ASTORIA LEATHERS,CHENNAI vs. ITO, CHENNAI

आयकर अपील�य अ�धकरण, ‘‘सी” �यायपीठ, चे�नई IN THE INCOME-TAX APPELLATE TRIBUNAL ‘C’ BENCH, CHENNAI �ी धु�वु� आर.एल रे�डी, �या�यक सद�य एवं �ी एस जयरामन, लेखा सद�य के सम� Before Shri Duvvuru RL Reddy, Judicial Member & Shri S. Jayaraman, Accountant Member I.T.A.Nos.2548, 2549, 2550, 2551, 2552 & 2553/Mds/2014 Assessment Years:2006-07, 07-08, 08-09, 2009-10 M/s. Astoria Leathers, The Income Tax Officer, No. 78, Mount Road, 3rd Floor, Vs. Business Ward III(1), Guindy, Chennai 600 032. Chennai. [PAN:AADFA4770A] (अपीलाथ� /Appellant) (��यथ�/Respondent) I.T.A. Nos. 2673 & 2674/Mds/2014 Assessment years: 2008-09 & 2010-11 The Income Tax Officer, M/s. Astoria Leathers, Vs. No. 78, Mount Road, 3rd Floor, Business Ward III(1), Guindy, Chennai 600 032. Chennai. (अपीलाथ� /Appellant) (��यथ�/Respondent) अपीलाथ� क� ओर से / Appellant by : Shri S. Sridhar, Advocate ��यथ� क� ओर से/Respondent by : Shri N. Madhavan, Addl. CIT सुनवाई क� तार�ख/ Date of hearing : 25.10.2017 घोषणा क� तार�ख /Date of Pronouncement : 27.12.2017 आदेश /O R D E R PER BENCH: The appeals in I.T.A.Nos.2548, 2549, 2550 & 2552/Mds/2014 filed by the assessee are directed against the common order of the ld. Commissioner of Income Tax (Appeals) V, Chennai dated 30.07.2014 for the assessment years 2006-07, 2007-08, 2008-09 and 2009-10 passed under

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section 143(3) r.w.s. 147 of the Income Tax Act, 1961 [“Act” in short]. The assessee also filed appeals against penalty order passed under section 271B of the Act for the assessment years 2008-09 and 2009-10. The Revenue has filed appeals against the order of the ld. CIT(A) for the assessment years 2008-09 and 2010-11.

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2.2 It is evident from the assessment order that the Assessing Officer has passed the assessment under section 143(3) r.w. section 147 of the Act. Therefore, the assessee cannot say that the ld. CIT(A) has erred in assuming jurisdiction under section 147 of the Act and consequently erred in framing the reassessment in terms of section 143(3) r.w.s. 147 of the Act. Thus, the ground raised by the assessee is misconceived and not maintainable. Otherwise also, the assessee has not challenged the reassessment order passed under section 143(3) r.w.s. 147 of the Act before the ld. CIT(A) and therefore, the assessee cannot challenge the reassessment order passed under section 143(3) r.w.s. 147 of the Act before the Tribunal. Accordingly, the ground raised by the assessee is dismissed.

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on 31.03.2006, relevant to the financial year 2005-06, the assessee was not in possession of tannery. Before the Assessing Officer, the assessee has submitted that the above amount received was returned. However, the assessee has not provided any evidence for its submission. Accordingly, the depreciation claimed in respect of tannery was disallowed in respect of all the assessment years and added to the total income of the assessee. In addition to the above, in the assessment year 2008-09 and 2009-10, the assessee has also claimed depreciation on motor car. Since the assessee has not produced any material evidence to substantiate its claims, the Assessing Officer made disallowance on the claim of depreciation on motor car and brought to tax. On appeal, both the claim of depreciation on tannery as well as motor car, the ld. CIT(A) confirmed the disallowance made since the assessee could not substantiate the claims with any material evidence.

