Sri Krishna Construction Company, CHENNAI V. DCIT, Coimbatore

ITA 814/CHNY/2013

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 7391 (ITAT-CHENNAI)
• Duration Of Justice: 5 year(s) 2 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-07-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 20-04-2017
• Assessment Year: 2008-2009
• Appeal Filed On: 29-04-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained expenditure
• Section: 69; 10

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, CHENNAI . . . , . !'# ! , % !& BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ ITA NOS.1104 & 1105/CHNY/2013 ( )( / ASSESSMENT YEARS : 2005-06 & 2008-09 THE DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE I, COIMBATORE. V. M/S SRI KRISHNA CONSTRUCTION CO., 78, EAST PERAMANUR STREET, 1 ST CROSS, MAYOR NAGAR, SALEM. PAN : AASFS 6015 R (+,/ APPELLANT) (-.+,/ RESPONDENT) ./ ITA NO.814/CHNY/2013 ( )( / ASSESSMENT YEAR : 2008-09 M/S SRI KRISHNA CONSTRUCTION CO., C/O SHRI S. SRIDHAR, SH. A.S. SRIRAMAN, ADVOCATES, NEW NO.14, OLD NO.82, FLAT NO.5, 1 ST AVENUE, INDIRA NAGAR, ADYAR, CHENNAI - 600 020. V. THE DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE I, COIMBATORE. (+,/ APPELLANT) (-.+,/ RESPONDENT) ./ ITA NO.589/CHNY/2014 ( )( / ASSESSMENT YEAR : 2009-10 ./ ITA NO.1422/CHNY/2015 ( )( / ASSESSMENT YEAR : 2010-11 & 2 I.T.A. NOS.1104 & 1105/CHNY/13 I.T.A. NO.814/CHNY/13 I.T.A. NO.5 89/CHNY/14 I.T.A. NO.1422/CHNY/15 I.T.A. NO.849/CHNY/16 ./ ITA NO.849/CHNY/2016 ( )( / ASSESSMENT YEAR : 2011-12 M/S SALEM SHRI KRISHNA CONSTRUCTION COMPANY PVT. LTD., C/O SHRI S. SRIDHAR, SH. A.S. SRIRAMAN, ADVOCATES, NEW NO.14, OLD NO.82, FLAT NO.5, 1 ST AVENUE, INDIRA NAGAR, ADYAR, CHENNAI - 600 020. V. THE DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE I, COIMBATORE. (+,/ APPELLANT) (-.+,/ RESPONDENT) / 0 1 /REVENUE BY : SMT. RUBY GEORGE, CIT (23 0 1 /ASSESSEE BY : SHRI S. SRIDHAR, ADVOCATE 4 0 3% / DATE OF HEARING : 22.05.2018 5') 0 3% / DATE OF PRONOUNCEMENT : 24.07.2018 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER: WHILE BOTH THE ASSESSEE AND THE REVENUE HAVE FIL ED APPEALS FOR ASSESSMENT YEAR 2008-09, AND IN ADDITIO N, THE REVENUE HAS FILED APPEAL FOR 2005-06 AND THE ASSESSEE HAS F ILED APPEALS FOR ASSESSMENT YEARS 2009-10, 2010-11 AND 2011-12 AGAIN ST THE VARIOUS ORDERS OF THE COMMISSIONER OF INCOME TAX (A PPEALS)-II, COIMBATORE. SINCE COMMON ISSUES ARISE FOR CONSIDER ATION, WE HEARD ALL THE APPEALS TOGETHER AND DISPOSING OF THE SAME BY THIS COMMON ORDER. 3 I.T.A. NOS.1104 & 1105/CHNY/13 I.T.A. NO.814/CHNY/13 I.T.A. NO.5 89/CHNY/14 I.T.A. NO.1422/CHNY/15 I.T.A. NO.849/CHNY/16 2. THERE WAS A DELAY OF 5 DAYS IN FILING BOTH THE A PPEALS BY THE REVENUE. THE REVENUE HAS FILED PETITIONS FOR CONDO NATION OF DELAY. WE HAVE HEARD THE LD. DEPARTMENTAL REPRESENTATIVE A ND THE LD.COUNSEL FOR THE ASSESSEE. WE FIND THAT THERE WA S SUFFICIENT CAUSE FOR NOT FILING THE APPEALS BEFORE THE STIPULA TED TIME. THEREFORE, WE CONDONE THE DELAY AND ADMIT THE APPEA L. 3. LETS FIRST TAKE REVENUES APPEAL FOR ASSESSMENT YEAR 2005- 06. 4. SMT. RUBY GEORGE, THE LD. DEPARTMENTAL REPRESENT ATIVE, SUBMITTED THAT THE ONLY ISSUE ARISES FOR CONSIDERAT ION IS ADDITION OF 27,80,000/- AS UNEXPLAINED EXPENDITURE UNDER SECTIO N 69 OF THE INCOME-TAX ACT, 1961 (IN SHORT 'THE ACT'). ACCORDI NG TO THE LD. D.R., THERE WAS A SEARCH IN THE PREMISES OF ONE SHRI A.R. SANTHAKUMAR. A SIMULTANEOUS SURVEY WAS CONDUCTED UNDER SECTION 1 33A OF THE ACT IN THE BUSINESS PREMISES OF THE ASSESSEE. DURI NG THE COURSE OF ASSESSMENT PROCEEDING, ACCORDING TO THE LD. D.R., I T WAS FOUND BY THE ASSESSING OFFICER THAT THERE WAS A CIVIL DISPUT E BETWEEN THE ASSESSEE-FIRM AND OWNER OF THE LAND. THE ASSESSEE HAS ALSO FILED A 4 I.T.A. NOS.1104 & 1105/CHNY/13 I.T.A. NO.814/CHNY/13 I.T.A. NO.5 89/CHNY/14 I.T.A. NO.1422/CHNY/15 I.T.A. NO.849/CHNY/16 CAVEAT BEFORE A CIVIL COURT AT SALEM IN RESPECT OF DEVELOPMENT OF LAND. THE ASSESSEE HAS SPENT 20.2 LAKHS TOWARDS DEVELOPMENT. HOWEVER, IN THE CAVEAT IT WAS CLAIMED THAT MORE THA N 50 LAKHS WAS INVESTED IN THE SAID PROPERTY. ACCORDING TO THE LD . D.R., WHEN THE ASSESSEE CLAIMED BEFORE THE CIVIL COURT IN THE CAVE AT, IT CANNOT GO BEYOND THE STATEMENT MADE BEFORE THE CIVIL COURT. THEREFORE, ACCORDING TO THE LD. D.R., THE ASSESSING OFFICER MA DE AN ADDITION OF 27,80,000/-, THE DIFFERENCE BETWEEN THE INVESTMENT DISCLOSED IN THE BOOKS OF ACCOUNT AND WHAT WAS DISCLOSED IN THE CAVEAT PETITION. 5. ON THE CONTRARY, SHRI S. SRIDHAR, THE LD.COUNSEL FOR THE ASSESSEE, SUBMITTED THAT THE CAVEAT PETITION IS ONL Y SIGNED BY THE COUNSEL ON THE BASIS OF ORAL INSTRUCTIONS GIVEN BY THE ASSESSEE. THE ASSESSEE HAD NO OCCASION TO READ THE AVERMENT C ONTAINED IN THE CAVEAT PETITION. CAVEAT PETITION, ACCORDING TO THE LD. COUNSEL, IS NOTHING BUT A PETITION IN ANTICIPATION OF CIVIL DIS PUTE AND REQUESTING THE COURT TO SERVE THE NOTICE BEFORE PASSING ANY IN TERIM ORDER. MOREOVER, ACCORDING TO THE LD. COUNSEL, IT WAS NOT A SWORN STATEMENT, THEREFORE, A CASUAL REFERENCE MADE BY TH E COUNSEL IN THE CAVEAT PETITION CANNOT BE A BASIS FOR MAKING ADDITI ON IN THE ABSENCE 5 I.T.A. NOS.1104 & 1105/CHNY/13 I.T.A. NO.814/CHNY/13 I.T.A. NO.5 89/CHNY/14 I.T.A. NO.1422/CHNY/15 I.T.A. NO.849/CHNY/16 OF ANY OTHER MATERIAL. MOREOVER, THE REFERENCE IN THE CAVEAT PETITION IS ONLY BASED UPON THE MARKET VALUE AND INFLATION W HICH HAS TO BE CONSIDERED ON THE INVESTMENT. THEREFORE, ACCORDING TO THE LD. COUNSEL, THE CIT(APPEALS) HAS RIGHTLY DELETED THE A DDITION MADE BY THE ASSESSING OFFICER. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. ADMITTEDLY, THE ADDITION WAS MADE BASED ON THE CAVEAT PETITION SAID TO BE FILED BEFORE THE CIVIL COURT AT SALEM. IT IS NOT THE CAS E OF THE REVENUE THAT A STATEMENT WAS ALSO RECORDED. OTHER THAN THE CAVEAT PETITION, NO OTHER MATERIAL IS AVAILABLE ON RECORD TO SUGGEST THAT THE ASSESSEE HAS INVESTED MORE THAN 50 LAKHS. THE CONTENTION OF THE ASSESSEE THAT THE MARKET RATE AFTER CONSIDERING THE INFLATION MAY BE EQUAL TO 50 LAKHS CANNOT BE BRUSHED ASIDE. THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT SINCE THE STATEMENT MADE IN THE CAVEAT PETITION IS NOT A SWORN STATEMENT, THERE CANNOT BE ANY ADDITION ONLY ON THE BASIS OF THE STATEMENT CONTAINED IN THE CAVE AT PETITION FILED BEFORE THE CIVIL COURT. THEREFORE, THE CIT(APPEALS ) HAS RIGHTLY DELETED THE ADDITION MADE BY THE ASSESSING OFFICER. THIS TRIBUNAL 6 I.T.A. NOS.1104 & 1105/CHNY/13 I.T.A. NO.814/CHNY/13 I.T.A. NO.5 89/CHNY/14 I.T.A. NO.1422/CHNY/15 I.T.A. NO.849/CHNY/16 DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF THE LOWER AUTHORITY AND ACCORDINGLY THE SAME IS CONFIRMED. 7. NOW COMING TO ASSESSMENT YEAR 2008-09 IN THE CAS E OF SRI KRISHNA CONSTRUCTION CO., FOR WHICH BOTH THE REVENU E AND THE ASSESSEE HAVE FILED APPEALS. 8. SMT. RUBY GEORGE, THE LD. DEPARTMENTAL REPRESENT ATIVE SUBMITTED THAT DURING THE COURSE OF SURVEY OPERATIO N AT THE PROJECT SITE, NAMELY, VISWA APARTMENTS, COIMBATORE, CERTAIN INCRIMINATING DOCUMENTS WERE FOUND AND IMPOUNDED. AS PER THE IMP OUNDED DOCUMENTS, ACCORDING TO THE LD. D.R., TRANSACTION R ELATING TO SOME LANDED PROPERTY WAS FOUND AND ALSO A RECEIPT OF 30 LAKHS IN THE STAMP PAPER DATED 30.11.2006 GIVEN BY ONE SHRI RAJA VELU TO SHRI PRABHAKARAN. ON ISSUE OF SHOW CAUSE NOTICE BY THE ASSESSING OFFICER, THE ASSESSEE CLARIFIED THAT THE SOURCE OF MAKING THE PAYMENT WAS THE SALE PROCEEDS OF DEBRIS ON DEMOLITI ON OF BUILDING. ACCORDING TO THE LD. D.R., THE ASSESSING OFFICER FO UND THAT THE ACCOUNTED AND DOCUMENTED VALUE OF THE SITE WAS 12 LAKHS AND THE ASSESSEE HAS PAID ON-MONEY OF 18 LAKHS. ACCORDING TO THE LD. D.R., THE CIT(APPEALS), AFTER CONSIDERING THE PAYME NT OF 18 LAKHS, 7 I.T.A. NOS.1104 & 1105/CHNY/13 I.T.A. NO.814/CHNY/13 I.T.A. NO.5 89/CHNY/14 I.T.A. NO.1422/CHNY/15 I.T.A. NO.849/CHNY/16 DELETED THE ADDITION MADE BY THE ASSESSING OFFICER TO THE EXTENT OF 18 LAKHS AND CONFIRMED THE ADDITION OF 12 LAKHS. ACCORDING TO THE LD. D.R., THE ADDITION MADE BY THE ASSESSING OFFICE R WAS ON THE BASIS OF SEIZED MATERIAL AND THERE WAS NO SUCH PRES UMPTION THAT THE ASSESSEE COULD HAVE RECEIVED THE ENTIRE MONEY ON SA LE OF DEBRIS ON THE DATE OF POWER OF ATTORNEY. 9. ON THE CONTRARY, SHRI S. SRIDHAR, THE LD.COUNSEL FOR THE ASSESSEE, SUBMITTED THAT THE DEMOLITION OF BUILDING WAS PERMITTED BY THE COIMBATORE MUNICIPALITY BY AN ORDER DATED 07 .09.2006. THE POWER OF ATTORNEY WAS GIVEN ON 30.11.2206. THEREFO RE, ACCORDING TO THE LD. COUNSEL, IT IS NOT CORRECT TO SAY THAT T HE ASSESSEE SOLD ENTIRE DEBRIS ON THE DATE OF POWER OF ATTORNEY. AC CORDING TO THE LD. COUNSEL, THERE WAS NEGOTIATION BETWEEN THE PARTIES BEFORE ENTERING INTO JOINT DEVELOPMENT AGREEMENT AND EXECUTION OF P OWER OF ATTORNEY. DURING THE COURSE OF NEGOTIATION, ACCORD ING TO THE LD. COUNSEL, THE ASSESSEE WAS PERMITTED TO DEMOLISH THE BUILDING, THEREFORE, IT IS NOT CORRECT TO SAY THAT THE ASSESS EE SOLD THE DEBRIS ON THE DATE OF POWER OF ATTORNEY. THE FACT REMAINS THAT THERE WAS SOURCE FOR PAYMENT OF 30 LAKHS. 8 I.T.A. NOS.1104 & 1105/CHNY/13 I.T.A. NO.814/CHNY/13 I.T.A. NO.5 89/CHNY/14 I.T.A. NO.1422/CHNY/15 I.T.A. NO.849/CHNY/16 10. SHRI S. SRIDHAR, THE LD.COUNSEL FOR THE ASSESSE E, FURTHER SUBMITTED THAT THE CONSIDERATION WAS 14,30,000/- AND THE DIFFERENCE OF 15,70,000/- WAS REALIZED FROM SALE OF DEMOLISHED MATERIAL. THE CIT(APPEALS) IS NOT JUSTIFIED IN CON FIRMING THE ORDER OF THE ASSESSING OFFICER TO THE EXTENT OF 12,00,000/-. 11. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EIT HER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. THE ASSESSEE APPEARS TO HAVE CLAIMED THAT THE DEMOLITION WORK WA S UNDERTAKEN BY ITS POWER OF ATTORNEY AGENT SHRI K. PRABHAKARAN AND REALIZED 12 LAKHS ON SALE OF DEBRIS. THE LOWER AUTHORITIES DIS BELIEVED THE CASE OF THE ASSESSEE ON THE GROUND THAT NO VOUCHER WAS P RODUCED. THE ASSESSEE APPEARS TO HAVE CLAIMED THAT THE PAYMENT O F 12 LAKHS ON 30.11.2006 WAS OUT OF 15.7 LAKHS OBTAINED FROM SALE OF DEBRIS AND NOT FROM SALE PROCEEDS OF THE LAND. THE ASSESSEE A LSO CLAIMS THAT 12 LAKHS WAS RECEIVED ON 30.11.2006 FROM SHRI PRABH AKARAN. THE BALANCE OF 18 LAKHS WAS RECEIVED ONLY AFTER 30.11.2006. IN FA CT, THE PAYMENT WAS MADE ONLY ON 04.07.2007. THE POWER OF ATTORNEY GIVEN BY SHRI RAJAVELU ON 30.11.2006 TO SHRI K. PRA BHAKARAN