The ACIT, Central Circle-2(4), Ahmedabad V. Devaditya Infrastructure, Ahmedabad

ITSSA 553/AHD/2011

• Counselvise Citation: [2015] 122 COUNSELVISE.COM (IT) 0652 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 6 month(s) 28 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 14-05-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2008-2009
• Appeal Filed On: 17-10-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D P GUPTA
• Keywords: Capital asset; Retrospective amendment; Question of law; Competent authority

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, AHMEDABAD BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER AND SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER ./ IT (SS) A NO S . 553 & 554 AHD / 20 1 1 / ASSESSMENT YEAR: 2008 - 09 & 2009 - 10 ACIT, CENTRAL CIRCLE - 2(4) , AHMEDABAD .. APPELLANT VS DEVADITYA INFRASTRUCTURE, 95, TAPOVAN SOCIETY, SM ROAD, AMBAWADI, AHMEDABAD .. RESPONDENT PAN : AAFFD 4687 H REVENUE BY : SH RI DP GUPTA, CIT - DR ASSESSEE(S) BY : SHRI PM MEHTA , AR WITH SHRI GM THAKORE, AR / DATE OF HEARING 30 /04/2015 / DATE OF PRONOUNCEMENT 14 /0 5 /2015 / O R D E R PER SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER : THESE APPEAL S HA VE BEEN FILED BY THE REVENUE AGAINST A CONSOLIDATED ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) - III , AHMEDABAD D ATED 28 .0 7 .201 1 FOR ASSESSMEN T Y EAR S 200 8 - 09 AND 2009 - 10 ON SAME ISSUE, SO THESE ARE BEING DISPOSED OF BY COMMON ORDER . IT(SS)A NOS.553 & 554/AH/ 2011 - DEVADITYA INFRASTRUCTURE A Y 200 8 - 09 & 2009 - 10 - 2 - 2 . THE SOLE GROUND RAISED BY THE REVENUE IN IT(SS)A NO.553/AHD/2011 FOR ASSESSMENT YEAR 2008 - 09 READS AS UNDER : - THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS AND CIRCUMSTANCES OF THE CASE BY DELETING ADDITION MADE OF RS.1,05,43,752/ - ON ACCOUNT OF DISALLOW ANCE OF DEDUCTION U/S 80IB(10) OF THE ACT. SIMILAR GROUND HAS BEEN RAISED BY REVENUE IN NEXT YEAR. 3 . THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A PARTNERSHIP FIRM ENGAGED IN THE BUSINESS OF DEVELOPING AND CONSTRUCTING H OUSING PROJECT . THE ASSESSEE HAS CONSTRUCTED A HOUSING SCHEME KNOWN AS DEV BHOOMI BUNGALOWS AT GHUMA. THE ASSESSEE HAS SHOWN THE PROFIT OF RS. 1 , 05,43,752 AND RS.1 , 01,10,250 IN THE PROFIT AND LOSS ACCOUNT IN ASSESSMENT YEAR S 2008 - 2009 AND 2009 - 2010 RESPECTIVELY WHICH H AS BEEN CLAIMED AS DEDUCTION UNDER SECTION 80 IB(10) OF THE INCOME - TAX ACT. THE ASSESSING OFFICER IN ASSESSMENT PROCEEDINGS FOR THESE YEARS OBSERVED THAT THE CONDITIONS OF DEDUCTIONS U/S 80 IB ARE NOT SATISFIED BY THE ASSESSEE . ACCORDINGLY, HE MADE ADDIT ION OF RS.1 ,05,43,752 AND RS.1,01 ,10,250 IN A SSESSMENT Y EAR S 2008 - 2009 AND 2009 - 2010 RESPECTIVELY IN THE TOTAL INCOME OF THE ASSESSEE . THE RELEVANT DISCUSSION OF THE ASSESSING OFFICER IN A SSESSMENT Y EAR 2008 - 2009 IS REPRODUCED AS UNDER: '3.2 THE SUBM ISSION OF ASSESSEE AND DOCUMENTS IN SUPPORT OF CLAIM U/S. 80IB(10) OF THE ACT ARE CAREFULLY CONSIDERED. IT(SS)A NOS.553 & 554/AH/ 2011 - DEVADITYA INFRASTRUCTURE A Y 200 8 - 09 & 2009 - 10 - 3 - A) IT WAS FOUND THAT THE LAND ON WHICH THE PROJECT WAS CONSTRUCTED BY THE FIRM WAS NOT IN THE NAME OF ASSESSEE FIRM, DEVADITYA INFRASTRUCTURE. THE LAND WA S IN THE NAME OF A SOCIETY M/S. DEV BHUMI (GHUMA) CO OPERATIVE HOUSING SOCIETY LTD. WHICH PURCHASED THE LAND IN NOVEMBER, 2006. B) IT WAS FOUND THAT THE APPROVAL OF THE HOUSING PROJECT BY NAGAR NIYOJAN AHMEDABAD WAS GIVEN TO SREEJI OWNERS ASSOCIATION VIDE L ETTER DATED 11.9.2006. THE PLAN FOR SANCTION OF THE PROJECT WAS ALSO SUBMITTED BY CHAIRMAN SREEJI OWNERS ASSOCIATION. C) THE LAND ON WHICH THE PROJECT WAS CONTEMPLATED WAS IN THE NAME OF INDIVIDUAL PERSONS. THE SOCIETY, DEV BHUMI (GHUMA); CO. - OPERATIVE HO USING SOCIETY LTD. WITH WHOM THE ASSESSEE ENTERED IN TO A DEVELOPMENT AGREEMENT FOR THE SAID LAND, PURCHASED IT FROM INDIVIDUAL PERSONS AND SREEJI OWNERS ASSOCIATION WAS ONLY A CONFIRMING PARTY TO TRANSACTION D) THE ASSESSEE FIRM IS CLAIMING THE DEDUCT ION U/S.80IB(10) OF THE ACT BY VIRTUE OF AGREEMENT WITH THE SOCIETY M/S. DEV BHUMI (GHUMA) CO - OPERATIVE HOUSING SOCIETY LTD. THE AGREEMENT BETWEEN THE SOCIETY ARID M/S. DEVADITYA INFRASTRUCTURE REVE A LS FOLLOWING FACTS : (I) IT WAS FOUND THAT THE PIECE OF LAND ON WHICH THE HOUSING PROJECT IS BEING CONSTRUCTED BY THE ASSESSE E DOES NOT BELONG TO IT BUT IT BELONGS TO M/S. DEV BHUMI (GHUMA) CO - OPERATIVE HOUSING SOCIETY LTD. WHICH IS A COOPERATIVE SOCIETY. (II) THE