The DCIT, Central Circle-1, Baroda V. M/s. Shree Narayan Enterprise, Baroda

ITSSA 167/AHD/2010

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 3086 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 7 month(s) 23 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 12-10-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 20-09-2012
• Assessment Year: 2007-2008
• Appeal Filed On: 19-02-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D P GUPTA
• Section: 80IB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD D BENCH BEFORE: SHRI D.K. TYAGI, JUDICIAL MEMBER AND SHRI T.R. MEENA, ACCOUNTANT MEMBER I.T.A.(SS) NOS.163, 164, 165, 166 & 167/AHD/2010 A.YS. 2003-04, 04-05, 05-06, 06-07 & 07-08 DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-1 BARODA APPELLANT(IN ALL APPEALS) VS. M/S SHREE NARAYAN ENTERPRISE C/201 TIMES SQUARE, BESIDE PETROL PUMP, FATEHGUNJ, BARODA PAN-AAPFS6878K RESPONDENT(IN ALL APPEALS) DEPARTM ENT BY : SHRI D.P. GUPTA, CIT-D.R. ASSESSEE BY : SHRI MUKUND BAKSHI, A.R. DATE OF HEARING : 20.09.2012 DATE OF PRONOUNCEMENT : 12.10.2012 / ORDER PER : D.K. TYAGI, JUDICIAL MEMBER ALL THESE APPEALS HAVE BEEN FILLED BY THE REVENUE A GAINST THE SEPARATE ORDERS OF LD. CIT(A)-IV, AHMEDABAD DATED 2 5.11.2009. AS ALL THE APPEALS BELONG TO THE SAME ASSESSEE AND ARE ON IDEN TICAL FACTS, THE SAME WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY PA SSING A CONSOLIDATED ORDER BY TAKING THE FACTS OF I.T.(SS) NO.163/AHD/20 10 FOR A.Y. 2003-04. 2. THE ASSESSEE HAS TAKEN FOLLOWING COMMON GROUNDS IN ALL THE APPEALS EXCEPT THE FIGURES:- I.T.A. (SS) NOS.163, 164, 165, 166 & 167/AHD/2010 A.YS. 2003-04, 04-05, 05-06, 06-07 & 07-08 2 THE LD. CIT(A) HAS ERRED IN LAW AND FACTS AND CIRC UMSTANCES OF THE CASE IN DELETING THE ADDITION MADE BY A.O. OF RS.67,32,850/- ON ACCOUNT OF DISALLOWANCE OF DEDUCT ION U/S 80IB OF THE ACT. 3. DURING THE ASSESSMENT PROCEEDINGS THE A.O. DISAL LOWED THE CLAIM OF DEDUCTION U/S 80IB OF THE ACT OF RS.67,32,850/- ON THE GROUND THAT ASSESSEE HAS NOT FULFILLED ALL THE PRESCRIBED CONDITIONS LAI D DOWN U/S 80IB OF THE ACT. THE A.O. HAS DISCUSSED THIS ISSUE IN PARAS 4 TO 9 O F HIS ORDER AND FINAL FINDING IS IN PARAS 8 AND 9 WHICH READ AS UNDER:- 8. TO CONCLUDE, THE DEDUCTION U/S 80IB (10) R.W.S. 80IB(1) AND RULE 18BBB IS ADMISSIBLE ONLY TO SUCH ASSESSEE AS A RE DERIVING PROFITS FROM AN UNDERTAKING OF BUILDING AND HOUSING PROJECTS APPROVED BY THE LOCAL AUTHORITY, AND FOR SUCH APPRO VAL, THE ASSESSEE MUST LEGALLY OWN THE LAND WHICH IS AN INAL IENABLE CONSTITUENT OF ANY HOUSING PROJECT. THE PERSON DOI NG ONLY THE WORK OF DEVELOPING AND CONSTRUCTING THE BUILDING ST RUCTURE ON THE AUTHORITY OF THE APPROVAL GRANTED TO THE LAND O WNER CAN NOT BE SAID TO BE IN THE BUSINESS OF AN UNDERTAKING DEV ELOPING AND BUILDING HOUSING PROJECTS, NOT ONLY ON ACCOUNT OF N OT BEING THE OWNER OF THE LAND, A NECESSARY CONSTITUENT OF THE H OUSING PROJECT, BUT ALSO AN ACCOUNT OF NOT HAVING BEEN GRA NTED THE APPROVAL TO EXECUTE THE PROJECTS IN HIS OWN RIGHT, BECAUSE THAT INVOLVES OBLIGATIONS THAT CAN BE DISCHARGE ONLY BY THE PERSON TO WHOM THE APPROVAL IS GRANTED. 9. SINCE THE ASSESSEE IS NOT THE OWNER OF LAND AND THE APPROVAL OF LOCAL AUTHORITY IS NOT IN THE NAME OF THE ASSESS EE BUT IN THE NAME OF THE LAND OWNERS, THE CONDITIONS LAID DOWN I N SECTION 80IB(10) R.W.S. 80IB (1), ARE NOT FULFILLED. IN VI EW OF THE DISCUSSION MADE IN THE ABOVE PRECEDING PARAS, DEDUC TION U/S 80IB(10) CLAIMED OF RS.6732850/- CAN NOT BE ALLOWED TO THE ASSESSEE AND THE SAME IS, THEREFORE, REJECTED. PEN ALTY PROCEEDINGS U/S 271(1)(C ) ARE INITIATED ON THIS PO INT FOR FURNISHING INACCURATE PARTICULARS. (ADDITION RS.6732850/-) 4. BEFORE LD. CIT(A) FOLLOWING WRITTEN SUBMISSIONS WERE FILED BY THE ASSESSEE:- I.T.A. (SS) NOS.163, 164, 165, 166 & 167/AHD/2010 A.YS. 2003-04, 04-05, 05-06, 06-07 & 07-08 3 THE LD. A.O. HAS DISALLOWED THE CLAIM OF THE APPEL LANT HOLDING THAT SUCH CLAIM IS ALLOWABLE ONLY TO AN ASSESSEE WH O DERIVES PROFITS FROM AN UNDERTAKING OF BUILDING AND HOUSING PROJECTS APPROVED BY THE LOCAL AUTHORITY, AND FOR SUCH APPRO VAL, THE ASSESSEE MUST LEGALLY OWN THE LAND WHICH IS AN INAL IENABLE CONSTITUENT OF ANY HOUSING PROJECT SUBJECT TO FULFI LLMENT OF OTHER CONDITIONS PRESCRIBED U/S 80IB(10). YOUR APPELLANT IS NOT BURDENING YOUR HONOUR BY THE SUBMISSIONS WITH RESPECT TO THE FULFILLMENT OF THE OTHER CONDIT IONS PRESCRIBED IN SEC.80IB(10) NOR THE SUBMISSIONS AND CONTENTIONS IN SUPPORT OF THE LAW THAT THE OWNERSHIP BY REGISTRATION IN TH E NAME OF THE ASSESSEE CLAIMING DEDUCTION U/S 80IB(10) IS NOT ESS ENTIAL IN VIEW OF THE SETTLED PROPOSITION LAID DOWN IN THE CA SE OF RADHE DEVELOPERS IN ITA NO.2482/AHD/2006 (NOW REPORTED IN 113 TTJ (AHD.) 300) THE APPELLANT IS ALSO AWARE OF THE LATER DECISION O F THE JURISDICTIONAL TRIBUNAL IN I.T.A. NO.1503/AHD/2008 FOR A.Y. 2005- 06 IN THE CASE OF M/S SHAKTI CORPORATION (UNREPORTE D) WHEREIN THE HONBLE TRIBUNAL RECONFIRMED THE LAW AND PROPOS ITION LAID DOWN IN RADHE DEVELOPERS WITH THE RIDER THAT THE SA ME CANNOT BE UNIVERSALLY APPLIED WITHOUT LOOKING INTO THE DEV ELOPMENT AGREEMENT ENTERED BY THE DEVELOPERS WITH THE LANDOW NER. THE HONBLE TRIBUNAL IN PARA 16 OF THE ORDER HAS HELD A S UNDER:- (THE RELEVANT FINDING OF THE DECISION OF M/S SHAKTI CORPORATION WILL BE REPRODUCED IN THE SUBSEQUENT PA RAS OF FINDING, THEREFORE TO AVOID REPETIION IT IS NOT REPRODUCED FOR SAKE OF BREVITY) CONSIDERING THE ABOVE DECISIONS OF THE HONBLE TRIB UNAL, YOUR APPELLANT SEEKS TO ESTABLISH BY REFERRING TO THE VA RIOUS TERMS OF THE DEVELOPMENT AGREEMENT AND THE ATTENDANT FACTS T O SHOW THAT THE APPELLANT IN FACT EXERCISES THE DOMINION O F OWNERSHIP OVER THE LAND AND SUBSEQUENT CONTROL OVER THE PROJE CT. ALL RISKS AND REWARD INVOLVED WITH THE PROJECT VEST WITH THE DEVELOPER AND THE LANDOWNER IS ONLY ENTITLED TO A FIXED REMUN ERATION. THE APPELLANT HAS DEVELOPED THE VARIOUS PROJECTS IN THE YEAR UNDER CONSIDERATION PARTICULARS OF WHICH WAS SUBMIT TED TO THE LD. A.O. VIDE ITS LETTER DATED NIL PLACED AT PAGE N O.25 TO 33 OF THE PAPER BOOK WHEREIN THE APPELLANT HAS SUBMITTED THE RELEVANT DOCUMENTS JUSTIFYING THE CLAIM AND ALSO TH E COPY OF THE DEVELOPMENT AGREEMENTS BY WHICH THE APPELLANT HAS P URCHASED THE PROPERTY FROM THE LANDOWNERS. I.T.A. (SS) NOS.163, 164, 165, 166 & 167/AHD/2010 A.YS. 2003-04, 04-05, 05-06, 06-07 & 07-08 4 THE APPELLANT HAS ENTERED INTO TWO DEVELOPMENT AGRE EMENTS: (A) THE FIRST AGREEMENT, THE COPY OF WHICH IS PLACE D AT PAGE NO.82 TO 87 IS WITH SMT. RAMBABEN BHOLABHAI PATEL & OTHERS WITH RESPECT TO LAND SITUATED AT SAYAJIPURA R.S. NO .328, 329, 330, 339, 340/PAIKI, 350, 337, 538, 540, 541, 543/1 , 543/2, 334, 338. THE AGREEMENT IS TITLED DEVELOPMENT AGREEMENT ON WHICH THE HOUSING PROJECT IN RESPECT OF WHICH DEDUCTION U/S 8 0IB(10) IS CLAIMED IS DISCUSSED AS UNDER: (THE BRIEF DISCUSSION ON THE CLAUSES OF THE AGREEM ENT IS NOT REPRODUCED FOR BREVITY. REFERENCE MAY BE MADE TO PAGE-7 TO 10 OF THE WRITTEN SUBMISSION OF THE LD. C OUNSEL) (B) THE SECOND AGREEMENT, THE COPY OF WHICH IS PLAC ED AT PAGE NO.88 TO 103 IS WITH SHRI HARSHADBHAI BABUBHAI GORA DIA AND OTHERS ON 21.6.2000 FOR PIECE OF LAND AT SAYAJIPURA R.S. NO.530/2 PAIKI. THE AGREEMENT IS TITLED 'DEVELOPMENT AGREEMENT' ON WHICH THE HOUSING PROJECT IN RESPECT OF WHICH DEDUCTION U/S. 80IB(10) IS CLAIMED IS DISCUSSED AS UNDER: (THE BRIEF DISCUSSION ON THE CLAUSES OF THE AGREEME NT IS NOT REPRODUCED FOR BREVITY.REFERENCE MAY BE MADE TO PAGE-7 TO 10 OF THE WRITTEN SUBMISSION OF THE LD. COUNSEL) ON THE BASIS OF ABOVE AGREEMENTS, THE APPELLANT HAS INCURRED AND PAID ALL THE DEVELOPMENT CHARGES TO LOCAL AUTHO RITY AS WELL AS CHARGES PAID TO BMC AND GUJARAT ELECTRICITY BOAR D FOR OBTAINING DRAINAGE CONNECTION AND ELECTRICITY CONNE CTION RESPECTIVELY HAVE BEEN ACCOUNTED FOR AND DEBITED TO PROFIT AND LOSS ACCOUNT UNDER THE VARIOUS HEADS OF DEVELOPMENT EXPENSES. THE APPELLANT HAS ALSO INCURRED ALL THE EXPENSES IN RESPECT OF CONSTRUCTION / DEVELOPMENT EXPENSE BY APPOINTING TH E ARCHITECTS, CONTRACTORS, PURCHASE OF MATERIAL ETC. FOR THE YEAR UNDER CONSIDERATION AS DEBITED IN THE PROFIT & LOSS ACCOUNT UNDER THE VARIOUS HEADS OF ACCOUNT MAINTAINED BY TH E APPELLANT. THE APPELLANT HAS PAID TO THE LANDOWNERS THE CONSID ERATION FOR PURCHASE OF THE LAND AS PER THE AGREED TERMS FROM THE PERUSAL OF THE TERMS OF THE AGREEMENTS AND ALSO THE CONDUCT OF THE APPELLANT AND THE LANDOWNER, IT IS E VIDENT THAT I.T.A. (SS) NOS.163, 164, 165, 166 & 167/AHD/2010 A.YS. 2003-04, 04-05, 05-06, 06-07 & 07-08 5 UPON EXECUTION OF THE AGREEMENTS-ALL THE EXPENSES I N RELATION TO THE HOUSING PROJECT ARE INCURRED BY THE APPELLANT A ND THAT THE LANDOWNERS BY HANDING OVER THE POSSESSION AND AGREE ING TO ACCEPT THE CONSIDERATION HAVE HANDED OVER BY TRANSF ER THE LAND UNDER CONSIDERATION TO THE DEVELOPER EVEN IN TERMS OF THE TRANSFER OF PROPERTY ACT (SEC. 53A) AND ALSO IN TER MS OF SEC. 2(47) OF THE L.T. ACT. THE DEVELOPER IS AUTHORIZED TO FURTHER TRANSFER THE LAND ALONG WITH CONSTRUCTION IN FAVOUR OF ANY OTHER PERSON AND THAT LANDOWNERS HAVE NO CONTROL OR RIGHT OVER THE DEVELO PER ON HANDING OVER THE POSSESSION. THUS THE RISK AND REWA RD AS ALSO THE RIGHT OF OWNERSHIP ARE VESTED IN THE DEVELOPER AND IT IS THUS STATED THAT THE APPELLANT HAS ESTABLISHED TO HAVE C OMPLIED WITH THE REQUIREMENTS AS LAID DOWN BY THE HON'BLE .TRIBU NAL IN. THE CASE OF SHAKTI CORPORATION REFERRED ABOVE. IN VIEW OF THE ABOVE SUBMISSION, THE ID. A.O. MAY P LEASE BE DIRECTED TO ALLOW THE CLAIM OF DEDUCTION U/S. 80IB AS MADE IN RESPECT OF THE PROJECT DEVELOPED ON THESE PLOTS OF LAND, THE PARTICULARS OF WHICH IS SUBMITTED TO THE ID.AO. AS MENTIONED ABOVE AND THE COPIES OF THE COMPLETE PARTICULARS IS PLACED AT PAGE NOS. 34 TO 79 OF THE PAPER BOOK. 5. AFTER TAKING INTO CONSIDERATION THESE SUBMISSION S OF THE ASSESSEE LD. CIT(A) ALLOWED THE APPEAL OF THE ASSESSEE BY HOLDIN G THAT ASSESSEE FIRM HAS FULFILLED ALL THE CONDITIONS AS LAID DOWN U/S 80IB( 10) OF THE ACT AND WAS ENTITLED TO DEDUCTION U/S 80IB(10) OF THE ACT OF RS .67,32,850/- BY OBSERVING AS UNDER:- 4.2 I HAVE CAREFULLY CONSIDERED THE SUBMISSION OF T HE LD. COUNSEL AS WELL AS THE FINDING OF OFFICER RECORDED IN THE ASSESSMENT ORDER ON THIS ISSUE. I HAVE CONSIDERED THE REPORT OF THE ASSESSING OFFICER DATED 27.08.2009 AND REMAND R EPORT DATED 03.11.200 AND ALSO CONSIDERED THE COUNTER COM MENTS OF THE LD. COUNSEL. I HAVE ALSO CONSIDERED THE MAIN CL AUSES OF BOTH THE DEVELOPMENT AGREEMENTS, VARIOUS APPROVALS GRANT ED BY VADODARA MUNICIPAL CORPORATION FOR THE RELEVANT PRO JECTS AND THE COMPLETION CERTIFICATES ISSUED BY THE VADODARA MUNICIPAL CORPORATION IN THIS RESPECT. THE APPELLANT DURING T HE COURSE OF ASSESSMENT PROCEEDINGS HAD FURNISHED ALL THE DETAIL S RELATING TO ALL THE FIVE PROJECTS OF VAIKUNTH-LL, THE COMMERCIA L NAME OF THE PROJECT, SITUATED AT SAYAJIPURA, VADODARA, AND SPEC IFICALLY I.T.A. (SS) NOS.163, 164, 165, 166 & 167/AHD/2010 A.YS. 2003-04, 04-05, 05-06, 06-07 & 07-08 6 CLARIFIED THAT THE APPELLANT IS FULFILLING ALL THE CONDITIONS PRESCRIBED U/S 80IB(10) OF THE ACT. IT WAS SUBMITTE D TO THE ASSESSING OFFICER THAT 'THE DOMINION OVER THE OWNER SHIP OF LAND IS PASSED ON TO THE ASSESSEE FIRM WITH ALL THE RISK AND LIABILITIES AND ALL THE PROFITS OR LOSS IN RELATION TO THE LAND IS VESTED IN THE ASSESSEE AND THEREFORE, IN TERMS OF THE DECISION OF THE JURISDICTIONAL TRIBUNAL IN THE CASE OF M/S RADHE DE VELOPERS IN ITA NO. 2482/AHD./2006 FOR 2003-04 {NOW REPORTED AT 113 TTJ (AND) 300}, IT IS SUFFICIENTLY ESTABLISHED THAT IN THE CASE OF THE APPELLANT ON ACQUIRING DOMINION OVER THE PROPERTY, THE ASSESSEE HAS DEVELOPED AND CONSTRUCTED THE HOUSING PROJECTS AT ITS OWN COST AND RISKS AND THEREFORE, THE ASSESSEE IS DEEME D TO BE THE OWNER OF THE PROPERTY ON WHICH THE PROJECT IS DONE. ' EVEN AFTER THE ABOVE QUOTED SUBMISSION OF THE APPELLANT INCLUD ING THE DECISION OF THE JURISDICTIONAL TRIBUNAL, THE ASSESS ING OFFICER HAD DISALLOWED THE DEDUCTION U/S 8018(10) OF THE ACT ON LY ON THE GROUND THAT THE ASSESSEE IS NOT THE OWNER OF LAND A ND THE APPROVAL OF LOCAL AUTHORITY IS NOT IN THE NAME OF T HE ASSESSEE BUT IN THE NAME OF THE LAND OWNERS AND THUS THE CON DITIONS LAID DOWN IN SECTION 80IB(10) R.W.S. 80IB(1) ARE NOT FUL FILLED. HOWEVER, THIS ISSUE HAD ALREADY BEEN DECIDED BY THE HON'BLE AHMEDABAD TRIBUNAL IN THE CASE OF M/S RADHE DEVELOP ERS & ORS. VS. I.T.O. & ORS. 113 TTJ (AHD) 300. THOUGH, THE AS SESSING OFFICER WAS WELL AWARE OF THE DECISION OF HON'BLE A HMEDABAD TRIBUNAL IN THE CASE OF M/S RADHE DEVELOPERS & ORS. VS. I.T.O. & ORS. 113 TTJ (AHD) 300, HE DISALLOWED THE CLAIM OF THE APPELLANT U/S 80IB(10) OF THE ACT IGNORING THE DECISION OF TH E JURISDICTIONAL TRIBUNAL. THE AHMEDABAD TRIBUNAL IS CONSISTENTLY FO LLOWING THE AFORESAID DECISION OF M/S RADHE DEVELOPERS (SUPRA). MY PREDECESSOR IN VARIOUS CASES OF THE JURISDICTION OF THE SAME ASSESSING OFFICER HAD ALLOWED THE DEDUCTION U/S 80I B(10) OF THE ACT BY RELYING ON THIS DECISION. I HAVE ALSO REQUES TED THE ASSESSING OFFICER VIDE LETTER DATED 05.10.2009 TO S TATE AS TO HOW THE CASE OF THE ASSESSEE IS NOT COVERED BY THE DECISIONS OF THE AHMEDABAD TRIBUNAL V CASES OF M/S RADHE DEVELOPERS AND M/S SHAKTI CORPORATION ITA NO. 1503/AHD./2008. HOWE VER, AS USUAL HE HAS TOTALLY IGNORED THIS PARTICULAR POINT ON WHICH A SPECIFIC REPORT WAS CALLED FOR WHILE SENDING HIS RE PORT DATED 03.11.2009. THE DEDUCTION UNDER ANY PROVISIONS OF T HE ACT INCLUDING THE PROVISIONS OF SEC. 80IB(10) OF THE AC T CANNOT BE DISALLOWED ONLY BY IGNORING THE DECISION OF THE JUR ISDICTIONAL TRIBUNAL BUT CAN ONLY BE DISALLOWED IF, THE CONDITI ONS LAID DOWN THEREIN ARE NOT FULFILLED. THE REASONS GIVEN BY THE ASSESSING OFFICER FOR DENYING THE DEDUCTION U/S 80IB OF THE A CT TO THE APPELLANT IN HIS ORDER HAD ALREADY BEEN ADJUDICATED BY THE HON'BLE AHMEDABAD TRIBUNAL IN THE CASE OF M/S RADHE DEVELOPERS & ORS. VS. I.T.O. & ORS. (SUPRA). THE RE LEVANT FINDING I.T.A. (SS) NOS.163, 164, 165, 166 & 167/AHD/2010 A.YS. 2003-04, 04-05, 05-06, 06-07 & 07-08 7 OF THE AFORESAID DECISION OF M/S RADHE DEVELOPERS & ORS. VS. I.T.O. & ORS. (SUPRA) IS REPRODUCED HERE UNDER FOR THE SAKE OF CONVENIENCE: ' A BARE READING OF THE-PROVISIONS OF S. 80-1 B(10) , AS THEY STOOD IN THE YEARS UNDER CONSIDERATION, SHOWS THAT THE REQUIREMENTS FOR CLAIMING DEDUCTION FOR HOUSING PRO JECTS ARE THAT (I) THERE MUST BE AN UNDERTAKING DEVELOPING AN D BUILDING HOUSING PROJECT (II) SUCH HOUSING PROJECT IS APPROV ED BY THE LOCAL AUTHORITY (III) THE DEVELOPMENT AND CONSTRUCT ION OF HOUSING PROJECT HAS COMMENCED ON OR AFTER 1 DAY OF OCTOBER, 1998 (IV) THE HOUSING PROJECT IS ON A SIZE OF PLOT OF LAND WH ICH HAS A MINIMUM AREA OF ONE ACRE; AND (V) THE RESIDENTIAL U NIT DEVELOPED AND BUILT HAS A BUILT UP AREA OF 1,000 SQ . FT. IF IT IS SITUATED IN DELHI AND MUMBAI OR WITHIN 25 KMS. OF M UNICIPAL LIMIT OF THESE CITIES AND 1,500 SQ. FT. AT ANY OTHE R PLACES. THERE IS NO OTHER CONDITION, WHICH IS TO BE COMPLIED BY A N ASSESSEE FOR CLAIMING THE DEDUCTION ON PROFITS OF THE HOUSING PR OJECT. THE CONTENTION OF THE REVENUE AUTHORITIES THAT TO CLAIM DEDUCTION U/S 80IB(10), THERE IS CONDITION PRECEDENT THAT THE ASSESSEE MUST BE OWNER OF THE LAND ON WHICH HOUSING PROJECT IS CONSTRUCTED HAS NO FORCE. THERE IS NO SUCH CONDITIO N AS APPEARING IN THE PROVISIONS OF THE SECTION. IT MIGH T BE TRUE THAT THE LAND BELONGS TO THE PERSON WHO HAS ENTERED INTO AN AGREEMENT WITH THE ASSESSEE TO DEVELOP AND BUILD HO USING PROJECT BUT ON A PERUSAL OF THE AGREEMENT IT IS EVI DENT THAT THE DEVELOPMENT AND BUILDING WORK HAS BEEN CARRIED OUT BY THE ASSESSEE IN PURSUANCE OF TRIPARTITE AGREEMENT AND I T IS NOT BY THE LANDOWNERS. THEREFORE, THE MERE FACT THAT THE L ANDOWNER AND THE UNDERTAKING DEVELOPING AND BUILDING HOUSING PROJECT, ARE TWO DIFFERENT ENTITIES WOULD NOT MAKE ANY DIFFE RENCE. THE DEDUCTION WOULD BE ELIGIBLE TO THE PERSON WHO IS DE VELOPING AND BUILDING, HOUSING PROJECT AND NOT TO THE MERE OWNER THEREOF. HAVING ENTERED INTO AGREEMENTS WITH LANDOWNERS FOR DEVELOPMENT AND BUILDING THE HOUSING PROJECT, ASSES SEE WAS OBVIOUSLY A CONTRACTOR BUT IT DOES NOT DEROGATE THE ASSESSEE FOR BEING A DEVELOPER, AS WELL. THE TERM CONTRACTOR IS NOT ESSENTIALLY CONTRADICTORY TO THE TERM DEVELOPER. THE ASSESSEE I S A 'DEVELOPER 1 AND NOT A 'CONTRACTOR 1 AS HELD BY THE LOWER AUTHORITIES. THE DEVELOPER IS NOT WORKING ON REMUNE RATION FOR THE LANDOWNERS, BUT DEVELOPER IS WORKING FOR HIMSEL F IN ORDER TO EXPLOIT THE POTENTIAL OF ITS BUSINESS IN HIS OWN IN TEREST AND, THEREFORE, FOR ALL BUSINESS RISKS ASSOCIATED WITH T HE BUSINESS OF DEVELOPMENT OF REAL ESTATE INCLUDING DEVELOPING AND BUILDING OF HOUSING PROJECTS. 4.3 THE ABOVE PRINCIPLE LAID DOWN IN THE CASE OF RA DHE DEVELOPERS (SUPRA) WAS ALSO ENDORSED BY THE HON'BLE I.T.A. (SS) NOS.163, 164, 165, 166 & 167/AHD/2010 A.YS. 2003-04, 04-05, 05-06, 06-07 & 07-08 8 AHMEDABAD TRIBUNAL IN THE UNREPORTED CASE OF ITO & ORS. VS. SHAKTI CORPORATION & ORS. VIDE ORDER DATED 07.11.20 08 IN ITA NO. 1503/A/2008. THE RELEVANT FINDING OF THE AFORES AID DECISION OF SHAKTI CORPORATION & ORS. (SUPRA) IS REPRODUCED HERE UNDER FOR THE SAKE OF CONVENIENCE: THE FACTS INVOLVED IN THE CASE OF THE ASSESSEE AR E SIMILAR TO THE FACTS IN THE CASE OF RADHE DEVELOPERS (SUPRA) AND A CCORDINGLY, WE ARE OF THE VIEW THAT THE ASSESSEE HAS ACQUIRED T HE DOMINANCE OVER THE LAND AND HAS DEVELOPED THE HOUSI NG PROJECT BY INCURRING ALL THE EXPENSES AND TAKING ALL THE RI SKS INVOLVED THEREIN. WE MAY MENTION HERE THAT, IN OUR OPINION, THE DECISION IN THE CASE OF RADHE DEVELOPERS (SUPRA) WILL NOT AP PLY IN A CASE WHERE THE ASSESSEE HAS ENTERED INTO THE AGREEMENT F OR A FIXED REMUNERATION MERELY AS A CONTRACTOR TO CONSTRUCT OR DEVELOP THE HOUSING PROJECT ON BEHALF OF THE LANDOWNER. THE AGR EEMENT ENTERED INTO IN THAT CASE WILL NOT ENTITLE THE DEVE LOPER TO HAVE THE DOMINANT CONTROL OVER THE PROJECT AND ALL THE R ISKS INVOLVED THEREIN WILL VEST WITH THE LANDOWNER ONLY. THE INTE REST OF THE DEVELOPER WILL BE RESTRICTED ONLY FOR THE FIXED REM UNERATION FOR WHICH HE WOULD BE RENDERING THE SERVICES. THE DECIS ION IN THE CASE OF RADHE DEVELOPERS (SUPRA) HAS NOT DEALT WITH SUCH SITUATION. THE PROPOSITION OF LAW LAID DOWN IN THE CASE OF RADHE DEVELOPERS CANNOT BE APPLIED UNIVERSALLY WITHOUT LO OKING INTO THE DEVELOPMENT AGREEMENT ENTERED INTO BY THE DEVEL OPER ALONG WITH THE LANDOWNER. IN THE CASE OF SHAKTI COR PORATION SINCE THE ASSESSEE HAS FILED COPY OF THE DEVELOPMEN T AGREEMENT AND THE CRUX OF THE AGREEMENT IS THAT THE ASSESSEE HAS PURCHASED THE LAND AND HAS DEVELOPED THE HOUSING PR OJECT AT ITS OWN, THEREFORE, WE ARE OF THE VIEW THAT THE ASSESSE E WILL BE ENTITLED FOR THE DEDUCTION U/S 80IB(10). THE DECISI ON OF THE HON'BLE SUPREME COURT IN FAKIR CHAND GULATI (CIVIL APPEAL NO. 3302 OF 2005)WILL NOT ASSIST THE REVENUE, AS THE AG REEMENT IS NOT SHARING OF CONSTRUCTED AREA' 4.4 I HAVE CAREFULLY GONE THROUGH THE RELEVANT CLAU SES OF BOTH THE DEVELOPMENT AGREEMENTS AND OTHER DOCUMENTS FILE D BEFORE THE ASSESSING OFFICER AS WELL AS BEFORE ME. ON CONS IDERATION OF THE RELEVANT DOCUMENTS, I CAME TO THE CONCLUSION TH AT THE APPELLANT HAD ACQUIRED THE DOMINANCE OVER THE LAND AND THE LAND IS UNDER THE POSSESSION OF THE APPELLANT FIRM. THE APPELLANT FIRM WAS THE DE-FACTO LAND OWNER FOR ALL PRACTICAL PURPOSES AND HAD DEVELOPED THE HOUSING PROJECT BY INCURRING ALL THE EXPENSES AND TAKING ALL THE RISKS INVOLVED THEREIN. THE APPE LLANT FIRM WAS NOT MERELY A CONTRACTOR OF THE LAND OWNER FOR FIXED REMUNERATION. THE LAND OWNERS WERE ELIGIBLE TO GET ONLY PRICE OF LAND FIXED BY THE DEVELOPMENT AGREEMENTS AND NOT TO SHARE IN I.T.A. (SS) NOS.163, 164, 165, 166 & 167/AHD/2010 A.YS. 2003-04, 04-05, 05-06, 06-07 & 07-08 9 THE DEVELOPMENT PROFITS OF THE PROJECT. THE APPELLA NT HAD FULFILLED ALL THE LAID DOWN IN SEC. 80IB(10) OF THE ACT. 4.5 IN VIEW OF THE ABOVE DISCUSSION IN PARA-4.2 TO PARA-4.4 AND RESPECTFULLY FOLLOWING THE DECISION OF THE HON'BLE AHMEDABAD TRIBUNAL IN THE CASE OF M/S RADHE DEVELOPERS & ORS. VS. I.T.O. & ORS. (SUPRA) AND ALSO THE SUBSEQUENT DECISION IN TH E CASE OF SHAKTI CORPORATION (SUPRA), I AM OF THE OPINION THAT THE A PPELLANT FIRM HAD FULFILLED ALL THE CONDITIONS LAID DOWN IN SEC. 80IB (10) OF THE ACT AND WAS ENTITLED TO THE DEDUCTION U/S 80IB(10) OF THE A CT. THE ASSESSING OFFICER WAS THUS NOT JUSTIFIED IN DENYING THE DEDUCTION U/S 8018(10) OF THE ACT TO THE APPELLANT FIRM. HIS FINDING SO RECORDED IS THUS CANCELLED AND DEDUCTION U/S 80IB(1 0) OF THE ACT IS ALLOWED TO THE APPELLANT FIRM. THE ADDITION MADE FO R RS.67,32,850/- IS HEREBY DELETED. THE SECOND GROUND OF APPEAL IS A CCORDINGLY ALLOWED. 6. AFTER HEARING BOTH THE PARTIES AND PERUSING THE RECORD WE FIND THAT DURING THE ASSESSMENT PROCEEDINGS THE A.O. HAS DISA LLOWED THE DEDUCTION U/S 80IB(10) OF THE ACT CLAIMED BY THE ASSESSEE ONLY ON THE GROUND THAT ASSESSEE IS NOT THE OWNER OF THE LAND AND THE APPROVAL OF LO CAL AUTHORITY IS NOT IN THE NAME OF THE ASSESSEE BUT IN THE NAME OF THE LAND OW NERS AND THUS THE CONDITIONS LAID DOWN U/S 80IB(10) ARE NOT FULFILLED . HOWEVER, IN APPELLATE PROCEEDINGS, LD. CIT(A) FOUND AFTER CAREFULLY GOING THROUGH THE RELEVANT CLAUSES OF DEVELOPMENT AGREEMENTS AND OTHER DOCUMEN TS FILED BEFORE THE A.O. AS WELL AS BEFORE HIM THAT THE ASSESSEE HAD AC QUIRED DOMINANCE OVER THE LAND AND THE LAND WAS UNDER THE POSSESSION OF THE A SSESSEE. THE ASSESSEE FIRM WAS DE-FACTO LAND OWNER FOR ALL PRACTICAL PURP OSES AND HAS ALSO DEVELOPED HOUSING PROJECT BY INCURRING ALL THE EXPENSES AND T AKING ALL THE RISK INVOLVED THEREIN. THUS, THE ASSESSEE FIRM WAS NOT MERELY CO NTRACTOR OF THE LAND OWNER FOR FIXED REMUNERATION. HE FURTHER FOUND THAT LAND OWNERS WERE TO GET ONLY THE PRICE OF LAND FIXED BY THE DEVELOPMENT AGREEMEN T AND NOT TO GET ANY I.T.A. (SS) NOS.163, 164, 165, 166 & 167/AHD/2010 A.YS. 2003-04, 04-05, 05-06, 06-07 & 07-08 10 PROFIT OF THE PROJECT. HE, THEREFORE, WAS OF THE V IEW THAT ASSESSEE HAD FULFILLED ALL THE CONDITIONS AS LAID DOWN U/S 80IB(10) OF THE ACT. THIS VIEW OF LD. CIT(A) IS IN CONFORMITY WITH THE PRINCIPLES LAID DOWN IN T HE CASE OF RADHE DEVELOPERS AND OTHERS VS. ITO AND M/S SHAKTI CORPORATION AND O THERS DECIDED BY AHMEDABAD TRIBUNAL. WE FURTHER FIND THAT THE DECIS ION OF THE TRIBUNAL IN THE CASE OF RADHE DEVELOPERS AND OTHERS VS. ITO HAS BEE N CONFIRMED BY THE JURISDICTIONAL HIGH COURT REPORTED IN 341 ITR 347. 7. IN VIEW OF ABOVE, WE FIND NO INFIRMITY IN THE OR DER PASSED BY LD. CIT(A) AND THE SAME IS HEREBY UPHELD. 8. IN THE RESULT, ALL THE APPEALS FILED BY THE REVE NUE ARE DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 12.10.2012 SD/- SD/- (T.R. MEENA) (D.K. TYAGI) ACCOUNTANT MEMBER JUDICIAL MEMBER TRUE COPY N.K. CHAUDHARY, SR. P.S. COPY OF THE ORDER FORWARDED TO: 1. THE APPLICANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE LD. CIT (APPEALS) 5. THE DR, AHMEDABAD 6. THE GUARD FILE BY ORDER AR,ITAT,AHMEDABAD