Madhav Builders, Ahmedabad V. The ACIT, Central Circle-1(4), Ahmedabad

ITSSA 383/AHD/2014

• Counselvise Citation: [2016] 122 COUNSELVISE.COM (IT) 1601 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 2 month(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 01-02-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 05-11-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 01-12-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: JAGDISH
• Keywords: Reopening of assessment; Capital asset; Business income; Search and seizure; Document seized; Principle of natural justice; Rule of consistency; Retrospective amendment; Initiation of penalty proceedings; Block assessment; Benefit of exemption; Documents seized
• Section: 143(3); 54B; 142(1); 133A; 153A; 80IB; 148; 132; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD B BENCH AHMEDABAD BEFORE S/SHRI KUL BHARAT, JM, & MANISH BORAD, AM . IT(SS)A NO.383/AHD/2014 ASST. YEAR: 2006-07 MADHAV BUILDERS, 73, NIJANAND PARK SOCIETY, VASTRAL ROAD, VASTRAL, AHMEDABAD. VS. ACIT, CENTRAL CIRCLE 1(4), AHMEDABAD. APPELLANT RESPONDENT PAN : AAJFM 9792J APPELLANT BY SHRI ANIL KSHATRIYA, AR RESPONDENT BY SHRI JAGDISH, CIT/DR DATE OF HEARING: 05/11/2015 DATE OF PRONOUNCEMENT: 01/02/2016 O R D E R PER MANISH BORAD, ACCOUNTANT MEMBER. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF CIT(A)-I, AHMEDABAD DATED 26.09.2014 IN APPEAL NO.C IT(A)- I/483/CC-1(4)/2013-14 FOR ASSESSMENT YEAR 2006-07. THE ASSESSMENT WAS FRAMED U/S 143(3) R.W.S. 153A OF THE INCOME-TAX ACT, 1961 (IN SHORT THE ACT) BY ACIT, CC-1(4), AHME DABAD ON 31.01.2014. THE GROUNDS RAISED IN THIS APPEAL ARE A S UNDER :- 1. IN LAW, ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A)-I, AHMEDABAD, HAS GROSSLY ERRED IN NOT CONSIDERING THE APPELLANTS SUBMISSIONS MADE BEFORE HIM AS SUCH THE ORDER IS AGAINST THE PRINCIPLE OF NATURAL JUSTICE, BAD IN LAW AND DESERVES TO BE CANCELLED. IT(SS)A NO. 383/AHD/2014 ASST. YEAR 2006-07 2 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LD. CIT(A)-I, AHMEDABAD, HAS GROSSLY ERRED IN CONFIRMIN G THE LEGITIMATE DEDUCTION U/S 80IB(10) OF THE ACT OF RS.1,32,19,672/-. THE SAME MAY KINDLY BE DIRECTED T O BE ALLOWED SUCH CLAIMED. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LD. CIT(A)-I, AHMEDABAD, HAS GROSSLY ERRED IN CONFIRMIN G ADDITION OF RS.2,34,39,999/-, BEING ADDITIONALLY CL AIMED U/S 80IB(10) ON THE BASIS OF SEIZED RECORDS. THE SAME M AY KINDLY BE DIRECTED TO BE ALLOWED ON SUCH LEGITIMATE CLAIM. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LD. CIT(A)-I, AHMEDABAD, HAS GROSSLY ERRED IN CONFIRMIN G THE CHARGING INTEREST U/S 234A, 234B, 234C & 234D OF TH E ACT. HE MAY BE DIRECTED TO WITHDRAW THE SAME. 5. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LD. CIT(A)-I, AHMEDABAD, HAS GROSSLY ERRED IN CONFIRMIN G THE INITIATION OF PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT. HE MAY BE DIRECTED TO WITHDRAW THE SAME. 6. THE APPELLANT FIRM CRAVES LEAVE TO ADD, ALTER, A MEND AND WITHDRAW ALL OR ANY GROUNDS OF APPEAL ON OR BEFORE HEARING OF THE APPEAL. 2. THE ASSESSEE HAS RAISED SIX GROUNDS OF APPEAL OU T OF WHICH GROUND NO.1 IS NOT PRESSED BY THE ASSESSEE, SO THE SAME IS DISMISSED. 3. GROUND NO.4 IS CONSEQUENTIAL. 4. GROUND NO.5 IS PREMATURE, WHICH NEEDS NO ADJUDIC ATION. IT(SS)A NO. 383/AHD/2014 ASST. YEAR 2006-07 3 5. GROUND NO.6 IS GENERAL IN NATURE WHICH NEEDS NO ADJUDICATION. 6. GROUND NOS. 2 IS RELATED TO INADMISSIBILITY OF D EDUCTION U/S 80IB(10) OF THE ACT AT RS.1,32,19,672/-. 7. GROUND NO.3 IS AGAINST DISALLOWING OF DEDUCTION U/S 80IB(10)OF THE ACT FOR SURRENDER MADE ON ACCOUNT OF UNDISCLOSED INCOME (ON MONEY FOUND DURING SEARCH PROCEEDINGS) A T RS.2,34,39,999/-. 8. GROUND NOS. 2 & 3 ARE INTER RELATED SO THAY ARE TAKEN TOGETHER FOR DISPOSAL. 9. BRIEFLY STATED FACTS AS CULLED OUT FROM THE AVAI LABLE RECORD ARE THAT THE ASSESSEE FIRM IS ENGAGED IN THE BUSINESS O F DEVELOPMENT AND CONSTRUCTION OF RESIDENTIAL HOUSES. THE ASSESSE E FILED ITS RETURN OF INCOME FOR ASST. YEAR 2006-07 UNDER THE P ROVISIONS OF SECTION 139(1) OF THE ACT ON 18.12.2006 DECLARING T OTAL INCOME OF RS.29,230/- (I.E. AFTER CLAIMING DEDUCTION OF RS.1, 32,19,672/- U/S 80IB(10) OF THE ACT). SCRUTINY ASSESSMENT WAS COMPL ETED U/S 143(3) OF THE ACT ON 4.2.2008 AND THE INCOME WAS A SSESSED AS PER THE INCOME RETURNED. 10. THEREAFTER A SEARCH ACTION U/S 132 OF THE ACT W AS CARRIED OUT IN THE CASE OF GALAXI GROUP ON 21.7.2011. THE ENTIR E GROUP IT(SS)A NO. 383/AHD/2014 ASST. YEAR 2006-07 4 CONSISTS OF 4 SUB-GROUPS AS MAINLY ENGAGED IN THE B USINESS OF CONSTRUCTION AND REAL ESTATE. THE CASE OF THE ASSES SEE BELONGS TO MADHAV GROUP. SEARCH AND SEIZURE U/S 132 OF THE ACT /SURVEY U/S 133A OF THE ACT WERE CARRIED OUT AT THE RESIDENTIAL AS WELL AS BUSINESS PREMISES OF ASSESSEE AS WELL AS ITS PARTNE RS. DURING THE COURSE OF SEARCH PROCEEDINGS AS WELL AS POST SEARCH PROCEEDINGS VARIOUS INCRIMINATING MATERIALS RELATING TO VARIOUS FIRMS OF ASSESSEE GROUP I.E. MADHAV GROUP WERE FOUND AND SEIZED. BASE D ON THE SEIZED MATERIAL, THE MAIN PERSONS OF THE ASSESSEE G ROUP SHRI MOTIBHAI REVABHAI PRAJAPATI, SHRI KANTIBHAI R. PRAJ APATI AND SHRI BHAGWANBHAI R. PRAJAPATI ADMITTED UNDISCLOSED INCOM E RELATING TO FIRM /GROUP CONCERN OF MADHAV GROUP AND ALSO SPECIF IED THE MANNER IN WHICH SUCH INCOME HAS BEEN DERIVED. 11. PURSUANT TO SEARCH ACTION U/S 132 OF THE ACT PR OCEEDINGS U/S 153 WERE INITIATED BY ISSUANCE OF NOTICE ON 11.1.20 12. IN RESPONSE TO THE NOTICE ASSESSEE FILED THE RETURN OF INCOME F OR ASST. YEAR 2006-07 ON 9.2.1012 DECLARING TOTAL INCOME OF RS.29 ,277/- AFTER CLAIMING DEDUCTION U/S 80IB(10) OF THE ACT AT RS.3, 66,59,672/-. THE ASSESSEE CLAIMED DEDUCTION U/S 80IB(10) OF THE ACT FOR NORMAL PROFITS FROM BUSINESS AS DEVELOPER AT RS.1,32,19,67 2/- AS SHOWN IN ORIGINAL RETURN OF INCOME AND ALSO CLAIMED DEDUCTIO N U/S 80IB(10) OF THE ACT FOR RS.2,34,39,999/- ON ACCOUNT OF UNDIS CLOSED INCOME SURRENDERED IN THE RETURN OF INCOME PURSUANT TO SEA RCH ACTION U/S 132 OF THE ACT. IT(SS)A NO. 383/AHD/2014 ASST. YEAR 2006-07 5 12. DURING THE COURSE OF ASSESSMENT PROCEEDINGS VAR IOUS REPLIES AND SUBMISSIONS WERE SUBMITTED BY THE ASSESSEE IN S UPPORT OF ITS CLAIM FOR DEDUCTION U/S 80IB(10) OF THE ACT BUT ASS ESSING OFFICER WAS NOT CONVINCED BY SUBMISSIONS OF ASSESSEE ON ACC OUNT OF FOLLOWING REASONS AS MENTIONED IN ASSESSMENT ORDER: - 5.23 IT IS THEREFORE HELD THAT THE ASSESSEE IS NOT ELIGIBLE FOR DEDUCTION UNDER SECTION 80IB FOR THE FOLLOWING REAS ONS:- 1. THE ASSESSEE IS NOT BOTH DEVELOPER AND BUILDER A S REQUIRED BY THE PROVISIONS OF SECTION 80IB(10). ASSESSEE IS NOT A DEVELOPER BECAUSE THE ASSESSEE DID NOT CONCEPTUALIS E AND OWN THE PROJECT IN AS MUCH AS THE ASSESSEE IS NOT T HE OWNER OF THE LAND AND THE APPROVAL WAS NOT ISSUED TO IT B Y THE LOCAL AUTHORITY. 2. THE ASSESSEE ENTERED INTO THE PROJECT BY WAY OF TRIPARTITE AGREEMENT EXECUTED BETWEEN THE MEMBERS. SHREE MADHA V CO-OP. HOUSING SOCIETY LTD. AND THE ASSESSEE FIRM A ND THE CONSTRUCTION WORK WAS DONE IN ACCORDANCE WITH SUCH TRIPARTITE AGREEMENT. HENCE THE ASSESSEE IS MERELY A CONTRACTOR FOR THE PURPOSES OF CONSTRUCTION OF THE PROJECT. 3. THE ASSESSEE HAS NOT SOLD ANY UNIT TO THE PURCHA SER BUT THE SOCIETY HAS EXECUTED THE SALE DEEDS AS A SELLER AND THE ASSESSEE JOINED ONLY AS A CONFIRMING PARTY TO THE T RANSACTION. THIS ALSO PROVES THAT THE ASSESSEE WAS MERELY A CONTRACTOR/AGENT OF THE SOCIETY. 4. AS PER THE AMENDMENT TO SECTION 80IB BY THE FINA NCE ACT 2009 A WORK CONTRACTOR WHO EXECUTES THE WORK AWARDE D BY ANY PERSON IS NOT ELIGIBLE FOR THE DEDUCTION U/S 80 IB. ANY PERSON INCLUDES SHREE MADHAV CO-OP. HOUSING SOCIETY LTD., WHICH IS A LEGAL ENTITY. IT(SS)A NO. 383/AHD/2014 ASST. YEAR 2006-07 6 ON ACCOUNT OF ABOVE REASONS ASSESSING OFFICER DENIE D THE DEDUCTION U/S 80IB(10) OF THE ACT AS CLAIMED BY THE ASSESSEE IN ITS ORIGINAL RETURN OF INCOME AT RS.1,32,19,672/- AND A LSO DENIED THE DEDUCTION FOR THE ENHANCED CLAIM OF DEDUCTION AT RS .2,34,39,999/- CLAIMED BY THE ASSESSEE IN THE RETURN FILED IN PURS UANCE OF NOTICE U/S 153A OF THE ACT. ACCORDINGLY INCOME OF THE ASSE SSEE WAS ASSESSED AT RS.3,66,88,899/-. 13. AGGRIEVED, ASSESSEE WENT IN APPEAL BEFORE CIT(A ) HOWEVER, LD. CIT(A) CONFIRMED THE ADDITION MADE BY THE ASSES SING OFFICER DISMISSING THE APPEAL OF THE ASSESSEE BY OBSERVING IN RESPECT OF GROUND NOS.2 & 3 AS UNDER:- REGARDING GROUND NO.2 6. I HAVE GONE THROUGH THE ASSESSMENT ORDER AND SU BMISSION OF THE A.R. OF THE APPELLANT CAREFULLY. IT IS IMPORTANT TO NOTE HERE T HAT THE CLAIM U/S 80IB OF THE I.T. ACT, 1961 BY ANOTHER FIRM OF THE APPELLANTS GROUP (MADH AV GROUP) I.E. MADHAV CORPORATION FOR AYS. 2006-07, 2007-08 AND 2008-09 H AS ALSO BEEN REJECTED BY THE ASSESSING OFFICER. IN THAT FIRM IN AY 2007-08 EVEN DURING ORIGINAL ASSESSMENT U/S 143(3) OF THE IT ACT, 1961 THE CLAIM U/S 80IB OF TH E IT ACT, 1961 WAS REJECTED FOR DETAILED REASONS PROVING THAT THE APPELLANT FIRM IS A CONTRACTOR AND NOT THE DEVELOPER. THAT ORDER WAS CONFIRMED BY THE CIT(A)-XV, AHMEDABA D VIDE ORDER IN APPEAL NO.CIT(A)-XV/ITO/9(2)/266/09-10 DATED 7.1.2011. THE FIRM OF THE APPELLANT GROUP HAS GONE TO ITAT, AHMEDABAD AGAINST THE ABOVE MENTI ONED ORDER OF CIT(A). THE CASE IS STILL PENDING BEFORE THE ITAT FOR ADJUDICATION. 6.1 THE APPELLANT IS THE FIRM OF THE SAME GROUP TO WHICH M/S MADHAV CORPORATION BELONGS. THE MAIN WORKING PARTNERS ARE THE SAME IN BOTH THE FIRMS I.E. SHRI MOTIBHAI REVABHAI PRAJAPATI AND SHRI KANTIBHAI REVABHAI PRAJ APATI. THE MODUS OPERANDI AND NATURE OF WORK IS ALSO EXACTLY THE SAME. 6.2 THE APPELLANT FILED HIS SUBMISSION WITH EXACTLY THE SAME DEFENCE AS WAS PRODUCED BEFORE THE ASSESSING OFFICER. IN HIS SUBMI SSION HE RELIED ON THE DECISION OF GUJARAT HIGH COURT IN THE CASE OF RADHE DEVELOPERS AND M/S SHAKTI CORPORATION IN VIEW OF THIS AND IN ABSENCE OF ANY ADDITIONAL MATER IAL AGAINST THE DECISION OF CIT(A) IT(SS)A NO. 383/AHD/2014 ASST. YEAR 2006-07 7 EXCEPT RELYING ON THE JUDGMENT BY THE JUDICIAL AUTH ORITIES IN CASE OF M/S RADHE DEVELOPERS/SHAKTI CORPORATION, I AM OF THE VIEW THA T NO INTERFERENCE IS CALLED FOR IN THE MATTER. AS FAR AS APPLICABILITY OF DECISION IN CASE OF M/S RADHE DEVELOPERS, IN APPELLANTS CASE IS CONCERNED, THE MATTER IS ALREA DY PENDING BEFORE ITAT IN MADHAV CORPORATION, A FIRM OF APPELLANTS OWN GROUP FOR TH E AY 2007-08. IN THIS SITUATION AT THE MOMENT, WITHOUT GOING INTO MERITS OF THE CASE, I FIND IT PROPER NOT TO DIFFER FROM THE ORDER PASSED BY CIT(A)-XV, AHMEDABAD IN THE CAS E OF MADHAV CORPORATION. ACCORDINGLY, TO MAINTAIN CONSISTENCY, SUBJECT TO OU TCOME OF THE DECISION OF ITAT, AHMEDABAD, IN CASE OF MADHAV CORPORATION, AY 2007-0 8 ON THE EXACTLY SIMILAR ISSUE, THE APPEAL IS DISMISSED. REGARDING GROUND NO.3 8. I HAVE GONE THROUGH THE ASSESSMENT ORDER AND SU BMISSION OF THE A.R. OF THE APPELLANT CAREFULLY. THIS GROUND IS AGAINST THE DIS ALLOWANCE OF RS.2,34,39,999/-, THE ADDITIONAL INCOME SHOWN BY THE APPELLANT IN THE BLO CK RETURN AND CLAIMED TO BE EXEMPT U/S.80LB OF THE I.T. ACT, 1961. THIS INCOME IS CALCULATED BY THE APPELLANT BASED ON THE SEIZED MATERIAL (PAGE NO.7 OF ANNEXURE A/7 - PARTY NO.21). THE ASSESSING OFFICER DISALLOWED THIS CLAIM FIRSTLY BECAUSE THE E NTIRE PROJECT IS TREATED AS INELIGIBLE FOR CLAIM U/S.80IB OF THE I.T. ACT. 1961. SECONDLY, THE ASSESSING OFFICER HAS DISALLOWED .THIS AMOUNT AS THE SAME DOES NOT FULFIL L THE CONDITIONS LAID DOWN IN SECTION 80IA(5) AND 80IA(7) OF THE IT. ACT, 1961 WH ICH ARE APPLICABLE TO SECTION 80!B OF THE IT, ACT, 1961 ALSO. THE PROVISION OF SECTION 80IA(7) READS AS UNDER: '(7) THE DEDUCTION UNDER NUB-SECTION (I) FROM PROFI TS, AND GAINS DERIVED FROM AN UNDERTAKING SHALL NOT BE ADMISSIBLE UNLESS THE A CCOUNTS OF THE UNDERTAKING FOR THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YE AR FOR WHICH THE DEDUCTION IS CLAIMED HAVE BEEN AUDITED BY AN ACCOUNTANT, AS D EFINED IN THE EXPLANATION BELOW SUB-SECTION (2) OF SECTION 288, AND SHE ASSES SEE FURNISHES, ALONG WITH HIS RETURN OF INCOME, THE REPORT OF SUCH AUDIT IN THE PRESCRIBED FORM DULY SIGNED AND VERIFIED BY SUCH ACCOUNTANT.' 