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Income Tax Appellate Tribunal, “ D ” BENCH, AHMEDABAD
Before: SHRI N.K. BILLAIYA & SHRI MAHAVIR PRASAD
आदेश / O R D E R
PER SHRI MAHAVIR PRASAD, JUDICIAL MEMBER : These are three appeals, out of three appeals one is taken by assessee and other two are taken by the department against the order of
ITA No.493/Ahd/2011 & 230 & 1783/Ahd/2012 Asst.Year – 2007-08, 2008-09 & 2009-10 - 2 - the Commissioner of Income Tax(Appeals)-XV, Ahmedabad, dated 10/01/2011 for the Assessment Year (AY) 2007-08, dated 25/11/2011 for A.Y.2008-09 and 28/05/2012 for A.Y. 2009-10.
First we take up the assessee’s appeal in ITA No.493/Ahd/2011 for Asst. Year 2007-08. Assessee has taken the following Grounds of appeal: i. The learned CIT(A) erred in law and on facts in upholding the disallowance of Rs.46,92,729/- made by the learned AO u/s.80IB(10) of the Income Tax Act, 1961. ii. The learned CIT(A) erred in law and on facts in including the area of ‘terrace’ of each tenement in the built up area for working out the limit of 1500 sq. feet as provided u/s.80IB(10)(C) of the Income Tax Act, 1961. iii. Without prejudice to the above, the learned CIT(A) erred in law and on facts in not considering the proportionate deduction in respect of the tenements, where the condition mentioned in section 80IB(10)(c) of the Income Tax Act, 1961 is satisfied. 3. The relevant facts as culled out from the materials on record are as under:- The return of income was filed by the appellant on 30/10/2007 showing total income of Rs. Nil after claiming legitimate benefit of deduction u/s.80IB(10) of Rs.46,92,729/-. Thereafter, the case of the appellant was subjected to Scrutiny assessment and the learned AO has passed the impugned order after making following addition/adjustments/disallowances.
3.2 The appellant-firm is a partnership-firm having following partners (i) Bhupatbhai Savjibai Bhalala
ITA No.493/Ahd/2011 & 230 & 1783/Ahd/2012 Asst.Year – 2007-08, 2008-09 & 2009-10 - 3 - (ii) Himatbhai Dhanjibhai Kotiya (iii) Rameshhai Ravjibhai Vaghasiya (iv) Mahendrabhai Janibhai Vadodariya (v) Mavjibhai Popatbhai Lungariya (vi) Dilipbhai Dhanjibhai Kothiya
3.3 The partners of the appellant-firm were having land in their hands on which the Housing Project is floated. The land was purchased by them in their individual hands. Subsequently, they have decided to float a Housing Project on the land and in consequence thereof the partners of the appellant-firm introduced their own land for floating the Housing Project on the land. Land Area 9294 sq. Mtrs. Buyers Bhupatbhai Savjibhai Bhalala, Pach Topra, Taluka Gariadhar, Dist- Bhavnagar Himmatbhai Dhanjibhai Kothia, A/10, Somnath Society, Near Harshad Coloney, Bapunagar, Ahmedabad. Rameshbhai Ravjibhai Vaghasia, 10, Nandi Apartment, India Coloney, Bapunagar, Ahmedabad Sellers Subodh Nathji Dhansukh Nathji, Bavaji’s Haveli Prem Darwaja, Ahmedabad. Survey No. 72 measured at 9294 sq. Mtrs Area 9294 sq. Mtrs. Location Ved Bunglows, Air Port Road, Nana Chiloda, Ahmedabad Consideration Paid Rs.12,41,500/- Dt. of purchase 25/01/2006
ITA No.493/Ahd/2011 & 230 & 1783/Ahd/2012 Asst.Year – 2007-08, 2008-09 & 2009-10 - 4 - Land Area 1059 sq. Mtrs. + 9409 sq. Mtrs Buyers Bhupatbhai Savjibhai Bhalala, Pach Topra, Taluka Gariadhar, Dist- Bhavnagar
Himmatbhai Dhanjibhai Kothia, A/10, Somnath Society, Near Harshad Coloney, Bapunagar, Ahmedabad Sellers Anandiben Naranbhai Prajapati, Viken Naranbhai Prajapati, 22, Haridwar Society, Naroda, Ahmedabad. Survey No. 71/1/2 & 4 measured at 1059 sq. Mtrs. Area 1059 sq. Mtrs + 9409 sq Mtrs Location Ved Bunglows, Air Port Road, Nana Chiloda, Ahmedabad Consideration Paid Rs.9,00,000/- Dt. of purchase – 11/05/2006
Land Area 9308 sq. Mtrs. Buyers Bhupatbhai Savjibhai Bhalala, Pach Topra, Taluka Gariadhar, Dist- Bhavnagar Sellers Subodh Nathji Dhansukh Nathji, Bavaji’s Haveli Prem Darwaja, Ahmedabad. Survey No. 71/1 measured at 9308 sq. Mtrs. Area 9308 sq. Mtrs Location Ved Bunglows, Air Port Road, Nana Chiloda, Ahmedabad Consideration Paid Rs.8,25,000/- Dt. of Purchase- 11/05/2006
3.4 During the course of assessment proceedings the appellant-firm was issued a show-cause notice wherein it was asked that on perusal of
ITA No.493/Ahd/2011 & 230 & 1783/Ahd/2012 Asst.Year – 2007-08, 2008-09 & 2009-10 - 5 - the ‘Development Agreement’ why the appellant-firm is the owner of the land on which the Housing Project is floated.