3.1 We have heard rival contentions, perused the materials available on record and gone through the orders of authorities below. With regard to the claim of depreciation on tannery, factually, the same was not in possession of the assessee since building and the tannery was demolished for ₹.3 lakhs on 05.02.2004. Before us, the assessee could not file any material evidence having repaid the money received by it for demolishing the building and tannery. Under these facts and circumstances, we find no infirmity in the

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order passed by the ld. CIT(A) and thus, the ground raised by the assessee on the claim of depreciation on tannery stands dismissed.

3.2 Accordingly, the appeal filed by the assessee for the assessment year 2007-08 stands dismissed.

3.3 With regard to the claim of depreciation on Toyota Innova Car of ₹.92,411/- and ₹.1,70,960/- in the assessment years 2008-09 and 2009-10 respectively is concerned, in the assessment order it is mentioned as “newly purchased”, but no detail is emanating from the assessment order as to why the claim of depreciation was denied for the assessment years 2008-09 and 2009-10 except reasonableness to the business activity. It is not in dispute that the assessee is engaged in the business, purchase of car was not in dispute, its usage was not questioned by the Assessing Officer. However, considering the reasonableness to the business activity, the Assessing Officer has denied the claim of depreciation for both the assessment years. The ld. CIT(A) has simply confirmed the disallowance made. Whether, the business of the assessee is running in loss or gain, the Assessing Officer cannot question the same. Once the assessee is engaged in the business activity, purchase of car is not in dispute, its usage was not questioned by the Assessing Officer, he was legally incorrect to deny the claim of depreciation for both the assessment years. Accordingly, we set aside the order of the ld. CIT(A) and direct the Assessing Officer to allow the claim of

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eligible depreciation as per Schedule. Thus, this ground of appeal for both the assessment years is allowed.

4.1 While examining the profit and loss account, the Assessing Officer noticed that the assessee has paid interest to SBI amounting to ₹.21,44,516/- towards the term loan taken for final settlement. Since the term loan was taken to acquire the property, being capital in nature, the interest paid upon was disallowed by the Assessing Officer. On appeal before the ld. CIT(A), the assessee has argued that the term loan taken was not related to the acquisition of property and it was only for the purpose of business and the same is allowable under section 37(1) of the Act as business expenditure and alternatively in terms of section 36(1)(iii) of the Act as well. However, the assessee has not filed any evidence on record to show that the bank loan was utilized for the purpose of business for claiming as business expenses and thus, the ld. CIT(A) dismissed the ground raised by the assessee.

4.2 We have heard rival contentions. By reiterating the submissions as made before the authorities below, the ld. Counsel for the assessee has

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submitted that the term loan was taken for the purpose of business, but, the assessee could not file any evidence on record to show that the bank loan was utilized for the purpose of business. Therefore, we find no infirmity in the order passed by the ld. CIT(A) and accordingly, the ground raised by the assessee is dismissed. Thus, the appeal filed by the assessee for the assessment year 2006-07 stands dismissed.

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income filed on 16.10.2010 or separately, the ld. CIT(A) dismissed the ground raised by the assessee. Before the Tribunal also, the assessee has not filed any cogent evidence substantiating the necessity to pay the amount by cash. Thus, the ground raised by the assessee is dismissed.

6.1 Accordingly, the appeals filed by the assessee for the assessment year 2008-09 & 2009-10 are partly allowed for statistical purposes.

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section 40(a)(ia) of the Act. From the profit and loss account, the Assessing Officer noticed that the assessee has claimed commission payment of ₹.3,24,731/-. However, the assessee has not deducted TDS for the above payment. In view of the above, as per provision of section 40(a)(ia) of the Act, the Assessing Officer disallowed the claim of expense, which was confirmed by the ld. CIT(A).

7.1 We have heard rival contentions. In the case of Palam Gas Service v. CIT in Civil Appeal No. 5512 of 2017 dated03.05.2017, the Hon’ble Supreme Court has held that disallowance under section 40(a)(ia) of the Act has to be made on the amounts not only paid but also payable if TDS was not deducted. Thus, the ground raised by the assessee is dismissed.

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has been utilized for the purpose of business for claiming as business expenses, the ld. CIT(A) confirmed the disallowance made by the Assessing Officer.

8.1 On being aggrieved, the assessee is in appeal before the Tribunal.

8.2 We have heard the rival contentions. While examining the profit and loss account, the Assessing Officer noticed that the major amount paid as interest was towards the term loan taken for final settlement. The said term loan was taken to acquire the property. Since the loan was taken for the purchase of the capital asset, the interest paid upon it was disallowed by the Assessing Officer. Before the ld. CIT(A), the assessee has argued that the loan taken was for the purpose of export business and not related to the acquisition of property. However, since the assessee could not file any evidence on record to show that the bank loan has been utilized for the purpose of business for claiming as business expenses, the ld. CIT(A) confirmed the disallowance made by the Assessing Officer. Before the Tribunal also, the assessee has not filed any evidence to show that the term loan taken was not for the purpose of acquiring property and the loan amount has been utilized for the purpose of business. Once the assessee has not proved that the expenditure was incurred for business purpose, the said expenditure cannot be claimed under section 37(1) of the Act. Thus, we

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find no infirmity in the order passed by the ld. CIT(A) on this issue. Accordingly, the ground raised by the assessee is dismissed.

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State Bank of India. The loan from State Bank of India was taken for the purchase of the property. Therefore, the Assessing Officer disallowed the claim of interest payment of ₹.31,00,374/-. On appeal, the ld. CIT(A) confirmed the disallowance made on both counts.

9.1 On being aggrieved, the assessee is in appeal before the Tribunal.

9.2 We have heard the rival contentions. During the year under consideration, the assessee has not admitted any receipts by way of sale of flats. However, the assessee has claimed a sum of ₹.2,62,10,424/- as a loss under the head “Real Estate Division” [i.e., project expenses of ₹.2,31,10,050/- + interest payment of ₹.31,00,374/-].

9.3 In the assessment order, the Assessing Officer has observed that the assessee has purchased the land for ₹.1,25,00,000/- at Pallavaram from M/s. Malik & Co. as per the document No. 1032 of 2001. The total cost including the stamp paper, registrations, etc. as ₹.1,48,34,592/-. This was reflected in the return of income filed by the assessee and in the balance sheet as a capital asset. The assessee has also explained the sources for the purchase of this property. While examining the details of the property, the Assessing Officer noted that it is a small shed with two acres of vacant land. As the assessee was continuously incurring loss, and the borrowals from SBI, Leather Division, Kilpauk, Chennai has become NPA, the

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assessee wanted to sell the vacant land. The assessee has entered into an agreement with M/s. KGEYES Residency Pvt. Ltd. on 23.01.2004. As per the agreement, the assessee firm is entitled to 34% of the built-up area and the builder is entitled to 66% of the built-up area. Accordingly, the builder has developed the project known as “KGEYES Astoria”. As per agreement, the assessee firm got 45 constructed and finished flats which constitute 34% of the built-up area. Thus, the Assessing Officer of the opinion that the assessee has nothing to incur towards the above project and accordingly, project expenses claimed by assessee disallowed by the Assessing Officer.

9.4 On verification of the details furnished by the assessee, the Assessing Officer has observed that M/s. KGEYES Residency Pvt. Ltd., the developer of the land has obtained the planning permission and completion certificate, developed the project and incurred all the expenditure and the same was routed in the books of account and claimed deduction under section 80IB(10) of the Act.

9.5 Before us, the ld. Counsel for the assessee has vehemently argued that as per agreement, the assessee firm is entitled to 34% of the built-up area and the builder is entitled to 66% of the built-up area. Accordingly, the assessee is also entitled to claim the project expenses as deduction as per the above ratio. However, the ld. DR has submitted that in the present case, the assessee has simply entered into an agreement with M/s. KGEYES

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Residency Pvt. Ltd. and got 45 constructed and finished flats, which constitute 34% of the built-up area. The assessee has not incurred any expenditure and therefore, the assessee is not entitled claim the project expenses. 9.6 It is an undisputed fact that the builder 66% share holder of the project, M/s. KGEYES Residency Pvt. Ltd. obtained the planning permission and completion certificate, developed the project and incurred all the expenditure and the same was routed in the books of account and claimed deduction under section 80IB(10) of the Act. The assessee, being 34% share holder, not admitted any receipts by way of sale of flats during the year under consideration and when there was no sale of flats, no profit could be recognized for claiming allowance of deduction under section 80IB(10) of the Act, since the said provision says that the amount of deduction would be hundred per cent of the profits derived in the previous year relevant to the assessment year under consideration, the assessee can claim deduction. In view of the above facts and circumstances, since the assessee has not received any profit during the relevant assessment year, the ground raised by the assessee is dismissed. 9.7 With regard to the claim of interest payment of ₹.31,00,374/-, the assessee has taken loan from M/s. KGEYES Residency Pvt. Ltd. to repay the loan taken from the State Bank of India, to facilitate the assessee to get back the title deeds mortgaged with State Bank of India. In view of the

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above, it has to be termed as the loan from State Bank of India was taken for the purchase of the property. Therefore, the Assessing Officer disallowed the claim of interest payment of ₹.31,00,074/-. Admittedly, in the assessment year under consideration, the assessee has not admitted any income from the property and therefore, the assessee cannot claim any expenditure in lieu thereof. Thus, we are of the considered opinion that the disallowance made by the Assessing Officer was rightly confirmed by the ld. CIT(A) and we find no infirmity in the order passed by the ld. CIT(A). Hence, the ground raised by the assessee is dismissed.

10.1 The assessee filed its original return of income on 18.07.2008 admitting total loss of ₹.12,91,784/- and filed a revised return of income on 16.10.2010 admitting loss of ₹.12,47,490/-. The revised return was filed based on the report prepared under section 44AB of the Act on 07.07.2010. As per the provisions of section 44AB of the Act, the report under this provision should have been filed within the due date as provide under section 139 of the Act. In this case, the report under section 44AB of the Act was prepared only on 07.07.2010, which is beyond the date prescribed under the Act. Accordingly, show-cause notice under section 271B of the Act dated 12.02.2013 was issued. Vide his reply dated 26-02-2013, before the

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Assessing Officer the assessee has submitted that at the time of filing the original return, the details regarding sale of undivided share of land and flat sales were not received from the builders and it was received only after 31- 03-2010. It was further submitted that their auditors have informed the assessee on account of the details furnished by the builders, that the turnover for the assessment year 2008-09 should be included in the sale of flats and 44AB report should be filed. It was also submitted that after getting the accounts audited, tax audit report was obtained on 07-07-2010 and revised return of income was filed on 16-07-2010. Further the assessee has submitted that the tax audit was not done intentionally within the due date and requested to drop the proceedings.

10.2 The facts and the reply of the assessee have been examined by the Assessing Officer. The assessee has closed its books of accounts on 31.03.2008. All the sale receipts have been duly credited in the bank account of the assessee. The assessee must be aware that the receipts on account of the sale of flat has exceeded the limit prescribed under the Act, to prepare the report under section 44AB of the Act. The plea of the assessee is that the details from the builder were not received within the due date and it has hindered the preparation of the 44AB report. This is not acceptable. Since the assessee realized the sale proceeds during the financial year 2007-08 itself and books of accounts were closed on 31.03.2008, and

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moreover, he failed to prepare and file the 44AB report, the Assessing Officer levied penalty of ₹.98,866/- under section 271B of the Act for violating the provision of Sec.44AB of the Act. On similar facts and circumstances, for the assessment year 2009-10 also penalty under section 271B of the Act was levied. On appeal, the ld. CIT(A) confirmed the penalty levied under section 271B of the Act.

10.3 We have heard rival contentions. The accounts of the assessee stands closed by the year ended on 31.03.2008 and 31.3.2009 for the assessment years 2008-09 and 2009-10 respectively. Similarly, the assessee is required to get prepared the 44AB report on or before 30.09.2008 and 30.09.2009 for the above assessment years respectively and file the same before the Assessing Officer. In this case, the tax audit report was obtained only on 07.07.2010 and 02.08.2010 for the above assessment years respectively. The Assessing Officer was of the opinion that when all the sale receipts have been duly credited in the bank account of the assessee by 31.03.2008 and 31.03.2009, the tax audit report should have been obtained on or before 30.09.2008 and 30.09.2009. Since the assessee has not complied with the statutory requirements under section 44AB of the Act, we are of the opinion that the Assessing Officer has validly levied penalty under section 271B of the Act for both the assessment years, which was confirmed by the ld. CIT(A). Thus, we find no reason to interfere

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with the order of the ld. CIT(A) on this issue and accordingly, both the appeals filed against levy of penalty under section 271B of the Act by the assessee are dismissed. I.T.A. Nos. 2673 & 2674/Mds/2014 [A.Y. 2008-09 & 2010-11] (Revenue’s Appeals) 11. The only effective ground raised in both the appeals of the Revenue is with regard to allowance of deduction under section 80IB(10) of the Act of ₹.1,22,03,205/- and ₹.10,48,09,234/- for the assessment years 2008-09 and 2010-11 respectively.

11.1 In the assessment year 2008-09, the assessee has claimed deduction under section 80IB(10) of the Act at ₹.1,22,03,205/- on the gross receipts from sale of six flats aggregating to ₹.1,94,39,317/-. By observing that the joint development agreement with M/s. KGEYES Residency Pvt. Ltd. should not be constructed as joint development simplicitor inasmuch as the assessee was not engaged in the development of the housing project, the Assessing Officer has held that the assessee is not eligible for the tax holiday benefits envisaged in section 80IB(10) of the Act. Further, with regard to computation of long term capital gains for the sale of six flats, the Assessing Officer rejected the claim of ₹.1,15,00,374/- comprised of the loans and other components including interest relating to the flats allotted to their share and further the claim for further deduction aggregating to ₹.18,46,744/- being the amount relatable to the extra work carried out in the

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flats transferred and subjected to the capital gains computation were also rejected. Similarly, for the assessment year 2010-11 also, similar claim of deduction under section 80IB(10) of the Act of the assessee was disallowed.

11.2 The assessee carried the matter in appeal before the ld. CIT(A). After considering the submissions of the assessee and also by following the decisions of various Benches of the Tribunal, the ld. CIT(A) allowed the ground and held that the assessee is eligible to claim the deduction under section 80IB(10) of the Act for both the assessment years.

11.3 Aggrieved, the Revenue is in appeal for both the assessment years. The ld. DR has submitted that the assessee had never indulged in the business activity of development/construction of housing project and has only exchanged the capital asset existing in its books of accounts for a consideration of the value of 34% of built up area. It was further submitted that the decision of the Tribunal in the case of Sri Lakshmi Bricks Industries in ITA Nos. 1644 to 1647/Mds/2012 has not been accepted by the Department and appeal has been preferred before the Hon’ble Madras High Court and pleaded that the order of the ld CIT(A) should be set aside and restored that of the Assessing Officer. On the other hand, the ld. Counsel for the assessee has strongly supported the orders of the ld. CIT(A).

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11.4 We have heard both the sides, perused the materials available on record and gone through the orders of the authorities below including the decision of the Tribunal in various case law. While rejecting the claim of deduction under section 80IB(10) of the Act, the primary observation of the Assessing Officer was that the joint development agreement with M/s. KGEYES Residency Pvt. Ltd. should not be constructed as joint development simplicitor inasmuch as the assessee was not engaged in the development of the housing project and moreover the assessee had not shifted a single brick for the construction and without incurring expenditure in relation thereto, the theory of joint development would fall to the ground.

11.5 However, the ld. CIT(A) has observed in his appellate order that the assessee has initially invested a sum of ₹.4.09 crores to develop the land to make it fit for the construction of the building. He also observed that in the year 2000, the assessee obtained an amount of ₹.2.95 crores from SBI and also ₹.1.15 crores from ICICI Bank in 2007 for the above said purpose involving investment risk. Subsequently, the assessee entered into an agreement with M/s. KGEYES Residency Pvt. Ltd. for the construction and development of residential flats on the land. With the above financial arrangement for development of its property, pooling its share being the land, the assessee pursued housing project, which has to be treated as business venture for the year under consideration and for the assessment

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year 2010-11, the above view was duly fortified by the decision of the Tribunal in the case of Sri Lakshmi Brick Industries in I.T.A. Nos. 1644 to 1647 and 1662 to 1665/Mds/2011 dated 22.12.2012. Further observations of the ld. CIT(A) are reproduced as under:

“ ……. The modalities were finalized and a series of agreements were executed between the parties for the smooth execution of the housing project. It cannot be said that the assessee did not undertake any risk i.e. investment/contract or contributed capital for the construction of the building project. The assessee contributed the developed land towards the housing project. Thereafter, the assessee postponed the benefits arising from the sale of land in the form of flats to be constructed thereon. It is an admitted fact that the assessee had incurred certain expenses for the sale of flats falling into its share. Thus both the parties were entitled to their respective shares in the developed property and shall have absolute discretion in negotiating the terms and conditions for the sale, lease, etc., in respect of their respective constructed areas and enter into agreements of sale, lease etc., with prospective purchasers/lessees etc., and to collect the consideration in respect thereof. The respective parties shall be entitled/liable to all profits, gains, capital appreciation and benefits as well as costs, charges, levies, cesses, taxes, etc arising or flowing from or in relation to the sale of their undivided shares, rights and interests in land and their share of constructed areas as per agreement. A perusal of the agreement between the parties show that there was ‘consensus ad idem’ between the assessee and M/s KGEYES Residency Pvt. Ltd. to develop a housing project. Without the availability of land M/s KGEYES Residency Pvt. Ltd., may not have been able to execute the housing project. Similarly, without capital and expertise, the assessee may not have been able to fulfil its desire to develop the land into a residential apartment complex. These days it is not uncommon to have such projects where the land is pooled in by one party and capital and necessary expertise is contributed by another. In some of the cases more than two parties joined hands together to execute such capital intensive projects. Moreover, the AR of the appellant has made a statement at par that the co-venturer of the assessee i.e. M/s KGEYES Residency Pvt. Ltd., has claimed benefit

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under section 8018 qua its share only. The Assessing Officer could not controvert the statement of the AR of the appellant. Thus the assessee has been treated as builder and developer. Keeping in view of the facts mentioned above, the assessee can be treated as a builder and developer and thus would be entitled to claim benefit under section 80IB.”

11.6 In the above case of the Tribunal, the judgement of the Hon’ble Karnataka High Court in the case of CIT v. Shravanee Constructions reported in LAWS(KAR)-2012-2-50 DATED 28.02.2012 has been followed and the Tribunal has held that the Assessing Officer was not justified in denying the deduction under section 80IB(1) of the Act in the hands of the land owner under the joint development agreement and also rejected the version of the Assessing Officer in bring to tax the gross receipts under the head ‘Capital gains’.

11.7 In the present case also, in the assessment order, the Assessing Officer has computed the long term capital gains for the sale six flats on the ground that the joint development agreement should not be construed as joint development simplicitor since the assessee was not engaged in the development of housing project and the assessee is only a land owner. By following the decision of the Tribunal in the case of Sri Lakshmi Bricks Industries in ITA Nos. 1644 to 1647 and 1662 to 1665/Mds/2011 dated 22.12.2012, wherein, the Tribunal, by following the decision of the Hon’ble Karnataka High Court in the case CIT v. Shravanee Constructions (supra),

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emphasized the business module and had approved the claim of deduction under section 80IB(10) of the Act in the hands of the land owner under the joint development agreement, the ld. CIT(A) has held that the assessee should be treated as a builder and developer and thus, would be entitled to claim the benefit under section 80IB(10) of the Act.

11.8 The ld. DR could not controvert the above findings of the Tribunal as well as the decision of the Hon’ble Karnataka High Court in the case of CIT v. Shravanee Constructions (supra). However, the only contention raised by the ld. DR that the decision of the Tribunal in the case of Sri Lakshmi Bricks Industries (supra) has not been accepted by the Department and preferred an appeal before the Hon’ble Madras High Court, we are of the view that it is binding on the Department to follow the decision of the Tribunal until and unless the decision of the Tribunal is reversed or modified by the Higher Court. Thus, the ground raised in both the appeals by the Revenue is dismissed.

11.9 With regard to allowance of deduction under section 80IB(10) of the Act, on carefully perusing the assessment order, besides failed to examine and brought on record as to whether the assessee has incurred any expenditure towards land development, the Assessing Officer gave a findings that the assessee has not incurred any expenditure, whereas, after examining the records, while allowing the claim of the assessee, the ld.

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CIT(A) has given a categorical findings that the assessee has invested a sum of ₹.4.09 crores to develop the land for the construction of residential flats. The above facts need verification. Secondly, the Assessing Officer has given a findings that M/s. KGEYES Residency Pvt. Ltd., developed the project and incurred all the expenditure and the same was routed in the books of account and claimed deduction under section 80IB(10) of the Act. While holding so, the Assessing Officer has not given any findings as to what extent the developer was allowed to claim 80IB(10) deduction as to whether on its share of 66% or 100%. But, before the ld. CIT(A), the AR of the assessee has submitted that the developer M/s. KGEYES Residency Pvt. Ltd. has claimed benefit under section 80IB of the Act qua its share only and accordingly, by following various decisions, the ld. CIT(A) allowed the deduction claimed by the assessee. It is not clear from the materials available on record as to whether the developer M/s. KGEYES Residency Pvt. Ltd. was allowed to claim deduction of profits from its share of 66% alone and if it so, then, the assessee should be allowed to claim deduction of similar profits and gains of its share of 34%. Accordingly, the Assessing Officer is directed to verify the above facts from the assessment order of the developer M/s. KGEYES Residency Pvt. Ltd. and decide the issue afresh in accordance with law after allowing an opportunity of being heard to the assessee. In case, the assessee has incurred any expenditure towards land development as noticed by the ld. CIT(A) and the developer M/s. KGEYES

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Residency Pvt. Ltd. has claimed deduction under section 80IB(10) of the Act of only its share of 66% then the assessee should be allowed to claim deduction under section 80IB(10) of the Act of its share of 34%. Thus, the ground raised by the Revenue in both the assessment years is allowed for statistical purposes.

Order pronounced on the 27th December, 2017 at Chennai.

Sd/- Sd/- (S. JAYARAMAN) (DUVVURU RL REDDY) ACCOUNTANT MEMBER JUDICIAL MEMBER Chennai, Dated, the 27.12.2017 Vm/- आदेश क� ��त�ल�प अ�े�षत/Copy to: 1. अपीलाथ�/Appellant, 2.��यथ�/ Respondent, 3. आयकर आयु�त (अपील)/CIT(A), 4. आयकर आयु�त/CIT, 5. �वभागीय ��त�न�ध/DR & 6. गाड� फाईल/GF.