ASSESSE E ENTERED INTO A DEVELOPMENT AGREEMENT WITH THE SOCIETY VIDE A DEED. THE DEED IS UNDATED BUT THE PURCHASE DATE OF STAMP PAPER I S MENTIONED AS 15.10.2006. (III) AS PER THE DEVELOPMENT AGREEMENT, THE SOCIETY IS IN THE POSSESSION OF LAND MEASU RING 6,576 SQ. METERS IT(SS)A NOS.553 & 554/AH/ 2011 - DEVADITYA INFRASTRUCTURE A Y 200 8 - 09 & 2009 - 10 - 4 - KNOWN AS SHREEJI OWNERS ASSOCIATION KHANGI VI BHAG - 3' BEARING BLOCK NO.830, IN VILLAGE GHUMA. (IV) THE SOCIETY IS DESIROUS OF DEVELOPING THE SAID ENTIRE LAND BY GETTING CONSTRUCTED THEREON A RESIDENTIAL COMPLEX CONSISTING OF BUNGALOWS ALONG WITH BAS IC COMMON INFRASTRUCTURE. (V) THE SOCIETY IS UNABLE TO D EVELOP / BUILT THE SAME AND IS DESIROUS TO DEVELOP / CONSTRUCT THE 'SAID PROPERTY THROUGH DEVELOPER / BUILDER WHO IS WELL CONVERSANT WITH SUCH JOB. (VI) THE SOCIETY THEREFORE, APPOINT ED AND AUTHORIZED THE BUILDER/ DEVELOPER TO DEVELOP SUCH LAND BY CONSTRUCTIO N THEREON BUILDING CONSISTING OF BUNGALOWS FOR THE USE OF ITS MEMBER AND THE DEVELOPER AGREED TO DEVELOP / BUILT/ CONSTRUCT THE SAID RESIDENTIAL COMPLEX ON THE SAID LAND ALONG WITH THE INFRASTRUCTURE AMENITIES. (VII) THE SOCIETY THEREFORE GRANT THE DEVELOPER / BU ILDER RIGHT TO BOOK / ALLOT ANY PERSON FOR THE CONSIDERATION, THE DEVELOPER MAY TH I NK FIT. THE PLA NS OF CONSTRUCTION SHOULD BE G ET [PASSED BY DEVELOPER/ BUILDERS AND DEVELOPMENT OF LAND SHALL BE MADE STRICTLY IN ACCORDANCE WITH THE PLAN SANCTIONE D. (VIII) THE SOCIETY WILL COOPERATE WITH THE DEVELOPER / BUILDER AFTER CONSIDERATION IS COMPLETED IN OBTAINING REQUISITE OCCUPANCY AND COMPLETION CERTIFICATE FROM THE NAGAR NIYOGA N AUTHORITY. THE SOCIETY ALSO AGREED AND UNDERTAKEN TO OBTAIN AND TO COOPERATE IN OBTAINING ALL AND EVERY PERMISSION, CERTIFICATE / CONSENT, WHICH MAY BE NECESSARY TO B E OBTAINED FROM ANY AUTHORITY. 3.4 FROM THE ABO VE DISCUSSION FOLLOWING FACTS EMERGED : - A) THE SANCTION OF PLAN FOR THE PROJECT WAS NOT GIVEN TO DEV BHUMI (GHUMA) CO - OPER ATIVE HOUSING SOCIETY LTD., IT(SS)A NOS.553 & 554/AH/ 2011 - DEVADITYA INFRASTRUCTURE A Y 200 8 - 09 & 2009 - 10 - 5 - OR TO THE ASSESSEE FIRM. IN FACT, THESE TWO ENTITIES WERE NOT ANYWHERE WHEN THE P LAN FOR SANCTION WAS PUT AND WHEN THE SANCTION FOR THE SAME WAS GIVEN. THE PLAN FOR APPROVAL WAS ALSO SUB MITTED BY CHAIRMAN SHREEJI OWNERS ASSOCIA TION AND THE APPROVAL OF THE PLAN TO C O NSTRUCT BUILDING WAS GIVEN - BY NAGAR NIYOJAN, AHME DABAD TO CHAIRMAN SREEJI OWNERS ASSOCIATION. B) THE OWNERSHIP OF LAND IS NOT WITH THE ASSESSEE FIRM. IN FACT THE SOCIETY DEV BHUMI (GHUMA) GO - OPERATIVE HOUSING SOCIE TY LTD. ALLOTTED THE LAND TO ITS INDIVIDUAL MEMBERS. EACH MEMBER AGAIN ENTERED INTO A CONSTRUCTION AGREEMENT WITH THE ASSESSEE FIRM FOR CONSTRUCTING THE BUNGALOW ON THE PLOTS ALLOTTED TO THEM. AS PER THIS AGREEMENT THE ASSESSEE FIRM IS TO CONSTRUCT A BUNGA LOW AS PER THE PLAN FOR THE CONSIDERATION MENTIONED IN THE AGREEMENT. C) THE COMPLETION CERTIFICATE OF THE PROJECT BY GHUMA GRAM PANCHAYAT DATED 27/3/2009 STATES THAT THE PROJECT OF DEV BHUMI BUNGALOW IN BLOCK NO.810 HAS BEEN COMPLETED BY SOCIETY. IN THIS DO CUMENT ALSO THERE IS NO MENTIO N OF THE NAME OF ASSESSEE FIRM. D) IN THE DEVELOPMENT AGREEMENT BETWEEN THE ASSESSEE FIR M AND SOCIETY THERE IS NO MENTION OF THE CONDITION THAT EACH MEMBER HAS TO CONSTRUCT HIS HOUSE THROUGH THE ASSESSEE FIRM. THERE IS ALSO NO T IME LIMIT FOR CONSTRUCTION OF EACH UNITS BY THE MEMBERS. E) THE ASSESSEE COULD NOT PRODUCE ANY DOCUMENTS IN WHICH HE APPLIED, REPLIED OR - SUBMITTED ANY SANCTION OF PLAN OR OTHER A MENITIES IN THE SCHEME TO THE AUTHORITIES IN RESPECT OF THIS PROJECT.' 3.1 O N THE BASIS OF ABOVE DISCUSSION, THE ASSESSING OFFICER CONCLUDED THAT THE ASSESSEE - FIRM WAS NEITHER O WNER OF THE LAND NOR THE PERMISSION HAD BEEN GRANTED BY THE LOCAL AUTHORITY I.E. NAGAR NIYOJAN, AHMEDABAD IN THE NAME OF THE ASSESSEE - FIRM. IN IT(SS)A NOS.553 & 554/AH/ 2011 - DEVADITYA INFRASTRUCTURE A Y 200 8 - 09 & 2009 - 10 - 6 - FACT , THE AP PROVAL HAS BEEN GRANTED IN THE NAME OF SHRIJI OWNERS ASSOCIATION, THE NTC. ACCORDING TO THE ASSESSING OFFICER, THE ASSESSEE ONLY CARRIED OUT THE CONSTRUCTION ACTIVITY AS WITH THE SOCIETY AND THE INDIVIDUAL MEMBERS. REFERRING TO THE PROVISIONS OF 80 IB(10) WITH RETROSPECTIVE EFFECT FROM 01.04.2001, THE A SSESSING OFFICER HELD THAT THE FINAL RIGHT WAS GIVEN BY EACH MEMBERS ON THIS PI ECE OF LAND FOR A FIXED CONS IDERATION AND THAT THE ASSESSEE IS NOT A DEVELOPER BUT A CONTRACTOR . IN VIEW OF