3.5 Surprisingly, on perusal of the impugned assessment order it is found that the residential unit allegedly exceeds the prescribed limit as Learned A.O has given in Para-2.4.1 to Para- 2.4.8 from page No. 4 to page No. 9 of the assessment order. Without issuing show-cause notice, the Learned A.O has disturbed the measurement of the residential unit of the Housing Project of the appellant-firm. The Learned A.O has considered 'open terrace' in 'built up area'. If the Show-cause would have issued on this point, the appellant-firm would have replied also on this point. But, as the learned A.O. has given his observation first time in the impugned order, the appellant-firm is before your honour with the following submissions on this issue.
3.6 In respect of the Learned A.O's observation that the built up area........... 'does not include common area shared with other residential unit' is for the purpose the common area of 'foyer' used and shared by more than one apartment on the same floor, (in case of multi-storied apartments). Otherwise, there could have been confusion that in which apartment the sharing of common area should be added. Open to sky 'terrace' cannot be added in the 'built up area' of the residential unit. However, if the open terrace at first floor as well as the open terrace on the second floor would be included in ‘built up area’ as in the independent residential unit, outsider would have no right to use such
ITA No.493/Ahd/2011 & 230 & 1783/Ahd/2012 Asst.Year – 2007-08, 2008-09 & 2009-10 - 6 - 'open terrace', it would give absurd result. If this is the opinion of the Learned A.O that the 'open to sky terrace' situated at first floor as well as the whole terrace open to sky situated at second floor would be covered in the definition of the 'built up area' and this will apply to all the plans filed by various assessees before the Learned A.O. All the cases assessed in Range-9 would be subject to revision. The Learned A.O has by his own imagination added the 'open to sky terrace' in the 'built up area'. The Learned A.O is not the technical person who can decide that what would be the 'built up area' and what would not be. If the show-cause on this point would have issued, the appellant would have made humble request for referring the case to the DVO for the measurement of the unit as the same is technical issue involved in the case.
3.7 In spite of the facts that the Learned A.O is not a technical person, he has disturbed measurement of the residential unit of the Housing Project of the appellant-firm. He has not disturbed the 'built up area' of the plans approved by AUDA/AMC in other assessee's case. Therefore, the approved plan filed by the appellant-firm may be considered correct on the line of other assessee's case who have filed their plans for claiming the legitimate claim of deduction under section 80IB (10).
On perusal of the impugned assessment order, it may be seen that the learned AO is of the opinion that only the land owner can be said to be the ‘Developer’ of the Housing Project. If the Developer does not possess the land on which the Housing Project is floated, the developer
ITA No.493/Ahd/2011 & 230 & 1783/Ahd/2012 Asst.Year – 2007-08, 2008-09 & 2009-10 - 7 - would be considered as work-contractor only and could not be treated as ‘Developer’ in true sense.
Before making specific submissions to the observations and the reasons of disallowance given by the Learned A.O in Para 2.20 on Page No.27 of the impugned assessment order, it is necessary to understand the "modus operandi" of the business of Housing Project. The same is narrated as under:
(a) In the business of Housing Project, a group of entrepreneurs conceived a Housing Project in their mind. For the purpose, they gathered to assess the viability of Housing Project in a particular area.
