The ACIT, Central Circle-1(3), Ahmedabad V. M/s. Vasudev Developers, Ahmedabad

ITSSA 113/AHD/2010

• Counselvise Citation: [2013] 121 COUNSELVISE.COM (IT) 9283 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 4 month(s) 1 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 07-06-2013
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: D
• Next Hearing Date: 17-04-2013
• Assessment Year: 2006-2007
• Appeal Filed On: 05-02-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: D P GUPTA
• Assessee Lawyers: VIJAY RANJAN
• Section: 143(3); 80IB; 10

Judgement Text

ITA NOS. 111 & 112 /A/10 & C.O. NOS. 98 & 99/A/10 . A.Y. 06-07 &07- 08 1 IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, AHMEDABAD (BEFORE SHRI G.C.GUPTA VICE PRESIDENT & SHRI ANIL CHATURVED I, A.M.) I.T(SS). A. NOS.111 & 112/AHD/2010 (ASSESSMENT YEAR:2006-07 & 2007-08) & C.O. NOS. 98 & 99/AHD/2010 (ASSESSMENT YEAR: 2006-07 & 2007-08) THE ACIT, CENTRAL CIRCLE 1(3), ROOM NO.304, 3 RD FLOOR, AAYKAR BHAVAN ASHRAM ROAD, AHMEDABAD SHRI NAND CORPORATION M.H. MILL COMPOUND KHOKHRA CIRCLE, AHMEDABAD (APPELLANT) VS. VS. SHRI NAND CORPORATION M.H. MILL COMPOUND KHOKHRA CIRCLE, AHMEDABAD PAN: ABAFS8534L THE ACIT, CENTRAL CIRCLE 1(3), ROOM NO.304, 3 RD FLOOR, AAYKAR BHAVAN ASHRAM ROAD, AHMEDABAD (RESPONDENT) I.T(SS). A. NO S. 113 & 114/AHD/201 (ASSESSMENT YEAR: 2006-07 & 2007-08) & C.O. NOS . 102 & 103/AHD/2010 (ASSESSMEN T YEAR: 2006-07& 2007-08) T HE ACIT, CENTRAL CIRCLE 1(3), ROOM NO.304, 3 RD FLOOR, AAYKAR BHAVAN ASHRAM ROAD, AHMEDABAD M/S VASUDEV DEVELOPERS M.H. MILL COMPOUND KHOKHRA CIRCLE, KHOKHRA AHMEDABAD APPELLANT VS. VS. M/S VASUDEV DEVELOPERS M. H. MILL COMPOUND KHOKHRA CIRCLE, KHOKHRA AHMEDABAD PAN NO. AAFFV0789A ACIT, CENTRAL CIRCLE 1(3), ROOM NO.304, 3 RD FLOOR, AAYKAR BHAVAN ASHRAM ROAD, AHMEDABAD (RESPONDENT) REVENUE BY : SHRI D. P. GUPTA, CIT D.R. ASSESSEE BY : SHRI VIJAY RANJAN, A.R. ( )/ ORDER ITA NOS. 111 & 112 /A/10 & C.O. NOS. 98 & 99/A/10 . A.Y. 06-07 &07- 08 2 DATE OF HEARING : 17.04.20 13 DATE OF PRONOUNCEMENT : 07-06-2013 PER SHRI ANIL CHATURVEDI,A.M. 1. THESE FOUR APPEALS AND TWO C.OS ARISE OUT OF A ND ARE DIRECTED AGAINST THE ORDER OF CIT(A)-1, AHMEDABAD DATED 30.11.2009 F OR ASSESSMENT YEAR 2006-07 & 2007-08 RESPECTIVELY. BEFORE US, AT THE OUTSET, BOTH THE PARTIES SUBMITTED THAT IN THE ALL THE APPEALS THE F ACTS ARE IDENTICAL EXCEPT FOR THE AMOUNTS AND THEREFORE ALL THE APPEAL S CAN BE CONSIDERED TOGETHER. WE THEREFORE DISPOSE OF ALL THE APPEALS BY A CONSOLIDATED ORDER. IT(SS) NO. 111/AHD/2010 A.Y. 2006-07: (REVENUES APPEAL) 2. THE FACTS AS CULLED OUT FROM THE ORDER OF LOWER AUTHORITIES ARE AS UNDER. 