THIS DIS CUSSION, THE A SSESSING OFFICER HELD THAT THE APPELLANT IS NOT ENTITLED TO DEDUCTION UNDER SECTION 80 IB(10) OF THE INCOME - TAX ACT. 3.2 MATTER WAS CARRIED BEFORE THE FIRST APPELLATE AUTHORITY, WHEREIN VARIOUS CONTENTIONS WERE RAISED ON BEHALF OF ASSESSEE AND HAVING CONSIDERED THE SAME, CIT(A) HAS GRANTED RELIEF TO THE ASSESSEE IN BOTH THE ASSESSMENT YEARS AND THE SAME HAS BEEN OPPOSED BEFORE US BY THE REVENUE INTER ALIA SUBMITTING THAT THE CIT (A) ERRED IN DELETING THE ADDITION MADE OF RS.1,05,43,752/ - AN D RS.1,01,10,250/ - FOR ASSESSMENT YEARS 2008 - 09 AND 2009 - 10 RESPECTIVELY, ON ACCOUNT OF DISALLOWANCE OF DEDUCTION U/S 80IB(10) OF THE ACT. THEREFORE, HE SUBMITTED THAT THE ORDER OF THE CIT(A) BE SET ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED. ON THE OTHER HAND, LD. AUTHORIZED REPRESENTATIVE SUPPORTED THE ORDER OF THE CIT(A). 3.3 AFTER GOING THROUGH RIVAL SUBMISSIONS AND MATERIAL ON RECORD, WE FIND THAT THE CIT(A), WHILE GRANTING RELIEF TO THE ASSESSEE, HAS RELIED UPON HIS OWN DECISION IN THE CAS E OF IT(SS)A NOS.553 & 554/AH/ 2011 - DEVADITYA INFRASTRUCTURE A Y 200 8 - 09 & 2009 - 10 - 7 - RALSON INFRASTRUCTURE PRIVATE LIMITED FOR ASSESSMENT YEARS 2006 - 07 AND 2007 - 08, VIDE HIS ORDER DATED 15.12.2010, WHEREIN, ON SIMILAR FACTS, HE HAD CONFIRMED THE DISALLOWANCE OF DEDUCTION U/S 80IB(10). THEREFORE, THE AUTHORIZED REPRESENTATIVE WAS ASKE D BY THE CIT(A) TO STATE AS TO WHY THE APPELLATE ORDER IN CASE OF RALSON INFRASTRUCTURE PRIVATE LIMITED SHOULD NOT BE FOLLOWED IN THIS CASE. IN THIS CONNECTION, THE ASSESSEE HAS SUBMITTED AS UNDER: - SR. NO. OBSERVATION IN CASE OF RALSON INFRASTRUCTURE PVT LTD APPELLANTS REBUTTAL 1 OWNERSHIP OF LAND IS NOT THE RELEVANT CRITE RIA FOR THE PURPOSE OF ALLOWABIL ITY OF DEDUCTION U/S 8018(10) AS HELD BY ITAT AHMEDABAD IN CASE OF RADHE DEVEL OPERS AND SHAKTI ORATION (PARA 10, PAGE 24) IN FAVOUR OF ASSESS EE WITH REGARDS TO ISSUE OF APPROVAL, PLAN WAS APPROVED BY COMPETENT AUTHORITY ON 02/08/2005 WHICH IS MUCH BEFORE THE DATE OF DEVELOPMENT AGREEMENT (04/L0/2005) ENTERED BY ASSESSEE WITH KARN ASSOCIATION HENCE IT CANNOT BE SAID THE APPELLANT HAD ANY ROLE IN PREP ARING THE PLAN AND GETTING APPROVAL FROM THE AUTHORITY. THERE IS NO EVIDENCE WHICH SUGGESTS THAT APPELLANT HAS HELPED THE NIC IN PREPARING PLAN AND GETTING APPROVAL FROM LOCAL AUTHORITY (PARA 10, PAGE 24) THE APPELLANT STATES THAT FOR THE PURPOSE OF DEVELO PMENT OF HOUSING PROJECT, APPELLANT HAD IDENTIFIED THE LAND FROM SELLERS AND TILL THE TIME LAND IS TRANSFERRED IN THE NAME OF DEV BHOOMI (GHUMA) COOPERATIVE HOUSING SOCIETY LTD AS TRANSFER OF LEGAL TIME REQUIRES SOME TIME(HEREIN AFTER SOCIETY, IT HAS PREPA RED ALL THE PLANS, DESIGN ETC OF HOUSING PROJECT AND SENT THE SAME FROM APPROVAL OF LOCAL AUTHORITIES. THE AUTHORITY GRANTS THE APPROVALS AND COMPLETION TO THE LAND OWNERS AS A MATTER OF PROCEDURE WHICH SHOULD NOT BE VIEWED BY TAKING THAT THE APPELLANT HAS NOT BEEN GRANTED ANY APPROVAL. EVEN AS PER CLAUSE 3 OF DEVELOPMENT IT(SS)A NOS.553 & 554/AH/ 2011 - DEVADITYA INFRASTRUCTURE A Y 200 8 - 09 & 2009 - 10 - 8 - AGREEMENT, IT WAS RESPONSIBILITY OF APPELLANT DEVELOPER FOR OBTAINING APPROVAL FOR WHICH ALL PLANS, ELEVATIONS, SECTIONS AND DRAWINGS OF ERECTION AND PREMISES WAS TO BE CREATED BY ASSESSEE DEVELOPER. IT IS FURTHER STATED THAT PERMISSION GRANTED ON 11/09/2006 WAS CONDITIONAL DEVELOPMENT PERMISSION GRANTED BY DEPARTMENT OF DISTRICT TOWN PLANNING & VALUATION DEPARTMENT TA: DASKROI AND FINAL PERMISSION WAS GRANTED BY SARPANCH, GHUMA VILLAGE ON 06/12/2006 WHICH IS AFTER ENTERING INTO DEVELOPME NT AGREEMENT. IN CASE OF RALSON, APPROVAL WAS BEFORE ENTERING INTO DEVELOPMENT AGREEMENT WHICH IS NOT THE CASE OF APPELLANT. THE APPELLANT FURTHER SUBMITS THAT IN PLAN KEPT FOR APPROVAL FROM LOCAL AUTHORIT Y, IT HAS BEEN SIGNED BY STRUCTURAL ENGINEER, KETAV P JOSHI (C/O. SHREEJI STRUCTURAL) AND ARCHITECT ENGINEER, SANJAY B PAREKH) (C/O. MS ASSOCIATES). BOTH THE PERSONS HAVE BEEN ENGAGED BY APPELLANT FOR CARRYING OUT SUCH WORK AND PAYMENTS HAVE BEEN MADE BY A PPELLANT FIRM FOR CARRYING OUT SUCH WORK OF PREPARING DESIGN, PLAN ETC IN F.Y. 2006 - 2007 TO 2008 - 2009. (COPY OF LEDGER ACCOUNT ENCLOSED HEREWITH. EVEN APPELLANT HAS MADE PAYMENT OF RS 51,000 TO M S ASSOCIATES ON IT(SS)A NOS.553 & 554/AH/ 2011 - DEVADITYA INFRASTRUCTURE A Y 200 8 - 09 & 2009 - 10 - 9 - 28/07/2006 WHICH IS BEFORE THE ENTERING INTO DEVELOPMENT AGREEMENT AND PURCHASE OF LAND AND IN THE MONTH OF GETTING CONDITIONAL