(b) On finding the possibility and viability of the Housing Project, the group of entrepreneurs becomes the partner and have share in Profit and Loss of the business commensurate to their contribution to purchase the land of Housing Project. Thus, the group of the entrepreneurs entered into the partnership through a partnership deed. Thereafter, the partners of the firm designed/get it designed the conceived Housing Project keeping in mind the locality of area and choice of the people residing around the area of the proposed Housing Project.
ITA No.493/Ahd/2011 & 230 & 1783/Ahd/2012 Asst.Year – 2007-08, 2008-09 & 2009-10 - 8 - (c) After designing a conception of the Housing Project and draft lay out plans/other plans, the partners of the firm will decide that in which hands the land is to be purchased. It was decided to purchase the land in the hands of the appellant-partnership- firm. But, since the land was 'agricultural land' at that point of time, the land ought to have been purchased in the hands of the partners (partners are agriculturist). It is a Rule that 'agricultural land' cannot be purchased other than agriculturist. So, the partners compelled to purchase the land of the Housing Project in their individual hands.
(c) If the land purchased by the partnership firm in the hands of the Society, there would be a 'Development Agreement' between the Society and the Developer partnership-firm. The contents of the 'Development Agreement' would be like the Housing Project belonging to the developer partnership-firm only. The Society would have nothing to do except to sell the sub-plot of the Housing Project to the prospective buyer/member only. All the relevant and incidental activities of development and construction of the Housing Project would be carried out by the developer partnership-firm only. Here is not the case because there is no Society.
The Housing Project is normally developed and built as per the 'modus operandi' mentioned above. Therefore, undoubtedly the Housing
ITA No.493/Ahd/2011 & 230 & 1783/Ahd/2012 Asst.Year – 2007-08, 2008-09 & 2009-10 - 9 - Project is a 'baby' of the developer partnership-firm or its partners because; the conception of the Housing Project took place in the mind of a group of entrepreneurs who subsequently becomes the partner of the developer-firm.
The cost/price of the land negotiated by the partners of the appellant developer-firm with original land owners and has decided with a group of partners of the appellant-firm to purchase the land on which the Housing Project is floated.
7.2 For the purpose to purchase aforesaid land and subsequently introduced the land in the hands of the appellant-firm as Capita Contribution.
7.3 Later on, a group of entrepreneur formed a partnership-firm i.e the appellant-firm on 25/5/2006. Thereafter, it was decided to introduce the land of the Housing Project in the hands of the appellant-firm as Capital Contribution of the partners. By virtue of this, the appellant-firm becomes the owner of the land on which the Housing Project is floated. The land is duly shown as Stock in Hand in the Trading, P & L Account.
7.4 The appellant developer-firm has funded the consideration of the land of the Housing Project.
ITA No.493/Ahd/2011 & 230 & 1783/Ahd/2012 Asst.Year – 2007-08, 2008-09 & 2009-10 - 10 - 7.5 As per GDCR of AUDA the 'Development Permissions' always granted in the name of the owner of the land whose name is appearing in revenue records i.e. 7X12 Extract. Therefore, ever if the plan of the Housing Project is passed with the efforts of the partners of the appellant- firm, the plan and the development permissions always are in the name of the owner of the land of the Housing Project.
7.6 The developer-firm has obtained and submitted the AUDA, along with the application for development permission; each progress report and application for occupation certificate.
7.7 The developer-firm has appointed Registered Architect/Engineer and Structural Designer.
7.8 The developer-firm has obtained at relevant stages certificates from approved Architect, Engineer and Structural Designer and submitted to the Competent Authority.
7.9 The appellant developer firm has appointed registered side supervisor.
7.10 The developer appellant-firm has adequately enabled the site supervisor to carry out his responsibilities.
ITA No.493/Ahd/2011 & 230 & 1783/Ahd/2012 Asst.Year – 2007-08, 2008-09 & 2009-10 - 11 - 7.11 The developer appellant-firm has certified along with the site supervisor that construction and development of the Housing Project has been carried out as per the design detailed drawing provided by Architect, Engineer and Structural Designer.
7.12 The appellant developer-firm has obtained 'development permission' from AUDA.
7.13 The appellant developer-firm has regularly submitted progress report and certificate as required by the Competent Authority.
7.14 The appellant developer-firm has not caused or allowed any deviation from the approved drawing in the course of execution of the Housing Project against the instruction of Architect, Engineer, and Structural Designer etc.
7.15 The appellant developer-firm is totally responsible for its duty and responsible under GDCR Rules.
7.16 The appellant developer-firm has not commenced the use of the particular area and has not given the possession to occupy the residential unit to anyone before obtaining B. U. permission, occupation certificate from HUDA.
ITA No.493/Ahd/2011 & 230 & 1783/Ahd/2012 Asst.Year – 2007-08, 2008-09 & 2009-10 - 12 - 7.17 The appellant developer-firm has provided adequate safety measures for structure and protection against fire likely from electrical services, drainage, plumbing, water supply etc.
7.18 The appellant developer-firm has exhibited the names of registered persons only on the site of the Housing Project and no additional name was exhibited or displayed.
7.19 The appellant developer-firm has explained the constructor designed and it is intended use as per approved plan to the prospective purchaser of the residential unit.
Accordingly, the appellant developer-firm has fulfilled all the criteria of being a "Developer" in the eyes of GDCR of AUDA also.
It is worth to mention that the ownership issued has been set a rest by the legislature by inserting an Explanation below section 80IB(10) w.r.e.f. 1/4/2001.
[Explanation-For the removal of doubts, it is hereby declared the nothing contained in this sub-section shall apply to an undertaking which executes the housing project as works contract awarded by any person (including the Central or Stat Government)]
After insertion of an Explanation below section 80IB(10), the important issue would be whether the appellant-firm is a developer in real sense or only a work-contractor. The developer appellant-firm has given 24
ITA No.493/Ahd/2011 & 230 & 1783/Ahd/2012 Asst.Year – 2007-08, 2008-09 & 2009-10 - 13 - differences with title to the Learned AO from which it can be decided that whether the developer appellant-firm is a developer in real sense or simply a work-contractor. It was also given that how the 24 differences are applicable to the developer appellant-firm. The same is given on Page No.13 and 19 of the impugned assessment order. Without rebutting it, the Learned A.O has disallowed the claim on the basis of stereo-typed order. He emphasized on word "and" used between developing and building the Housing Project. In the opinion of the Learned A.O the developer appellant-firm has to satisfy that the firm has not only built but also developed the Housing Project. It is important to note that the developer appellant-firm has fulfilled all the criteria of being a developer in the eyes of GDCR of AUDA (who is highest technical Authority). The activity carried out by the developer appellant-firm can also be summarized as under: (i) The developer-firm has acted or processed or developed the Housing Project. The developing progress of the Housing Project has been intimated to the Competent Authority from time to time. (ii) The partners of the developer appellant-firm have realized the potential of the locality where the Housing Project is floated. Therefore, the land which is placed in the area was selected by partners of the developer appellant-firm. (iii) The developer appellant-firm has not only carried out the construction activity but has carried out all the activities which is necessary for making the Housing Project inhabitable.
ITA No.493/Ahd/2011 & 230 & 1783/Ahd/2012 Asst.Year – 2007-08, 2008-09 & 2009-10 - 14 - (iv) By developing of the Housing Project by the developer appellant-firm, the growth of the city increased and the State is strengthen. (v) The developer appellant-firm has made it possible with the conception and designed of the Housing Project into being. (vi) The developer appellant-firm has converted the raw land into inhabitable land by developing the Housing Project on the land. Thus, the partners of the developer appellant-firm has realized the potentiality of the land or territory and floated the Housing Project on the land. (vii) The land owner firm has made efforts to develop the Housing Project which approved in the name of original land owners from whom the land was purchased. The land owner appellant- firm has not thrown itself into developing of the Housing Project. Throwing itself into the business of development and building of housing projects by taking all risks associated with the business by engaging architects, structural consultants, designing necessary permissions, approving plans, hiring machinery and equipments, hiring engineers, appointing contractors etc., it is done by the Developer-firm only.
(viii) It is also important to note that the developer appellant-firm has worked for its own in order to exploit the potential of its business in its own interest and, therefore, option for all
ITA No.493/Ahd/2011 & 230 & 1783/Ahd/2012 Asst.Year – 2007-08, 2008-09 & 2009-10 - 15 - business risks associated with the business of development of Housing Project.
(ix) The appellant-firm had physical possession and dominant control on the land of the Housing Project. The Profit and Loss accrued out of the activity of developing and building the Housing Project would also to be considered belonging to the developer-firm only.
(x) The all risks carried by the developer appellant-firm only.
(xi) It is surprising that how the developer can be said to be work- contractor because the work contractor is always engaged at the fixed remuneration or at fixed price, A person who accepts the work of RCC work can be said to be a work contractor, a person who accepts the work of plastering/colouring/carpentering can be said to be a work contractor. These are the examples of work contractors. The work contractors are not responsible to the buyer of the residential unit of the Housing Project. Only the Developer is answerable and responsible to the buyer of the residents unit.
(xii) The Learned A.O has tried to convert developer appellant firm into work-contractor by giving the case-law decided by Mumbai ITAT in the case of B. T. Patil & Sons, Belgam Construction Pvt. Ltd. The Learned A.O himself is committing that "developer" is a person or company that designs and create
ITA No.493/Ahd/2011 & 230 & 1783/Ahd/2012 Asst.Year – 2007-08, 2008-09 & 2009-10 - 16 - new product whereas "contractor" is a person or company that has contracted to do work or provide services or goods to another. The developer appellant-firm (through its partners) has conceived and designed the product i.e. the Housing Project. The developer appellant-firm has executed the entire project. He has not been assigned the particular object to be accomplished on behalf of another person. The appellant-firm has translated the conception and designed Housing Project into reality. The developer appellant-firm’s role as developer is much larger than that of contractor.
(xiii) The Learned A.O has tried to fix the developer appellant-firm as work-contractor by giving that since the plan were approved in the name of the original land-owner development permission was also in the name of the original land-owners, the developer appellant-firm has undertaken the work according to the pre- decided plan and therefore, the developer appellant-firm is work-contractor and not a 'developer'. In this regards, it is submitted that according to the GDCR of the AUDA the plan always to be passed in the name of land-owner only. The Housing Project itself was conceived and designed by the develop appellant-firm and got it approved from the Competent Authority. However, the approval has to be in the name of land- owner only because it is the Rule of GDCR that the plans can
ITA No.493/Ahd/2011 & 230 & 1783/Ahd/2012 Asst.Year – 2007-08, 2008-09 & 2009-10 - 17 - be approved in the name of land owner only. The development permission can also be given in the name of land owner only.
(xiv) In this case the land owner is silent and all the efforts to make the Housing Project viable and successful have been (made by the developer appellant-firm only.
(xv) The developer appellant-firm carried out the risk and reward of the Housing Project in the sense that it has not been given a fixed remuneration from the land owner but the developer appellant-firm has fixed the consideration of the residential unit with the prospective buyer independently.
(xvi) Whatever the Profit of Loss accrued out of the activity of developing and building the Housing Project, it would belong to the developer-firm only. The so-called land owners have no authority to interfere in fixing the consideration of the residential unit between the 'developer and prospective buyer'. If there is bearing trend in the real estate market, the developer would be looser and in the case of bullish trend in the real estate market, the developer-firm would be a gainer. It is also important to note that the developer appellant-firm has completed the Housing Project by its own investment without waiting the consideration/booking of the residential unit from prospective buyer. All the necessary facilities have also bet
ITA No.493/Ahd/2011 & 230 & 1783/Ahd/2012 Asst.Year – 2007-08, 2008-09 & 2009-10 - 18 - provided by the appellant-firm to make the residential ur inhabitable.
(xvii) The developer appellant-firm objects the observations given in Para 2.20 while summing of the assessment order under:
(a) Shri Viken Naranbhai is the previous owner of the land from whom the land on which the Housing Project is floated is purchased. Since the land has already been purchased by the partners, there is no existence of the previous owner. Since the application was made by the previous owner of the land, the approval was also granted in his name. It does not make any difference to decide who has developed the Housing Project. (b) No legal title is necessary to show the introduction of the land as stock in trade in the hands of the partnership-firm. Under the Stamp-duty Act, the stamp-duty is attracted on transferring the own land to the firm in which the land owner is a partner. The book-entry passed in the books of the firm as well as in the books of the partners is sufficient to show the assets introduced as capital in the books of the firm.
(c) Of course, the land owner partners are the principal but later on appellant-firm becomes the owner and principal by virtue of introduction of land as capital contribution and satisfying all the criteria of the development of the Housing Project.
ITA No.493/Ahd/2011 & 230 & 1783/Ahd/2012 Asst.Year – 2007-08, 2008-09 & 2009-10 - 19 - (d) The Housing Project was conceived and designed by the partners of the appellant-firm and got it approved from Competent Authority. So indirectly, the developer appellant- firm has developed its own 'baby' i.e. the Housing Project as per the approved plan. It is a Rule that the plan can be approved in the name of land owner only therefore; the plan was approved in the name of the previous land owner from whom the land was purchased. Since the land owned by the firm and construction and all relevant expenses incurred for the development, it is developer's wish to whether to sale the residential unit including land or to sale the land separately and entered into a contract for construction. The important thing is, the land belong to the developer-firm and the construction/developmental expenses also incurred by the developer-firm.
(e) The appellant-firm is genuinely ‘developer’ of the project because the conception of the Housing Project is that of partners of the appellant-firm, they have designed and make it possible and turn into reality. Only thing that; the land was belonging to the previous land owner in whose name the application for approval of plan was made.
(f) It is very clear that the partners of the appellant-firm have conceived the Housing Project in their mind. They have
ITA No.493/Ahd/2011 & 230 & 1783/Ahd/2012 Asst.Year – 2007-08, 2008-09 & 2009-10 - 20 - designed/got it designed through approved architect the plan and got it approved from the Competent Authority. They have funded the land which was purchased in the hands of the Society. Thus, they have completed Housing Project in every respect and got the B.U. permission from the Competent Authority. They have fulfilled all the conditions according to GDCR of AUDA of the completion of the Housing Project and then only the BU permission was granted. Therefore, the developer appellant-firm is ‘a developer’ in true sense.
Learned AO was not satisfied with the contention of the assessee and according to him assessee has failed to satisfy the condition of section 80IB(10). Therefore, no deduction u/s.80IB(10) is allowed and disallowance of Rs.46,92,729/- were made against the assessee.
Thereafter assessee preferred first statutory appeal before the learned CIT(A) and held that terrace should be included because as per definition of built-up area given in the IT Act in clause (a) of section 80IB(14) which includes the measurements at floor level of projections and balconies as well. The appellant violates the condition stipulated in clause(c) of section 80IB(10) and the disallowance of the deduction claimed of Rs.46,92,729/- was upheld.
Now appeal is before us.
ITA No.493/Ahd/2011 & 230 & 1783/Ahd/2012 Asst.Year – 2007-08, 2008-09 & 2009-10 - 21 - 12. We have gone through the relevant record and impugned order and detailed Paper Book filed by the assessee. Learned DR rely on AO and CIT. Assessee cited a judgment [2011] 11 taxmann.com 420 (Ahmedabad) in the case of Amaltas Associates vs. Income Tax Officer, Ward-9(2), in this case it is held as under: “The lower authorities should not have rejected the claim of the assessee at least an alternate contention that the assessee would be entitled for deduction under Section 80IB(10) on pro rata basis. No other point was considered against the assessee for refusing relief under section 80IB(10) by the lower authorities. Since the open terrace is not part of balcony/verandah, therefore, according to the submissions of the assessee, the built up area of the assessee was within the prescribed limit.
It was further held that the assessee fulfilled the conditions and requirement of the section 80IB(10), therefore, the claim of the assessee for deduction should not have been denied by the lower authorities. Accordingly, the orders of the lower authorities was to be set aside and the Assessing Officer was to be directed to grant deduction under section 80IB(10) as claimed by the assessee and assessee’s appeal was allowed.”
12.2 Learned AR also cited a judgment [2015] 56 taxmann.com 50 (Bombay) in the case of CIT vs. Hermes Developers, in this case it is held as under: “When super-built up area (which includes common area of stair-case and balcony area) cannot be equated with built-up area to determine area of a residential flat to allow deduction under section 80IB and this case was also decided in favour of the assessee.”
These judgments were pronounced on January 21, 2011 for Asst. Year 2006-07 and November 27, 2014, respectively. In view of the above said judgments, we allow appeal of the assessee because at that time when
ITA No.493/Ahd/2011 & 230 & 1783/Ahd/2012 Asst.Year – 2007-08, 2008-09 & 2009-10 - 22 - learned CIT passed the order this above said judgment was not passed. Therefore, we allow the appeal of the assessee.
Now we take up the Department’s appeals in ITA Nos.230/Ahd/2012 For Asst. Year 2008-09 and ITA No.1783/Ahd/2012 for Asst. Year 2009-10. Following Grounds of appeal has taken by the department: i. The learned CIT(A)-XV, Ahmedabad has erred in law and on facts in directing the Assessing Officer to allow the Assessee’s claim for deduction of Rs.1,45,89,254/- for Asst. Year 2008-09 and Rs.2,61,59,095/- for Asst. Year 2009-10 u/s.80IB(10) of the IT Act. ii. The learned CIT(A)-XV, Ahmedabad has erred in holding that the Assessee fulfills the conditions laid down for claiming deduction u/s.80IB(10) even when the land was in the name of Viken Naranbhai & others (one of the original land owner and Power of Attorney holder of other original land owners), which is a separate legal entity in the eye of law and the assessee entered into the project by a development agreement with Viken Naranbhai. The entire responsibility to execute the housing project and abide by the terms and conditions of its approval right from the inception of the project till its completion rests with Viken Naranbhai. The local Authority had granted permission for development to Viken Naranbhai. Assessee was just a contractor of the land owners constructing 113 residential units of the scheme titled ‘Ved Bungalows’ (out of which terrace was attached with 62 units) and not a developer.
iii. On the facts and in the circumstances of the case, the learned CIT(A)-XV, Ahmedabad ought to have upheld the order of the Assessing Officer.
ITA No.493/Ahd/2011 & 230 & 1783/Ahd/2012 Asst.Year – 2007-08, 2008-09 & 2009-10 - 23 - iv. It is therefore, prayed that the order of the learned CIT(A)-XV, Ahmedabad may be set-aside and that of the Assessing Officer be restored.
Since we have already allowed the appeal of the assessee in view of the Amaltas Associates vs. Income Tax Officer and CIT vs. Hermes Developers judgments, we are not inclined to give any relief to the department. Therefore, we dismiss both the appeals of department.
In the result, appeal of the assessee in ITA No.493/Ahd/2011 for Asst. Year 2007-08 is allowed and appeals of the department in ITA Nos.230 & 1783/Ahd/2012 for Asst. Years 2008-09 & 2009-10 are dismissed. This Order pronounced in Open Court on 08/08/2017
Sd/- Sd/- एन.के. �ब�लैया महावीर �साद (लेखा सद�य) (�या�यक सद�य) ( N. K. BILLAIYA ) ( MAHAVIR PRASAD ) ACCOUNTANT MEMBER JUDICIAL MEMBER
Ahmedabad; Dated 08/08/2017 Priti Yadav, Sr.PS
ITA No.493/Ahd/2011 & 230 & 1783/Ahd/2012 Asst.Year – 2007-08, 2008-09 & 2009-10 - 24 -
आदेश क� ��त�ल�प अ�े�षत/Copy of the Order forwarded to : 1. अपीलाथ� / The Appellant 2. ��यथ� / The Respondent. 3. संबं�धत आयकर आयु�त / Concerned CIT 4. आयकर आयु�त(अपील) / The CIT(A)-XV, Ahmedabad. 5. �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाड� फाईल / Guard file. आदेशानुसार/ BY ORDER, स�या�पत ��त //True Copy//
उप/सहायक पंजीकार (Dy./Asstt.Registrar) आयकर अपील�य अ�धकरण, अहमदाबाद / ITAT, Ahmedabad True Copy 1. Date of dictation 02/08/2017 (dictation-pad 3 pages attached at the end of this appeal-file) 2. Date on which the typed draft is placed before the Dictating Member …04/08/2017 3. Other Member… 4. Date on which the approved draft comes to the Sr.P.S./P.S…………….. 5. Date on which the fair order is placed before the Dictating Member for pronouncement…… 6. Date on which the fair order comes back to the Sr.P.S./P.S……. 7. Date on which the file goes to the Bench Clerk………………… 8. Date on which the file goes to the Head Clerk…………………………………... 9. The date on which the file goes to the Assistant Registrar for signature on the order…………………….. 10. Date of Despatch of the Order………………