8.1 AS THE SECTION 80IA(5) AND 80IA(7) ARE VERY CL EAR THE ADDITIONAL INCOME WHICH IS NOT SHOWN IN THE REGULAR BOOKS OF ACCOUNTS CANNO T BE CONSIDERED FOR THE PURPOSE OF DEDUCTION U/S.80LB(10) OF THE I.T. ACT, 1961. THE B OOKS OF ACCOUNT ON THIS BASIS OF WHICH THE ASSESSING OFFICER FILED HIS RETURN OF INC OME AND WAS ASSESSED U/S. 143(3) OF THE I.T. ACT, 1961 DO NOT CONTAIN THIS INCOME OF TH E APPELLANT. THIS INCOME IS ADDED TO THE APPELLANT'S INCOME ONLY SUBSEQUENT TO THE SEARC H. AS THE INCOME IS NOT PART OF THE REGULAR BOOKS AS PER PREVISION OF SECTION 801A(5) A ND 801A(7) OF THE I.T. ACT, 1961 ARE APPLICABLE AND CLAIM U/S.80IB(10) OF THE I.T. A CT, 1961 IS NOT ADMISSIBLE ON THIS ADDITIONAL INCOME OF THE APPELLANT. 8.2. THE ASSESSING OFFICER HAS ALSO RIGHTLY APPLIE D THE PROVISIONS OF SECTION 80IA10) FOR THE FOLLOWING REASONS: IT(SS)A NO. 383/AHD/2014 ASST. YEAR 2006-07 8 I) THE ASSESSEE FIRM IS CLOSELY CONNECTED WITH THE PAR TNERS AND CLOSE RELATIVES HAVE PROVIDED FUNDS UNIFORMLY FOR PURCHASE OF LAND BY THE SOCIETY. THE ARRANGEMENT MADE BY THE ASSESSEE FOR DEVELOPMEN T IS SUCH THAT NO PROFIT WHATSOEVER IS PASSED TO THE SOCIETY, THOUGH IT IS THE REAL OWNER OF THE LAND. THIS ARRANGEMENT HAS ACTUALLY RESULTED IN ABNORMALLY HIGH PROFITS IN THE ASSESSEES HAND WHICH HAS BEEN ORCHESTRATED TO CLAIM HIGHER DEDUCTION. THE ADDITIONAL INCOME OFFERED ON ACCOUNT OF ON-MONE Y RECEIVED HAS BEEN INCLUDED IN THE INCOME OF THE ASSESSES WITH THE INT ENTION OF CLAIMING HIGHER THAN DUE DEDUCTION U/S, 80LB(10) OF THE ACT. HENCE, IN VIEW OF PROVISIONS OF SECTION 80IA (5) AN D 80IA (7) AND ALSO 80LA(10) OF THE I.T, ACT. 1961, THE ADDITIONAL INCO ME OF THE APPELLANT CANNOT BE TREATED AS INCOME ELIGIBLE FOR THE DEDUCTION U/S. 8 0LB (10) OF THE I T ACT. 1961. 8.3 IN VIEW OF ABOVE DISCUSSION, THE DISALLOWANCE O F RS.2,34,39,999/- IS CONFIRMED, THE APPEAL ON THIS GROUND IS DISMISSED. 14. AGGRIEVED ASSESSEE IS NOW IN APPEAL BEFORE THE TRIBUNAL. LD. AR SUBMITTED THAT - I) DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER CALLED FOR DETAILS OF ASSESSEES CLAIM FOR DEDUCTION U/S 80IB(10) OF THE ACT OF RS.3,66,59,672/- ATTRIBUTABL E TO HOUSING PROJECT. THE ASSESSEE SUBMITTED EXHAUSTIVE DETAILS. HOWEVER, THE ASSESSING OFFICER DISALLOWED ASSESSEES CLAIM U/S 8 0IB(10) OF THE ACT, HAVING TREATED THE UNDISCLOSED PROFIT AS INCO ME FROM OTHER SOURCES. II) THAT THE ASSESSEE FIRM HAS BUILT AND DEVEL OPED THE HOUSING PROJECT WITHIN THE MEANING OF SEC.80IB(10) OF THE A CT, ON LAND SURVEY NO.1943 F.P. NO.64 SITUATED AT VILLAGE VASTR AL, TA.DIST. AHMEDABAD. THE TOTAL AREA OF LAND WAS 38,365 SQ.MTR S. THE ASSESSEE FIRM BUILT AND DEVELOPED THE HOUSING PROJE CT NAMELY MADHAV BUNGLOWS (MADHAV CO-OP. HOUSING SOCIETY LT D.). FOR COMMENCEMENT OF SUCH PROJECT, PERMISSION (RAJACHITH I) WAS ISSUED ON 3/12/2004 BY THE LOCAL AUTHORITY, AS PER COPY OF SUCH DOCUMENTS FURNISHED BEFORE THE AO. AS PER THE PLAN SUBMITTED BY THE FIRM AND RAJACHITTHI GRANTED BY THE LOCAL AUTHO RITY, THERE ARE 204 RESIDENTIAL UNITS AND ONE WATER TANK PLUS ONE E LECTRICAL IT(SS)A NO. 383/AHD/2014 ASST. YEAR 2006-07 9 SUBSTATION. THE PROJECT COMPLETED ON 29/06/2006, CO RRESPONDING TO AY 2007-08. III) AS MAY BE PERUSED FROM THE RECORDS OF THE AO T HE ASSESSEE FIRM CLAIMED THE LEGITIMATE DEDUCTION U/S 80IB(10) IN THE ORIGINAL RETURN OF INCOME FOR AY 2004-05 TO AY 2006-07, CLAI MING DEDUCTION U/S 80IB(10) OF THE ACT WHICH HAVE BEEN A LLOWED BY THE DEPARTMENT IN THE SCRUTINY ASSESSMENTS FRAMED U/S 1 43(3) OF THE ACT, AS PER PARTICULARS BELOW :- A.Y. AMOUNT CLAIMED U/S 8018(10) . (RS.) AMOUNT ALLOWED BY THE A.O. (RS.) SEC. OF ASSESSMENT ORDER DATE OF ASSESSMENT ORDER 2004-05 75,72,250/- 75,72,2507- 143(3) 28/0372006 2005-06 1,66,40,8187- 1,66,40,8187- 143(3) 06/0772007 2006-07 1,32,19,6727- 1,32,19,6727- 143(3) 04702/2008 FROM THE ABOVE, IT MAY BE APPRECIATED THAT THE DEPA RTMENT HAVING SCRUTINIZED THE CLAIM OF THE ASSESSEE AND ALLOWED A S SUCH IN THE AFORESAID YEARS, HOWEVER, IN ABSENCE OF ANY CHANGE IN FACTS AND/OR CIRCUMSTANCES OF THE CASE, THERE IS NO JUSTIFICATIO N IN REJECTING THE CLAIM OF THE ASSESSEE FIRM IN THE SUBSEQUENT PROCEEDINGS U/S 143(3) R.W.S. 153A OF THE ACT FOR A.Y. 2006-07. IV) FURTHER IT IS RESPECTFULLY SUBMITTED T HAT CONSEQUENT TO SEARCH U/S 132 OF THE ACT AT THE BUSINESS PREMISES OF THE ASSE SSEE, CERTAIN DOCUMENTS/PAPERS WERE SEIZED BY THE DEPARTMENT ON T HE BASIS OF WHICH, THE ASSESSEE FIRM, HAS ARRIVED AT THE UNDISCLOSED P ROFIT FROM THE REFERRED PROJECT [WHICH FULFILLS THE CRITERIA OF LEGITIMATE DEDUCTIONS U/S 8016(10) OF THE ACT] TO THE TUNE OF RS. 2,34,39,999/- AS PER CO PY PROFIT & LOSS ACCOUNT AND BALANCE-SHEET PLACED ON RECORD, CUMULAT IVELY THE TOTAL CLAIM OF LEGITIMATE DEDUCTION U/S 80IB(10) ON THE B ASIS OF SEIZED PAPERS AND REGULAR BOOKS OF ACCOUNTS FOR THE WHOLE PROJECT WORKED OUT AS UNDER:- - AS PER SEIZED PAPER ANNEXED AL/7: RS. 2,34,39,999/- ADD AS PER REGULAR BOOKS OF ACCOUNTS RS. 1.32.19.672/- AS CLAIMED AND ALLOWED IN IT(SS)A NO. 383/AHD/2014 ASST. YEAR 2006-07 10 ORIGINAL ASSESSMENT ORDER U/S 143(3) DATED 04/02/2008. TOTAL CLAIM MADE IN BLOCK RETURN RS. 3,66,59,671/- V) FURTHER TO SUBSTANTIATE, IT CLAIMS, THE ASSESSEE FIRM HAS SUBMITTED REQUIRED DOCUMENTS I.E. COPY OF PLANS, COPY OF COMM ENCEMENT OF PERMISSION, B.U. PERMISSION ALONG WITH REQUISITE AU DIT REPORT, DURING THE COURSE OF SSESSMENT PROCEEDINGS. THE PROJECT WA S APPROVED ON 03/12/2004, THE SAME HAS BEEN COMPLETED ON 29/06/20 06, THE SIZE OF PLOT ON WHICH THE HOUSING PROJECT WAS FLOATED BY TH E ASSESSEE FIRM, IS 38,365 SQ.MTS. WHICH EXCEED AREA OF 1 ACRE, THE RES IDENTIAL UNIT OF THE PROJECT DID NOT EXCEED THE PRESCRIBED LIMIT OF 1500 SQ.FEET OF BUILT UP AREA. THUS, THE BASIC CONDITIONS OF CLAIMING THE LEGI TIMATE DEDUCTION U/S 80IB(10) ARE DULY-FULFILLED. 15. AS REGARDS ASSESSEE'S CLAIM OF DEDUCTION U/S 8O IB(10) ON ADDITIONAL INCOME REFERABLE TO SEIZED MATERIAL LD. AR SUBMITTED THAT (I) THE ORIGINAL CLAIM OF DEDUCTION U/S 80IB(10) OF RS. 1,32,19,672/- HAS BEEN ENHANCED BY THE RS.2,34,39,999/- AS WORKED OUT ON THE BASIS OF DETAILS PLACED ON RECORD AND THE ASSESSEE' S CLAIM OF ADDITIONAL PROFIT HAS BEEN BASED ON SEIZED DOCUMENT . (II) ACCORDING TO LD. CIT(A), THE ENTIRE PROJECT IS TREATED AS INELIGIBLE FOR CLAIM U/S 8016(10) OF THE ACT, SIMPLY FOLLOWING THE VIEWS OF THE A.O. WITHOUT GIVING HIS OWN INDEPENDENT FINDINGS. S ECONDLY, HE HAS NOTED THAT AS PER A.O. THE CLAIM DOES NOT FULFILL T HE CONDITIONS LAID DOWN IN SEC. 80!A(5) AND 80IA(7) OF THE ACT. ON THA T BASIS, THE LD. CIT(A) HAS CONCLUDED THAT THE ADDITIONAL INCOME WHI CH IS NOT SHOWN IN THE REGULAR BOOKS OF ACCOUNTS, CANNOT BE CONSIDE RED FOR THE PURPOSE OF DEDUCTION U/S 8016(10) OF THE ACT AND HE HAS CONFIRMED THE DISALLOWANCE OF RS.2,34,39,999/-. (III) AS AFORESAID, IN THE ASSESSEE'S OWN CASE, T HE CLAIM OF THE ASSESSEE MADE U/S 801B(10) OF THE ACT, HAS BEEN CON SIDERED BEING IN ORDER AND WITHIN THE PARAMETERS OF RELEVANT PROV ISIONS OF THE ACT IN THE COMPLETED ASSESSMENTS IN THE PAST I.E. A.Y. 2004-05 TO 2006- 07 [AS SUBMITTED IN PARA 4(III)ABOVE]. IT(SS)A NO. 383/AHD/2014 ASST. YEAR 2006-07 11 (IV) HAVING REGARD TO THE AFORESAID ORDER, THE I SSUE INVOLVED IN THE ASSESSEE'S CASE FOR THE YEAR UNDER APPEAL IS EXACTL Y IDENTICAL. WHEN THE FACTS ARE IDENTICAL, THE REVENUE DEPARTMEN T IS EXPECTED TO ADOPT A CONSISTENT APPROACH IN FINALIZATION OF T HE ASSESSMENT, AS PER THE RATIO LAID DOWN BY THE HON'BLE APEX COURT I N RADHASWAMI SATSANG VS. COMMISSIONER OF INCOME- TAX [1992] 193 ITR 321 (SC). OTHERWISE ALSO IT IS NOT OPEN TO THE REVENUE DEPARTMENT TO KEEP ON CHANGING ITS STANDS, IN RESPECT OF THE SAME NATURE OF TRANSACTION, WITHOUT JUST CAUSE [BERGER PAINTS INDIA LTD.266 ITR 99 (SC)]. IT THEREFORE, FLOWS THAT IF AN INCOME IS EXEMPT EITHER U/S. 2(14), 10 OR OTHERWISE, DUE EFFE CT OF THE SAME HAS TO BE GIVEN WHILE FRAMING THE ASSESSMENT. (V) IN THE LIGHT OF THE FACTS AS NARRATED ABOVE, IT EMERGES FROM THE RECORDS THAT THE DISCLOSED INCOME ATTRIBUTABLE TO ' ON-MONEY' HAS BEEN DULY OFFERED FOR TAXATION IN THE FORM OF ENHAN CED PROFIT WHILE COMPUTING TAXABLE INCOME IN THE YEAR UNDER CONSIDER ATION. MEANING THEREBY UNDISCLOSED INCOME WAS, IN FACT, RECEIVED I N THE NORMAL COURSE. HOWEVER, ON ONE HAND THE UNDISCLOSED INCOME IS TAXED; WHEREAS IEGITIMATE DEDUCTION IS DISALLOWED. THE DEP ARTMENTAL AUTHORITIES HAVE TAKEN DIFFERENT STAND. THIS IS CON TRARY TO THE INTENTION OF THE LEGISLATURE AND AGAINST THE LETTER AND SPIRIT OF THE BENEFICIAL PROVISIONS OF THE ACT. 16. FURTHER THE LD. AR SUBMITTED THAT THE ISSUE STA NDS SETTLED IN THE ASSESSEE'S OWN CASE BY VIRTUE OF ORDER PASSED B Y THE HON'BLE GUIARAT HIGH COURT IN THE ASSESSEE'S CASE FOR ASSE SSMENT YEAR FOR A.Y. 2004-05 WAS FRAMED U/S 143(3) OF THE ACT ON 28 /03/2006. SUBSEQUENTLY, BY NOTICE DATED 17/03/2011, THE ASSES SMENT WAS REOPENED BY THE DEPARTMENT. THE ASSESSEE CHALLENGED THE NOTICE BEFORE THE HON'BLE GUJARAT HIGH COURT IN S.C.A. NO. 17304 OF 2011. THEREBY HON'BLE HIGH COURT VIDE ITS ORDER DATED 27/12/2011 HAS QUASHED THE NOTICE U/S 148 AND ALSO CONSEQUENTI AL ORDER OF ASSESSMENT PASSED PURSUANT THERETO, WHILE DISPOSING OF THE WRIT, THE HON'BLE HIGH COURT HAS REASONED AS UNDER- IT(SS)A NO. 383/AHD/2014 ASST. YEAR 2006-07 12 '10. IT CAN BE NOTED FROM THE RECORD THAT FOR THE A SSESSMENT YEAR 2004-05, AS MENTIONED HEREINABOVE, ON 28/03/2006, T HE ASSESSMENT IN THE CASE OF THE PRESENT PETITIONER IS FINALIZED U/S 143(3) OF THE INCOME TAX ACT AFTER ALLOWING DEDUCTI ON OF RS, 75,72,250/~ U/S 80IB(10) OF THE ACT. IT CAN BE NOTE D THAT SPECIFIC QUERY WAS RAISED ISSUING THE NOTICE U/S 142(1) DATE D 10/02/2006, WHICH HAD BEEN REPLIED TO BY THE PRESENT PETITIONER STATING THEREIN THAT THEY ARE INTO THE BUSINESS OF INFRASTRUCTURE, CONSTRUCTION AND DOING BUSINESS OF CONSTRUCTION OF RESIDENTIAL HOUSE S FOR THE COMMON MAN WITH FURTHER DETAIL THAT FIRM HAD CARRIE D OUT THE CONSTRUCTION ACTIVITY AT THE MARKET VALUE WORTH RS. 3.36 CRORES (ROUNDED OFF). IT APPEARS THAT IN THE FINAL ASSESSM ENT ORDER, WHICH WAS PASSED ON 28/03/2006, IT WAS NOTED THAT THE ASS ESSEE'S FIRM IS IN THE BUSINESS OF CONSTRUCTION OF HOUSING PROJE CT AND IT CARRIED OUT THE CONSTRUCTION OF HOUSING PROJECT FOR AND ON BEHALF OF M/S MADHAV CO-OPERATIVE HOUSING SOCIETY LIMITED. IN THE COMPUTATION OF INCOME THE DEDUCTION U/S 80IB(10) TO THE TUNE OF RS.75,72,250/- HAD BEEN PERMITTED. THUS, IT CAN BE SEEN THAT AFTER RAISING SPECIFIC QUERY AND ON GETTING REPLY A ND AFTER DULY CONSIDERING THE SAME, THE ASSESSMENT ORDER HAD BEEN PASSED. THIS FACT ALSO IS NOT BEING DISPUTED BY THE RESPOND ENT.' '14. AS IS MENTIONED HEREINABOVE, THIS IDENTICAL IS SUE ALREADY HAS BEEN DISCUSSED AND THIS QUESTION HAS BEEN HELD IN F AVOUR OF THE ASSESSEE AND IN THE PRESENT CASE ALSO THE PETITIONE R BEING THE WORKS CONTRACTOR SHOULD BE AVAILED THE BENEFIT OF DEDUCTI ON U/S 80IB(10) OF THE ACT AND NOTICE OF REOPENING REQUIRES TO BE QUAS HED.' LD. AR FURTHER SUBMITTED THAT WITHOUT PREJUDICE TO THE ABOUT IT IS RESPECTFULLY SUBMITTED THAT INCIDENTALLY, RECENTLY HON'BLE ITAT AHMEDABAD 'B' BENCH, AHMEDABAD HAD AN OCCASION TO C ONSIDER ALLOW-ABILITY OF CLAIM OF DEDUCTION U/S 54B OF THE ACT AGAINST CAPITAL GAIN TAXATION ON THE 'ON MONEY COMPONENTS' IN THE C ASE OF ONE OF THE PARTNERS OF THE FIRM NAMELY SHRIBHAGWANBHAI R. PRAJAPATI IN IT(SS) APPEAL NO. 377/AHD/2014. THE RELEVANT GROUND OF APPEAL RAISED IN THE CASE OF BHAGWANBHAI R. PRAJAPATI READ S AS UNDER. IT(SS)A NO. 383/AHD/2014 ASST. YEAR 2006-07 13 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-I, AHMEDABAD, HAD GROSSLY ERRED IN ALIOWING THE LEGITIMATE EXEMPTION U/S. 54B TO THE EXTENT OF RS. 39,38,100/-BEING THE SALE CONSIDERATION RECEIVE D AS PER REGISTERED SALE DEED ONLY. SHE HAS NOT ALLOWED THE LEGITIMATE DEDUCTION U/S.54B ON THE V ON MONEY' RECEIVED ON SALE OF AGRICULTURE LAND. THE SAME MAY KINDLY BE DIRECTED TO BE ALLOWED LEGITIMATE DEDUCTION OF RS.92,47,100/- CLAIMED U/S.54B ON FULL SALE CONSIDERATION I.E. AS PER 'REGISTERED SALE DEED V ON MONEY' RECEIVED ON SALE OF SAID AGRICULTURE LAND.' THE CO-ORDINATED BENCH, IN THE CASE OF BHAGWANBHAI R. PRAJAPATI HELD THAT BENEFICIAL PROVISIONS PLAY IN THEIR OWN S PHERE AND THEY ARE MEANT FOR BENEFIT OF THE TAX PAYERS AND OBSERVE D AS UNDER :- '6,2 REGARDING AL/OWABILITY OF CLAIM OF CLAIM OF 'ON-MON EY' THE LD. AR DREW OUR ATTENTION TO THE DECISION OF HON'BL E GUJARAT HIGH COURT IN THE CASE OF CIT VS. SUMAN PAPER & BOARDS L TD. (2009) 221 CTR 0781 WHEREIN IT WAS HELD THAT IN VIEW OF AM ENDMENT ON THE PROVISIONS OF SECTION 158BB BY THE FINANCE ACT, 2002 WITH RETROSPECTIVE EFFECT FROM 1 ST JULY, 1995 THE ASSESSEE WAS ENTITLED TO CLAIM DEDUCTION UNDER SEC. 80-1 OR SECTION 80-IA IN BLOCK ASSESSMENT OF THE BLOCK PERIOD. THE REVENUE HAS ACK NOWLEDGED THE BENEFIT OF DEDUCTION WITH REGARD TO UNDISCLOSED INCOME OF THE BLOCK PERIOD. 6.3 IN THE CASE BEFORE US THE ISSUE IS WITH REGARD S TO THE BENEFIT OF EXEMPTION UNDER SECTION 54B WITH REGARD TO THE ON MONEY. BOTH ARE BENEFICIAL PROVISIONS IN THEIR OWN SPHERES SO DRAWING THE SAME ANALOGY, WE ARE OF THE VIEW THAT A SSESSEE IS ENTITLED FOR GETTING BENEFIT OF EXEMPTION U/S 54B W ITH REGARD TO THE 'ON MONEY'. THIS VIEW IS FORTIFIED BY DECISION OF HON'B LE BOMBAY HIGH COURT IN THE CASE OF CIT VS. SHETH DEVELOPERS (P) LTD. IN ITA NO. 3724 OF 2010, WHEREIN IT WAS HELD THAT ASSE SSEE WAS ENTITLED TO THE BENEFIT OF SEC. 80IB AND ACCORDINGLY DIRECTED THE A.O. TO RECOMPUTED THE TAX PAYABLE FOR THE BLOCK PE RIOD 1.4.1995 TO 21.2.2002 U/S 185BB AFTER GIVING BENEFIT OF SEC. 80IB.THUS IT WAS HELD THAT FOR BLOCK PERIOD ASSESSEE WAS ENTITLE D TO CLAIM DEDUCTION IN ITS INCOME UNDER SECTION 80IB,' IT(SS)A NO. 383/AHD/2014 ASST. YEAR 2006-07 14 IN VIEW OF ABOVE DECISION, WE HOLD THAT THE ASSESSE E IS ENTITLED IN CLAIMING EXEMPTION ON TOTAL INCOME INCLUDING ON MON EY. THE ASSESSING OFFICER IS DIRECTED ACCORDINGLY. SINCE, THE ISSUE INVOLVED IN THE CASE ON HAND, BEIN G THE SAME AND HAVING BEARING ON THE IDENTICAL FACTS, BY VIRTUE OF HON'BLE TRIBUNAL'S ORDER (SUPRA) AS WELL AS BY VIRTUE OF HON'BLE GUJAR AT HIGH COURT'S ORDER DATED 27/12/2011 THE ISSUE INVOLVED IN THE CA SE OF THE APPELLANT IS SQUARELY 'COVERED MATTER'. LD. AR FURTHER SUBMITTED THAT INCIDENTALLY, RECENTL Y HON'BLE ITAT D' BENCH AHMEDABAD HAD AN OCCASION TO CONSIDER ALLOWAB ILITY OF CLAIM OF DEDUCTION U/S 80IB(10) OF THE ACT, AGAINST ADDITIONAL INCOME ON THE 'ON MONEY COMPONENTS' IN THE CASE OF APPELLANT'S ASSOCIATED CONCERNS NAMELY M/S MADHAV CORPORATTON V S. ACIT IN ITCSS)A NOS. 380 TO 382/AHD/2014(ORDER DATED 28/07/ 2015) THE RELEVANT GROUND OF APPEAL RAISED IN THE REFERRE D CASE READS AS UNDER:- GROUND NO.4 'ON FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A)-1, AHMEDABAD, HAS GROSSLY ERRED IN CONFIRMING THE ADDI TION OF RS. 2,75,00,000/- REFLECTED IN SEIZED DOCUMENTS BY CONS IDERING IT AS NOT RELATED TO PROFIT OF THE HOUSING PROJECT. THOUGH THE SAME I S FORMING PART OF TOTAL PROFIT OF THE HOUSING PROJECT AND THEREFORE, THE SA ME MAY KINDLY BE CONSIDERED AS PART OF PROFIT OF THE HOUSING PROJECT . THE SAME MAY KINDLY BE DIRECTED TO CONSIDER AS PART OF PROFIT OF THE HO USING PROJECT AND BE ALLOWED AS DEDUCTION U/S 80IB(10) OF THE ACT.' THE RELEVANT GROUND OF APPEAL RAISED IN THE CASE OF THE PRESENT - APPELLANT READS AS UNDER:- IT(SS)A NO. 383/AHD/2014 ASST. YEAR 2006-07 15 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-I, AHMEDABAD, HAS GROSSLY E RRED CONFIRMING ADDITION OF RS,2,34,39,999/- BEING ADDITIONALLY CLA IMED U/S80IB(10) ON THE BASIS OF SEIZED RECORDS. THE SAME MAY KINDLY BE ALL OWED ON SUCH LEGITIMATE CLAIM.' THE CO-ORDINATED BENCH IN THE CASE OF M/S MADHAV CO RPORATION (SUPRA) HAS ALLOWED THE ASSESSEE'S GROUND RAISED AS ABOVE HOLDING THAT THE ASSESSEE IS ELIGIBLE FOR DEDUCTION U/S 80IB(10) OF THE ACT IN RESPECT OF UNDISCLOSED INCOME ASSESSED B Y THE A.O. IN ACCORDANCE WITH THE RETURN FILED BY THE ASSESSEE U/ S 153A OF THE ACT, IN RESPONSE TO NOTICE U/S 153A OF THE ACT ISSU ED BY THE DEPARTMENT. THE RELEVANT PORTION OF THE ORDER DATED 28/07/2015 IS REPRODUCED AS UNDER:- PARA. 5.3 'EVEN OTHERWISE BASED ON THE RULE OF CONSISTENCY IF THE ELIGIBLE PROJECT UNDERTAKEN REMAINS THE SAME AND TH E CONDITIONS ARE SATISFIED AND IF DEDUCTION IS ALLOWABLE IN THE FIRS T ASSESSMENT YEAR (WHICH IS A.Y. 2006-07 IN THE ASSESSEE'S CASE) THEN THE SAME HAS TO BE ALLOWED IN THE SUBSEQUENT ASSESSMENT YEARS. WE FIND THAT COORD INATE 'D' BENCH OF TRIBUNAL IN ITA NO. 496/AHD/2011 A.Y. 2007-08 IN TH E CASE OF GOLDEN DEVELOPERS VS. ITO(OSD), RANGE-9, AHMEDABAD DATED 1 3/11/2014, IT WAS HELD THAT IN CASE THE APPLICANT IS ENTITLED FOR CLA IM OF DEDUCTION U/S 80IB(10) IN A.Y.2006-07 THEN THE APPELLANT IS ALSO ELIGIBLE FOR THE SAID IN A.YS. 2007- 08 & 2008-09. FOLLOWING SAME REASONING, WE HOLD THAT THE ASSESSEE ON THIS ADDITIONAL INCOME OF RS. 85,66,22S/- FOR A.Y. 2008-09 IS ENTIT LED FOR CLAIMING DEDUCTION U/S 80IB(10) OF THE ACT AS DISCUSSED ABOV E. ASSESSING OFFICER IS DIRECTED ACCORDINGLY,' IN THE CASE ON HAND, THE CLAIM U/S 80IB(10) OF THE ACT WAS ORIGINALLY ALLOWED IN A.YS. 2004-05, 2005-06 & 2006-07 BY PASS ING THE ASSESSMENT ORDERS U/S 143(3) OF THE ACT DATED 28/03/2006, 06/0 7/2007 & 04/02/2008 RESPECTIVELY. THEREFORE, THE DEDUCTION OF RS. 1,32,19,672/- ORIGINALLY ALLOWED IN A.Y. 2006-07, CANNOT BE DISALLOWED AGAIN BUT IS ALLOWABLE FOR THE SAME ASSESSMENT YEAR UNDER APPEAL I.E. A.Y. 200 6-07 AS PER THE BINDING DECISIONS OF TWO COORDINATED BENCHES (SUPRA ) AS PER -GROUND NO.2 OF THE APPEAL. IN SUPPORT OF THIS, CONTENTION COPIE S OF ORIGINAL* IT(SS)A NO. 383/AHD/2014 ASST. YEAR 2006-07 16 ASSESSMENT ORDERS PASSED U/S 143(3) FOR A.YS. 2004- 5, 2005-06 & 2006- 07 ARE ENCLOSED . 17. THE DR VEHEMENTLY SUPPORTED THE ORDERS OF THE L OWER AUTHORITIES. 18. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD AND REFERRED TO VARIOUS DECISION S RELIED UPON. THE ISSUE IN THIS APPEAL REVOLVES ROUND THE ADMISSI BILITY OF DEDUCTION U/S 80IB(10) OF THE ACT FOR THE CLAIM MAD E AT THE TIME OF FILING ORIGINAL RETURN OF INCOME AT RS.1,32,19,672/ - AND ADDITIONAL CLAIM OF DEDUCTION U/S 80IB(10) OF THE ACT AT RS.2, 34,39,999/- FOR THE INCOME SURRENDERED DURING SEARCH PROCEEDINGS ON THE BASIS OF INDISCRIMINATING MATERIAL FOUND AND SEIZED AND THE SAME BEING SURRENDERED IN THE RETURN OF INCOME FILED IN PURSUA NCE TO NOTICE U/S 153A(1) OF THE ACT. 19. BEFORE GOING FURTHER TO EXAMINE THE FACTS OF TH E CASE LET US GO THROUGH THE PROVISIONS OF SECTION 80IB(10) OF TH E ACT WHICH READS AS FOLLOWS :- SEC.80IB[(10) THE AMOUNT OF DEDUCTION IN THE CASE OF AN UNDERTAKING DEVELOPING AND BUILDING HOUSING PROJECTS APPROVED BEFORE THE 31ST DAY OF MARCH, [2008] BY A LOCAL AUTHORITY SHALL BE HUNDRED PER CENT OF THE PROFITS DERIVED IN THE PREVIOUS YEAR RELEVANT TO ANY ASSESSMENT YEAR FROM SUCH HOUSING PROJECT IF , ( A ) SUCH UNDERTAKING HAS COMMENCED OR COMMENCES DEVEL OPMENT AND CONSTRUCTION OF THE HOUSING PROJECT ON OR AFTER THE 1ST DAY OF O CTOBER, 1998 AND COMPLETES SUCH CONSTRUCTION, ( I ) IN A CASE WHERE A HOUSING PROJECT HAS BEEN APPROV ED BY THE LOCAL AUTHORITY BEFORE THE 1ST DAY OF APRIL, 2004, ON OR BEFORE THE 31ST D AY OF MARCH, 2008; ( II ) IN A CASE WHERE A HOUSING PROJECT HAS BEEN, OR, I S APPROVED BY THE LOCAL AUTHORITY ON OR AFTER THE 1ST DAY OF APRIL, 2004 98 [BUT NOT LATER THAN THE 31ST DAY OF MARCH, IT(SS)A NO. 383/AHD/2014 ASST. YEAR 2006-07 17 2005], WITHIN FOUR YEARS FROM THE END OF THE FINANC IAL YEAR IN WHICH THE HOUSING PROJECT IS APPROVED BY THE LOCAL AUTHORITY; [(III) IN A CASE WHERE A HOUSING PROJECT HAS BEEN APPROVED BY THE LOCAL AUTHORITY ON OR AFTER THE 1ST DAY OF APRIL, 2005, WITHIN FIVE YE ARS FROM THE END OF THE FINANCIAL YEAR IN WHICH THE HOUSING PROJECT IS APPR OVED BY THE LOCAL AUTHORITY.] EXPLANATION.FOR THE PURPOSES OF THIS CLAUSE , ( I ) IN A CASE WHERE THE APPROVAL IN RESPECT OF THE HO USING PROJECT IS OBTAINED MORE THAN ONCE, SUCH HOUSING PROJECT SHALL BE DEEMED TO HAVE BEEN APPROVED ON THE DATE ON WHICH THE BUILDING PLAN OF SUCH HOUSING PRO JECT IS FIRST APPROVED BY THE LOCAL AUTHORITY; ( II ) THE DATE OF COMPLETION OF CONSTRUCTION OF THE HOU SING PROJECT SHALL BE TAKEN TO BE THE DATE ON WHICH THE COMPLETION CERTIFICATE IN RES PECT OF SUCH HOUSING PROJECT IS ISSUED BY THE LOCAL AUTHORITY; ( B ) THE PROJECT IS ON THE SIZE OF A PLOT OF LAND WHIC H HAS A MINIMUM AREA OF ONE ACRE: PROVIDED THAT NOTHING CONTAINED IN CLAUSE ( A ) OR CLAUSE ( B ) SHALL APPLY TO A HOUSING PROJECT CARRIED OUT IN ACCORDANCE WITH A SCHEME FRA MED BY THE CENTRAL GOVERNMENT OR A STATE GOVERNMENT FOR RECONSTRUCTION OR REDEVELOPMENT OF EXISTING BUILDINGS IN AREAS DECLARED TO BE SLUM ARE AS UNDER ANY LAW FOR THE TIME BEING IN FORCE AND SUCH SCHEME IS NOTIFIED BY THE B OARD IN THIS BEHALF; ( C ) THE RESIDENTIAL UNIT HAS A MAXIMUM BUILT-UP AREA OF ONE THOUSAND SQUARE FEET WHERE SUCH RESIDENTIAL UNIT IS SITUATED WITHIN THE CITY OF DELHI OR MUMBAI OR WITHIN TWENTY-FIVE KILOMETRES FROM THE MUNICIPAL LI MITS OF THESE CITIES AND ONE THOUSAND AND FIVE HUNDRED SQUARE FEET AT ANY OTHER PLACE; [***] ( D ) THE BUILT-UP AREA OF THE SHOPS AND OTHER COMMERCI AL ESTABLISHMENTS INCLUDED IN THE HOUSING PROJECT DOES NOT EXCEED [THREE] PER CE NT OF THE AGGREGATE BUILT-UP AREA OF THE HOUSING PROJECT OR [FIVE THOUSAND SQUA RE FEET, WHICHEVER IS HIGHER];] [(E) NOT MORE THAN ONE RESIDENTIAL UNIT IN THE HOU SING PROJECT IS ALLOTTED TO ANY PERSON NOT BEING AN INDIVIDUAL; AND (F) IN A CASE WHERE A RESIDENTIAL UNIT IN THE HOUSI NG PROJECT IS ALLOTTED TO A PERSON BEING AN INDIVIDUAL, NO OTHER RESIDENTIAL UNIT IN SUCH HO USING PROJECT IS ALLOTTED TO ANY OF THE FOLLOWING PERSONS, NAMELY: (I) THE INDIVIDUAL OR THE SPOUSE OR THE MINOR CHILD REN OF SUCH INDIVIDUAL, (II) THE HINDU UNDIVIDED FAMILY IN WHICH SUCH INDIV IDUAL IS THE KARTA, (III) ANY