APPROVAL FROM LOCAL AUTHORITY WHICH PROVE BEYOND DOUBT THAT APPELLANT WAS ENGAGED IN DEVELOPMENT OF HOUSING PROJECT SINCE INCEPTION AND APPROVAL WAS RECEIVED ON ACCOUNT OF EFFORTS AN D WORK CARRIED OUT BY DEVELOPER. IT IS SUBMITTED THAT EVEN IN BROCHURE OF PR OJECT, NAME OF BOTH THE PARTIES ALONG WITH NAME OF APPELLAN T AS DEVELOPER HAS BEEN MENTIONED AND NO NAME OF SOCIETY HAS BEEN MENTIONED. HAD THE SOCIETY HAS CARRIED OUT ANY WORK OF DEVELOPMENT, NAME OF IT OUGHT TO HAVE BEEN MENTIONED WHICH IS NOT THE CASE. 3 I T IS INCORRECT TO SAY THAT LAND WAS PURCHASED BY NIC; OUT OF FUNDS PROVIDED BY DEVELOPER. IN FACT PART PAYMENT OF PURCHASE WAS MADE OUT OF DEPOSITS RECE IVED FROM - T HE MEMBERS OF THE NT C.( PARA 10.1 PAGE 27) IN THE PRESENT CASE AS STATED HEREIN ABOVE, LAND WAS IDENTIFIED BY APPELLANT DEVELOPER ITSELF AND FOR AND BEHALF OF THE APPELLANT, LAND WAS PURCHASED IN THE NAME OF SOCIETY. THE LAND WAS PURCHASED - FIRST IN SOCIET Y TO CONVENIENTLY HOLD & TRANSFER TITLES' - AND FOR MAINTENANCE OF HOUSING UNITS OF THE HOUSING PROJECT AFTER DEVELOPMENT WORK IS COMPLETED. FURTHER, AS PER CLAUSE 9 OF DEVELOPMENT AGREEMENT ENTERED WITH SOCIETY, IT WAS RESPONSIBILITY OF APPELLANT DEVELOPE R TO ARRANGE FOR FINANCE REQUIRED FOR PURCHASE OF LAND . IT(SS)A NOS.553 & 554/AH/ 2011 - DEVADITYA INFRASTRUCTURE A Y 200 8 - 09 & 2009 - 10 - 10 - THE APPELLANT VIDE ITS EARLIER SUBMISSION HAS GIVEN CHART EXPLAINING FACT THAT ENTIRE PAYMENT OF LAND MADE BY SOCIETY WAS FROM FUNDS RECEIVED FROM APPELLANT DEVELOPER. IT IS ALSO EXPLAINED THAT THER E IS NO OTHER BANKING TRANSACTIONS BETWEEN THE D ATE OF RECEIPT OF FUN DS FROM DEVELOPER AND DATE OF PAYMENT TOWARDS LAND BY SOCIETY. IT IS ALSO STATED THAT ANY SURPLUS FUND AVAILABLE WITH SOCIETY ON R ECEIPT OF FUNDS FROM DEVELOPER, AFTER MAKING PAYMENT OF L AND ON A PARTICULAR DATE, IS UTILIZED IN SUBSEQUENT PAYMENT OF LAND ON SUBSEQUENT DATES. 4 IT WAS OBSERVED BY AO THAT NTC ALLOTTED LAND AMONGST 63 MEMBERS AND EACH MEMBER ENTERED INTO AGREEMENT FOR CONSTRUCTION OF BUNGALOW AND AS LAND IS DIVIDED AMONGST 6 3 MEMBERS, PRIMARY CONDITION OF LAND AREA BEING MORE THAN ONCE ACRE IS NOT SATISFIED. THIS FINDING WAS CONFIRMED BY L D CIT(A) AND OBSERVED THAT' APPELLANT HAS WORKED AS MERELY CONTRACTOR. IN THE PRESENT CASE, AO HAS NOT DISPUTED THE BASIC FACT THAT LAND ON WHICH HOUSING PROJECT IS DEVELOPED BY APPELLANT FIRM IS IN MORE THAN ONE ACRE. WITH REGARDS, TO OBSERVATION OF AO THAT SOCIETY ALLOTTED LAND TO INDIVIDUAL MEMBERS AND EACH MEMBER HAS ENTERED INTO AGREEMENT FOR CONSTRUCTION OF BUNGALOW WITH APPELLANT FIRM , APPELLANT SUBMITS ' THAT AO HAS FAILED TO, APPRECIATE FOLLOWING CLAUSES OF DEVELOPMENT AGREEMENT: (A) AS PER CLAUSE 2 OF THE AGREEMENT, DEVELOPER HAS EXCLUSIVE RIGHT TO BOOK/ALLOT UNITS AS PER CONSIDERATION - DECIDED BY APPELLANT FOR BUNGALOWS DEVELOPE D. (B ) AS PER CLAUSE 15 OF THE IT(SS)A NOS.553 & 554/AH/ 2011 - DEVADITYA INFRASTRUCTURE A Y 200 8 - 09 & 2009 - 10 - 11 - AGREEMENT, AMOUNT TO BE RECOVERED, FROM MEMBERS TOWARDS BLOCK ALLOTTED TO THEM SHALL BE FIXED BY APPELLANT DEVELOPER AT ITS OWN DISCRETION AND PRICE OF THE UNITS MAY VARY FROM MEMBER TO MEMBER AND SOCIETY HAS NOT OBJECTION O N SUCH ACT; (C) AS PER CLAUSE 21 OF THE AGREEMENT, SOCIETY SHALL RECOGNIZE PERSON AS MEMBERS OF SOCIETY AT' THE RECOMMENDATION OF THE .APPELLANT DEVELOPER. IN VIEW OF AFORESAID FACTS, APPELLANT STATES THAT AO HAS FAIL ED TO APPRECIATE THAT APPELLANT D EVELOPER HAS I DENTIFIED THE BUYERS AT ITS OWN , HAS ALLOTTED UNITS TO BUYERS AT OWN AT PRICE DECIDED BY IT AND ON RECOMMENDATION OF DEVELOPER , SOCIETY HAS ENROLLED SUCH PERSON AS MEMBER OF SOCIETY. IT IS REITERATED THAT SOCIETY WAS FORMED ONLY FOR TRANSFE R OF TITLE OF LAND CONVENIENT LY TO BUYERS. IT IS SUBMITTED T HA T ENTIRE PROCESS OF IDENTIFYING THE MEM BERS, COLLECTION OF MONEY, GIVING - POSSESSION TO BUYERS WERE CARRIED - OUT BY DEVELOPER AND NOT SOCIETY AND SEPARATE AGREEMENT WERE ENTERED JUST FOR CONNIVANC E. WITH REGARDS TO OBSERVATION THAT SEPARATE CONSTRUC TION AGREEMENT IS ENTERED WITH EACH MEMBER, IT IS SUBMITTED THAT IT(SS)A NOS.553 & 554/AH/ 2011 - DEVADITYA INFRASTRUCTURE A Y 200 8 - 09 & 2009 - 10 - 12 - SUCH AGREEM ENT IS PART OF SALE OF UNITS WITH MEMBERS AND SUCH AGREEMENT WAS SUBSEQUENT TO THE DEVELOPMENT AGREEMENT. THE APPELLANT HAS CO MMENCED ITS WORK OF DEVELOPMENT AND CONSTRUCTION OF PROJECT ON ENTIRE FOND AND NOT ON PARTICULAR PORTION OF LAND AFTER ALLOTTING THE SAME TO MEMBER. IF ONLY CONSTRUCTION AGREEMENT WITH MEMBERS WAS THERE, THE APPELLANT WOULD NOT HAVE RESPONSIBILITY TO DEVEL OP PROJECT AS A WHOLE - SUCH AS ELECTRICITY, ROAD, GARDEN, TUBE WELL, DRAINAGE, ETC WHICH IN THIS CASE IS CREATED BY APPELLANT. IT IS FURTHER SUBMITTED THAT IN CASE OF APPELLANT FIRST COLLECTION HAS BEEN* RECEIVED IN THE MONTH OF FEBRUARY 2007, AND UP TO SUCH DATE, APPELLANT HAS ALREADY INCURRED EXPENDITURE TOWARDS CONSTRUCTION AND DEVELOPMENT OF PROJECT FOR RS 57.71 LACS WHICH PROVE THAT APPELLANT IS NET CONSTRUCTING BUNG A LOW AFTER ENTERING INTO CONSTRUCTION AGREEMENT WITH MEMBER BUT DEVELOPING IT WI THOUT WAF TING FOR ALLOTMENT OR SELLING OF UNITS WHICH PROVE THAT SEPARATE AGREEMENT WITH PROPOSED MEMBERS WAS ONLY FOR 'CONVENIENCE OF TRANSFER OF LAND AND ENTERING INTO SEPARATE AGREEMENT CANNOT LEAD TO CONCLUSION THAT DEVELOPER IS JUST CONTRACT AND DISALLOWANCE O F DEDUCTION U/S 80IB(IO) OF THE ACT IS REQUIRED TO BE DELETED. WITH REGARDS TO OBSERVATION IN IT(SS)A NOS.553 & 554/AH/ 2011 - DEVADITYA INFRASTRUCTURE A Y 200 8 - 09 & 2009 - 10 - 13 - CASE OF RALSON REGARDING WORK CARRIED OUT BY ASSESSEE IS OF CONTRACTOR, IT IS STATED THAT IN PRESENT CASE APPE LLANT IS NOT AT ALL CONTRACTOR WHICH IS PROVED FROM FOLLOWING FACTS : - (I) THE APPELLANT .HAS NOT RECEIVED ANY FIXED REMUNERATION FROM SOCIETY BUT ENTIRE PROFIT/LOSS ARISING FROM PROJECT WAS ON ACCOUNT OF FIRM WHICH CANNOT BE IN THE CASE OF CONTRACTOR. (II) THE FIRM HAS GOT PRINTED BROCHURE FOR ADVERTISEMENT OF SCHEME AND MADE ADVERTISEMENT IN NEWS PAPERS AT ITS OWN COST. NAME OF THE FIRM ONLY [WITHOUT REFERENCE OF THE SOCIETY] HAS BEEN REFLECTED ON THE BROCHURE AND IN ADVERTISEMENT IN NEWS PAPER THE CONTRACTOR NEVER MAKES ADVERTISEMENT OF SELLING HOUSING UNITS. (III) RESPONSIBILITY OF SALE OF HOUSING UNIT AS EXPLAINED IN EARLIER PARA IS ON ACCOUNT OF FIRM WHICH CANNOT BE IN THE CASE OF CONTRACTOR. E VEN THE APPELLANT HAS SHOWN CLOS ING WIP IN ITS BOOKS OF ACCOUNT. (IV) THE APPELLANT HAS CREATED 'ALL THE COMMON AMENITIES AND OTHER INFRASTRUCTURE LIKE ROADS; GARDEN, ELECTRICITY, WATER, DRAINAGE, ET C; FOR AFORESAID PROJECT AT THEIR OWN COST. HAD THE AP PELLANT WAS ONLY IT(SS)A NOS.553 & 554/AH/ 2011 - DEVADITYA INFRASTRUCTURE A Y 200 8 - 09 & 2009 - 10 - 14 - CONSTRUCTING UNIT AS PER CONSTRUCTION AGREEMENT, IT WOULD NOT H AVE CREATED FACILITIES OF GARDEN OR ROODS BUT ITS WORK WOULD HAVE BEEN RESTRICTED TO ONLY CONSTR UCTION OF PARTICULAR BUNGALOW. (V) THE APPELLANT DEVELOPER WAS INVOLVED IN ALL THE STAGES OF DEVELOPMENT OF HOUSING PROJECT I.E FROM IDENTIFICATION OF LAND, PLANNING OF THE PROJECT, OBTAINING APPROVAL, CONSTRUCTION AND DEVELOPMENT', SELLING OF UNITS ETC. THE COMPLETE RESPONSIBILITY FOR WHATEVER AGREEMENTS EXECUTED UNDER THE PROJECT AND WHATEVER TRANSACTIONS TAKEN PLACE WITH THIRD PARTIES, THE SAME WAS RESTED UPON THE DEVELOPER AND THE SOCIETY WAS NOT RESPONSIBLE. 5 AS POINTED OUT BY AO AND ADMITTED BY APPELLANT, PURCHASE OF SOME RAW MATERIAL HAS BEEN MADE BY NTC AND PAYMENT IS ALSO MADE BY NTC . (PARA 10.4, PAGE 29) THE APPELLANT HAS INCURRED ENTIRE EXPENDITURE OF RAW MATERIAL, LABOUR ETC TOWARDS DEVELOPMENT AND CONSTRUCTION OF HOUSING PROJECT AND NO SUCH - EXPENDITURE HAS BEEN INCURRED' BY SOCIETY. EVEN AO HAS NOT MADE ANY ADVERSE OBSE RVATION AS MADE IN CASE OF RALSON. THE APPELLANT SUBMITS THAT FACTS OF APPELLANT ARE DISTINGUISHABLE WITH FACTS OF R ALSON AS REFERRED BY YOUR GOODHONOUR AND AS APPELLANT HAS SATISFIED ALL THE CONDITIONS LAID DOWN U/S 80 IB (10) OF THE ACT, DISALLOWANCE MA DE BY AO DESERVES TO BE DELETED . ' 3.4 HAVING GONE THROUGH THE AFORESAID SUBMISSION MADE ON BEHALF OF THE ASSESSEE, CIT(A) FOUND THAT THE ASSESSING OFFICER IT(SS)A NOS.553 & 554/AH/ 2011 - DEVADITYA INFRASTRUCTURE A Y 200 8 - 09 & 2009 - 10 - 15 - HAS DISALLOWED THE CLAIM OF DEDUCTION U/S 80IB(10) ON THE FOLLOWING GROUNDS: - I. . THE APPELLANT WAS NOT THE OWNER OF THE LAND BUT THE LAND WAS BELONGING TO THE SOCIETY. IT HAS BEEN HELD BY ME THAT THE OWNERSHIP OF LAND IS NOT THE RELEVANT CRITERIA FOR THE PURPOSE OF ALLOWAB I LITY OF DEDUCTION U/S'80IB(10) AS HELD BY ITAT AHMEDABAD IN CASE OF RADHE DEV ELOPERS AND SHA KTI CORPORATION(PARA 10, PAGE 24) II. THE APPROVAL OF THE HOUSING PROJECT BY NAGAR NIYOJAN AHMEDABAD WAS GIVEN TO SREEJI OWNERS ASSOCIATION VIDE LETTER DATED 11/9/2006 AND THE PLAN FOR SANCTION OF THE PROJECT WAS ALSO SUBMITTED BY THE CHAIR MAN OF THIS ASSOCIATION AND NOT BY THE APPELLANT. ACCORDING TO THE APPELLANT THE PERMISSION GRANTED ON 11/9/2006 WAS CONDITIONAL DEVELOPMENT PERMISSION GRANTED BY THE DEPARTMENT OF DISTRICT TOWN PLANNING AND VALUATION DEPARTMENT AND THE FINAL PERMISSION WA S GRANTED BY THE SURPUNCH, GHUMA VILLAGE ALL 0/12/2006 WHICH IS AFTER ENTERING INTO DEVELOPMENT AGREEMENT. FURTHER, IT WAS ALSO STATED THAT THE LAND WAS IDENTIFIED BY THE APPELLANT DEVELOPER ITSELF AND FOR AND ON BEHALF OF THE APPELLANT, LAND WAS PURCHASED IN THE NAME OF THE SOCIETY. THE LAND WAS PURCHASED FIRST IN SOCIETY TO CONVENIENTLY S OLD AND TRANSFER TITLES AND FOR MAINTENANCE OF HOUSING UNITS OF THE HOUSING PROJECT AFTER DEVELOPMENT WORK IS COMPLETED. FURTHER THE ENTIRE PAYMENT OF LAND MADE BY THE SO CIETY WAS OUT OF THE FUNDS RECEIVED FROM THE APPELLANT DEVELOPER. IT WAS THEREFORE STATED THAT THE FACTS OF THE CASE OF RALSON I NFRASTRUCTURE PRIVATE LIMITED ARE DIFFERENT TO THIS EXTENT. 3.5 IN CASE OF RAL SON I NFRASTRUCTURE PRIVATE LIMITED (SUPRA), THE CIT(A) OBSERVED AS UNDER: - 10.2 ANOTHER OBSERVATION OF THE AO IS THAT THE NTC ALLOTTED THE LAND AMONG THE, 63 MEMBERS AND THEN EACH MEMBER ENTERED INTO AN AGREEMENT WI TH THE APPELLANT FOR IT(SS)A NOS.553 & 554/AH/ 2011 - DEVADITYA INFRASTRUCTURE A Y 200 8 - 09 & 2009 - 10 - 16 - THE CONSTRUCTION OF THEIR BUNGALOWS. ACCORDING TO HIM, SINCE THE L AND HAS BEEN DIVIDED AMONG 63 MEMBERS AND EVERY MEMBER HAS ENTERED INTO AN AGREEMENT TO CONSTRUCT A BUNGALOW WITH THE APPELLANT, THEN IN THAT CASE, THE PRIMARY CONDITION OF LAND AREA BEING MORE THAN ONE ACRE IS NOT SATISFIED. FOR THIS PURPOSE, I HAVE GONE THROUGH THE COPY OF ALLOTMENT AGREEMENT WITH EACH MEMBER AND ALSO THE AGREEMENT OF THE CONSTRUCTION OF BUNGALOW. I FIND THAT, THE NTC KARN ASSOCIATION HAS ALLOTTED THE LAND AMONGST THE VARIOUS MEMBERS OF THE NTC, THE LAND AREA IS VARYING F ROM 98 M 2 TO 244. 8 M 2 AS UNDER: RALSONS INFRASTRACTURE PVT LTD DEVLOPED BY HARIOM VILLA SC H EME HARFOIN VILLA SCEME BUNGLOW NO. LAND AREA SQ.MT 1 TO 8 137.7 9 244.8 10 TO 23 127.92 24 75.5 25 180 26 TO 39 127.92 40 172.8 41 171 42 TO 55 1 27.9 2 56 180. 9 57 207 58 188 59 208.8 60 208.8 61 183.6 62 173.7 63 238.5 IT(SS)A NOS.553 & 554/AH/ 2011 - DEVADITYA INFRASTRUCTURE A Y 200 8 - 09 & 2009 - 10 - 17 - 64 127.8 65 117 66 121.5 67 129.6 68 138.6 69 148.5 70 158.4 71 TO 76 97.82 77 162.9 78 160.2 79 TO 90 104.59 91 229.5 92 TO 98 1 13.37 99 244.8 100 TO 103 98 104 121.5 10.3 AFTER THE LAND HAS BEEN ALLOTTED BY THE NTC TO THE MEMBERS, ON THE SAME DATE THE MEMBER HAS ENTERED INTO AN AGREEMENT WITH THE APPELLANT FOR THE CONSTRUCTION OF A BUNGALOW IN THAT LAND. THE NTC KARRI ASSO CIATION IS SHOWN AS THE CONFIRMING PARTY 'IN THE CONSTRUCTION AGREEMENT. IN MY VIEW, ONCE THE LAND HAS BEEN ALLOTTED TO THE CONCERNED MEMBERS AND THE CONSIDERATION OF THE LAND HAS BEEN TAKEN BY THE NTC FROM THE CONCERNED MEMBERS AND THEN, THE INDIVIDUAL ME MBER HAS ENTERED INTO AN AGREEMENT WITH THE APPELLANT FOR THE CONSTRUCTION OF HIS BUNGALOW, IT CANNOT BE SAID THAT THE APPELLANT ACTED AS A DEVELOPER. FOR THIS PURPOSE, THE APPELLANT HAS WORKED MERELY AS A CONTRACTOR. FURTHER THE PRIMARY CONDITION OF IT(SS)A NOS.553 & 554/AH/ 2011 - DEVADITYA INFRASTRUCTURE A Y 200 8 - 09 & 2009 - 10 - 18 - THE L AND AREA OF ONE ACRE IS NOT SATISFIED IF THE AGREEMENT WITH EACH MEMBER IS CONSIDERED SEPARATELY. 3.6. IN THIS CASE ALSO, THE ASSESSEE HAS ALLOTTED PLOTS OF LAND ADMEASURING LESS THAN ONE ACRE TO EACH MEMBER OF THE ASSESSEE WHO IN TURN HAS ENTERED INTO AN AGREEMENT WITH THE ASSESSEE - FIRM FOR THE CONSTRUCTION OF HIS BUNGALOW. IT CANNOT BE SAID THAT IN SUCH CASE THE ASSESSEE HAS WORKED AS A DEVELOPER BUT MERELY AS A CONTRACTOR. IN SUCH CASE, THE PRIMARY CONDITION OF THE LAND AREA OF ONE ACRE IS NOT SATIS FIED IF THE AGREEMENT WITH EACH MEMBER IS CONSIDERED SEPARATELY. ITAT, AHMEDABAD C BENCH IN THE CASE OF ITO V. KRISHNA DEVELOPERS FOR ASSESSMENT YEAR 2005 - 06 VIDE ITA NO.2532/AHD/2010 HAS ALLOWED DEDUCTION U/S 80IB(10) AND LD. AUTHORIZED REPRESENTATIVE OF THE ASSESSEE CONTENDED THAT THE FACTS OF THE PRESET CASE ARE SIMILAR TO THE FACTS OF KRISHNA DEVELOPERS (SUPRA) AND ACCORDINGLY REQUESTED US TO ALLOW DEDUCTION TO THE ASSESSEE AS WELL. IN PARAGRAPH 2 OF THE AFORESAID ORDER OF THE TRIBUNAL IN THE CASE OF K RISHNA DEVELOPERS (SUPRA), THE TRIBUNAL OBSERVED AS UNDER: - 2. THE FACTS RELATING TO THE CASE ARE THAT THE ASSESSEE HAS CLAIMED ITSELF AS DEVELOPER CUM BUILDER AND ACCORDINGLY CLAIMED DEDUCTION U/S 80IB(10). THE AO DISALLOWED THE CLAIM FOR THE FOLLOWIN G REASONS: - I. THE ASSESSEE WAS NOT THE OWNER OF THE LAND ON WHICH CONSTRUCTION ACTIVITIES WAS CARRIED OUT/PROJECT WAS BUILT UP. II. THE ASSESSEE HAS NOT TAKEN THE APPROVAL OF THE HOUSING PROJECT FROM THE LOCAL AUTHORITY. THE SAME IT(SS)A NOS.553 & 554/AH/ 2011 - DEVADITYA INFRASTRUCTURE A Y 200 8 - 09 & 2009 - 10 - 19 - WAS TAKEN BY THE OTHER PERSONS WERE ENTIRELY SEPARATE ENTITY IN THE EYES OF LAW. III. THE LANDOWNERS HAVE SOLD THE PIECES OF LAND TO UNIT HOLDERS DIRECTLY AND ASSESSEE HAD ACTED MERELY AS THE CONFIRMING PARTY. IV. ASSESSEE FIRM HAS ACTED MERELY AS A CONTRACTOR AJIT HAS ENTERED INTO CONSTRUC TION AGREEMENT WITH THE UNIT HOLDERS. V. THE ASSESSEE FIRM HAS NEVER SOLD THE HOUSE TO THE UNIT HOLDERS AS THERE WAS NO REGISTERED 3 . 7 . IN THIS BACKGROUND, IT WAS CONTENDED THAT THE JUDGEMENT HAS BEEN RENDERED BY THE ITAT, AHMEDABAD IN THE CASE OF KRISHN A DEVELOPERS AFTER CONSIDERING THE POINTS MENTIONED IN PARA NUMBER ( III ) TO ( V ) ABOVE. THE FOURTH CONDITION NAMELY THE SOCIETY HAS ALLOTTED PLOT TO ITS MEMBERS WHO IN TURN HAD ENTERED WITH THE APPELLANT FIRM TO CONSTRUCT BUNG A LOWS FOR THEM, HAS ALSO, BEEN CONSIDERED BY THE ITAT AND ALLOWED THE DEDUCTION UNDER SECTION 80 IB (10). NOWHERE IN THE SAID ORDER IT HAS BEEN MENTIONED THAT AFTER EACH PLOT OF LAND HAS BEEN ALLOTTED TO THE MEMBERS OF THE SOCIETY WHO HAS ENTERED INTO AN AGREEMENT WITH THE APPELLANT FIR M TO CONSTRUCT BUNG A LOW AND IN THAT CASE EVEN IF THE AREA OF EACH BUNGALOW IS LESS THAN ONE ACRE, THEN ALSO THE ASSESSEE IS ENTITLED TO DEDUCTION UNDER SECTION 80 IB (10). IN RESPONSE TO THE RATIO OF DECISION IN THE CASE OF RALSON'S INFRASTRUCTURE PRIVATE LIMITED, IT WAS EXPLAINED ON BEHALF OF THE ASSESSEE THAT THE ASSESSEE HAS COMMENCED HIS WORK OF DEVELOPMENT AND CONSTRUCTION PROJECT ON ENTIRE LAND IT(SS)A NOS.553 & 554/AH/ 2011 - DEVADITYA INFRASTRUCTURE A Y 200 8 - 09 & 2009 - 10 - 20 - AND NOT ON PARTICULAR PORTION OF LAND. THIS PROPOSITION GETS STRENGTH FROM THE FOLLOWING FACTS: - I THE F IRST COLLECTION W AS RECEIVED IN THE MONTH OF FEBRUARY 2007, HOWEVER TILL THAT DATE, THE APPELLANT HAD ALREADY STARTED DEVELOPMENT AND CONSTRUCTION OF THE PROJECT AND ALSO INCURRED EXPENDITURE OF RS.57,7 0,476/ - WHICH PROVES THAT THE APPELLANT HAS HIMSELF S TARTED THE WORK OR PROJECT ON I TS OWN, AND NOT AFTER ENTERING INTO CONSTRUCTION AGREEMENT WITH THE MEMBER. IT WAS SUBMITTED THAT EVEN IN THE MONTH OF FEBRUARY 2007, THE APPELLANT HAS RECEIVE D TOTAL MEMBERS COLLECTION FOR RS. 26.50 LACS AGAINST WHICH IT HAS ALREADY INCURR ED EXPENDITURE OF RS . 77.33 LACS. II. I N THE HOUSING PROJECT, THREE OF THE UNITS NAMELY BUNG A LOW NUMBER 6, 32 AND 35 HAS BEEN SOLD BY THE APPELLANT FOR RS.44 , 42,000 EVEN AFTER THE COMPLETION OF THE ENTIRE PROJECT IN FINANCIAL YEAR 2008 - 2009. THIS FACT GOES TO PROVE THAT THE ACTUAL CONSTRUCTION AND DEVELOPMENT OF THE PROJECT HAS ALREADY BEEN COMPLETED BY THE APPELLANT ON ITS OWN AND MUCH BEFORE THE ENTERING INTO CONSTRUCTION AGREEMENT WITH THE FUTURE MEMBERS. 3 . 8 THE STAND OF THE ASSESSEE HAS BEEN THAT THE DEVELOPMENT AND CONSTRUCTION WORK HAD STARTED MUCH EARLIER THAN ANY OF THE AGREEMENT WITH THE MEMBERS REGARDING THE ALLOTMENT OF LAND AND CONSTRUCTION OF BUNG A LOW WAS ENTERED INTO. IN THIS REGARD, THE ASSESSEE PLACED ON RECORD THE COPIES OF THE AGREEMENTS IN RESPECT OF TWO BUNG A LOWS NUMBER 4 AND 23 IN THE NAMES OF . I. NITISH MANSUKH LAL KHEREDIA ALLOTMENT OF LAND WAS DATED 26/2/2008 COST OF LAND AT RS. 3 , 05,500. PAYMENT MADE AGAINST THE LAND ON 3/2/2008 FOR RS. 1 LAKH AND ON 5/3/200 8 FOR RS.2 , 05,500. THE CONSTRUCTION AGREEMENT WAS DATED 26/2/2008 - TOTAL AGREEMENT FOR THE IT(SS)A NOS.553 & 554/AH/ 2011 - DEVADITYA INFRASTRUCTURE A Y 200 8 - 09 & 2009 - 10 - 21 - CONSTRUCTION IS AT RS. 13,94,500 AND THE PAYMENT HAS BEEN MADE ON 6/2/2008 FOR RS.L LAKH AND ON 4/3/2008 FOR RS.12,94,500/ - . II. SATYAWAN SHIVAJI RAO THAVALAR - ALLOTMENT OF LAND WAS MADE ON 6/2/2008 FOR TOTAL COST OF RS.234,000. THE PAYMENT THEREOF WAS MADE ON 24/1/2008. THE CONSTRUCTION AGREEMENT IN RESPECT OF THE BUNGLOW NUMBER 23 IS ENTERED INTO ON 6/2/2008 FOR RS. 10,25,000 PAYMENT OF WHICH WAS MADE ON 23/1/2 008. THE POSSESSION WAS GIVEN ON 19/3/2008. 3 . 9 . IN THIS BACKGROUND , IT WAS CONTENDED ON BEHALF OF THE ASSESSEE THAT IT HAS STARTED THE CONSTRUCTION AND DEVELOPMENT WORK OF THE PROJECT EARLIER, IT WAS NOT POSSIBLE TO GIVE THE POSSESSION OF THE BUNG A LO W WITHIN ONE AND HALF MONTHS FROM THE DATE OF ALLOTMENT OF LAND MADE TO ITS MEMBERS. THE RELIANCE WAS ALSO PLACED ON THE DECISION OF ITAT NAGPUR BENCH IN THE CASE OF ITO VERSUS AIR DEVELOPERS 123 TTJ 959 (NAGPUR) AND THE DECISION OF ITAT MUMBAI BENCH IN TH E CASE OF VANDANA PROPERTIES 31 SOT 392 (MUMBAI) IN SUPPORT OF HIS CONTENTION. 