TO PUT UP A RESIDENTIAL CONSTRUCTION ON THE LAND AFTER DEM OLITION OF THE 9 I.T.A. NOS.1104 & 1105/CHNY/13 I.T.A. NO.814/CHNY/13 I.T.A. NO.5 89/CHNY/14 I.T.A. NO.1422/CHNY/15 I.T.A. NO.849/CHNY/16 SUPER STRUCTURE. THEREFORE, THIS TRIBUNAL IS OF TH E CONSIDERED OPINION THAT THE PAYMENT OF 12 LAKHS ON 30.11.2006 AND ANOTHER PAYMENT OF 18 LAKHS ON 04.07.2007 WAS FROM THE SALE PROCEEDS O F DEBRIS AND THE SALE OF LAND, THEREFORE, THE CIT(APP EALS) OUGHT TO HAVE ALLOWED THE ENTIRE CLAIM OF THE ASSESSEE. THI S TRIBUNAL DO NOT FIND ANY REASON TO DISALLOW THE CLAIM OF THE ASSESS EE. THEREFORE, THE ORDERS OF BOTH THE AUTHORITIES BELOW ARE SET AS IDE AND THE ASSESSING OFFICER IS DIRECTED TO ALLOW THE CLAIM OF 30 LAKHS. 12. IN THE RESULT, THE APPEAL OF THE REVENUE IS DIS MISSED AND THE APPEAL OF THE ASSESSEE IS ALLOWED. 13. NOW COMING TO THE APPEALS FILED BY THE ASSESSEE , M/S SALEM SHRI KRISHNA CONSTRUCTION COMPANY PVT. LTD., FOR AS SESSMENT YEARS 2009-10, 2010-11 AND 2011-12. 14. THE ONLY ISSUE ARISES FOR CONSIDERATION IS WHET HER THE ASSESSEE IS DEVELOPER OR CONTRACTOR. 15. SHRI S. SRIDHAR, THE LD.COUNSEL FOR THE ASSESSE E, SUBMITTED THAT THE ASSESSING OFFICER CONCLUDED THAT THE ASSES SEE IS A CONTRACTOR, THEREFORE, NOT ELIGIBLE FOR DEDUCTION U NDER SECTION 80-IB 10 I.T.A. NOS.1104 & 1105/CHNY/13 I.T.A. NO.814/CHNY/13 I.T.A. NO.5 89/CHNY/14 I.T.A. NO.1422/CHNY/15 I.T.A. NO.849/CHNY/16 OF THE ACT AND PROTECTIVE ASSESSMENT WAS MADE TO TH E EXTENT OF 1,73,71,258/- ON PROJECT COMPLETION METHOD. THE LD .COUNSEL FURTHER SUBMITTED THAT THE ASSESSEE IS A DEVELOPER OF THE PROJECT. BY WAY OF AMENDED DEED, THE ASSESSEE-COMPANY STEPPED I NTO THE SHOES OF PARTNERSHIP FIRM AND PROMOTED THE HOUSING PROJECT. ACCORDING TO THE LD. COUNSEL, BOTH THE AUTHORITIES BELOW MISUNDERSTOOD THE AMENDED DEED EXECUTED BETWEEN THE PARTIES. ACCORDING TO THE LD. COUNSEL, IT IS CLEARLY STATED THAT THE ASSESSEE- COMPANY IS THE DEVELOPER OF THE PROJECT, THEREFORE, THE ASSESSEE- COMPANY IS ENTITLED FOR ALL THE ATTENDED BENEFITS T O THE PROFIT. ACCORDING TO THE LD. COUNSEL, THE ASSESSING OFFICER MADE PROTECTIVE ASSESSMENT BASED ON THE CERTIFICATE SAID TO BE ISSU ED BY THE MUNICIPAL CORPORATION. ACCORDING TO THE LD. COUNSE L, THE CIT(APPEALS) OUGHT TO HAVE SEEN WHETHER THE INCOME HAS TO BE ASSESSED SUBSTANTIALLY IN THE HANDS OF THE ASSESSEE OR IN THE HANDS OF THE PARTNERSHIP FIRM. THEREFORE, ACCORDING TO T HE LD. COUNSEL, THE CIT(APPEALS) CANNOT CONTINUE THE PROTECTIVE ASSESSM ENT IN THE ABSENCE OF ANY MATERIAL AVAILABLE ON RECORD. THE L D.COUNSEL FURTHER SUBMITTED THAT THE CIT(APPEALS) CONFIRMED THE ORDER OF THE ASSESSING OFFICER IGNORING THE CLAIM OF THE ASSESSE E THAT THE 11 I.T.A. NOS.1104 & 1105/CHNY/13 I.T.A. NO.814/CHNY/13 I.T.A. NO.5 89/CHNY/14 I.T.A. NO.1422/CHNY/15 I.T.A. NO.849/CHNY/16 ASSESSEE WAS FOLLOWING PROJECT COMPLETION METHOD. IN FACT, THE ASSESSEE IS FOLLOWING PROJECT COMPLETION METHOD AND THE ENTIRE INCOME WAS OFFERED FOR TAXATION FOR THE ASSESSMENT YEAR 2012-13 AND THE ASSESSING OFFICER ACCEPTED THE RETURN ON SC RUTINY. 16. ON THE CONTRARY, SMT. RUBY GEORGE, THE LD. DEPA RTMENTAL REPRESENTATIVE, SUBMITTED THAT AS PER THE AMENDED D EED, THE ASSESSEE WAS THE DEVELOPER OF THE PROJECT. ACCORDI NG TO THE LD. D.R., THE OTHER RIGHTS AND LIABILITIES AS PER THE O RIGINAL JOINT DEVELOPMENT AGREEMENT WERE NOT TAKEN OVER BY THE AS SESSEE- COMPANY, THEREFORE, THE ASSESSEE IS NOT ELIGIBLE FO R ANY DEDUCTION UNDER SECTION 80-IB OF THE ACT. ACCORDING TO THE L D. D.R., THE ORIGINAL AGREEMENT WAS BETWEEN M/S SRI KRISHNA CONS TRUCTION COMPANY AND M/S VAITHAMANIDHI CONSTRUCTION. THE AS SESSEE- COMPANY IS NOT A PARTY TO THE AMENDED DEED. ACCORD ING TO THE LD. D.R., THE AMENDED DEED ALSO DOES NOT SPEAK ABOUT TH E TAKING OVER OF RESPONSIBILITY OF SRI KRISHNA CONSTRUCTION COMPA NY. NO SHARE OF INCOME WAS GIVEN TO THE ASSESSEE-COMPANY. THE ASSE SSEE WAS EXPECTED TO CONSTRUCT THE PROJECT. THEREFORE, ACCO RDING TO THE LD. D.R., THE CIT(APPEALS) HAS RIGHTLY FOUND THAT THE A SSESSEE IS ONLY A 12 I.T.A. NOS.1104 & 1105/CHNY/13 I.T.A. NO.814/CHNY/13 I.T.A. NO.5 89/CHNY/14 I.T.A. NO.1422/CHNY/15 I.T.A. NO.849/CHNY/16 CONTRACTOR AND NOT ELIGIBLE FOR DEDUCTION UNDER SEC TION 80-IB OF THE ACT. THE CIT(APPEALS) FURTHER FOUND THAT SINCE THE ASSESSEE IS CONSIDERED AS A CONTRACTOR, THE PROTECTIVE ASSESSME NT MADE IN THE HANDS OF THE ASSESSEE WAS DELETED. THEREFORE, ACCO RDING TO THE LD. D.R., IT IS NOT CORRECT TO SAY THAT THE PROTECTIVE ASSESSMENT MADE BY THE ASSESSING OFFICER WAS CONTINUED IN THE HANDS OF THE ASSESSEE BY THE ORDER OF THE CIT(APPEALS). 17. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EIT HER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. WE HAVE CAREFULLY GONE THROUGH THE JOINT DEVELOPMENT AGREEM ENT, A COPY OF WHICH IS AVAILABLE AT PAGE 123 OF THE PAPER-BOOK. THIS DOCUMENT WAS EXECUTED BETWEEN M/S A.V.R. VAITHAMANIDHI CONST RUCTIONS, PARTNERSHIP FIRM, BEING THE OWNER OF THE LAND AND M /S SRI KRISHNA CONSTRUCTION COMPANY, ANOTHER PARTNERSHIP FIRM CALL ED AS PROMOTER. THE RIGHTS AND LIABILITIES OF THE PARTIES WERE MENT IONED IN THE JOINT DEVELOPMENT AGREEMENT. SRI KRISHNA CONSTRUCTION CO MPANY, PARTNERSHIP FIRM, WAS EXPECTED TO DEVELOP THE HOUSI NG PROJECT WHICH CONSISTS OF GROUND + 3 FLOORS. THE COMPLEX CONSIST S OF 72 FLATS. IT IS DESIGNED IN SUCH A WAY THAT EVERY FLOOR SHALL HAVE 18 FLATS. THE 13 I.T.A. NOS.1104 & 1105/CHNY/13 I.T.A. NO.814/CHNY/13 I.T.A. NO.5 89/CHNY/14 I.T.A. NO.1422/CHNY/15 I.T.A. NO.849/CHNY/16 TOTAL AREA OF CONSTRUCTION EXCLUDING CAR PARKING, C OMPOUND WALL, SUMPS, OVERHEAD TANKS, SEPTIC TANK, LIFT MACHINE RO OM, ELECTRICAL ROOM, COMMON TOILETS, WOULD APPROXIMATELY COME TO 9 0,000 SQ.FT. 30% OF THE CONSTRUCTED AREA WOULD GO TO M/S A.V.R. VAITHAMANIDHI CONSTRUCTIONS, BEING THE OWNER OF THE LAND. 18. BY WAY OF AMENDED DEED DATED 07.10.2006, M/S A. V.R. VAITHAMANIDHI CONSTRUCTIONS AND SRI KRISHNA CONSTRU CTION COMPANY AGREED THAT THE PROFIT AND LOSS OF THE PROJ ECT SHALL BE SHARED ONLY ON COMPLETION OF FLATS ON PROJECT COMPL ETION METHOD. THEY ALSO MUTUALLY AGREED THAT THE JOINT DEVELOPMEN T PROJECT HAS TO BE EXECUTED BY THE ASSESSEE-COMPANY, I.E. M/S SALE M SHRI KRISHNA CONSTRUCTION COMPANY PVT. LTD. INSTEAD OF S RI KRISHNA CONSTRUCTION COMPANY, THE PARTNERSHIP FIRM. IT IS TO BE NOTED THAT THE MANAGING DIRECTOR OF THE PARTNERSHIP FIRM, NAME LY, SRI KRISHNA CONSTRUCTION COMPANY AND THE MANAGING DIRECTOR OF M /S SALEM SHRI KRISHNA CONSTRUCTION COMPANY PVT. LTD. ARE ONE AND THE SAME PERSON, I.E. SHRI K. PRABHAKARAN. IT IS ALSO NOT THE CASE OF THE REVENUE THAT SHAREHOLDERS OF THE ASSESSEE-COMPANY A ND PARTNERS OF THE PARTNERSHIP FIRM ARE DIFFERENT PERSONS. WHE N THE LAND OWNER 14 I.T.A. NOS.1104 & 1105/CHNY/13 I.T.A. NO.814/CHNY/13 I.T.A. NO.5 89/CHNY/14 I.T.A. NO.1422/CHNY/15 I.T.A. NO.849/CHNY/16 M/S A.V.R. VAITHAMANIDHI CONSTRUCTIONS EXECUTED JOI NT DEVELOPMENT AGREEMENT FOR CONSTRUCTION OF MULTI-STO RIED COMPLEX WITH SRI KRISHNA CONSTRUCTION COMPANY AND BY WAY OF ANOTHER DEED THE EXECUTION OF JOINT DEVELOPMENT AGREEMENT WAS AS SIGNED TO THE ASSESSEE-COMPANY BY THE LAND OWNER AND JOINT DEVELO PER, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE ENTI RE WORK OF JOINT DEVELOPMENT WAS ASSIGNED TO THE COMPANY, NAMELY, M/ S SALEM SHRI KRISHNA CONSTRUCTION COMPANY PVT. LTD. THE VE RY FACT THAT BY WAY OF AMENDED DEED, M/S A.V.R. VAITHAMANIDHI CONST RUCTIONS AND SRI KRISHNA CONSTRUCTION COMPANY MUTUALLY AGREED TH AT THE JOINT DEVELOPMENT WOULD BE EXECUTED BY M/S SALEM SHRI KRI SHNA CONSTRUCTION COMPANY PVT. LTD. SHOWS THAT THE ATTEN DED BENEFITS AND LIABILITIES WERE SHIFTED TO M/S SALEM SHRI KRIS HNA CONSTRUCTION COMPANY PVT. LTD. IN OTHER WORDS, THE PARTNERSHIP FIRM RELINQUISHED ITS ALL RIGHTS INDIRECTLY IN FAVOUR OF M/S SALEM SH RI KRISHNA COMPANY PVT. LTD. 19. THE JOINT DEVELOPMENT AGREEMENT AS WELL AS THE AMENDED DEED EXECUTED BETWEEN M/S A.V.R. VAITHAMANIDHI CONS TRUCTIONS AND SRI KRISHNA CONSTRUCTION COMPANY HAS TO BE READ HARMONIOUSLY 15 I.T.A. NOS.1104 & 1105/CHNY/13 I.T.A. NO.814/CHNY/13 I.T.A. NO.5 89/CHNY/14 I.T.A. NO.1422/CHNY/15 I.T.A. NO.849/CHNY/16 SO AS TO GIVE EFFECT TO THE INTENTIONS OF THE PARTI ES. IF THE AMENDED DEED ALONE IS READ AND INTERPRETED AS IF THE OTHER LIABILITIES OF THE ORIGINAL DEED WERE NOT TRANSFERRED TO M/S SALEM SHR I KRISHNA CONSTRUCTION COMPANY PVT. LTD., THEN IT WILL CREATE AN ANOMALY AS TO WHO WILL FUND FOR CONSTRUCTION OF MULTI-STORIED BUI LDING AS PER THE AGREEMENT. IF M/S SALEM SHRI KRISHNA CONSTRUCTION COMPANY PVT. LTD. PUTS ITS OWN FUNDS INSTEAD OF SRI KRISHNA CONS TRUCTION COMPANY, NATURALLY M/S SALEM SHRI KRISHNA CONSTRUCT ION COMPANY PVT. LTD. IS ENTITLED FOR THE SHARE OF PROFIT IN CO NSTRUCTION OF THE BUILDING AS PER THE ORIGINAL JOINT DEVELOPMENT AGRE EMENT. THEREFORE, THIS TRIBUNAL IS OF THE CONSIDERED OPINI ON THAT M/S SALEM SHRI KRISHNA CONSTRUCTION COMPANY PVT. LTD., THE AS SESSEE HEREIN, IS A DEVELOPER, THEREFORE, ENTITLED FOR DEDUCTION U NDER SECTION 80-IB OF THE ACT. EVEN OTHERWISE, THE ASSESSEE OFFERED T HE PROFIT FOR TAXATION FOR THE ASSESSMENT YEAR 2012-13 AS PER PRO JECT COMPLETION METHOD AND THE ASSESSING OFFICER ALSO ACCEPTED THE SAME ON SCRUTINY OF RETURN. HENCE, WE ARE UNABLE TO UPHOLD THE ORDERS OF BOTH THE AUTHORITIES BELOW. ACCORDINGLY, ORDERS OF BOTH THE AUTHORITIES BELOW ARE SET ASIDE AND THE ASSESSING O FFICER IS DIRECTED TO ALLOW DEDUCTION UNDER SECTION 80-IB OF THE ACT. 16 I.T.A. NOS.1104 & 1105/CHNY/13 I.T.A. NO.814/CHNY/13 I.T.A. NO.5 89/CHNY/14 I.T.A. NO.1422/CHNY/15 I.T.A. NO.849/CHNY/16 20. IN THE RESULT, ALL THE THREE APPEALS OF THE ASS ESSEE STAND ALLOWED. 21. TO SUM UP THE RESULT, BOTH THE APPEALS OF THE R EVENUE IN I.T.A. NO.1104 & 1105/CHNY/2013 ARE DISMISSED. THE ASSESSEES APPEAL IN I.T.A. NO.814/CHNY/2013 IS ALLOWED, WHERE AS, THE ASSESSEES APPEALS IN I.T.A. NO.589/CHNY/2014, I.T. A. NO.1422/CHNY/2015 AND I.T.A. NO.849/CHNY/2016 ARE A LLOWED. ORDER PRONOUNCED ON 24 TH JULY, 2018 AT CHENNAI. SD/- SD/- (. !'# ! ) ( . . . ) (A. MOHAN ALANKAMONY) (N.R.S. GANESAN) % / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 7 /DATED, THE 24 TH JULY, 2018. KRI. 0 -389 :9)3 /COPY TO: 1. (23 /ASSESSEE 2. ASSESSING OFFICER 3. 4 ;3 () /CIT(A)-II, COIMBATORE 4. DGIT (INV.), CHENNAI 5. CIT, CENTRAL III, CHEN NAI 6. 9< -3 /DR 7. =( > /GF.