3. THE ASSESSEE IS A FIRM ENGAGED AS BUILDERS AND D EVELOPERS. IN THIS CASE WARRANT OF AUTHORIZATION UNDER SECTION 132(1) OF THE ACT WAS ISSUED AND EXECUTED AT THE BUSINESS PREMISES OF THE ASSESSEE GROUP ON 10.5.2006 AND CERTAIN DOCUMENTS ARE SEIZED. THEREAF TER PROCEEDINGS UNDER SECTION 153(A) OF THE ACT WAS INITIATED FOR A SSESSMENT YEARS 2001-02 TO 2006-07. IN RESPONSE TO THE SAME,ASSESSE E FILED ITS RETURN OF INCOME FOR ASSESSMENT YEAR 2006-07ON 24.10.2007 DEC LARING TOTAL INCOME AT RS. NIL. THEREAFTER ASSESSMENT ORDER UNDE R SECTION 143 (3) READ WITH SECTION 153(A) (1) (B) OF THE ACT WAS PAS SED ON 31.12.2008 AND THE TOTAL INCOME WAS DETERMINED AT RS. 5,08,210/-. AGGRIEVED BY THE ORDER OF ASSESSING OFFICER, ASSESSEE CARRIED THE MA TTER BEFORE CIT(A). CIT(A) VIDE HIS ORDER DATED 30.11.2009 GRANTED PART IAL RELIEF TO THE ASSESSEE. AGGRIEVED BY THE AFORESAID ORDER OF CIT( A), THE REVENUE AND THE ASSESSEE ARE NOW IN APPEAL BEFORE US. THE GROU NDS RAISED BY THE REVENUE READS AS UNDER:- ITA NOS. 111 & 112 /A/10 & C.O. NOS. 98 & 99/A/10 . A.Y. 06-07 &07- 08 3 1. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN DEL ETING THE ADDITION OF RS. 5,08,210/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF INCOME WORKED OUT AS PER PROJECT COMPLETION METHOD. WHEN ACCOUNTING STANDARD-7 HAS ALREADY BEEN INTRODUCED AND APPLICABLE TO THE ASSESSEE . VIDE LETTER DATED 3/9/2012 REVENUE HAS RAISED AN AD DITIONAL GROUND WHICH READS AS UNDER:- THE LD. CIT(A)-1, AHMEDABAD HAS ERRED IN LAW AND I N ON FACTS IN NOT ADJUDICATING THE CLAIM OF THE ASSESSEE U/S. 80IB (10) OF THE IT ACT ON MERIT THOUGH THE SAME WAS DISALLOWED BY THE A.O. AFTER DISCUSSING AT LENGTH IN ASSESSMENT. 4. BEFORE US THE LD. D.R. SUBMITTED THAT THE ADDIT IONAL GROUND RAISED ARISE FROM THE ORDER OF CIT(A) AND THE MATERIAL IS ALREADY ON RECORD. THE LD. A.R. DID NOT SERIOUSLY OPPOSE THE REQUEST O F REVENUE. WE THEREFORE ADMIT THE ADDITIONAL GROUND. 5. 1 ST GROUND IS WITH RESPECT TO DELETION OF ADDITION OF RS. 508210/- 6. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, ASSESSING OFFICER NOTICED THAT ASSESSEE HAD SHOWN TOTAL WORK IN PROGR ESS OF RS. 50,82,085/- AND PROFIT WAS SHOWN AS NIL. HE ALSO NOTICED THAT A SSESSEE IN THE AUDIT REPORT SUBMITTED ALONG WITH RETURN UNDER SECTION 10 CCB HAS STATED THAT THE PROFIT WILL BE SHOWN AT THE TIME OF COMPLETION OF P ROJECT AND THE ASSESSEE WAS ALSO CLAIMING DEDUCTION UNDER SECTION 80 IB OF THE ACT. THE ASSESSEE WAS ASKED TO SUBSTIANTIATE ITS CLAIM FOR DEDUCTION U/S 80 IB AND DETAILS TO SUPPORT PROJECT COMPLETION METHOD. THE ASSESSEE IN TERALIA SUBMITTED THAT IT WAS FOLLOWING PROJECT COMPLETION METHOD AND THE WORK IN PROGRESS AT THE YEAR END WAS SHOWN AT COST PLUS ESTIMATED PROFIT WH ICH WAS WORKED OUT ON THE BASIS OF TOTAL ESTIMATED PROJECT REVENUE AND TO TAL ESTIMATED PROJECT COST. THE ASSESSING OFFICER DID NOT ACCEPT THE SUB MISSIONS OF THE ASSESSEE. HE WAS OF THE VIEW THAT SINCE THE ASSESSE E WAS FOLLOWING MERCANTILE OF ACCOUNTING, THE PROFIT FROM CONSTRUC TION AND DEVELOPMENT WORK WAS ALSO REQUIRED TO BE ASSESSED ON ACCRUAL BA SIS BY FOLLOWING PERCENTAGE COMPLETION METHOD. HE ALSO NOTICED THA T ASSESSEE HAS TAKEN ITA NOS. 111 & 112 /A/10 & C.O. NOS. 98 & 99/A/10 . A.Y. 06-07 &07- 08 4 BOOKING ADVANCE AND THEREFORE ACCORDING TO HIM, INC OME HAD ACCRUED TO ASSESSEE. HE ACCORDINGLY REJECTED THE METHOD FOLLOW ED BY THE ASSESSEE AND ADOPTED THE PERCENTAGE COMPLETION METHOD AND ES TIMATED THE PROFIT AT 10% OF THE WORK IN PROGRESS. HE ACCORDINGLY WORKED OUT THE PROFIT AT RS. 5,08,208/- AND ADDED IT TO THE INCOME. 7. AGGRIEVED BY THE ORDER OF ASSESSING OFFICER, ASS ESSEE CARRIED THE MATTER BEFORE CIT(A). CIT(A) AFTER CONSIDERING THE SUBMISS IONS OF THE ASSESSEE DELETED THE ADDITION MADE BY THE ASSESSING OFFICER BY HOLDING AS UNDER :- 5.4 I HAVE CAREFULLY CONSIDERED THE ASSESSMENT ORDER AN D SUBMISSION MADE ON BEHALF OF THE APPELLANT. IT IS FACT THAT TH E APPELLANT IS A DEVELOPER CUM BUILDER ENGAGED IN CONSTRUCTION AND S ALE OF IMMOVABLE PROPERTIES AND NOT IN CARRYING OUT CONSTR UCTION CONTRACTS AND HENCE THE REVISED ACCOUNTING STANDARD 7 AS WELL AS THE DECISION OF TIRTHRAM AHUJA PVT. LTD. 186 ITR 42 8, HEAVILY RELIED UPON BY THE A.O., WAS NOT APPLICABLE TO THE FACTS O F THE CASE OF THE APPELLANT FIRM. HENCE, THE ADDITION MADE WHILE PLAC ING THE RELIANCE ON THE SAME CANNOT BE UPHELD. I ALSO FIND FORCE IN THE ARGUMENTS OF THE LEARNED COUNSEL FOR THE APPELLANT, THAT AS THE APPELLANT WAS FOLLOWING THE PROJECT COMPLETION METHOD OF ACCOUNTI NG CONSISTENTLY AND THE INCOME ARISING FROM THE SAME IS ASSESSED IN THE HANDS OF THE APPELLANT IN THE A.Y 2008-09,IN WHICH THE MAJOR PORTION OF THE WORK WAS COMPLETED, THERE IS NO JUSTIFICATION IN MA KING ADDITION OF ESTIMATED PROFIT WITHOUT GIVING ANY CONTRARY OBSERV ATION TO THE EFFECT THAT THE METHOD ADOPTED BY THE APPELLANT HAS RESULTED INTO UNDER ASSESSMENT OF THE REAL INCOME OF THE APPELLAN T. ACCORDINGLY, ON APPRECIATION OF THE FACTS OF THE CASE OF THE APP ELLANT IN LIGHT OF THE VARIOUS JUDICIAL RULINGS RELIED ON BY THE APPEL LANT, I HOLD THAT THE ADDITION MADE IN BOTH THE ASSESSMENT YEARS BY WAY O F ESTIMATED PROFIT ON WORK IN PROGRESS, WAS UNWARRANTED AND ACC ORDINGLY THE A.O. IS DIRECTED TO DELETE THE SAID ADDITION. THE R ELATED GROUND OF APPEAL IS THUS ALLOWED. 8. AGGRIEVED BY THE AFORESAID ORDER OF CIT(A) THE R EVENUE IS NOW IN APPEAL BEFORE US. ITA NOS. 111 & 112 /A/10 & C.O. NOS. 98 & 99/A/10 . A.Y. 06-07 &07- 08 5 9. BEFORE US, THE LEARNED D.R. SUBMITTED THAT SINCE THE ASSESSEE WAS IN THE BUSINESS OF CONSTRUCTION ACTIVITY AND IT WAS FOLL OWING THE MERCANTILE SYSTEM OF ACCOUNTING, IT SHOULD HAVE FOLLOWED PER CENTAGE COMPLETION METHOD. HE FURTHER SUBMITTED THAT IN RESPECT OF REC OGNITION OF INCOME IN CONSTRUCTION BUSINESS HON. SUPREME COURT IN THE CAS E OF TIRTHARAM AHUJA VS. CIT(90) 186 ITR 428 HAS CONFIRMED THE RATIO LA ID DOWN BY HON. DELHI HIGH COURT IN THE CASE OF TIRATH RAM AHUJA (P) LTD. VS. CIT (1976) 103 ITR 15 (DEL) WHERE IT WAS HELD THAT IN CASE OF CONTRACT S, IN ORDER TO ASCERTAIN INCOME, ONE NEED NOT WAIT TILL CONTRACT IS COMPLET ED AND THAT IT IS OPEN TO REVENUE TO ESTIMATE PROFIT ON THE BASIS OF RECEIPTS IN EACH YEAR OF CONSTRUCTION ALTHOUGH THE CONTRACT IS NOT COMPLETED . HE FURTHER SUBMITTED THAT IN THE CASE OF GIRIRAJ CORPORATION AND SHRI HA RI ASSOCIATES WHICH ALSO BELONGS TO THE SAME GROUP THE ASSESSEE HAS ADOPTED PERCENTAGE COMPLETION METHOD FOR SAME PROJECTS AND THEREFORE T HE ASSESSEE ALSO OUGHT TO HAVE FOLLOWED PERCENTAGE COMPLETION METHOD . HE THUS SUPPORTED THE ORDER OF ASSESSING OFFICER. 10. THE LEARNED A.R. ON THE OTHER HAND SUBMITTED THAT THE ASSESSEE IS A DEVELOPER CUM BUILDER AND IS ENGAGED IN DEVELOPMENT CONSTRUCTION AND SALE OF MOVABLE PROPERTIES AND NOT IN THE BUSINESS OF CARRYING ON CONSTRUCTIONS CONTRACT. HE FURTHER SUBMITTED THAT THE ASSESSEE WAS CONSISTENTLY FOLLOWING THE PROJECT COMPLETION METHO D OF ACCOUNTING FOR RECOGNISING THE INCOME AND IT WAS A VALID ACCOUNTIN G METHOD AND WAS ALSO ACCEPTED UNDER THE INCOME-TAX ACT AND IT WAS F OLLOWING THE SAME METHODS FROM YEAR TO YEAR ON CONSISTENT BASIS AND W AS ALSO ACCEPTED BY REVENUE. HE FURTHER SUBMITTED THAT THE ASSESSING OFFICER HAD NOT DEMONSTRATED THAT THE METHOD FOLLOWED BY THE ASSESS EE RESULTED INTO UNDER ESTIMATION OF PROFIT OR THE REAL INCOME OF TH E ASSESSEE FOR WHICH HE PLACED RELIANCE ON THE DECISION IN THE CASE OF CIT VS. REALEST BUILDERS AND SERVICES LTD. (2008) 307 ITR 202 (SC). HE FURTHER S UBMITTED THAT THE FOUR ITA NOS. 111 & 112 /A/10 & C.O. NOS. 98 & 99/A/10 . A.Y. 06-07 &07- 08 6 FIRMS ARE INDEPENDENT FIRMS AND LEGALLY IT IS NOT N ECESSARY THAT ALL THE FIRMS SHOULD FOLLOW SAME ACCOUNTING POLICIES. 11. THE LEARNED A.R. FURTHER SUBMITTED THAT THE MAJOR PORTION OF THE PROJECT WAS COMPLETED IN ASSESSMENT YEAR 2008-09 AND NOT IN ASSESSMENT YEAR 2006-07 AND 2007-08. THE ASSESSEE HAD OFFERED THE INCOME FROM PROJECT IN ASSESSMENT YEAR 2008-09 AND THE SAME WAS ACCEPTED B Y THE REVENUE WHILE FRAMING ASSESSMENT UNDER SECTION 143(3). HE ALSO PLACED ON RECORD THE COPY OF THE RETURN OF INCOME FOR 2008-09 ALONG WITH THE COMPUTATION OF TOTAL INCOME AND THE ASSESSMENT ORDER DATED 6.12.2010 PAS SED UNDER SECTION 143(3) OF THE ACT. HE, THEREFORE SUBMITTED THAT I F PROFIT IS ESTIMATED FOR THE YEAR UNDER APPEAL, IT WOULD AMOUNT TO TAXING THE S AME INCOME TWICE IN THE HANDS OF THE ASSESSEE. HE THUS SUPPORTED THE ORDER OF CIT(A). 12. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PER USED THE MATERIAL ON RECORD. IT IS UNDISPUTED FACT THAT ASSESSEE IS A DEVELOPER CUM BUILDER ENGAGED IN THE CONSTRUCTION AND SALE OF MOVABLE PROPERTIES AND IS NOT CARRYING OUT CONSTRUCTION CONTRACTS. THE ASSESSEE WAS FOLLOWING PROJECT COMPLETION METHOD OF ACCOUNTING CONSISTENTLY IN EARLIER YEARS AND THE SAME WAS ALSO ACCEPTED BY THE REVENUE IN THE PAST. IT IS ALSO A F ACT THAT THE INCOME FROM THE PROJECT THAT IS UNDER EXECUTION IN THE YEAR UND ER APPEAL HAS BEEN OFFERED TO TAX IN ASSESSMENT YEAR 2008-09 AND THE S AME HAS ALSO BEEN ACCEPTED BY THE REVENUE WHILE FRAMING ASSESSMENT UN DER SECTION 143(3). IT IS ALSO SEEN THAT WHILE FRAMING THE ASSESSMENT UNDER SECTION 143(3), FOR A.Y. 2008-09 THE ASSESSING OFFICER HAS CONSIDERED T HE TOTAL PROFITS AS INCOME OF THE YEAR AND HAS NOT MADE ANY BIFURCATION WITH RESPECT TO PROFITS FOR DIFFERENT ASSESSMENT YEARS NOR HAS GIV EN CREDIT FOR THE PROFITS PERTAINING TO EARLIER YEARS. CIT(A) WHILE DELETING THE ADDITION HAS GIVEN A FINDING THAT THE ACCOUNTING STANDARD 7 ISSUED BY TH E INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA ARE NOT APPLICABLE TO ASSESSEE AND THE ASSESSING ITA NOS. 111 & 112 /A/10 & C.O. NOS. 98 & 99/A/10 . A.Y. 06-07 &07- 08 7 OFFICER HAS NOT GIVEN ANY CONTRARY OBSERVATION TO T HE EFFECT THAT THE METHOD FOLLOWED BY ASSESSEE HAS RESULTED INTO UNDERSTATEME NT OF REAL INCOME OF THE ASSESSEE. REVENUE HAS NOT BROUGHT ANY CONTRARY MATERIAL TO CONTRADICT THE FINDINGS OF CIT(A). IN VIEW OF THE AFORESAID FACTS, WE ARE OF THE VIEW THAT IF THE ESTIMATED PROFITS IS BROUGHT T O TAX IN THE YEAR UNDER APPEAL, IT WOULD AMOUNT TO TAXING THE SAME INCOME T WICE THAT IS ONCE IN ASSESSMENT YEAR 2006-07 AND THE OTHER IN ASSESSMENT YEAR 2008-09 WHICH IS AGAINST THE SETTLED LAW POSITION THAT INCOME CAN BE TAXED ONLY ONCE. IN VIEW OF THE AFORESAID FACTS, WE FIND NO REASON TO I NTERFERE WITH THE ORDER OF CIT(A) AND THUS THIS GROUND OF REVENUE IS DISMISSED . 13. GROUND NO. 2 IS WITH RESPECT TO THE CLAIM OF ASSESSEE UNDER SECTION 80IB (10). 14. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, ASSESSING OFFICER NOTICED THAT THE LAND ON WHICH THE HOUSING PROJECT WAS CONS TRUCTED WAS PURCHASED BY FIVE HOUSING SOCIETIES (THE NAMES ARE LISTED AT PAGE 3 & 4 OF ORDER). HE ALSO NOTICED THAT A SINGLE HOUSING PROJECT ALONG WI TH COMMERCIAL COMPLEX WAS PLANNED AND APPROVED BY AHMEDABAD MUNICIPAL COR PORATION AND THEREFORE IT WAS A SINGLE PROJECT. HE FURTHER NOTI CED THAT LATER ON, THE PROJECT WAS ARTIFICIALLY DIVIDED INTO FOUR PARTS A ND CLAIMED TO BE CONSTRUCTED BY FOUR FIRMS OF THE GROUP NAMELY (1) G IRIRAJ CORPORATION, (2) NAND CORPORATION (3) SHRI HARI ASSOCIATES (4) VASUD EV DEVELOPERS. HE ALSO NOTICED THAT LAND WAS REGISTERED IN THE NAME O F SOCIETIES AND WAS NOT DEMARCATED AND THEREFORE IT WAS JOINT OWNERSHIP OF LAND. HE FURTHER NOTICED THAT ASSESSEE HAS ENTERED INTO DEVELOPMENT AGREEMENT WITH NANDANVAN COOPERATIVE HOUSING SOCIETY FOR THE DEVEL OPMENT OF LAND. HE ALSO NOTICED THAT THE ASSESSEE HAD SHOWN RS. 50,82, 085/- AS WORK IN PROGRESS IN PROFIT AND LOSS ACCOUNT AND AFTER DEBIT ING THE DIRECT AND INDIRECT EXPENSES NET PROFIT OF RS. NIL WAS SHOWN T HE ASSESSEE HAD ALSO CLAIMED DEDUCTION UNDER SECTION 80 IB (10) ASSESSIN G OFFICER WAS OF THE ITA NOS. 111 & 112 /A/10 & C.O. NOS. 98 & 99/A/10 . A.Y. 06-07 &07- 08 8 VIEW THAT THE ASSESSEE WAS NOT ENTITLED TO DEDUCTIO N UNDER 80 IB (10) FOR THE FOLLOWING REASONS. [1] THE PIECE OF LAND ON WHICH THE PROJECT WAS DEV ELOPED WAS NOT OWNED BY THE ASSESSEE BUT WAS OWNED BY THE SOCIETY THAT NANDANVAN COOPERATIVE HOUSING SOCIETY. [2] THE PROJECT WAS ARTIFICIALLY DIVIDED INTO FOUR PARTS AND EACH PART WAS CONSTRUCTED BY A SEPARATE FIRM [3] THE CONSTRUCTION WORK DONE WAS AS PER THE DEVE LOPMENT CONSTRUCTION AGREEMENT AND THE ASSESSEE WAS MERELY A CONTRACTOR FOR THE PURPOSE CONSTRUCTION OF PROJECTS. [4] THE ASSESSEE HAS NOT SOLD ANY UNIT TO THE CLIE NT AS NO SALE DEED ACCEPTED BY THE ASSESSEE. [5] ALL THE EXPENSES WERE DONE ON BEHALF OF THE C OOPERATIVE SOCIETY. IN THE BOOKS OF ACCOUNT THE ASSESSEE HAD NEVER SHOWN A NY INCOME FROM SALE OF FLATS/ BUNGALOW HOUSES BUT HAD MERELY SHOW N WORK DONE WHICH WAS SUBSEQUENTLY TRANSFERRED TO THE COOPERATIVE SOC IETY . 15. ASSESSING OFFICER ALSO NOTICED THAT AS PER TH E PLAN APPROVED BY AMC, THE AREA OF COMMERCIAL COMPLEX WORKED OUT TO 19.52% TO THE TOTAL AREA OF PROJECT WHICH WAS MORE THAN THE PRESCRIBED LIMITS U /S 80IB (10). FURTHER, THE PROJECT WAS APPROVED AS HOUSING PROJECT VIS A VIS COMMERCIAL COMPLEX AND THEREFORE IT CANNOT BE SAID TO BE A HO USING PROJECT ELIGIBLE FOR DEDUCTION. IN VIEW OF THE AFORESAID FACTS, THE ASSESSING OFFICER HELD THAT THE ASSESSEE WAS NOT A BUILDER AND DEVELOPER I N RESPECT OF THE SAID PROJECT BUT WAS MERELY A CONTRACTOR AND ACCORDINGLY THE CONDITIONS SATISFIED UNDER SECTION 80 IB (10) WERE NOT SATISFI ED AND HENCE THE ASSESSEE WAS NOT ELIGIBLE FOR DEDUCTION U/S 80 IB(1 0). 16. AGGRIEVED BY THE AFORESAID ORDER OF ASSESSING O FFICER, ASSESSEE CARRIED THE MATTER BEFORE CIT(A). CIT(A) DID NOT AD JUDICATE THE GROUND ON MERITS AS ACCORDING TO HIM WHILE ADJUDICATING THE I SSUE RELATING TO ESTIMATING THE INCOME ON WORK IN PROGRESS, THE ESTI MATION OF PROFIT ON WORK IN PROGRESS WAS UNWARRANTED AND HENCE THE ISSUE BEC AME REDUNDANT. 17. AGGRIEVED BY THE AFORESAID ORDER OF CIT(A) THE REVENUE IS NOW IN APPEAL BEFORE US. ITA NOS. 111 & 112 /A/10 & C.O. NOS. 98 & 99/A/10 . A.Y. 06-07 &07- 08 9 18. BEFORE US, THE LEARNED D.R. SUBMITTED THAT S INCE THE ISSUE HAS NOT BEEN EXAMINED ON MERITS BY CIT(A), THE MATTER MAY BE SEN D BACK TO CIT(A) FOR ADJUDICATION. THE LEARNED A.R. DID NOT OPPOSE THE SUBMISSION OF LEARNED D.R. 19 WE HAVE HEARD THE RIVAL SUBMISSIONS AND PER USED THE MATERIAL ON RECORD. WE FIND THAT THE ASSESSING OFFICER HAS HEL D THAT THE ASSESSEE IS NOT ENTITLED FOR DEDUCTION FOR 80IB (10) FOR THE RE ASONS LISTED IN THE ORDER. WE FURTHER FIND THAT LEARNED CIT(A) HAS NOT ADJUDI CATED THE ISSUE ON MERITS AND ACCORDING TO HIM THE ISSUE WAS REDUNDANT. IN V IEW OF THE AFORESAID FACTS, WE ARE OF THE VIEW THAT THE MATTER NEEDS TO BE EXAMINED ON MERITS. WE THEREFORE SET ASIDE THIS GROUND TO THE FILE OF CIT(A) AND DIRECT HIM TO EXAMINE THE ISSUE ON MERITS AND PASS A SPEAKING ORD ER AFTER GIVING ADEQUATE OPPORTUNITY OF HEARING TO BOTH THE PARTIES . THUS THIS GROUND OF REVENUE IS ALLOWED FOR STATISTICAL PURPOSES. 20. IN THE RESULT THE APPEAL OF REVENUE IS PA RTLY ALLOWED. C.O. NO. 98/A/2010: 21. THE LD. A.R. DID NOT PRESS THE C.O. AND THEREF ORE THE SAME IS DISMISSED AS NOT PRESSED. I.T.SS(A) NOS. 113 & 114 C.O. NO. 102 & 103:- 22. BEFORE US BOTH THE PARTIES SUBMITTED THAT T HE GROUNDS OF APPEAL AND THE C.O. IN THE PRESENT CASE ARE IDENTICAL TO THAT IN THE CASE OF NAND CORPORATION (ITA NO. 111 & 112 & CO NO. 98 & 99) EX CEPT FOR THE AMOUNTS. THE SUBMISSIONS MADE BY THEM IN THOSE CASES EQUALLY APPLY TO THE PRESENT CASE AND THEY HAVE NO FURTHER SUBMISSIONS TO MAKE I N THE PRESENT CASE. 23. WE HAVE HEARD BOTH THE PARTIES. SINCE IT IS AN ADMITTED FACT THAT THE FACTS IN THE PRESENT CASES ARE IDENTICAL TO THAT OF NAND CORP. (ITA NOS. 111 & ITA NOS. 111 & 112 /A/10 & C.O. NOS. 98 & 99/A/10 . A.Y. 06-07 &07- 08 10 112 & CO NO. 98 & 99) WHICH WE HAVE DECIDED HEREIN ABOVE, WE FOR SIMILAR REASONS, PARTLY ALLOW THE APPEAL OF REVENUE AND DI SMISS THE C.O. OF ASSESSEE. 24. IN THE RESULT ALL THE APPEALS OF REVENUE ARE PARTLY ALLOWED AND COS OF ASSESSEE ARE DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 07- 06- 2013 . SD/- SD/ - (G.C.GUPTA) (ANIL CHATURVED I) VICE PRESIDENT ACCOUNTANT MEMBER TRUE COPY AHMEDABAD. RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AHMEDA BAD