4. AGREEING TO THE CONTENTION OF THE ASSESSEE, THE CIT(A) RIGHTLY OBSERVED THAT THE DEVELOPMENT AND THE CONSTRUCTION WORK OF THE PROJECT OF THE ASSESSEE HAD STARTED EARLIER A ND E VEN BEFORE THE ASSESSEE MAKING THE ALLOTMENT OF ANY LAND TO ITS MEMBER, IT HAD DONE THE DEVELOPMENT WORK OF APPROX. RS.57.7 LACS, WHICH IS EVIDENCED FROM THE FACT THAT IT WAS IMPOSSIBLE TO HANDOVER THE CONSTRUCTION OF THE BUNG A LOW TO A PARTICULAR MEMBE R WITHIN ONE AND HALF MONTHS FROM THE DATE OF THE AGREEMENT OF ALLOTMENT OF THE LAND TO THAT PARTICULAR MEMBER AS DISCUSSED ABOVE . THEREFORE, THE FACTS OF THE ASSESSEE ARE IT(SS)A NOS.553 & 554/AH/ 2011 - DEVADITYA INFRASTRUCTURE A Y 200 8 - 09 & 2009 - 10 - 22 - DISTINGUISHABLE WITH THE FACTS OF THE CASE OF RALSONS INF RASTRUCTURE PRIVATE LIMITE D (SU P R A), HENCE THE SAME IS NOT APPLICABLE TO THE FACTS OF THE ASSESSEES CASE ON HAND. IN VIEW OF THESE FACTS, THE CIT(A) HELD THAT THE ASSESSEE IS ENTITLED TO DEDUCTION U/S 80IB(10) OF THE ACT AS ALL THE NECESSARY CONDITIONS OF THE SECTION ARE SATISFIED BY THE HIM. THIS VIEW IS FORTIFIED BY DECISION OF HONBLE GUJARAT HIGH COURT IN CASE OF CIT VS. MA N G A LA PROPERTIES PVT. LTD. W HEREIN SIMILAR ISSUE WAS DECIDED AS UNDER: 16. THE ABOVE REFERRED DECISION IN THE CASE OF COMMISSIONER OF INCOME TAX - 1 V. ARCHA N ENTERPRISES WOULD BE SQUARELY APPLICABLE TO THE FACTS OF THE PRESENT CASE. UNDER THE CIRCUMSTANCES, WHEN THE TRIBUNAL HAS RECORDED CONCURRENT FINDINGS OF FACT TO THE EFFECT THAT THE DECISION OF THIS COURT IN THE CASE OF RADHE DEVELOPERS (SUPRA) WOULD BE SQUARELY APPLICABLE TO THE FACTS OF THE PRESENT CASE, IN THE ABSENCE OF ANY PERVERSITY BEING POINTED OUT IN THE FINDINGS OF FACT RECORDED BY THE TRIBUNAL, THERE IS NO WARRANT FOR INTERFERENCE. THE DECISION OF THE SUPREME COURT IN THE CASE OF LARSEN AND TOU BRO LIMITED (SUPRA) HAVING BEEN RENDERED IN THE CONTEXT OF THE KARNATAKA SALES TAX ACT AND THE MAHARASHTRA VALUE ADDED TAX ACT, WOULD NOT BE APPLICABLE TO THE FACTS OF THE PRESENT CASE AND THE MEANING ASSIGNED TO THE EXPRESSION 'WORKS CONTRACT' IN THE SAID DECISIONS CANNOT BE IMPORTED WHILE CONSTRUING THE MEANING OF THE SAID EXPRESSION IN THE CONTEX T OF THE PROVISIONS OF THE INCO ME TAX ACT. 17. IN THE LIGHT OF THE ABOVE DISCUSSION, IT IS NOT POSSIBLE TO STATE THAT THERE IS ANY LEGAL INFIRMITY IN THE IMPUGN ED ORDER PASSED BY THE TRIBUNAL, SO AS TO GIVE RISE TO ANY QUESTION OF LAW, MUCH LESS, A SUBSTANTIAL QUESTION OF LAW SO AS TO WARRANT INTERFERENCE. THE APPEALS, THEREFORE, FAIL AND ARE, ACCORDINGLY, DISMISSED. IT(SS)A NOS.553 & 554/AH/ 2011 - DEVADITYA INFRASTRUCTURE A Y 200 8 - 09 & 2009 - 10 - 23 - 4.1 IN VIEW OF ABOVE , WE HOLD THAT EVEN IF A SSESSE IS NO T OWNER OF LAND ON WHICH CONSTRUCTION ACTIVITY WAS CARRIED OUT ASSESSEE CAN CLAIM DEDUCTION U/S.80IB(10) OF ACT . EVEN IF SOCIETY OWNER OF LAND HAS ALLOTTED PLOTS TO ITS MEMBERS WHO IN TURN HAD ENTERED WITH ASSESSE TO CONSTRUCT BUNGALOW FOR THE M, DOES NOT EFFECT THE CLAIM OF ASSESSE U/S.80IB(10) OF ACT. MOREOVER, ASSESSE HAS COMMENCED HIS WORK OF DEVELOPMENT AND CONSTRUCTION PROJECT ON ENTIRE LAND AND NOT PARTICULAR PORTION OF LAND. THUS DEVELOPMENT AND CONSTRUCTION WORK ON LAND IN QUESTION HA D STARTED MUCH EARLIER THAN ANY OF THE AGREEMENT WITH ITS MEMBERS REGARDING THE ALLOTMENT OF LAND AND CONSTRUCTION OF BUNGALOW WAS ENTERED INTO. UNDER FACTS AND CIRCUMSTANCES, THE REASONED FINDING OF THE CIT(A) , WHEREBY HE HAS GRANTED RELIEF TO THE ASSESS EE UNDER PROVISIONS OF SECTION 80IB(10) IN BOTH THE YEARS UNDER APPEAL, HAVING SIMILAR ISSUE, NEEDS NO INTERFERENCE FROM OUR SIDE , WE UPHOLD THE SAME. 5 . IN THE RESULT, BOTH THE APPEALS FILED BY THE REVENUE ARE DISMISSED. ORDER PRONOUNCED IN THE COURT ON 14TH OF MAY , 201 5 AT AHMEDABAD. S D/ - SD/ - SD/ - SD/ - (ANIL CHATURVEDI ) ACCOUNTANT MEMBER ( SHAILENDRA KUMAR YADAV ) JUDICIAL MEMBER AHMEDABAD; DATED 14 /0 5 /2015 *BT TRUE COPY / COPY OF THE ORDER FORWARDED TO : IT(SS)A NOS.553 & 554/AH/ 2011 - DEVADITYA INFRASTRUCTURE A Y 200 8 - 09 & 2009 - 10 - 24 - 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. ( ) / THE CIT(A), 5. , , / DR, ITAT, AHMEDABAD 6. / GUARD FILE . / BY ORDER, //TRUE COPY// / (DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD