Appeals Upheld for Deduction u/s. 80-IB(10) - Assessees Prevail in Tribunal

The appeals against the orders of the ld.CIT (A)-V Baroda regarding the claim of deduction u/s.80-IB(10) for two Assessees, M/s. Sagar Associates and M/s. Sagar Builders for Asst. Year 2005-06, were decided in favor of the assessee by the Tribunal. The Tribunal allowed both appeals based on precedent set in similar cases and reliance on tribunal decisions supporting the assessee's claim for deduction u/s.80IB(10). The appellant's contention of being a Builder and Developer was accepted, and the denial of the claim of deduction u/s.80IB(10) by the ld.CIT(A)-V Baroda was overturned.

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Issues involved: The judgment involves appeals against the orders of the ld.CIT (A)-V Baroda regarding the claim of deduction u/s.80-IB(10) of the Act for two different Assessees, M/s. Sagar Associates and M/s. Sagar Builders for Asst. Year 2005-06.

Issue 1: Nature of Business Activity

The ld.CIT (A)-V, Baroda held that the appellant is not a Builder and Developer assuming entrepreneurial risk, but rather a Works Contractor. The appellant's contention of being a Builder and Developer for claiming deduction u/s.80IB(10) was rejected based on the execution of sale deeds of incomplete houses and construction agreements. The appellant's profit was deemed ineligible for the deduction u/s.80IB(10).

Issue 2: Claim of Deduction u/s.80IB(10)

The ld.CIT(A)-V, Baroda disallowed the appellant's claim of deduction u/s.80IB(10) amounting to Rs. 83,185, despite the appellant fulfilling all conditions for the claim. The denial was based on the separate sale of plots and completion of construction work, rendering the appellant ineligible for the deduction.

Issue 3: Tribunal Decisions

The appellant relied on tribunal decisions, including DCIT vs. SMR Builders (P.) Ltd., M/s. Vardhman Builders and Developers vs. ITO, and Raghava Estates Vs. Dy.CIT. The Tribunal noted that a similar issue was decided in favor of the assessee in the case of Satsang Developers vs. ACIT, and decided the present appeals in favor of the assessee based on the precedent and other tribunal decisions cited.

In conclusion, the Tribunal allowed both appeals of the assessees based on the precedent set in similar cases and the reliance on tribunal decisions supporting the assessee's claim for deduction u/s.80IB(10).

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