012-13. THERE IS NO CLARI TY ON WHY THE ASSESSEES CLAIM OF PROJECT COMPLETION METHOD IS WRONG AND UNSUSTAIN ABLE IN PRINCIPLE. HAVING REJECTED THE PROJECT COMPLETION METHOD OF THE ASSE SSEE, THERE IS NO CLARITY ON THE METHOD THE AO ADOPTED. OTHERWISE, IT IS THE CASE OF THE ASSESSEE THAT THE INCOME 21 ITA NOS.742/PUN/2014 & 1326/PUN/2015 M/S. DANGAT BROTHERS DEVELOPERS. ACCRUED TO THE ASSESSEE IS TAXABLE ONLY AS PER PROJ ECT COMPLETION METHOD OF THE HOUSING PROJECT AND CERTAINLY NOT IN THE ASSESSMENT YEARS UNDER CONSIDERATION. IF THE AO WANT TO TAX THE SHARE OF THE SALE RECEIPTS I N THE YEAR OF RECEIPT FROM THE ACCOUNT OF JOINT VENTURE, THEN, WHY DID HE TAX THE RECEIPTS IN ADDITION TO THE ADVANCE OF RS. 5 CRORES PERTAINING TO THE AY 2009-1 0? AS SUCH, THERE IS NO CLARITY ON FACTS FOR US AS TO HOW THE MEMBERS OF AOP-JOINT VENTURE FILED THEIR RETURNS FOR THE ASSESSMENT YEARS TILL THE PROJECT IS EVENTUALLY COMPLETED AND WITH WHAT KIND OF CLAIMS OF DEDUCTION. THIS ISSUE IN A WAY IS CONNECT ED TO ONE ABOVE ALREADY REMANDED TO THE FILE OF THE ASSESSING OFFICER VIDE THE GROUND NO.4 & 5. THEREFORE, (THESE GROUNDS) 6 TO 8 ARE ALSO REMANDED TO THE FIL E OF THE ASSESSING OFFICER FRESH ADJUDICATION. THEREFORE, IN OUR VIEW, THESE GROUND S ARE ALSO TO BE REMANDED TO THE FILE OF THE ASSESSING OFFICER FOR FRESH ADJUDICATIO N AFTER GRANTING REASONABLE OPPORTUNITY OF BEING HEARD TO THEIR ASSESSEE. ACCO RDINGLY, GROUND NOS.6 TO 8 ARE ALLOWED FOR STATISTICAL PURPOSES. 35. FURTHER, TO ELABORATE ON THE INCONSISTENCIES OF THE AO IN MATTERS OF RECOGNIZING THE INCOME OF THE PROJECT AND REGARDING THE YEAR TAXATION OF (A) ADVANCE OF RS. 5 CRORES AS WELL AS (B) THE SUM OF RS.27,23,121/- BOTH RECEIVED IN THE YEAR RELEVANT TO A.Y. 2009-10, WE FIND FROM THE ORDERS OF THE REVENUE THAT THERE IS NO REQUISITE DISCUSSION AS TO WHY THE A.Y. 2009-10 IS NOT RELEVANT FOR TAXING THESE RECEIPTS. IT IS NOT KNOWN WHY THE ASSESSING O FFICER, AFTER HAVING DECIDED TO TAX THE RECEIPTS ON THE BASIS OF YEAR OF RECEIPT, C HOSE TO TAX THE SAID ADVANCE OF RS.5 CRORES AND OTHER SUM OF RS 27,23,121/- IN THE YEARS UNDER CONSIDERATION AND NOT EITHER IN A.Y. 2009-10 OR IN YEAR OF COMPLETION OF THE PROJECT. FURTHER, WE FIND THE SHARE OF THE REVENUE RECEIPTS OF FIRM IS BROUGH T TO TAX BY THE ASSESSING OFFICER IN THE AYRS. 2010-11 AND 2011-12 REJECTING THE PROJ ECT COMPLETION METHOD ADOPTED BY THE ASSESSEE. THOUGH, ASSESSEE RECEIVED HIS SHAR E OF RECEIPTS IN A.Y. 2009-10, 22 ITA NOS.742/PUN/2014 & 1326/PUN/2015 M/S. DANGAT BROTHERS DEVELOPERS. THEY ARE NOT SUBJECTED TO TAX IN THAT ASSESSMENT YE AR. FOR THE RULE OF CONSISTENCY, AO SHOULD HAVE TAXED THE SUM OF RS. 5 CRORES AND S UM OF RS.27,23,121/- IN A.Y. 2009-10 AND SUCH A DECISION SHOULD HAVE AVOIDED THE OBVIOUS ABSURDITY IN HIS ORDER. ASSESSING OFFICER DID NOT GIVE ANY REASON FO R THE SAID DEVIATION. THUS, WE FIND THE ASSESSING OFFICER ADOPTED INCONSISTENT APP ROACH/METHODS OF RECOGNIZING THE INCOME. 36. REGARDING GROUND NOS. 9 TO 10 ARE RAISED WITHOU T PREJUDICE AND THE SAME RELATES TO ERRONEOUS COMPUTATION OF PROFITS, ASSESS EE MENTIONED THAT THE ASSESSING OFFICER FAILED IN GRANTING PROPER REDUCTION TO AN A CCOUNT OF COST OF THE DEVELOPMENT OF THE PROJECT WHILE COMPUTING THE PROFITS OF THE Y EAR. ASSESSEE ALSO OBJECTS TO AOS DECISION IN TAXING OF SALE RECEIPTS RELATABLE TO A.Y. 2009-10 IN THE YEAR UNDER CONSIDERATION. THIS ASPECT IS DISCUSSED IN DETAIL I N THE PRECEDING PARAGRAPHS OF THIS ORDER. THESE ISSUES ARE ALSO OBVIOUSLY CONNECTED TO THE RECOGNITION OF THE INCOME - 4 & 5 OF THE GROUNDS OF APPEAL WERE ALSO REMANDED T O THE FILE OF ASSESSING OFFICER FOR FRESH ADJUDICATION. THE MATTERS RELATING TO CO MPUTATION OF CORRECT PROFITS IS CONSEQUENTIAL AND CONTINGENT UPON THE CONCLUSIONS O N GROUND NOS. 4 AND 5 OF THE APPEAL. FOR THE SAKE OF HARMONIOUS ADJUDICATION OF THE GROUNDS, WE PROCEED TO REMAND THESE ISSUES ALSO TO THE FILE OF THE ASSESSI NG OFFICER FOR FRESH ADJUDICATION AFTER GRANTING REASONABLE OPPORTUNITY OF BEING HEAR D TO THE ASSESSEE. 37. GROUND NOS. 11 TO 13 ARE ALSO RAISED WITHOUT PR EJUDICE THAT THE ASSESSEE IS ENTITLED TO DEDUCTION U/S 80IB(10) OF THE ACT IN RE SPECT OF THE INCOME OF THE HOUSING PROJECT. IT IS THE ARGUMENT OF LD. COUNSEL FOR THE ASSESSEE THAT THE INCOME, IF ANY TAXED IN THIS YEAR, IS RELATABLE TO ELIGIBLE HOUSING PROJECT. THE CLAIM OF THE ASSESSEE HAS TO BE EXAMINED DENOVO IN THE LI GHT OF THE CONDITIONS SPECIFIED IN THE SUB-SECTION 10 OF SAID SECTION. IT IS THE V IEW OF THE ASSESSEE THAT THE FIRM DULY FULFILLS ALL THE CONDITIONS, DETAILED EXPENSES ARE GIVEN, THE SAME ARE ALREADY 23 ITA NOS.742/PUN/2014 & 1326/PUN/2015 M/S. DANGAT BROTHERS DEVELOPERS. EXTRACTED BY THE CIT(A) IN PARA 8 (PAGE 17 OF THE P APER BOOK). THE CIT(A) WHILE ADJUDICATING THIS GROUND IN PARA 8.4 RELIED HEAVILY ON THE ORDER OF CIT(A) IN THE CASE OF DANGAT BROTHERS VENTURES (SUPRA). IN PARA 8.5, CIT(A) HELD THE FACTS ARE IDENTICAL TO THAT OF THE PRESENT CASE AND MENTIONED THAT SIMILAR CLAIM OF THAT ASSESSEE WAS DENIED BY THE CIT(A). ACCORDINGLY, HE TOOK IDENTICAL VIEW FOR THIS CASE ALSO IGNORING CERTAIN DISTINGUISHABLE FACTS. ON EXAMINING THE FACTS AS WELL AS THE SUBSEQUENT DEVELOPMENTS IN THE CASE OF LAGAD BR OTHER DEVELOPERS(SUPRA), WE FIND IN PARA 50 OF THE ORDER OF THE TRIBUNAL, WHICH IS ALREADY EXTRACTED ABOVE, THIS ISSUE WAS ADJUDICATED BY THE TRIBUNAL BY HOLDING THAT ASSESSEE IS NOT ENTITLED TO ANY DEDUCTION U/S 80IB(10) OF THE ACT. ACCORDING TO THE TRIBUNAL IN THE SAID CASES, IT IS THE JOINT VENTURE WHICH IS ELIGIBLE FOR DEDUC TION AS JOINT VENTURE IS THE DEVELOPER OF THE HOUSING PROJECT. BUT, IN THE INST ANT CASE, WE FIND THE JOINT VENTURE HAS NOT RETURNED ANY INCOME FROM THE SAID H OUSING PROJECT. THEREFORE, THE QUESTION OF JOINT VENTURE MAKING A CLAIM OF DED UCTION DOES NOT ARISE IN THE CASE OF THE ASSESSEES JOINT VENTURE WITH DJA. CON SIDERING THE DIFFERENCES OF THE FACTS, WE ARE OF THE OPINION, THIS ISSUE MUST ALSO BE EXAMINED AFRESH BY THE ASSESSING OFFICER IN DENOVO PROCEEDINGS AFTER GRANT ING REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. IN THE REMAND PROCEEDI NGS, AO SHALL TAKE INTO ACCOUNT THE ABOVE FACTS AND DECIDE THE ISSUE AFRESH IN THE LIGHT OF THE DECISIONS CITED ABOVE. AO SHALL GRANT REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. ACCORDINGLY, GROUNDS 11 TO 13 ARE ALLOWED FOR STATI STICAL PURPOSES. 38. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PA RTLY ALLOWED FOR STATISTICAL PURPOSES. ITA NO.1326/PUN/2015 - A.Y 2011-12 (BY ASSESSEE) : 39. AT THE OUTSET, LD. COUNSELS FOR BOTH THE PARTIE S MENTIONED THE ISSUES RAISED IN THE APPEALS ARE IDENTICAL TO THE ISSUES ADJUDICA TED IN CONNECTION WITH THE ITA 24 ITA NOS.742/PUN/2014 & 1326/PUN/2015 M/S. DANGAT BROTHERS DEVELOPERS. NO.742/PUN/2014. THE DECISION OF THE TRIBUNAL ON TH E SAID ISSUES HOLDS GOOD FOR THE ISSUES RAISED IN THE PRESENT APPEAL UNDER CONSI DERATION. ON THE OTHER HAND, MOST OF THE ISSUES IN THAT APPEAL WERE ALLOWED FOR STATISTICAL PURPOSES. ON COMPARISON OF THE FACTS / GROUNDS / ISSUES, WE FIND SIMILAR DIRECTIONS ARE REQUIRED ON THE ISSUES RAISED IN THIS APPEAL ALSO. ACCORDIN GLY, THE GROUND NOS. 1 TO 4 ARE DISMISSED AS NOT PRESSED AND GROUND NOS. 5 TO 11 ARE ALLOWED FOR STATISTICAL PURPOSES. 40. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 28 TH DAY OF JUNE, 2017. SD/- SD/- ( /VIKAS AWASTHY) ( . /D.KARUNAKARA RAO) / JUDICIAL MEMBER / ACCOUNTANT MEMBER / PUNE; / DATED : 28 TH JUNE, 2017 GANGADHAR/SATISH / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. ( ) / THE CIT(A)-CENTRAL, PUNE 4. / THE CIT-CENTRAL, PUNE 5. , , , / DR, ITAT, B BENCH, PUNE. 6. / GUARD FILE. / BY ORDER, / / TRUE COPY / / / ASSISTANT REGISTRAR, , / ITAT, PUNE