PERSON REPRESENTING SUCH INDIVIDUAL, THE SPOUSE OR THE MINOR CHILDREN OF SUCH INDIVIDUAL OR THE HINDU UNDIVIDED FAMILY IN WH ICH SUCH INDIVIDUAL IS THE KARTA.] [ EXPLANATION. FOR THE REMOVAL OF DOUBTS, IT IS HEREBY DECLARED T HAT NOTHING CONTAINED IN THIS SUB-SECTION SHALL APPLY TO ANY UN DERTAKING WHICH EXECUTES THE HOUSING PROJECT AS A WORKS CONTRACT AWARDED BY ANY PERSON (INCLUDING THE CENTRAL OR STATE GOVERNMENT). ] IT(SS)A NO. 383/AHD/2014 ASST. YEAR 2006-07 18 FROM GOING THROUGH THE PROVISIONS OF SECTION 80IB(1 0) OF THE ACT, SUBMISSIONS MADE BY THE ASSESSEE BEFORE THE LOWER A UTHORITIES, OBSERVATIONS MADE BY THE ASSESSING OFFICER AND FIND INGS OF LD. CIT(A), FOLLOWING MATTERS NEED TO BE ANALYZED IN T HE PRESENT CASE- (1) WHETHER THE ASSESSEE IS A DEVELOPER OR A WORKS CONTRACTOR; (2) WHETHER THE ASSESSEE FULFILLS ALL THE CONDITION S OF SECTION 80IB(10) OF THE ACT OTHER THAN THE MATTERS MENTIONE D AT POINT (1) ABOVE; (3) WHETHER IT IS A PRE-CONDITION FOR CLAIMING EXEM PTION U/S 80IB(10) OF THE ACT THAT THE DEVELOPER OWNS THE LAN D ON WHICH THE HOUSING PROJECT HAS BEEN CONSTRUCTED; (4) WHETHER THE ASSESSEE IS ELIGIBLE TO CLAIM DEDUC TION U/S 80IB(10) OF THE ACT FOR THE UNDISCLOSED INCOME SURR ENDERED DURING SEARCH/SURVEY ACTION IN A SITUATION WHEN ASS ESSEE HAS BEEN ASSESSED IN PREVIOUS YEARS AND HAS BEEN AL LOWED THE DEDUCTION U/S 80IB(10) OF THE ACT. 20. WE WILL NOW ANALYZE THE ABOVE MATTERS ONE BY ON E TO ARRIVE AT THE DECISION. THE MOST CRUCIAL ISSUE IS - (1) WHETHER THE ASSESSEE IS A DEVELOPER OR A WORKS CONTRACTOR WITH RETROSPECTIVE AMENDMENT WHICH CAME IN FORCE BY FINANCE ACT 2009 EFFECTIVE FROM 1.4.2001 WHEREBY TO REMOVE THE DOUBTS IT WAS DECLARED THAT THE PROVISIONS OF SECTION 80IB(10) SH ALL NOT APPLY TO ANY UNDERTAKING WHICH EXECUTES HOUSING PROJECT AS A N WORKS CONTRACTOR. IN OTHER WORDS IF AN ASSESSEE IS A DEV ELOPER AND NOT A WORKS CONTRACTOR THEN ONLY HE WILL BE ELIGIBLE FOR DEDUCTION U/S 80IB(10) OF THE ACT. DURING THE COURSE OF HEARING L D. AR HAS IT(SS)A NO. 383/AHD/2014 ASST. YEAR 2006-07 19 SUBMITTED THAT THE ASSESSEE FIRM IN THE CAPACITY AS A DEVELOPER HAS BUILT AND DEVELOPED THE HOUSING PROJECT ON LAND SURVEY NO.1043 F.P.64 SITUATED AT VILLAGE VASTRAL, TA. DI ST. AHMEDABAD. THE TOTAL AREA OF THE LAND WAS 38,365 SQ.METERS AND THE HOUSING PROJECT IN THE NAME OF MADHAV BUNGALOWS WAS DEVELOP ED. PERMISSION FOR COMMENCEMENT OF THIS PROJECT WAS ISS UED ON 30.12.2004 TO MADHAV CO-OP. HOUSING SOCIETY LTD. AS THE LAND WAS OWNED BY MADHAV CO-OP. HOUSING SOCIETY LTD. AS PER THIS PLAN 204 RESIDENTIAL UNITS, ONE WATER TANK AND ELEC TRICAL SUB-STATION WERE TO BE DEVELOPED. BEFORE RECEIVING THE PERMISSI ON ON 3.12.2004, A DEVELOPMENT AGREEMENT DATED 27.8.2003 WAS ENTERED INTO BETWEEN THE LAND OWNER MADHAV CO-OP. H OUSING SOCIETY LTD. AND DEVELOPER MADHAV BUILDERS I.E. THE ASSESSEE. THE ASSESSEE FIRM HAS BEEN CLAIMING LEGITIMATE DEDUCTIO N U/S 80IB(10) OF THE ACT FOR ASST. YEAR 2004-05 TO ASST. YEAR 200 5-06. LD. AR SUBMITTED THAT ASSESSEE HAS BEEN WORKING IN THE CAP ACITY OF A DEVELOPER AND NOT AS A WORKS CONTRACTOR. 21. ON THE OTHER HAND, LD. DR REFERRED TO THE DECIS ION OF HONBLE JURISDICTIONAL HIGH COURT DATED 27.12.2011 IN ASSES SEES OWN CASE IN SPECIAL CIVIL APPLICATION 17304 OF 20011 WHEREIN THEIR LORDSHIPS HAVE OBSERVED AS UNDER :- 13. WE ALSO HAD OCCASION TO DEAL WITH THE SIMILAR QUESTION IN SPECIAL CIVIL APPLICATION NO. 15966 OF 2011 IN THE CASE OF PRAVIN KUMAR BHOGILAL SHAH VS. INCOME TAX OFFICER (OSD) AND FOLLOWING OTHER DECISIONS OF THIS COURT, THE ISSUE HAS BEEN HELD IN FAVOUR OF THE ASSESSEE. IT NEEDS TO BE NOTE D THAT PRIOR TO THE AMENDMENT, WHICH HAD TO BE GIVEN RETROSPECTIVE EFFECT, THERE WAS NO DISTINCTION BETWEEN THE TERM DEVELOPER AND WORKS CONTRACT. ALL THAT WAS REQU IRED OF THE ASSESSEE HAD BEEN IT(SS)A NO. 383/AHD/2014 ASST. YEAR 2006-07 20 DISCLOSED AND THIS WAS PURSUANT TO THE AMENDMENT BR OUGHT IN BY THE STATUTE WITH EFFECT FROM 1.4.2001. THERE HAS BEEN DENIAL OF BENEFIT UND ER SECTION 80IB(10) TO THE WORKS CONTRACTOR EXECUTING THE HOUSING PROJECT AND, THERE FORE, IT WOULD NOT BE FEASIBLE FOR ANY PERSON TO CONTEMPLATE ANY SUCH RETROSPECTIVE AM ENDMENT AND DISCLOSE IN THE RETURN, WHICH WAS OTHERWISE NOT REQUIRED. AS CAN BE SEEN FROM THE ASSESSMENT ORDER AS WELL AS FROM THE RECORD THAT HAS BEEN PLACED BEF ORE THE COURT THAT THE PETITIONER HAD DISCLOSED ALL THE MATERIAL FACTS WHICH WERE NECESSA RY FOR THE PURPOSE OF ASSESSMENT AND AS THE NOTICE UNDER CHALLENGE IS ISSUED ON EXPI RY OF THE PERIOD OF 4 YEARS FROM THE END OF THE RELEVANT YEAR OF ASSESSMENT UNDER CONSID ERATION, THERE IS NOTHING TO INDICATE NOR ANYTHING TO ESTABLISH THAT THE ASSESSEE HAS NOT DISCLOSED FULLY AND TRULY ALL MATERIAL FACTS. THE VERY EDIFICE TO THE IMPUGNED NOTICE IS N OT TO BE HELD SUSTAINABLE. 14. AS IS MENTIONED HEREINABOVE, THIS IDENTICAL ISS UE ALREADY HAS BEEN DISCUSSED AND THIS QUESTION HAS BEEN HELD IN FAVOUR OF THE ASSESS EE AND IN THE PRESENT CASE ALSO THE PETITIONER BEING THE WORKS CONTRACTOR SHOULD BE AVAILED THE BENEFIT OF DEDUCTION UNDER SECTION 80IB(10) OF THE ACT AND NOTICE OF REOPENING REQUIRES TO BE QUASHED. AS MENTIONED EARLIER SINCE THERE WAS NO TIME AVAILABLE FOR COMMUNICATION AS THE NOTICE ALONG WITH THE INTERIM ORDER HAD BEEN PASSED ON 28. 11.2011, AND PURSUANT TO THE NOTICE UNDER CHALLENGE WHEN THE ASSESSMENT ORDER HA S BEEN PASSED BY THE ASSESSING OFFICER ON THE VERY SAME DAY, WHEN THE VERY NOTICE IS NOT BEING FOUND SUSTAINABLE, THERE IS A NEED TO QUASH BOTH THE IMPUGNED NOTICES DATED 17.3.2011 18.11.2011 AND ALL CONSEQUENTIAL PROCEEDINGS AND THE ORDER OF ASSESSME NT DATED 28.12.2011 PASSED PURSUANT THERETO. PETITION IS ACCORDINGLY ALLOWED. NO ORDER AS TO COSTS. 22. BY REFERRING TO THE ABOVE MENTIONED PARAGRAPH I N THE DECISION OF HON. GUJARAT HIGH COURT IN ASSESSEES O WN CASE, LD. DR MENTIONED THAT THE ASSESSEE WAS BEING TERMED AS WORKS CONTRACTOR AND, THEREFORE, SUBMITTED THAT AS THE H ON. HIGH COURT HAS MENTIONED THE ASSESSEE AS A WORKS CONTRACTOR, T HE SAME SHOULD BE CONSTRUED FOR THE PURPOSE OF SECTION 80IB (10) OF THE ACT AND THE ASSESSEE SHOULD NOT BE ALLOWED THE BENEFIT OF SECTION 80IB(10) OF THE ACT AS THE ASSESSEE IS NOT A DEVELO PER BUT WORKS CONTRACTOR. 23. BY GOING THROUGH THE DECISION OF HON. JURISDICT IONAL HIGH COURT IN ASSESSEES OWN CASE WE FIND THAT THIS SPEC IAL CIVIL IT(SS)A NO. 383/AHD/2014 ASST. YEAR 2006-07 21 APPLICATION OF ASSESSEE WAS FILED BY THE ASSESSEE A GAINST THE ACTION OF ASSESSING OFFICER FOR REOPENING OF ASSESS MENT BY ISSUING AN IMPUGNED NOTICE U/S 148 FOR ASST. YEAR 2004-05 B EING UNDERTAKEN BEYOND FOUR YEARS AFTER THE END OF THE R EGULAR ASSESSMENT YEAR AND EVEN AFTER THE SCRUTINY ASSESSM ENT WAS COMPLETED U/S 143(3) OF THE ACT, ASSESSEE HAS DISCL OSED FULLY AND TRULY ALL MATERIAL FACTS. HON. HIGH COURT HAS DISCU SSED THE ISSUE RELATING TO REOPENING OF ASSESSMENT AND HAS DECIDED THE SAME IN FAVOUR OF THE PETITIONER AND HELD THAT THE ACTION O F ASSESSING OFFICER WAS NOT JUSTIFIED IN REOPENING THE ASSESSME NT. WE FIND THAT THIS SPECIAL CIVIL APPLICATION WAS NOT IN RELATION TO THE ISSUE THAT WHETHER THE ASSESSEE IS A DEVELOPER OR A WORKS CONT RACTOR AND THEREFORE THERE WAS NO OCCASION TO DISCUSS THIS ISS UE IN THE DECISION ON THE SPECIAL CIVIL APPLICATION FILED BEF ORE THE HON. CURT. THEREFORE, WE ARE NOT CONVINCED WITH THE CONTENTION OF LD. DR OF TREATING THE ASSESSEE AS WORKS CONTRACTOR ONLY ON T HE BASIS OF MENTIONING IN A GENERAL PARLANCE THAT THE ASSESSEE IS WORKS CONTRACTOR. NOW GOING AHEAD WE WILL EXAMINE THIS AS PECT IN DETAIL IN THE LIGHT OF THE FACTS OF THE CASE THAT WHETHER THE BUSINESS ACTIVITY CARRIED ON BY THE ASSESSEE ARE IN THE NATU RE OF A DEVELOPER OR OF A WORKS CONTRACTOR. IN ORDER TO STUDY THE DIF FERENCE BETWEEN A DEVELOPER AND A CONTRACTOR WE WOULD LIKE TO REFER T O THE DECISION OF ITAT, CHENNAI BENCH IN THE CASE OF PRIME DEVELOPERS VS. ITO, WARD -1(4)-TIRUPUR IN ITA NO.933(MDS) OF 2013, FOR ASST. YEAR 2009-10 DATED SEPTEMBER 23, 2015, WHICH READS AS UN DER :- 6.1 THE CONTENTION OF THE LD. AR IS THAT THE ASSESSEE IS A DEVELOPER AND NOT MERE A CONTRACTOR AND BEING SO, THE ASSESSEE IS ENTITLED TO DEDUCTION UNDER SECTION 80-IB(10) OF IT(SS)A NO. 383/AHD/2014 ASST. YEAR 2006-07 22 THE ACT. NOW, WE HAVE TO EXAMINE AS TO WHETHER THE ASSESSEE CAN BE CALLED AS A DEVELOPER WITHIN THE MEANING OF SECTION 80-IB(10) READ WITH EXPLANATION I HEREIN ABOVE. THE LD. AR SUBMITTED THAT THE WORK CARRIED ON BY THE ASSESSEE MADE IT A DEVELOPER ENTITLED FOR DEDUCTION UNDER SECTION 80-IB(10) OF THE ACT. ACCORDING TO HIM, A DEVELOPER IS A PERSON WHO DEVELOPS THE FACILITY AND SUCH PERSON MA Y OR MAY NOT BE A CONTRACTOR. ON THE OTHER HAND, A CONTRACTOR IS STATED TO BE A LEGAL TERM WHOSE RIGHTS AND DUTIES VIS- -VIS CONTRACTEE ARE DETERMINED BY WAY OF LEGAL DOCUMENT CA LLED THE CONTRACT. ACCORDING TO THE LD. AR, THE ASSESSEE HAS UNDERTAKEN ALL RISKS INVOLVE D IN THE PROJECT INCLUDING TECHNOLOGICAL INPUTS, ENTREPRENEURIAL INPUTS ETC. BES IDES, THERE IS HEAVY FINANCIAL INVOLVEMENT IN TERMS OF DEPLOYMENT OF MAN AND MACHIN E AS WELL AS ALL MATERIALS. AT THIS POINT, IT IS PERTINENT TO NOTE THAT THE JUDGMENT OF TH E SUPREME COURT IN THE CASE OF HINDUSTAN AERONAUTICS LTD. V. STATE OF ORISSA [1989] 55 STC 327 IN WHICH IT HAS BEEN OBSERVED THAT IN A CONTRACT FOR WORK, THE PERSON PR ODUCING HAS NO PROPERTY IN THE THING PRODUCED AS A WHOLE, EVEN IF PART OR WHOLE OF THE M ATERIAL USED BY HIM MAY HAVE BEEN HIS PROPERTY EARLIER. FURTHER, IN ANOTHER JUDGMENT OF THE SUPREME COURT IN THE CASE OF STATE OF TAMIL NADU V. ANANDAM VISWANATHAN [1989] 1 SCC 613 IN WHICH IT WAS HELD THAT THE NATURE OF CONTRACT CAN BE FOUND ONLY WHEN THE INTENTION OF PARTIES ARE FOUND OUT. THE FACT THAT IN THE EXECUTION OF THE WORKS CONTRAC T SOME MATERIAL ARE USED AND THE PROPERTY IN THE GOODS SO USED PASSES TO THE OTHER PA RTY, THE CONTRACTOR UNDERTAKING THE WORK WILL NOT NECESSARILY BE DEEMED, ON THAT ACCOUNT , TO SELL THE MATERIAL. IT WAS, THEREFORE, ARGUED THAT THE DEVELOPER IS A PERSON WH O BRINGS IN ADDITIONAL RESOURCES BY WAY OF INVESTMENT AND TECHNICAL EXPERTISE FOR DEVELO PING THE INFRASTRUCTURE FACILITIES. SINCE THE ASSESSEE HAD SIMPLY DONE A PART OF WORK OF CIVIL CONSTRUCTION RELATING TO THE HOUSING PROJECT, HE STATED THAT IT IS NOT ELIGIBLE FOR DEDUCTION. 6.2 WE FIND THAT THE WORDS DEVELOPER AND CONTRACTOR HAVE NOT BEEN DEFINED IN OR FOR THE PURPOSES OF SECTION 80-IB(10). THE PRIMARY QUESTION WHICH ARISES IS THAT HOW TO FIND OUT THE MEANING OF A WORD OR AN EXPRESSION WHICH IS NOT DE FINED IN THE ACT. IT IS A SETTLED LEGAL POSITION THAT ORDINARILY THE MEANING OR DEFINITI ON OF A WORD USED IN ONE STATUTE CANNOT PER SE BE IMPORTED INTO ANOTHER AS HAS BEEN HELD BY THE SUPREME COURT IN THE CASE OF UNION OF INDIA V. R.C. JAIN [1981] 2 SCC 308. THEREFORE, THE MEANING OF THE WORDS DEVELOPER AND CONTRACTOR, AS PUT FORTH BEFORE US BY THE RIVAL PARTIES FROM OTHER LEGISLATIONS, BE THEY STATE OR CENTRAL ENACTMENTS, CAN NOT BE AUTOMATICALLY APPLIED IN THE PRESENT CONTEXT. IN ORDER TO ASCERTAIN THE MEANING OF A WORD NOT DEFINED IN THE ACT, A USEFUL REFERENCE CAN BE MADE TO THE GENERAL CLAUSES AC T, 1897. IF A PARTICULAR WORD IS NOT DEFINED IN THE RELEVANT STATUTE BUT HAS BEEN DEFIN ED IN THE GENERAL CLAUSES ACT, SUCH DEFINITION THROWS AMPLE LIGHT FOR GUIDANCE AND ADOPT ION IN THE FORMER ENACTMENT. ACCORDING TO S. 3 OF THE GENERAL CLAUSES ACT THE DEFINIT IONS GIVEN IN THIS ACT SHALL HAVE APPLICABILITY IN ALL THE CENTRAL ACTS UNLESS A CONTRARY DE FINITION IS PROVIDED OF A PARTICULAR WORD OR EXPRESSION. ON SCANNING S. 3 OF THE GENERAL CLAUSES ACT WE OBSERVE THAT NEITHER THE WORD CONTRACTOR NOR DEVELOPER HAS BEEN DEFINE D THEREIN. THUS, THE GENERAL CLAUSES ACT IS ALSO OF NO ASSISTANCE IN THIS REGARD. GOING AH EAD, WHEN THESE WORDS ARE NEITHER DEFINED IN THE IT ACT, 1961 NOR IN THE GENERAL CLAUSE S ACT, THE NEXT QUESTION IS THAT WHEREFROM TO FIND THE MEANING OF SUCH WORDS. THERE IS NO NEED TO WANDER HERE AND THERE IN SEARCH OF AN ANSWER WHICH HAS BEEN APTLY GIVEN BY T HE SUPREME COURT IN THE CASE OF CWT V. OFFICER-IN-CHARGE (COURT OF WARDS) [1976] 105 ITR 133 (SC) IN WHICH IT WAS HELD THAT THE ORDINARY DICTIONARY MEANING OF A WORD CAN NOT BE DISREGARDED. 6.3 COMING BACK TO OUR POINT OF ASCERTAINING THE MEANING OF THE WORDS CONTRACTOR AS WELL AS DEVELOPER, WHICH HAVE NEITHER BEEN DEFINED IN TH E ACT NOR IN THE GENERAL CLAUSES ACT, WE FALL UPON OXFORD ADVANCED LEARNERS DICTIONA RY TO FIND OUT THEIR MEANING. ACCORDING TO THIS DICTIONARY DEVELOPER IS A PERSON OR C OMPANY THAT DESIGNS AND CREATES NEW PRODUCTS, WHEREAS CONTRACTOR IS A PERSON OR A COMPANY THAT HAS A CONTRACT TO DO IT(SS)A NO. 383/AHD/2014 ASST. YEAR 2006-07 23 WORK OR PROVIDES SERVICES OR GOODS TO ANOTHER. THE NEW SHORTER OXFORD DICTIONARY DEFINES THE WORD CONTRACTOR AS: A PERSON WHO ENT ERS INTO A CONTRACT OR AGREEMENT. NOW CHIEFLY SPEC. A PERSON OR FIRM THAT UNDERTAKES WORK B Y CONTRACT, ESPECIALLY FOR BUILDING TO SPECIFIED PLANS. IN THE LIGHT OF THE MEANING ASCRIBED TO THESE WORDS BY THE DICTIONARIES IT IS OBSERVED THAT THE DEVELOPER IS A PERSON WHO DESI GNS AND CREATES NEW PRODUCTS. HE IS THE ONE WHO CONCEIVES THE PROJECT. HE MAY EXECUTE TH E ENTIRE PROJECT HIMSELF OR ASSIGN SOME PARTS OF IT TO OTHERS. ON THE CONTRARY THE CONT RACTOR IS THE ONE WHO IS ASSIGNED A PARTICULAR JOB TO BE ACCOMPLISHED ON THE BEHALF OF TH E DEVELOPER. HIS DUTY IS TO TRANSLATE SUCH DESIGN INTO REALITY. THERE MAY, IN CERTAIN CIRC UMSTANCES, BE OVERLAPPING IN THE WORK OF DEVELOPER AND CONTRACTOR, BUT THE LINE OF DEMARC ATION BETWEEN THE TWO IS THICK AND UNBREACHABLE. WHEN THE PERSON ACTING AS DEVELOPER, WH O DESIGNS THE PROJECT, ALSO EXECUTES THE CONSTRUCTION WORK, HE WORKS IN THE CAP ACITY OF CONTRACTOR TOO. BUT WHEN HE ASSIGNS THE JOB OF CONSTRUCTION TO SOMEONE ELSE, HE R EMAINS THE DEVELOPER SIMPLICITER, WHEREAS THE PERSON TO WHOM THE JOB OF CONSTRUCTION I S ASSIGNED, BECOMES THE CONTRACTOR. THE ROLE OF DEVELOPER IS MUCH LARGER THAN THAT OF THE CONTRACTOR. IT IS NO DOUBT THAT IN CERTAIN CIRCUMSTANCES A DEVELOPER MAY ALSO DO THE WORK OF A CONTRACTOR BUT A MERE CONTRACTOR PER SE CAN NEVER BE CALLED AS A DEVELOPER, WHO UNDERTAKES TO DO WORK ACCORDING TO THE PRE- DECIDED PLAN. 6.4 SO, IN ORDER TO BE ELIGIBLE FOR DEDUCTION, THE DEVELOP MENT SHOULD BE THAT OF HOUSING PROJECT AS A WHOLE AND NOT A PARTICULAR PART OF IT, A S HAS BEEN CONTENDED BY THE LD. AR. IT MAY BE POSSIBLE THAT SOME PART OF THE HOUSING PROJECT IS ASSIGNED BY THE LAND LORD TO SOME CONTRACTOR FOR DOING IT ON HIS BEHALF. THAT WILL N OT PUT THE DOER OF SUCH WORK IN THE SHOES OF A DEVELOPER. 24. THE ABOVE REFERRED DECISION OF THE TRIBUNAL, CH ENNAI BENCH MAKES IT CRYSTAL CLEAR THAT A DEVELOPER TAKES ON TH E BASIC OF HOUSING PROJECT RIGHT FROM THE BEGINNING I.E. FROM THE POINT OF TIME WHEN THE PLAN OF THE HOUSING PROJECT ARE APPROVED, TRAVELS THROUGH THE CREATING OF DESIGN OF THE PROJECT, ARRANGING OF FINANCE AS WELL AS BOOKING OF THE UNITS OF THE PROJECT AND TO APPOINT VARIOUS AGENCIES RELATING TO THE START AND FINISHING OF THE PROJECT WHICH INTER ALIA ALSO INCLUDES THE APPOINTMENT OF VARIOUS TYPES OF CONTRA CTORS FOR DIFFERENT TYPES OF WORKS TO BE CARRIED OUT. IN THE PRESENT CASE, THE ABOVE SAID ASPECT CAN BE EXAMINED BY GOING THROUGH SOME OF THE CLAUSES OF DEVELOPMENT AGREEMENT DATED 26.8.2003 BETWEEN T HE ASSESSEE I.E MADHAV BUILDERS AND SHREE MADHAV CO-OP . HOUSING SOCIETY LTD. COPY OF WHCH IS PLACED IN THE PAPER BO OK DATED IT(SS)A NO. 383/AHD/2014 ASST. YEAR 2006-07 24 3/11/2015 AT PAGES 1 TO 110. SOME PARTS OF DEVELOPM ENT AGREEMENT ARE AS UNDER :- (3) THE SAID ORGANIZER/BUILDING IS CARRYING OUT ALL CONSTRUCTED RELATED WORK. IN THIS WAY, THE MAIN WORK AND ACTIVI TY OF THE SAID BUILDER IS TO DEVELOPMENT HOUSING PROJECTS OR TO REMAIN ATTACHED WITH THE WORK OF CONSTRUCTION AND TO CARRY OUT/GET CARRIED OUT THE CONSTRUCTION WORK. (5) IN ORDER TO FULFILL THE DESIRE OF PROCURING RES IDENTIAL UNITS FOR ITS MEMBERS ON THE SAID PROPERTY, AS PER THE WISH OF TH E MEMBERS BY THE SAID HOUSING SOCIETY ON THE ABOVE RE FERRED PROPERTY, THE SOCIETY IS PLANNING TO ORGANIZE A SCH EME OF RESIDENTIAL HOUSING UNITS ON THE SAID LAND BUT THE SAID HOUSING SOCIETY IS LACKING THE SKILL AND THE FUNDS REQUIRED FOR FINANCIAL INVESTMENT FOR FULFILLING THE SAID SCHEME AND DUE TO LACK OF NECESSARY EFFICIENCY AND NECESSARY EXPERTIS E AND TIME BY THE OFFICE-BEARERS OF THE HOUSING SOCIETY F OR ENROLLING NEW MEMBERS IN THE SAID HOUSING SOCIETY AS AND WHEN REQUIRED, THEY THEMSELVES ARE NOT IN A POSITION TO ORGANIZE A SCHEME ON THE SAID LAND AND UNDER SUCH CIRCUMSTANCE S, THE SAID HOUSING SOCIETY HAS TILL DATE TAKEN HELP OF TH E FIRST PARTY BUILDER. AND FROM NOW ONWARDS, APPOINTING THE SAID BUILDER AS ORGANIZER/BUILDER, THE SOCIETY IS PLANNING OF EN TRUSTING THE LIABILITY OF ORGANIZING THE SAID SCHEME TO THE SAID FIRST PARTY ORGANISER AND FOR THAT THE SOCIETY IS DESIROUS OF HANDING OVER ALL THE WORKING POWERS. AND WHEREAS AS THE SAI D FIRST PARTY ORGANISER / BUILDER PARTNERSHIP FIRM IS HOL DING NECESSARY QUALIFICATION, EFFICIENCY, WORKING CAPACI TY AND SKILL REQUIRED FOR ORGANIZING THE SCHEME AS PER THE DESIR OUS OF THE MEMBERS OF THE HOUSING SOCIETY THE SAID HOUSING SOC IETY IS DESIROUS OF HANDING OVER AND ENTRUSTING SUCH LIABIL ITY AND RESPONSIBILITY BY APPOINTING THE SAID ORGANIZER/DEVELOPER/BUILDER IN PURSUANCE TO THE SAI D DEVELOPMENT AGREEMENT AND THE SAID ORGANIZER HAS ACCEPTED SUCH RESPONSIBILITY. MOREOVER, THE SAID OR GANIZER ACCEPTS THE RESPONSIBILITY AND LIABILITY OF DEVELOP ING THE LAND MENTIONED IN THE SAID AGREEMENT TO SALE AS STATED HEREINABOVE BY ENTERING INTO THIS AGREEMENT. IT(SS)A NO. 383/AHD/2014 ASST. YEAR 2006-07 25 (6) THE PLANNING OF THE ABOVE STATED SCHEME OF THE SAID HOUSING SOCIETY IS TO BE DONE BY THE SAID ORGANIZER AND THE NAME OF THE SAID SCHEME HAS BEEN GIVEN AS MADHAV PARK PART- 4 (SHRI MADHAV CO-OP. HOUSING SOCIETY LTD.), WHICH NA ME WOULD REMAIN FOREVER. AND WITHOUT THE WRITTEN PERMI SSION OF THE SAID HOUSING SOCIETY, NO CHANGE IN THE NAME CAN BE MADE. (7) AS STATED HEREIN ABOVE, THE SAID DEVELOPER/ORGA NISER/BUILDER IS ENTRUSTED THE BELOW MENTIONED POWERS FOR ORGANIZ ING THE SAID HOUSING SOCIETY SCHEME. (7.1) TO APPOINT ARCHITECT, ENGINEER, SUPERVISOR, C ONTRACTOR, LEGAL ADVISOR AND OTHER PROFESSIONALS WHOSE SERVICES ARE REQUIRED FOR COMPLETING THE SAID SCHEME AND TO DECIDE AND FI X THEIR AREA OF OPERATION AND TO DECIDE THEIR REMUNERATION AND FEE, WHICH IS TO BE BORNE BY THE SECOND PARTY EXECUTANT . (7.2) TO ENTER INTO CONTRACT, SUB-CONTRACT, LABOUR CONTRACT, MATERIAL CONTRACT ETC. IN ORDER TO COMPLETE BY CARRYING OUT CONSTRUCTION IN THE SCHEME OF THE SAID HOUSING SOCIETY AS PER TH E SPECIFICATION, AS PER THE ITEM OR ON LUMP SUM PRICE AND TO PROVIDE NECESSARY BASIC MATERIALS ETC. FOR COMPLETI NG THE SAID HOUSING SOCIETY SCHEME AND FOR THAT THE ORGANI ZER WILL PROVIDE ALL TYPES OF HELP AND AID. (7.3) THE ORGANIZER WILL HAVE TO COLLECT CONSTRUCTI ON FUND, LAND FUND AND THE AMOUNTS OF DEPOSITS WITH REGARD TO OTHER EX PENSES FROM THE PRESENT MEMBERS AND FROM THE PROPOSED MEMB ERS IN ORDER TO MEET WITH THE CONSTRUCTION COST AND OTH ER RELATED EXPENSES OF THE SAID SCHEME BY ISSUING PUCCA RECEIP T THEREOF. (7.9) THE SAID ORGANIZER WOULD ALLOT CONCERNED PROP ERTIES TO THE MEMBER OF THE SAID HOUSING SOCIETY GETTING ENROLLED IN THE SAID SCHEMES AS PER THE SAID SCHEME AND IN THE FINA L SCHEME THAT WOULD BE FORMED AFTER NECESSARY CHANGES AND IN THE CONCERNED TENEMENT, OPEN LAND AND COMMON AMENITIES ETC. BUT THE FINAL DECISION OF THE SAID O RGANIZER WITH IT(SS)A NO. 383/AHD/2014 ASST. YEAR 2006-07 26 REGARD TO THE ALLOTMENT OF THE PROPERTY TO THE MEMB ERS WOULD BE ACCEPTABLE AND BINDING TO THE SAID HOUSING SOCIE TY AND ITS MEMBERS AND PROPOSED MEMBERS. (7.10) THE SAID HOUSING HOUSING SOCIETY HAS ENTRUST ED ALL THE RIGHTS AND POWERS TO THE ORGANIZER FOR THE PURPOSE OF COMP LETING AND ERECTING THE SAID SCHEME AND ALL OTHER RELATED POWERS AND THEREFORE THE SAID ORGANIZER WILL HAVE TO COMPL ETE THE SAID SCHEME USING HIS DISCREPANCY AND AS PER HIS WI SDOM BY TAKING DECISION THAT MAY BE DEEMED FIT AND PROPE R BY HIM AND TILL THE SOCIETY DOES NOT COMPLETE THE ACCO UNTS RELATED TO THE FUNDS INVESTED BY THE ORGANIZER FROM THE DATE OF THE IMPLEMENTATION OF THE SAID SCHEME IS TO BE MAINTAINED BY THE ORGANIZER. THE CONCERNED ACCOUNTS SUBMITTED BY THE SAID ORGANIZER TO THE SAID HOUSING SOCIETY IS TO BE ACCEPTED BY THE SAID HOUSING SOCIETY WITHO UT ANY DISPUTE AND OBJECTION AND MOREOVER THE ACCOUNTS PER TAINING TO THE SAID SCHEME SUBMITTED BY THE SAID ORGANIZER IS TO BE ACCEPTED BY THE HOUSING SOCIETY WITHOUT ANY SORT OF CRITICISM, REMARK, AUDIT OR DOUBT WHATSOEVER AND TH E SAID ACCOUNTS ARE TO BE INCLUDED IN THE RECORDS OF THE H OUSING SOCIETY AND MOREOVER AN UNDERSTANDING HAS BEEN ARRI VED AT BETWEEN THE PARTIES THAT WITH REGARD TO THE AUDIT O F THE SAID HOUSING SOCIETY, THE ACCOUNTS PROCURED BY THE SAID ORGANIZER BY THE SAID HOUSING SOCIETY AND THE ACCOU NTS AS PER THE GRADUAL PROGRESS OF THE SAID SCHEME IS TO B E UNDERSTOOD AS ACCEPTABLE AND THE RECORDS AND BOOKS OF ACCOUNTS OF THE SAID ORGANIZER WITH REGARD TO THE S AME WOULD NOT BE SUBJECT TO AUDIT OR VERIFICATION, WHIC H HAS BEEN CLEARLY UNDERSTOOD BY BOTH THE PARTIES. (7.11) AS PER THE SAID SCHEME, THE SAID ORGANIZER H AS GIVEN RELATED ESTIMATED LUMPSUM PRICE OF THE SAID SCHEME AND THE CONSTRUCTION OF THE TENEMENTS ETC. AS SHOWN IN THE PLAN BUT AS PER THE STAGEWISE PROGRESS OF THE SAID SCHEM E AND AS PER THE CHANGES THAT MAY BE MADE IN THE SAID SCH EME AND WHATEVER CHANGES THAT MAY BE MADE IN THE CONCER NED CIRCUMSTANCES, THE SAID ORGANIZER WOULD BE AUTHORIS ED TO REVISE THE SAID ESTIMATED AMOUNT AND THE SAME WOULD BE ACCEPTABLE AND BINDING TO THE SAID HOUSING SOCIETY AND ITS IT(SS)A NO. 383/AHD/2014 ASST. YEAR 2006-07 27 MEMBERS AND THE NEW MEMBERS GETTING ENROLLED IN THE SAID SCHEME. (7.13) IF THE FIRST PARTY IS REQUIRED TO SUBMIT NEC ESSARY APPLICATIONS, REPLIES, STATEMENTS AND FORMS FOR AND ON BEHALF OF THE SECOND PARTY IN ANY GOVERNMENT OR SEMI GOVERNMENT O FFICE OR LEGAL COURT OR ANY OTHER PLACE THEN ALL SUCH PRO CEEDINGS IS TO BE DONE BY THE FIRST PARTY AND THE FIRST PARTY I S HEREBY EMPOWERED FOR THE SAME. INSPITE OF THAT IN FUTURE I F ANY SPECIFIC POWER OF ATTORNEY OR AUTHORITY IS REQUIRED TO BE SUBMITTED THEN AT THAT TIME THE SECOND PARTY WILL H AVE TO GIVE CONCERNED AUTHORITY OR POWER OF ATTORNEY IN FAVOUR OF THE FIRST PARTY. 25. BY GOING THROUGH THE VARIOUS CLAUSES OF THE DEV ELOPMENT AGREEMENT DATED 28.8.2003 BETWEEN THE ASSESSEE AND THE LAND OWNER SHREE MADHAV CO-OP. HOUSING SOCIETY, IT CAN B E CONSTRUED THAT THE ASSESSEE IS HAVING MUCH WIDER AUTHORITY R IGHTS AND POWERS FOR ACCOMPLISHING THE PLAN OF THE HOUSING PR OJECT AND CERTAINLY SUCH TYPE OF POWERS AND RIGHTS WHICH ARE EXERCISED ALONG WITH COLLECTION OF REVENUE FROM EACH UNIT OF THE HO USING PROJECT AND SUCCESSFUL COMPLETION OF EACH PART OF THE HOUSING P ROJECT VERY WELL JUSTIFY TO LARGE EXTENT THAT ASSESSEE WAS WORKING A S DEVELOPER AND NOT WORKS CONTRACTOR. FURTHER WE HAVE ALSO EXAMINED THE FINANCIAL STATEMENT OF THE ASSESSEE AND FIND THAT IN THE AUDI TED BALANCE SHEET AS ON 31.3.2006 ASSESSEE HAS SHOWN SUNDRY DEB TOR OF RS.1,99,21,445/-, THE LIST OF WHICH INCLUDES 42 PAR TIES INCLUDING SHRI MADHAV CO-OP. HOUSING SOCIETY LTD. BEING A SUNDRY D EBTOR OF RS.8,87,166/- AND THE REMAINING AMOUNT OF DEBTOR I. E. RS.1,90,34,279/- ARE BEING DEBIT BALANCE IN THE NAM ES OF VARIOUS FLAT OWNERS FROM WHOM THE ASSESSEE HAD YET TO RECEI VE THE AMOUNT IT(SS)A NO. 383/AHD/2014 ASST. YEAR 2006-07 28 WHICH IT HAS SPENT FOR THE HOUSING PROJECT. THIS SH OWS THAT ASSESSEE WAS NOT WORKING ONLY AS A WORK CONTRACTOR ON BEHALF OF SHREE MADHAV CO-OP. HOUSING SOCIETY LTD. ELSE THE A SSESSEE WOULD HAVE BEEN SHOWING THE COMPLETE OUTSTANDING BA LANCE IN THE NAME OF SHREE MADHAV CO-OP. HOUSING SOCIETY LTD. TH IS FACT HAS NOT BEEN CONTROVERTED BY THE REVENUE AT ANY STAGE B ELOW AND, THEREFORE, LOOKING TO THE TERMS AND CONDITIONS OF T HE DEVELOPMENT AGREEMENT AND AUDITED FINANCIAL STATEMENT OF THE AS SESSEE, WE ARE OF THE VIEW THAT ASSESSEE COMES UNDER THE CATEG ORY OF DEVELOPER AND NOT OF WORKS CONTRACTOR AND, THEREFOR E, COMES WITHIN THE DEFINITION OF DEVELOPER AS REFERRED IN THE PROV ISIONS OF SECTION 80IB(10) OF THE ACT. (2) WHETHER THE ASSESSEE FULFILLS ALL THE CONDITIONS OF SECTION 80IB(10) OF THE ACT OTHER THAN THE MATTERS MENTIONED AT POINT (1) ABOVE; 26. THE ISSUE ENTAILS UPON TO EXAMINE THAT WHETHER THE ASSESSEE (NOW AS WE HAVE HELD THAT ASSESSEE IS A DE VELOPER) FULFILLS ALL THE OTHER CONDITIONS WHICH ARE REQUIRE D TO BE ADHERED UPON FOR CLAIMING THE DEDUCTION U/S 80IB(10). WE FI ND THAT ASSESSEE HAS BEEN GRANTED DEDUCTION U/S 80IB(10) AT RS.75,72,250/- IN ASST. YEAR 2004-05 WHICH WAS ASSE SSED U/S 143(3) OF THE ACT BY ITO, WARD 9(2), AHMEDABAD ON 2 8.03.2006. SIMILARLY, FOR ASST. YEAR 2005-06 ASSESSEE WAS ALLO WED DEDUCTION U/S 80IB(10) AT RS.1,66,40,818/- VIDE ASSESSMENT OR DER U/S 143(3) OF THE ACT DATED 6.7.2007 ISSUED BY ITO WD-9(2), AH MEDABAD AND EVEN FOR ASST. YEAR 2006-07 ASSESSEE WAS GRANTED DE DUCTION AT IT(SS)A NO. 383/AHD/2014 ASST. YEAR 2006-07 29 RS.1,32,19,672/- U/S 80IB(10) OF THE ACT IN THE ASS ESSMENT COMPLETED U/S 143(3) OF THE ACT ON 4.1.2008. SO FRO M THESE STATISTICS IT IS AMPLY CLEAR THAT ASSESSEE HAS BEEN CONSISTENTLY ALLOWED BENEFIT U/S 80IB(10) OF THE ACT BY THE ASSE SSING OFFICER AND CERTAINLY ASSESSEE BEING A DEVELOPER MUST HAVE FURN ISHED ALL THE RELEVANT INFORMATION REQUIRED TO JUSTIFY ITS CLAIM TO BE ELIGIBLE FOR DEDUCTION U/S 80IB(10). FURTHER IN SUPPORT OF OUR A BOVE OBSERVATIONS, WE FIND THAT CO-ORDINATE BENCH IN THE CASE OF GOLDEN DEVELOPER VS. ITO (OSD), RANGE-9, AHMEDABAD, IN ITA NO.496/AHD/2011 FOR ASST. YEAR 2007-08, VIDE ITS OR DER DATED 13.11.2014 HAS DEALT WITH SIMILAR ISSUE AND HAS HEL D AS FOLLOWS :- 4.2. THE CONTENTION OF THE ASSESSEE IS THAT IN EAR LIER YEARS CLAIM OF THE ASSESSEE WAS ALLOWED BY THE DEPARTMENT IN SCRUTINY ASSESSMENT. T HE LD.COUNSEL FOR THE ASSESSEE HAS DRAWN OUR ATTENTION TOWARDS PAGE-7 OF THE PAPER-BOO K, WHEREIN THE ASSESSMENT ORDER PERTAINING TO THE AY 2005-06 IS ENCLOSED. THE AO HA S ALLOWED THE CLAIM OF THE ASSESSEE FOR DEDUCTION U/S.80-IB(10) OF THE ACT. AT PAGE NO.10 OF THE PAPER-BOOK IS ENCLOSED THE ASSESSMENT PERTAINING TO THE AY 2006-0 7, WHEREIN ALSO THE AO ALSO ALLOWED THE CLAIM OF THE ASSESSEE OF DEDUCTION U/S. 80IB(10) OF THE ACT. FACTS ARE IDENTICAL AND PROJECT IS ALSO SAME AND THE REVENUE HAS NOT POINTED OUT AS TO HOW THE CLAIM THAT WAS ALLOWED IN EARLIER YEARS AND ITA NO. 496 /AHD/2011 M/S.GOLDEN DEVELOPERS VS. ITO (OSD) ASST.YEAR 2007-08 - 6 - UNDER THE SAME FACTS AND CIRCUMSTANCES WOULD BE DISALLOWABLE IN THE YEAR UND ER CONSIDERATION. IT IS SETTLED POSITION OF LAW THAT EVERY YEAR IS AN INDEPENDENT Y EAR, HOWEVER, THE RULE OF CONSISTENCY IS TO BE ADOPTED BY THE REVENUE AUTHORI TY WHILE FRAMING THE ASSESSMENT. IN THE PRESENT CASE, THE REVENUE HAS NOT BROUGHT OU T ANY NEW MATERIAL ON THE BASIS OF WHICH A DIFFERENT VIEW HAS BEEN TAKEN FOR THE YEAR UNDER CONSIDERATION. IF THE ASSESSEE WAS DEVELOPER IN THE EARLIER YEARS, IT WOULD REMA IN SO IN THE FOLLOWING YEARS UNLESS A NEW MATERIAL COMES TO NOTICE OF AO OR OTHERWISE WHI CH WAS AVAILABLE ON RECORD BUT WAS NOT CONSIDERED IN EARLIER YEARS. NOWHERE IN THE ORDERS OF THE AUTHORITIES BELOW THIS FACT HAS BEEN RECORDED. THEREFORE, IN OUR CONS IDERED VIEW, THE REVENUE WAS NOT JUSTIFIED IN REJECTING THE CLAIM FOR DEDUCTION U/S. 80IB(10) OF THE ACT IN THIS YEAR. IT IS ALSO NOTEWORTHY THAT THE AUTHORITIES BELOW HAVE NOT RECORDED ANY FINDING AS TO WHAT WAS THE REMUNERATION FIXED BY THE CONTRACT AND HOW THE SUBMISSION OF THE ASSESSEE THAT IT WAS BEARING ALL RISKS AND CONSEQUENCES ARIS ING FROM THE CONTRACT WERE NOT CORRECT. IN FACT, THE AO HAS STATED THESE STIPULATI ONS ARE ONLY INTENDED TO MAKE THE SOCIETY TOOTHLESS BUT THEY CANNOT CONVERT BY ANY ST RETCH OF IMAGINATION AN AGREEMENT IT(SS)A NO. 383/AHD/2014 ASST. YEAR 2006-07 30 FOR CONSTRUCTION INTO A CONVEYANCE DEED IN THE EYES OF THE LAW. IT IS NOT DISPUTED THAT SUCH TERMS AND CONDITIONS WERE IN THE AGREEMENT IN THE EARLIER YEARS ALSO. ON THE BASIS OF SUCH TERMS THE ASSESSEE WAS FOUND TO HAVE FULFIL LED THE CONDITIONS AS ENVISAGED U/S.80IB(10) OF THE ACT. IN OUR CONSIDERED VIEW, TH E CONSTRUCTION OF ANY AGREEMENT CANNOT BE DIFFERENT IN TWO DIFFERENT ASSESSMENT YEA RS, THEREFORE THE ORDERS OF THE AUTHORITIES BELOW REJECTING THE CLAIM OF DEDUCTION U/S.80-IB(10) OF THE ACT CANNOT BE CONFIRMED, MORE ITA NO.496 /AHD/2011 M/S.GOLDEN DEV ELOPERS VS. ITO (OSD) ASST.YEAR 2007-08 - 7 - PARTICULARLY IN THE LIGHT OF THE JUDGEMENT OF THE HONBLE GUJARAT HIGH COURT RENDERED IN THE CASE OF CIT VS. RADHE DEVELOPERS REPORTED AT (2012) 341 ITR 403 (GUJ.) AND FOLLOWED SUBSEQUENTLY IN A SERIES OF DECISIONS OF THIS TRIBUNAL. THUS, THIS SOLE GROUND OF THE ASSESSEES APPEAL IS ALLOWED AND THE DISALLOWANCE MADE BY THE AO IS HEREBY DELETED. 27. RELYING ON THE ABOVE DECISION OF THE CO-ORDINAT E BENCH IN THE CASE OF GOLDEN DEVELOPER VS. ITO (OSD), RANGE-9 , AHMEDABAD (SUPRA) AND LOOKING TO THE FACTS OF THE C ASE OF ASSESSEE AND APPLYING THE RATIO OF CONSISTENCY, WE FIND THAT ASSESSEE HAS SUCCESSFULLY BEEN ABLE TO FULFILL ALL THE REQUISITE CONDITIONS FOR GETTING DEDUCTION U/S 80IB(10) OF TH E ACT. (3) WHETHER IT IS A PRE-CONDITION FOR CLAIMING EXEMPTIO N U/S 80IB(10) OF THE ACT THAT THE DEVELOPER HOLDS THE LA ND ON WHICH THE HOUSING PROJECT HAS BEEN CONSTRUCTED; 28. OBJECTION HAS BEEN RAISED BY THE ASSESSING OFFI CER DURING ASSESSMENT PROCEEDINGS BY MENTIONING THE FACT THAT ASSESSEE WAS NOT THE OWNER OF THE LAND ON WHICH THE HOUSING PROJ ECT WAS CARRIED OUT AND ALL THE PERMISSIONS WERE GRANTED TO THE LAN D OWNER I.E. SHREE MADHAV CO-OP. HOUSING SOCIETY LTD. AND NOT TH E ASSESSEE AND APPROVAL OF PLAN OF CONSTRUCTION ISSUED BY THE LOCAL AUTHORITY WAS IN THE NAME OF LAND OWNER AND NOT THE ASSESSEE AND THE CONSTRUCTIONS WERE DONE IN A TRIPARTITE AGREEMENT E XECUTED BETWEEN THE MEMBERS, SHREE MADHAV CO-OP. HOUSING SO CIETY LTD. AND THE ASSESSEE AND, THEREFORE, ASSESSING OFFICER WAS OF THE IT(SS)A NO. 383/AHD/2014 ASST. YEAR 2006-07 31 VIEW THAT ASSESSEE IS MERELY A CONTRACTOR FOR THE P URPOSE OF CONSTRUCTION OF THE PROJECT. 29. WE FIND THAT APART FROM THE FACT DISCUSSED ABOV E THAT ASSESSEE IS A DEVELOPER AND NOT A WORKS CONTRACTOR, ASSESSEE IS ELIGIBLE FOR DEDUCTION U/S 80IB(10) OF THE ACT IN A SITUATION WHEN THE LAND ON WHICH THE HOUSING PROJECT IS CONSTRUCTED IS NOT IN THE OWNERSHIP OF THE DEVELOPER. THIS FINDING IS BASED O N THE DECISION OF HON. JURISDICTIONAL HIGH COURT IN THE CASE OF RA DHE DEVELOPERS WHEREIN THEIR LORDSHIPS HAS GIVEN THE DECISION THAT THE ASSESSEES WERE ENTITLED TO THE BENEFIT UNDER SECTION 80IB(10) OF THE ACT EVEN WHERE THE TITLE OF THE LANDS HAD NOT PASSED ON TO T HE ASSESSEES AND IN SOME CASES, THE DEVELOPMENT PERMISSIONS MAY ALSO HAVE BEEN OBTAINED IN THE NAME OF THE ORIGINAL LAND OWNE RS. RELEVANT EXTRACT OF THE DECISION IS AS UNDER :- 39. WE MAY NOW MOVE ON TO THE QUESTION OF OWNERSHI P OF THE LAND. 40. RELEVANT PORTION OF SECTION 2(47) READS AS UNDE R:- 2(47): TRANSFER, IN RELATION TO A CAPITAL ASSET, INCLUDES,- (V) ANY TRANSACTION INVOLVING THE ALLOWING OF THE P OSSESSION OF ANY IMMOVABLE PROPERTY TO BE TAKEN OR RETAINED IN PART PERFORMANC E OF A CONTRACT OF THE NATURE REFERRED TO IN SECTION 53A OF THE TRANSFER OF PROPE RTY ACT, 1882(4 OF 1882); OR SECTION 53A OF THE TRANSFER OF PROPERTY ACT READ S AS UNDER:- 53A. WHERE ANY PERSON CONTRACTS TO TRANSFER FOR CON SIDERATION ANY IMMOVABLE PROPERTY BY WRITING SIGNED BY HIM OR ON HIS BEHALF FROM WHICH THE TERMS NECESSARY TO CONSTITUTE THE TRANSFER CAN BE ASCERTAINED WITH REA SONABLE CERTAINTY, AND THE TRANSFEREE HAS, IN PART PERFORMANCE OF THE CONTRACT , TAKEN POSSESSION OF THE PROPERTY OR ANY PART THEREOF, OR THE TRANSFEREE, BEING ALREA DY IN POSSESSION, CONTINUES IN POSSESSION IN PART PERFORMANCE OF THE CONTRACT AND HAS DONE SOME ACT IN FURTHERANCE OF THE CONTRACT, AND THE TRANSFEREE HAS PERFORMED O R IS WILLING TO PERFORM HIS PART OF THE CONTRACT, THEN NOTWITHSTANDING THAT WHERE THERE IS AN INSTRUMENT OF TRANSFER, THAT THE TRANSFER HAS NOT BEEN COMPLETED IN THE MANNER P RESCRIBED THEREFOR BY THE LAW FOR THE TIME BEING IN FORCE, THE TRANSFEROR OR ANY PERS ON CLAIMING UNDER HIM SHALL BE DEBARRED FROM ENFORCING AGAINST THE TRANSFEREE AND PERSONS CLAIMING UNDER HIM ANY IT(SS)A NO. 383/AHD/2014 ASST. YEAR 2006-07 32 RIGHT IN RESPECT OF THE PROPERTY OF WHICH THE TRANS FEREE HAS TAKEN OR CONTINUED IN POSSESSION, OTHER THAN A RIGHT EXPRESSLY PROVIDED B Y THE TERMS OF THE CONTRACT: PROVIDED THAT NOTHING IN THIS SECTION SHALL AFFECT THE RIGHTS OF A TRANSFEREE FOR CONSIDERATION WHO HAS NO NOTICE OF THE CONTRACT OR OF THE PART PERFORMANCE THEREOF. 41. IN THE PRESENT CASE, WE FIND THAT THE ASSESSEE HAD, IN PART PERFORMANCE OF THE AGREEMENT TO SELL THE LAND IN QUESTION, WAS GIVEN POSSESSION THEREOF AND HAD ALSO CARRIED OUT THE CONSTRUCTION WORK FOR DEVELOPMENT OF THE HOUSING PR OJECT. COMBINED READING OF SECTION 2(47)(V) AND SECTION 53A OF THE TRANSFER OF PROPERT Y ACT WOULD LEAD TO A SITUATION WHERE THE LAND WOULD BE FOR THE PURPOSE OF INCOME TAX ACT DEE MED TO HAVE BEEN TRANSFERRED TO THE ASSESSEE. IN THAT VIEW OF THE MATTER, FOR THE PURPO SE OF INCOME DERIVED FROM SUCH PROPERTY, THE ASSESSEE WOULD BE THE OWNER OF THE LAND FOR THE PURPOSE OF THE SAID ACT. IT IS TRUE THAT THE TITLE IN THE LAND HAD NOT YET PASSED ON TO THE ASSE SSEE. IT IS EQUALLY TRUE THAT SUCH TITLE WOULD PASS ONLY UPON EXECUTION OF A DULY REGISTERED SALE DEED. HOWEVER, WE ARE, FOR THE LIMITED PURPOSE OF THESE PROCEEDINGS, NOT CONCERNED WITH TH E QUESTION OF PASSING OF THE TITLE OF THE PROPERTY, BUT ARE ONLY EXAMINING WHETHER FOR THE PU RPOSE OF BENEFIT UNDER SECTION 80IB (10) OF THE ACT, THE ASSESSEE COULD BE CONSIDERED AS THE OW NER OF THE LAND IN QUESTION. AS HELD BY THE APEX COURT IN THE CASE OF MYSORE MINERALS LTD. VS. COMMISSIONER OF INCOME TAX (SUPRA), AND IN THE CASE OF COMMISSIONER OF INCOME-TAX VS. P ODAR CEMENT PVT. LTD. AND OTHERS (SUPRA), THE OWNERSHIP HAS BEEN UNDERSTOOD DIFFEREN TLY IN DIFFERENT CONTEXT. FOR THE LIMITED PURPOSE OF DEDUCTION UNDER SECTION 80IB(10) OF THE ACT, THE ASSESSEE HAD SATISFIED THE CONDITION OF OWNERSHIP ALSO; EVEN IF IT WAS NECESSA RY. 42. IN THE CASE OF SHAKTI CORPORATION SIMILARLY THE ASSESSEE HAD ENTERED INTO A DEVELOPMENT AGREEMENT WITH THE LAND OWNERS ON SIMILAR TERMS AND CONDITIONS. IT IS TRUE THAT THERE WERE CERTAIN MINOR DIFFERENCES, HOWEVER, IN SO FAR AS AL L MATERIAL ASPECTS ARE CONCERNED, WE SEE NO SIGNIFICANT OR MATERIAL DIFFERENCE. HERE ALSO ASSES SEE WAS GIVEN FULL RIGHTS TO DEVELOP THE LAND BY PUTTING UP THE HOUSING PROJECT AT ITS OWN RISK A ND COST. ENTIRE PROFIT FLOWING THEREFROM WAS TO BE RECEIVED BY THE ASSESSEE. IT IS TRUE THAT THE AGREEMENT PROVIDED THAT THE ASSESSEE WOULD RECEIVE REMUNERATION. HOWEVER, SUCH ONE WORD USED IN THE AGREEMENT CANNOT BE INTERPRETED IN ISOLATION OUT OF CONTEXT. WHEN WE RE AD THE ENTIRE DOCUMENT, AND ALSO CONSIDER THAT IN FORM OF REMUNERATION THE ASSESSEE HAD TO BEAR THE LOSS OR AS THE CASE MAY BE TAKE HOME THE PROFITS, IT BECOMES ABUNDANTLY CLEAR THAT THE PROJECT WAS BEING DEVELOPED BY HIM AT HIS OWN RISK AND COST AND NOT THAT OF THE LAND OWNE RS. ASSESSEE THUS WAS NOT WORKING AS A WORKS CONTRACT. INTRODUCTION OF THE EXPLANATION TO SECTION 80IB(10) THEREFORE IN THIS GROUP OF CASES ALSO WILL HAVE NO EFFECT. 43. WE MAY AT THIS STAGE EXAMINE THE RATIO OF DIFFE RENT JUDGMENTS CITED BY THE REVENUE. THE DECISION IN CASE OF FAQIR CHAND GULATI VS. UPPAL AG ENCIES PRIVATE LIMITED AND ANOTHER (SUPRA) WAS RENDERED IN THE BACKGROUND OF THE PROVI SIONS OF THE CONSUMER PROTECTION ACT. IN THE CASE BEFORE THE APEX COURT, THE LAND OWNER HAD ENTERED INTO AN AGREEMENT WITH THE BUILDER REQUIRING HIM TO CONSTRUCT APARTMENT BUILDI NG ON THE LAND IN QUESTION. PART OF THE CONSTRUCTED AREA WAS TO BE RETAINED BY THE OWNER OF THE LAND. IN CONSIDERATION OF THE LAND PRICE REMAINING AREA WAS FREE FOR THE BUILDER TO SE LL. WHEN THE LAND OWNER FOUND SERIES OF DEFECTS IN THE CONSTRUCTION, HE APPROACHED THE CONS UMER PROTECTION FORUM. IT WAS IN THIS BACKGROUND THE APEX COURT WAS CONSIDERING WHETHER T HE LAND OWNER CAN BE STATED TO BE A CONSUMER AND THE BUILDER A SERVICE PROVIDER. IT WAS IN THIS BACKGROUND THAT THE APEX COURT MADE CERTAIN OBSERVATIONS. SUCH OBSERVATIONS CANNOT BE SEEN OUT OF CONTEXT NOR CAN THE SAME BE APPLIED IN THE PRESENT CASE WHERE WE ARE CO NCERNED WITH THE DEDUCTION UNDER SECTION 80IB( 10) OF THE ACT. 44. IN THE CASE K. RAHEJA DEVELOPMENT CORPORATION V S. STATE OF KARNATAKA (SUPRA), THE APEX COURT CONSIDERED WHETHER THE BUILDER, WHO WAS ENGAG ED IN THE DEVELOPMENT OF PROPERTY AND FOR SUCH PURPOSE HAD ENTERED INTO AN AGREEMENT WITH THE LAND OWNER, CAN BE STATED TO HAVE EXECUTED WORKS CONTRACT. SUCH INTERPRETATION WAS RE NDERED IN THE BACKGROUND OF THE TERM IT(SS)A NO. 383/AHD/2014 ASST. YEAR 2006-07 33 WORKS CONTRACT DEFINED IN SECTION 2(1)(V-I) OF TH E KARNATAKA SALES TAX ACT, WHICH READS AS UNDER:- 12. SECTION 2(1)(V-I) IS RELEVANT. IT DEFINES A WORKS CONTRACT AS FOLLOWS: 2.(1)(V-I) WORKS CONTRACT INCLUDES ANY AGREEMENT FOR CARRYING OUT FOR CASH, DEFERRED PAYMENT OR OTHER VALUABLE CONSIDERATION, THE BUILDI NG, CONSTRUCTION, MANUFACTURE, PROCESSING, FABRICATION, ERECTION, INSTALLATION, FI TTING OUT, IMPROVEMENT, MODIFICATION, REPAIR OR COMMISSIONING OF ANY MOVABLE OR IMMOVABLE PROPERTY; IT IS THUS TO BE SEEN THAT UNDER THE KARNATAKA SALE S TAX ACT THE DEFINITION OF THE WORDS WORKS CONTRACT IS VERY WIDE. IT IS NOT REST RICTED TO A WORKS CONTRACT AS COMMONLY UNDERSTOOD I.E. A CONTRACT TO DO SOME WORK ON BEHALF OF SOMEBODY ELSE. IT ALSO INCLUDES ANY AGREEMENT FOR CARRYING OUT EITHER FOR CASH OR FOR DEFERRED PAYMENT OR FOR ANY OTHER VALUABLE CONSIDERATION, THE BUILDING AND CONS TRUCTION OF ANY MOVABLE AND IMMOVABLE PROPERTY. (EMPHASIS SUPPLIED) THE DEFINITION WOULD THEREFORE TAKE WITHIN ITS AMBI T ANY TYPE OF AGREEMENT WHEREIN CONSTRUCTION OF A BUILDING TAKES PLACE EITHER FOR C ASH OR DEFERRED PAYMENT, OR VALUABLE CONSIDERATION. TO BE ALSO NOTED THAT THE DEFINITION DOES NOT LAY DOWN THAT THE CONSTRUCTION MUST BE ON BEHALF OF AN OWNER OF THE P ROPERTY OR THAT THE CONSTRUCTION CANNOT BE BY THE OWNER OF THE PROPERTY. THUS EVEN I F AN OWNER OF PROPERTY ENTERS INTO AN AGREEMENT TO CONSTRUCT FOR CASH, DEFERRED PAYMEN T OR VALUABLE CONSIDERATION A BUILDING OR FLATS ON BEHALF OF ANYBODY ELSE, IT WOU LD BE A WORKS CONTRACT WITHIN THE MEANING OF THE TERM AS USED UNDER THE SAID ACT. IT WAS IN BACKGROUND OF THIS DEFINITION PROVIDED BY THE STATUTE THAT THE APEX COURT CONCLUDED THAT THE AGREEMENT WAS ONE OF WORKS CONTRACT. THE A PEX COURT OBSERVED THAT THE TERM WORKS CONTRACT CONTAINED IN THE ACT IS INCLUSIVE DEFINITI ON AND INCLUDES NOT MERELY THE WORKS CONTRACT AS NORMALLY UNDERSTOOD BUT IT IS A WIDE DEFINITION WHICH INCLUDES ANY AGREEMENT FOR CARRYING OUT BUILDING OR CONSTRUCTION ACTIVITY FOR CASH, DEF ERRED PAYMENT OR OTHER VALUABLE CONSIDERATION. THUS THE INTERPRETATION RENDERED BY THE APEX COURT IN THE SAID DECISION WAS BASED ON NOT THE NORMAL MEANING OF TERM WORKS CONT RACT BUT ON THE SPECIAL MEANING ASSIGNED TO IT UNDER THE ACT ITSELF, WHICH PROVIDED FOR A DEFINITION OF THE INCLUSIVE NATURE. 45. UNDER THE CIRCUMSTANCES, WE ARE OF THE OPINION THAT THE TRIBUNAL COMMITTED NO ERROR IN HOLDING THAT THE ASSESSEES WERE ENTITLED TO THE BEN EFIT UNDER SECTION 80IB(10) OF THE ACT EVEN WHERE THE TITLE OF THE LANDS HAD NOT PASSED ON TO T HE ASSESSEES AND IN SOME CASES, THE DEVELOPMENT PERMISSIONS MAY ALSO HAVE BEEN OBTAINED IN THE NAME OF THE ORIGINAL LAND OWNERS. 30. FURTHER IN THE CASE OF CIT VS. MOON STAR DEVELO PERS IN TAX APPEAL NO.549 OF 2008 & OTHERS, VIDE JUDGMENT DATED 5 & 11/03/2014, HON. JURISDICTIONAL HIGH COURT ON SIMIL AR ISSUE HAS HELD AS UNDER :- 36. WE HAVE NOTED AT SOME LENGTH, THE RELEVANT TER MS AND CONDITIONS OF THE DEVELOPMENT AGREEMENTS BETWEEN TH E IT(SS)A NO. 383/AHD/2014 ASST. YEAR 2006-07 34 ASSESSEES AND THE LAND OWNERS IN CASE OF RADHE DEVE LOPERS. WE ALSO NOTED THE TERMS OF THE AGREEMENT OF SALE ENTER ED INTO BETWEEN THE PARTIES. SUCH CONDITIONS WOULD IMMEDIAT ELY REVEAL THAT THE OWNER OF THE LAND HAD RECEIVED PART OF SAL E CONSIDERATION. IN LIEU THEREOF HE HAD GRANTED DEVELOPMENT PERMISSI ON TO THE ASSESSEE. HE HAD ALSO PARTED WITH THE POSSESSION OF THE LAND. THE DEVELOPMENT OF THE LAND WAS TO BE DONE ENTIRELY BY THE ASSESSEE BY CONSTRUCTING RESIDENTIAL UNITS THEREON AS PER THE PLANS APPROVED BY THE LOCAL AUTHORITY. IT WAS SPECI FIED THAT THE ASSESSEE WOULD BRING IN TECHNICAL KNOWLEDGE AND SKI LL REQUIRED FOR EXECUTION OF SUCH PROJECT. THE ASSESSEE HAD TO PAY THE FEES TO THE ARCHITECTS AND ENGINEERS. ADDITIONALLY, ASSESSE E WAS ALSO AUTHORIZED TO APPOINT ANY OTHER ARCHITECT OR ENGINE ER, LEGAL ADVISER AND OTHER PROFESSIONALS. HE WOULD APPOINT S UBCONTRACTOR OR LABOUR CONTRACTOR FOR EXECUTION OF THE WORK. THE ASSESSEE WAS AUTHORIZED TO ADMIT THE PERSONS WILLING TO JOIN THE SCHEME. THE ASSESSEE WAS AUTHORISED TO RECEIVE THE CONTRIBUTION S AND OTHER DEPOSITS AND ALSO RAISE DEMANDS FROM THE MEMBERS FO R DUES AND EXECUTE SUCH DEMANDS THROUGH LEGAL PROCEDURE. IN CA SE, FOR SOME REASON, THE MEMBER ALREADY ADMITTED IS DELETED , THE ASSESSEE WOULD HAVE THE FULL RIGHT TO INCLUDE NEW M EMBER IN PLACE OF OUTGOING MEMBER. HE HAD TO MAKE NECESSARY FINANCIAL ARRANGEMENTS FOR WHICH PURPOSE HE COULD RAISE FUNDS FROM THE FINANCIAL INSTITUTIONS, BANKS ETC. THE LAND OWNERS AGREED TO GIVE NECESSARY SIGNATURES, AGREEMENTS, AND EVEN POWER OF ATTORNEY TO FACILITATE THE WORK OF THE DEVELOPER. IN SHORT, THE ASSESSEE HAD UNDERTAKEN THE ENTIRE TASK OF DEVELOPMENT, CONSTRUC TION AND SALE OF THE HOUSING UNITS TO BE LOCATED ON THE LAND BELO NGING TO THE ORIGINAL LAND OWNERS. IT WAS ALSO AGREED BETWEEN TH E PARTIES THAT THE ASSESSEE WOULD BE ENTITLED TO USE THE THE FULL FSI AS PER THE EXISTING RULES AND REGULATIONS. HOWEVER, IN FUTURE, RULES BE AMENDED AND ADDITIONAL FSI BE AVAILABLE, THE ASSESS EE WOULD HAVE THE FULL RIGHT TO USE THE SAME ALSO. THE SALE PROCEEDS OF THE UNITS ALLOTTED BY THE ASSESSEE IN FAVOUR OF THE MEM BERS ENROLLED WOULD BE APPROPRIATED TOWARDS THE LAND PRICE. EVENT UALLY AFTER PAYING OFF THE LAND OWNER AND THE ERSTWHILE PROPOSE D PURCHASERS, THE SURPLUS AMOUNT WOULD REMAIN WITH THE ASSESSEE. SUCH TERMS AND CONDITIONS UNDER WHICH THE ASSESSEE UNDERTOOK T HE DEVELOPMENT PROJECT AND TOOK OVER THE POSSESSION OF THE LAND FROM THE ORIGINAL OWNER, LEAVES LITTLE DOUBT IN OUR MIND THAT THE ASSESSEE HAD TOTAL AND COMPLETE CONTROL OVER THE LA ND IN QUESTION. THE ASSESSEE COULD PUT THE LAND TO USE AS AGREED BETWEEN THE PARTIES. THE ASSESSEE HAD FULL AUTHORIT Y AND ALSO IT(SS)A NO. 383/AHD/2014 ASST. YEAR 2006-07 35 RESPONSIBILITY TO DEVELOP THE HOUSING PROJECT BY NO T ONLY PUTTING UP THE CONSTRUCTION BUT BY CARRYING OUT VARIOUS OTHER ACTIVITIES INCLUDING ENROLLING MEMBERS, ACCEPTING MEMBERS, CAR RYING OUT MODIFICATIONS ENGAGING PROFESSIONAL AGENCIES AND SO ON. MOST SIGNIFICANTLY, THE RISK ELEMENT WAS ENTIRELY THAT O F THE ASSESSEE. THE LAND OWNER AGREED TO ACCEPT ONLY A FIXED PRICE FOR THE LAND IN QUESTION. THE ASSESSEE AGREED TO PAY OFF THE LAND O WNER FIRST BEFORE APPROPRIATING ANY PART OF THE SALE CONSIDERA TION OF THE HOUSING UNITS FOR HIS BENEFIT. IN SHORT, ASSESSEE T OOK THE FULL RISK OF EXECUTING THE HOUSING PROJECT AND THEREBY MAKING PR OFIT OR LOSS AS THE CASE MAY BE. THE ASSESSEE INVESTED ITS OWN FUND S IN THE COST OF CONSTRUCTION AND ENGAGEMENT OF SEVERAL AGENCIES. LAND OWNER WOULD RECEIVE A FIX PREDETERMINED AMOUNT TOWARDS TH E PRICE OF LAND AND WAS THUS INSULATED AGAINST ANY RISK. 37. BY NO STRETCH OF IMAGINATION CAN IT BE SAID THA T THE ASSESSEE ACTED ONLY AS A WORKS CONTRACTOR. THE TERMS WORKS C ONTRACTOR HAS BEEN RECEIVING JUDICIAL ATTENTION IN SEVERAL CASES. XXXXXX XXXXXX 41. IN THE PRESENT CASE, WE FIND THAT THE ASSESSEE HAD, IN PART PERFORMANCE OF THE AGREEMENT TO SELL THE LAND IN QU ESTION, WAS GIVEN POSSESSION THEREOF AND HAD ALSO CARRIED OUT T HE CONSTRUCTION WORK FOR DEVELOPMENT OF THE HOUSING PR OJECT. COMBINED READING OF SECTION 2(47)(V) AND SECTION 53 A OF THE TRANSFER OF PROPERTY ACT WOULD LEAD TO A SITUATION WHERE THE LAND WOULD BE FOR THE PURPOSE OF INCOME TAX ACT DEEMED T O HAVE BEEN TRANSFERRED TO THE ASSESSEE. IN THAT VIEW OF T HE MATTER, FOR THE PURPOSE OF INCOME DERIVED FROM SUCH PROPERTY, T HE ASSESSEE WOULD BE THE OWNER OF THE LAND FOR THE PURPOSE OF T HE SAID ACT. IT IS TRUE THAT THE TITLE IN THE LAND HAD NOT YET PASS ED ON TO THE ASSESSEE. IT IS EQUALLY TRUE THAT SUCH TITLE WOULD PASS ONLY UPON EXECUTION OF A DULY REGISTERED SALE DEED. HOWEVER, WE ARE, FOR THE LIMITED PURPOSE OF THESE PROCEEDINGS, NOT CONCERNED WITH THE QUESTION OF PASSING OF THE TITLE OF THE PROPERTY, B UT ARE ONLY EXAMINING WHETHER FOR THE PURPOSE OF BENEFIT UNDER SECTION 80IB (10) OF THE ACT, THE ASSESSEE COULD BE CONSIDERED A S THE OWNER OF THE LAND IN QUESTION. AS HELD BY THE APEX COURT IN THE CASE OF MYSORE MINERALS LTD. VS COMMISSIONER OF INCOME TAX (SUPRA), AND IN THE CASE OF COMMISSIONER OF INCOMETAX VS. PO DAR CEMENT PVT. LTD. AND OTHERS (SUPRA), THE OWNERSHIP HAS BEE N UNDERSTOOD IT(SS)A NO. 383/AHD/2014 ASST. YEAR 2006-07 36 DIFFERENTLY IN DIFFERENT CONTEXT. FOR THE LIMITED P URPOSE OF DEDUCTION UNDER SECTION 80IB(10) OF THE ACT, THE AS SESSEE HAD SATISFIED THE CONDITION OF OWNERSHIP ALSO; EVEN IF IT WAS NECESSARY. 42. IN THE CASE OF SHAKTI CORPORATION SIMILARLY THE ASSESSEE HAD ENTERED INTO A DEVELOPMENT AGREEMENT WITH THE LAND OWNERS ON SIMILAR TERMS AND CONDITIONS. IT IS TRUE THAT THERE WERE CERTAIN MINOR DIFFERENCES, HOWEVER, IN SO FAR AS ALL MATERI AL ASPECTS ARE CONCERNED, WE SEE NO SIGNIFICANT OR MATERIAL DIFFER ENCE. HERE ALSO ASSESSEE WAS GIVEN FULL RIGHTS TO DEVELOP THE LAND BY PUTTING UP THE HOUSING PROJECT AT ITS OWN RISK AND COST. ENTIR E PROFIT FLOWING THERE FROM WAS TO BE RECEIVED BY THE ASSESSEE. IT I S TRUE THAT THE AGREEMENT PROVIDED THAT THE ASSESSEE WOULD RECEIVE REMUNERATION. HOWEVER, SUCH ONE WORD USED IN THE AG REEMENT CANNOT BE INTERPRETED IN ISOLATION OUT OF CONTEXT. WHEN WE READ THE ENTIRE DOCUMENT, AND ALSO CONSIDER THAT IN FORM OF REMUNERATION THE ASSESSEE HAD TO BEAR THE LOSS OR AS THE CASE MAY BE TAKE HOME THE PROFITS, IT BECOMES ABUNDANTLY CLEAR THAT THE PROJECT WAS BEING DEVELOPED BY HIM AT HIS OWN R ISK AND COST AND NOT THAT OF THE LAND OWNERS. ASSESSEE THUS WAS NOT WORKING AS A WORKS CONTRACT. INTRODUCTION OF THE EXPLANATIO N TO SECTION 80IB(10) THEREFORE IN THIS GROUP OF CASES ALSO WILL HAVE NO EFFECT. 43. WE MAY AT THIS STAGE EXAMINE THE RATIO OF DIFFE RENT JUDGMENTS CITED BY THE REVENUE. THE DECISION IN CASE OF FAQIR CHAND GULATI VS. UPPAL AGENCIES PRIVATE LIMITED AND ANOTHER (SUP RA) WAS RENDERED IN THE BACKGROUND OF THE PROVISIONS OF THE CONSUMER PROTECTION ACT. IN THE CASE BEFORE THE APEX COURT, THE LAND OWNER HAD ENTERED INTO AN AGREEMENT WITH THE BUILDER REQU IRING HIM TO CONSTRUCT APARTMENT BUILDING ON THE LAND IN QUESTIO N. PART OF THE CONSTRUCTED AREA WAS TO BE RETAINED BY THE OWNER OF THE LAND. IN CONSIDERATION OF THE LAND PRICE REMAINING AREA WAS FREE FOR THE BUILDER TO SELL. WHEN THE LAND OWNER FOUND SERIES O F DEFECTS IN THE CONSTRUCTION, HE APPROACHED THE CONSUMER PROTECTION FORUM. IT WAS IN THIS BACKGROUND THE APEX COURT WAS CONSIDERI NG WHETHER THE LAND OWNER CAN BE STATED TO BE A CONSUMER AND T HE BUILDER A SERVICE PROVIDER. IT WAS IN THIS BACKGROUND THAT TH E APEX COURT MADE CERTAIN OBSERVATIONS. SUCH OBSERVATIONS CANNOT BE SEEN OUT OF CONTEXT NOR CAN THE SAME BE APPLIED IN THE P RESENT CASE WHERE WE ARE CONCERNED WITH THE DEDUCTION UNDER SEC TION 80IB(10) OF THE ACT. XXXXX IT(SS)A NO. 383/AHD/2014 ASST. YEAR 2006-07 37 XXXXX 45. UNDER THE CIRCUMSTANCES, WE ARE OF THE OPINION THAT THE TRIBUNAL COMMITTED NO ERROR IN HOLDING THAT THE ASS ESSEES WERE ENTITLED TO THE BENEFIT UNDER SECTION 80IB(10) OF T HE ACT EVEN WHERE THE TITLE OF THE LANDS HAD NOT PASSED ON TO T HE ASSESSEES AND IN SOME CASES, THE DEVELOPMENT PERMISSIONS MAY ALSO HAVE BEEN OBTAINED IN THE NAME OF THE ORIGINAL LAND OWNE RS. 4. UNDER THE CIRCUMSTANCES, IN THE PRESENT GROUP OF TAX APPEALS ALSO, SUCH QUESTION IS ANSWERED AGAINST THE REVENUE AND I N FAVOUR OF THE ASSESSEES. 31. RESPECTFULLY FOLLOWING THE ABOVE DECISIONS, WE ARE OF THE CONSIDERED VIEW THAT EVEN IN THE SITUATION IF THE A SSESSEE IS NOT THE OWNER OF THE LAND, NOR APPROVAL FOR CONSTRUCTION RE CEIVED FROM THE LOCAL AUTHORITY IS IN ITS NAME BUT STILL ASSESSEE B EING A DEVELOPER AND FULFILLING ALL THE CONDITIONS EMBEDDED IN THE P ROVISIONS OF SECTION 80IB(10) OF THE ACT ASSESSEE IS ELIGIBLE F OR DEDUCTION UNDER SECTION 80IB(10) OF THE ACT. (4) WHETHER THE ASSESSEE IS ELIGIBLE TO CLAIM DEDUCTION U/S 80IB(10) OF THE ACT FOR THE UNDISCLOSED INCOME SURRENDERED DURING SEARCH/SURVEY ACTION IN A SITUAT ION WHEN ASSESSEE HAS BEEN ASSESSED IN PREVIOUS YEARS AND HAS BEEN ALLOWED THE DEDUCTION U/S 80IB(10) OF THE ACT. 32. IN THE CASE OF ASSESSEE PURSUANT TO SEARCH PROC EEDINGS U/S 132 OF THE ACT, ON THE BASIS OF SEIZED PAPERS/DOCUM ENTS ASSESSEE SURRENDERED RS.2,34,39,999/- AS UNDISCLOSED PROFITS FROM THE HOUSING PROJECT NAMELY MADHAV BUNGLOWS BY SHOWING I T IN THE RETURN FILED PURSUANT TO NTICE U/S 153A OF THE ACT. HOWEVER, ASSESSEE SIMULTANEOUSLY CLAIMED DEDUCTION U/S 80IB( 10) OF THE ACT IT(SS)A NO. 383/AHD/2014 ASST. YEAR 2006-07 38 FOR ITS UNDISCLOSED INCOME ON THE GROUND THAT ASSES SEE WAS NOT HAVING ANY OTHER BUSINESS ACTIVITIES EXCEPT THE BUS INESS ACTIVITIES CARRIED ON AS A DEVELOPER OF HOUSING PROJECT COMING WITHIN THE AMBIT OF SECTION 80IB(10) OF THE ACT AND NOR THERE WAS ANY OTHER CHARGE ON THE ASSESSEE OF EARNING THIS UNDISCLOSED INCOME FROM ANY OTHER SOURCES EXCEPT THE BUSINESS ACTIVITY OF W ORKING AS A DEVELOPER OF THE HOUSING PROJECT AND, THEREFORE, AS SESSEE CLAIMED AN ADDITIONAL DEDUCTION OF RS.2,34,39,999/- U/S 80I B(10) OF THE ACT. FROM PERUSAL OF THE RECORDS, WE FIND THAT IN THE GR OUP CASES OF ASSESSEE IN ONE OF THE CASE I.E. MADHAV CORPORATION VS. ACIT CENTRAL CIRCLE-1(4), AHMEDABAD IN IT(SS)A NO.380 TO 382/AHD/2014 FOR ASST. YEAR 2006-07 TO 2008-09 HAS DISCUSSED THE ISSUE IN DETAIL AND HELD AS UNDER :- 5. NEXT ISSUE IN A.Y 2008-09 IS REGARDING ADDITIONA L CLAIM OF DEDUCTION U/S.80IB(10) OF THE ACT. 'MODIFICATION OF THE CORRECT FIGURE IN ORIGINAL GRO UND NO.3 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-I, AHMEDABAD, HAS GROSSLY ERRED IN CONFIR MING ADDITION OF RS. 85,66,228/- BEING ADDITIONAL CLAIM OF DEDUCTION U/S . 80IB(10) ON THE BASIS OF SEIZED RECORDS. THE SAME MAY KINDLY BE DIRECTED TO BE ALLOWED ON SUCH LEGITIMATE CLAIM,' 5.3 IN CASE BEFORE US, ASSESSEE HAS EARNED ADDITION AL INCOME WHICH AMOUNT IS DISCLOSED CONSEQUENCE UPON THE SEARCH, HENCE IT PAR TAKES THE CHARACTER OF BUSINESS INCOME AND THE ASSESSEE HAS ADMITTED THAT THE SAID AMOUNT WAS A PART OF INCOME EARNED FROM THE PROJECT UNDERTAKEN NAMELY BY IT. TH EREFORE, THE AMOUNT HAS DIRECT AND PROXIMATE CONNECTION WITH THE NORMAL BUSINESS/DEVEL OPMENT ACTIVITIES, HENCE AS ELIGIBLE FOR DEDUCTION U/S. 80IB (10) OF THE ACT. O NCE ON THE BASIS OF DECLARATION OF THE ASSESSEE, THE INCOME OF THE ASSESSEE WAS ACCEPTED A ND HAS BEEN ASSESSED IN THE HANDS OF THE ASSESSEE, THE DEPARTMENT HAS ONLY DISPUTED T HE FACTUM THAT THE PROJECT UNDERTAKEN BY THE ASSESSEE FIRM IS NOT ELIGIBLE FOR HOUSING PROJECT U/S. 80IB OF THE ACT. THUS, VIEWING CORRECT INTERPRETATION OF THE PR OVISION OF THE ACT IN THE TUNE OF THE AFORESAID JUDGMENTS, THE UNDISCLOSED INCOME I.E. 'O N MONEY' BEING PART OF BUSINESS INCOME ONLY. THE SAME FORMS PART OF BOOK PROFIT AND IT HAS NO OTHER SOURCES OF IT(SS)A NO. 383/AHD/2014 ASST. YEAR 2006-07 39 INCOME AND WHATEVER INCOME ARISING TO THE ASSESSEE FIRM IS BUSINESS INCOME. THE HEAD OF INCOME HAS TO BE DETERMINED FROM THE NATURE OF BUSINESS WHICH ASSESSEE WAS BEING CARRIED AT THE TIME OF SEARCH. THEREFORE, ADD ITIONAL INCOME DISCLOSED BY THE ASSESSEE BEING PART AND PARCEL OF BUSINESS INCOME O NLY I.E. ALREADY IT(SS)A NOS. 380 TO 382/AHD/2014 ASST. YEARS 2006-07 TO 2008-09 15 D ISCLOSED BY THE ASSESSEE FIRM DURING THE COURSE OF SEARCH HAS BEEN BUSINESS INCOM E AND THE ASSESSEE IS ELIGIBLE FOR DEDUCTION U/S. 80IB(10) OF THE ACT. IN VIEW OF THE ABOVE AND CONSEQUENT TO SEARCH U/S. 132 OF THE ACT, DOCUMENT MARKED AS PAGE NO. 116 AT ANNEX. A/19 WAS SEIZED BY THE DEPARTMENT WHICH CONTAIN NOTING OF CALCULATION OF P ROFIT FOR THE HOUSING PROJECT EXECUTED BY THE ASSESSEE AND SUCH PROFIT WAS INCLUS IVE OF 'ON MONEY' COMPONENT. IN RESPONSE TO NOTICE U/S. 153A OF THE ACT, THE RETURN S OF INCOME U/S. 153A ARE FILED WHICH ARE THE RETURNS OF INCOME U/S. 139 OF THE ACT . THE ASSESSING OFFICER HAS MADE ASSESSMENT ON THE SAID RETURNS INCOME. THE SAID ASS ESSMENT ORDERS WERE CHALLENGED BEFORE THE CONCERN CIT(A), WHO PASSED APPELLATE ORD ERS ON IT NEGATING CLAIM OF ASSESSEE. WE FIND THAT ASSESSEE HAS DEMONSTRATED WI TH SUPPORTIVE DOCUMENTARY EVIDENCE THAT IT IS ELIGIBLE FOR THE CLAIM OF DEDUC TION U/S. 80IB(10) OF THE ACT AND THE SAME IS ALLOWABLE NOT ONLY ON THE PROFIT DISCLOSED IN THE PRE-SEARCH RETURNS OF INCOME FILED U/S. 139(1) BUT ALSO ON THE ENTIRE PROFIT INC LUDING THE ONE DISCLOSED ADDITIONALLY SUBSEQUENT TO THE SEARCH PROCEEDING U/S. 132 OF THE ACT AND DISCLOSED IN THE RETURN OF INCOME FILED U/S. 153A OF THE ACT. EVEN OTHERWISE B ASED ON THE RULE OF CONSISTENCY IF THE ELIGIBLE PROJECT UNDERTAKEN REMAINS THE SAME AN D THE CONDITIONS ARE SATISFIED AND IF DEDUCTION IS ALLOWABLE IN THE FIRST ASSESSMENT YEAR (WHICH IS A.Y. 2006-07 IT(SS)A NOS. 380 TO 382/AHD/2014 ASST. YEARS 2006-07 TO 200 8-09 16 IN THE ASSESSEE'S CASE) THEN THE SAME HAS TO BE ALLOWED IN THE SUBSEQUENT A SSESSMENT YEARS. WE FIND THAT COORDINATE 'D' BENCH OF TRIBUNAL IN ITA NO. 496/AHD /2011 A.Y. 2007- 08 IN THE CASE OF GOLDEN DEVELOPERS VS. ITO (OSD), RANGE-9, AHMEDA BAD DATED 13/11/2014, IT WAS HELD THAT IN CASE THE APPELLANT IS ENTITLED FOR CLA IM OF DEDUCTION U/S. 80IB(10) IN A.Y.2006-07 THEN THE APPELLANT IS ALSO ELIGIBLE FOR THE SAID DEDUCTION IN A.YS.2007-08 & 2008-09. FOLLOWING SAME REASONING, WE HOLD THAT T HE ASSESSEE ON THIS ADDITIONAL INCOME OF RS.85,66,228/- FOR A.Y. 2008-09 IS ENTITL ED FOR CLAIMING DEDUCTION U/S. 80IB(10) OF THE ACT AS DISCUSSED ABOVE. ASSESSING O FFICER IS DIRECTED ACCORDINGLY. 33. RESPECTFULLY APPLYING THE JUDGMENT OF CO-ORDINA TE BENCH IN THE CASE OF MADHAV CORPORATION (SUPRA), WE ARE OF T HE VIEW THAT ASSESSEE IS ELIGIBLE TO CLAIM DEDUCTION U/S 80IB(10 ) OF THE ACT FOR THE UNDISCLOSED INCOME SURRENDERED DURING SEARCH/SU RVEY ACTION IN A SITUATION WHEN ASSESSEE HAS BEEN ASSESSED IN PREV IOUS YEARS AND HAS BEEN ALLOWED DEDUCTION U/S 80IB(10) OF THE ACT AS WELL AS THERE IS NO OTHER SOURCE OF INCOME OF THE ASSESSEE OTHER THAN THE BUSINESS OF DEVELOPING HOUSING PROJECTS. IT(SS)A NO. 383/AHD/2014 ASST. YEAR 2006-07 40 34. WE, THEREFORE, TO SUMMARIZE OUR DECISION ON GRO UND NOS.2 & 3 IN VIEW OF OUR OVERALL DISCUSSIONS MADE ABOVE AS WELL AS PLACING RELIANCE ON VARIOUS JUDICIAL PRONOUNCEMENTS, WE ARE OF THE VIEW THAT ASSESSEE IS A DEVELOPER AND NOT WORKS CONTRACT OR AND IS ELIGIBLE FOR DEDUCTION UNDER SECTION 80IB(10) OF TH E ACT FOR RS.1,32,19,672/- AS WELL AS FOR INCOME SURRENDERED DURING SEARCH/SURVEY PROCEEDINGS AT RS.2,34,39,999/-. ACCO RDINGLY, THESE GROUNDS OF ASSESSEES APPEAL ARE ALLOWED. 35. IN THE RESULT, THE APPEAL OF ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 1 ST FEBRUARY, 2016 SD/- SD/- (KUL BHARAT) JUDICIAL MEMBER (MANISH BORAD) ACCOUNTANT MEMBER DATED 01/02/2016 MAHATA/- COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE BY ORDER ASST . REGISTRAR, ITAT, AHMEDABAD IT(SS)A NO. 383/AHD/2014 ASST. YEAR 2006-07 41 1. DATE OF DICTATION: 28-29/01/2016 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE T HE DICTATING MEMBER: 01/02/2016 OTHER MEMBER: 3. DATE ON WHICH APPROVED DRAFT COMES TO THE SR. P. S./P.S.: 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE TH E DICTATING MEMBER FOR PRONOUNCEMENT: __________ 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE S R. P.S./P.S.: 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK: 1/2/16 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK: 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER: 9. DATE OF DESPATCH OF THE ORDER: