TaxTMI 
TaxTMI 
2008 (11) TMI 436
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....B(10), which is a machinery provision, postulating complete identity between the assessee as referred to in section 80-IB(1), and the undertaking developing and building housing projects approved by the local authority as referred to in section 80-IB(10), not permitting such splitting between the assessee and the person who is granted approval by the local authority for developing and building housing projects, as presumed by the CIT(A). 3.The ld. CIT(A) failed to abide by the scheme of section 80-IB based on complete identity between the assessee as referred to in section 80-IB(1), on the one hand, and the entity fulfilling the conditions laid down in sections 80-IB(3), 80-IB(9), 80-IB(11) and 80-IB(11AA), besides section 80-IB(10), on the other. 4.The ld. CIT(A) failed to appreciate that the land being integral part of any housing project, the assessee, without owning the land component, could not pass on full title over dwelling units to the customers so as to derive profits from developing and building housing projects and this integration is further fortified by the requirement of approval by the local authority as well as grant of completion certificate by the local aut....
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....decision of the Tribunal, he directed the Assessing Officer to allow the deduction under section 80-IB(10) to the assessee. Similarly in all other cases, the deduction was allowed. The revenue has come in appeals before us. 4. The learned DR before us vehemently relied on the decision of the Hon'ble Supreme Court in the case of Fakir Chand Gulati v. Uppal Agencies (P.) Ltd. [Civil Appeal No. 3302 of 2005], and contended that the essence of the agreement has to be looked into before deciding whether the assessee is entitled for the deduction under section 80-IB(10) or not. If the agreement entered into between the assessee and the landowners points out that it relates to the sale between the two and the contractor is developing housing projects at its own rights, not as an agent of the landowner, the assessee should be allowed deduction but where the assessee is working on behalf of the landowner as its agent for a fixed consideration, the case of the assessee will not be covered by the decision of the Tribunal in the case of Radhe Developers (supra). 5. The learned AR, on the other hand, drawn our attention towards the decision of the Hon'ble Supreme Court in the case of Gove....
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....ically paras 3, 8, 10, 12, 13, 14, 29 and 31 of the decision and contended that the facts involved in the case of the assessee are similar to the facts involved in the case of Radhe Developers (supra) and for this attention was drawn towards the agreement entered into by the assessee with the landowner appearing at pages 42 to 49 of the paper book. On a query from the Bench he was fair enough to concede that where a developer/Builder is working for a fixed remuneration on behalf of the landowners, the provisions of law laid down in the case of Radhe Developers ( supra) will not apply. It was vehemently contended that the assessee is a developer of the project at its own cost and risks and not a mere contractor working on behalf of the landowner. The assessee has not worked for a fixed remuneration for the landowner but has worked for himself in order to exploit the potential of its business in his own interest. The assessee was responsible for all the business risks associated with the business of development and building of housing projects. Whether there is a profit or loss the owner of the plot was not responsible for the same. In substance, the assessee has purchased the land f....
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....t the disposal of the builder, vacant possession of the premises and authorize the builder to secure necessary sanctions, permissions and approvals for demolition of the existing building and construction and completion of a new building. ****** (iii)The builder shall demolish the existing structure and construct a residential building consisting of ground, first and second floors, at its cost and expense. (iv)The builder will have the right to appoint Architects, contractors, sub-contractors, etc. (v )The new building to be constructed by the builder shall be of good quality as per the detailed specifications contained in Annexure-A to the agreement. (vi)On completion of construction, the land-owner will be entitled to the entire ground floor (consisting of three bedrooms with attached bathrooms, one drawing-cum-dining, one store room, one kitchen) with one servant room under the overhead water tank on rear terrace and one parking space, as his share in consideration of his having made available the land. The builder shall also pay a sum of Rs. 8 lakhs as non-refundable consideration to the owner. (vii)The remaining part of the building (the entire first and seco....
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....er alleges that the Builder made several unauthorized deviations during the construction from the sanctioned plan of Municipal Corporation of Delhi due to which the landowner received a number of notices from Municipal Corporation of Delhi and vide order dated 16-1-1991, Municipal Corporation of Delhi directed to seal the premises and the premises were de-sealed subsequently to enable the Builder to rectify the deviations. The Builder delivered the Ground Floor to the landowner's son during the landowner's absence from India. The landowner on return noted a number of shortcomings in the construction and the violation of sanctioned plan and, accordingly, vide letter dated 29-10-1992 asked the Builder to rectify the deviations and defects. The Builder did not comply with the same. The landowner, therefore, filed a complaint before the District Consumer Disputes Redressal Forum. The District Consumer Disputes Redressal Forum dismissed the complaint as not maintainable under the Consumer Protection Act, 1986 holding that the landowner was not a consumer. The appeal filed before the State Commission, Delhi was dismissed as not maintainable. Revision petition was filed before the Nationa....
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....rs. The usual feature of these agreements is that the land-holder will have no say or control in the construction. Nor will he have any say as to whom and at what cost the builder's share of apartments are to be dealt with or disposed of. His only right is to demand delivery of his share of constructed area in accordance with the specifications. The builders contend that such agreements are neither contracts for construction, nor contracts for sale of apartments, but are contracts entered for mutual benefit and profit and in such a contract, they are not 'service-providers' to the land-owners, but a co-adventurer with the land-holder in a 'joint venture', in developing the land by putting up multiple-housing (Apartments) and sharing the benefits of the projects. The question is whether such agreements are truly joint-ventures in the legal sense. 19. What then is the nature of the agreement between the appellant and the first respondent? Appellant is the owner of the land. He wants a new house, but is not able to construct a new house for himself either on account of paucity of funds or lack of expertise or resources. He, therefore, enters into an agreement with the builder. He a....
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....his purpose whether the collaboration agreement is for construction and delivery of one apartment or one floor to the owner or whether it is for construction and delivery of multiple apartments or more than one floor to the owner. The principle would be the same and the contract will be considered as one for house construction for consideration. The deciding factor is not the number of apartments deliverable to the landowner, but whether the agreement is in the nature of a joint-venture or whether the agreement is basically for construction of certain area for the landowner. 20. It is, however, true that where the contract is a true joint venture the scope of which has been pointed out in para 17 above, the position will be different. In a true joint venture agreement between the landowner and another (whether a recognized builder or fund provider), the landowner is a true partner or co-adventurer in the venture where the landowner has a say or control in the construction and participates in the business and management of the joint venture, and has a share in the profit/loss of the venture. In such a case, the landowner is not a consumer nor is the other co-adventurer in the joi....
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....d being that of the Delhi State Commission in Har Swarup Gupta v. Mis. Kailash Nath & Associates - II (1995) CPJ 275. In C. Narasimha Rao, there was an agreement between the landowners and a builder for construction of a building and sharing of the constructed area. The old building was demolished, but the builder failed to complete the construction of a new building and hand over the owner's share of flats. The landowners preferred a complaint claiming Rs. 94,000 as the value of the malba (retrievable valuables from the debris of the old building) that had been removed by the builder. The National Commission held that as the claim was for recovery of the money being value of the malba removed by the builder, it does not amount to a claim based on deficiency of service and, therefore, such a claim would fall outside the scope of the Consumer Protection Act. The said decision is wholly inapplicable, as it dealt with a different question. In Har Swarup Gupta, the State Commission was concerned with a claim of the landowners for compensation alleging that the builder had not built the flats in terms of the contract under which the landowners were entitled to 36 per cent and the builde....
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....he agreement/document/instrument." On the facts of this case, the Hon'ble Supreme Court observed that the landowner has to do nothing except to the extent he has to receive the constructed area by way of consideration from the Builder/Developer. The Hon'ble Supreme Court came to the conclusion that the basic purpose of the agreement to construct a house or apartment by the Builder for the owner and, therefore, the agreement is not joint venture even though the nomenclature of the agreement given may be a collaboration agreement. The landowner will not have any say or control in the construction. His motive is not to develop, construct or carry on the business. His only right is to demand delivery of his share of constructed area in accordance with the specifications. Therefore, the Hon'ble Supreme Court after having lengthy and pain taking discussion came to the conclusion that the contract entered into even though is titled as collaboration agreement is in fact a contract for house construction for the consideration and accordingly, took the view that the landowner is a consumer and the Builder is a service provider. The remedy is available to the landowner against the Builder ....
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....cts; (ii) statements of the principles of law applicable to the legal problems disclosed by the facts; and (iii) judgment based on the combined effect of the above. A decision is an authority for what it actually decides. What is of the essence in a decision is its ratio and not every observation found therein nor what logically flows from the various observations made in the judgment. The enunciation of the reason or principle on which a question before a Court has been decided is alone binding as a precedent - State of Orissa v. Sudhansu Sekhar Misra AIR 1968 SC 647 and Union of India v. Dhanwanti Devi [1996] 6 SCC 44. A case is a precedent and binding for what it explicitly decides and no more. The words used by the Judges in their judgments are not to be read as if they are words in Act of Parliament. In Quinn v. Leathem [1901] AC 495 (H.L.), Earl of Halsbury LC observed that every judgment must be read as applicable to the particular facts proved or assumed to be proved, since the generality of the expressions which are found there are not intended to be exposition of the whole law but governed and qualified by the particular facts of the case in which such expressions are fou....
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....ificant detail may alter the entire aspect, in deciding such cases, one should avoid the temptation to decide cases (as said by Cordozo) by matching the colour of one case against the colour of another. To decide therefore, on which side of the line a case falls, the broad resemblance to another case is not at all decisive.' ****** 'Precedent should be followed only so far as it marks the path of justice, but you must cut the dead wood and trim off the side branches else you will find yourself lost in thickets and branches. My plea is to keep the path to justice clear of obstructions which could impede it.'" 10. Now the question before us is whether the decision of the Hon'ble Supreme Court in the case of Fakir Chand Gulati (supra) will be applicable in the case of the assessee or not or can it be regarded to be the precedent for deciding the issue involved in the cases before us for which the Ld. Senior Advocate took all the pains for travelling from Ahemadabad to Baroda and made us read and understand the whole judgment delivered by the Hon'ble Apex Court in the case of Fakir Chand Gulati (supra) and that of this Tribunal in the case of Radhe Developers (supra) vis-a-vis....
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....ion has granted Rajachiththi No. L/96/ 2003, dated 28-7-2003. The assessee has to perform the following acts over the said land including construction : "(1)That the Party of the Second Part (Assessee) shall upon obtaining all necessary permissions over the said land such as N A, N O C, Development Permission, Rajachiththi, permission for passing plans, Title Clearance, etc., for making the construction and erect an apartment in the same, can organize shops, offices, flats and tenement society and can engage architect if required, can prepare plans and obtain the Occupation Certificate, Completion Certificate, can get the revised maps prepared and for which, the complete powers are given to the Party of the Second Part. (2)The entire responsibility for carrying all legal proceedings in respect of aforesaid land shall be that of the Party of the Second Part and for that purpose, the Party of the First Part are bound to subscribe signatures, consents, affidavits, if and when found necessary. However, the entire expenses that may be required to be incurred by the Second Party on the same cannot be recovered from the Party of the First Part. With this clear-cut condition, this la....
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....od of making the develop it. (8)If required, the Party of the Second, will raise necessary capital for making development and construction over the said land and can obtain the loan from the bank or any other institutions to complete the scheme and for that purpose can file a claim against such institutions for carrying out necessary proceedings and Party of the Second Part of its own whatever financial responsibility that may arise in such works, shall be on the head of the Party of the Second Part Developers. (9)That all activities relating to the construction is to be carried out by the Developer and if required, the Party of the First Part has to extend necessary co-operation and assistance as a landowner. The expenses for the said works is to be borne by the Party of the Second Part Developer. (10)From the date of this Agreement, you, the Party of the Second Part is bound to pay tax, land revenue, special cess, etc., in the offices of the Vadodara Municipal Corporation, Government, Semi-Government and whatever tax, land revenue, education cess, special cess, etc., are outstanding prior to the date of this Agreement, the same are and shall be paid by us, the Party of t....
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....of Fakir Chand Gulati ( supra), we noted that in this case, there is no agreement to share the constructed area. This agreement relates only to purchase part of the land from the landowner by the assessee for a pre-determined consideration. All the responsibilities for carrying out the construction, permission, NA, NOC, legal proceedings and the results of the development lies with the assessee. The first party is only to co-operate the assessee in carrying out the development and also to execute the documents whenever it is required by the Developer. The assessee has also handed over the physical possession to the Builder for carrying out the development of the project. The landowner does not have any right, interest, title in the development so carried out except to the extent he has to receive the consideration from the assessee. The assessee is entitled to publicize the project, print brochures, etc., and can sell the project at its own right. All the expenses have to be incurred by the assessee for carrying out the construction, etc. The landowner has to do nothing except to the extent he has to receive consideration from the assessee. His motive is not to develop, construct o....
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....ject was approved by the local authority, Baroda Municipal Corporation hereinafter referred to as 'BMC' on 17-7-2000. The approval was in the name of the said owners of the land. As the assessee-firm is not the owner of the land and even the approval for permission to develop and construct the project was also not in the name of the assessee but in the name of the original landowners, the Assessing Officer held that the assessee has merely acted as an agent/contractor for construction of residential houses, and, therefore, did not satisfy the conditions for granting the claim of deduction under section 80-IB(10) of the Act and accordingly not entitled to the deduction. 4. The CIT(A) dismissed the assessee's appeal vide discussion in paragraph Nos. 15 & 16 of his order in the following manner : '15. Therefore, the deduction under section 80-IB(10), read with section 80-IB(1) and rule 18BBB is admissible only to such assessees as are deriving profits from an undertaking of building and housing projects approved by the local authority, and for such approval, the assessee must legally own the land which is an inalienable constituent of any housing project. The person doing only t....
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....ately, etc. In some cases, the land may be conveyed directly in favour of Co-operative Housing Societies or Non-Trading Corporations or Developers. Therefore, if the land is conveyed to a developer, what the developer does is that he enters into an agreement titled as Development Agreement with the land-owner. The Development Agreement effectively is an agreement of sale under which the landowner hands over the possession to the Developer, which entitle Developer to develop the property entirely at his choice, convenience and discretion. By such Development Agreement, the price on which the land would be sold, is fixed. The Agreement would also specify that the land-owner would be entitled to receive his consideration either immediately or over a fixed period, irrespective of whether or not the land is actually developed by the Developer. The land-owner gives all his rights over the land and gives full authority to the developer to enjoy the land in the manner of his choice. The Agreement would also specifically authorize the developer to develop the land, construct tenements thereon, book members and hand over possession to one or more allottees. For all purposes, therefore, the l....
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....Clause 3 of GDCR prescribes procedure for acquiring development permission. Application has to be made in Form No. 1 which can be filed by anyone including "Developer". Thus, a "Developer" has a right to apply for development permission and to carry on all construction activities. Clause 11 prescribes conditions for development of land and clearly contemplates grant of development permission not only to "Owner" but also to a person who has a right to develop the land. Regulation 23 shows that it applies to the new construction, as distinguished from the applicability to the person applying for construction. In other words, the Developer caries out development activity as to comply with the Regulations whether or not he is the "Owner". This becomes further clear when one examines Clause 25, which pertains to penalties. Finally when the construction is completed the application for occupancy permission has to be made in Form No. 7 pursuant to Regulation No. 6.2(b) and that Building Completion Certificate is given by the authority in Form No. 10 pursuant to Regulation No. 7 in relation to development. Therefore, what is material is the development of the real estate and not, who has c....
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.... amount towards the sale price of the land and, therefore, the party of Third Part is made consenting party and, therefore, the amount of sale price is to be given to the consenting party by the purchaser as per this agreement to sale.' 14. The relevant terms and conditions clearly states that the second party are the owners of the land. The agreement for development of the housing project and construction dated 18-5-2000 described in the schedule and the land is in their names in the Government records. The relevant clauses 1, 2, 3 and 4, read as under:- 'Who shall be hereinafter in this present Agreement of Development of Housing Project and Construction termed as The Party of the Third Part or You the said Firm or Developer-Builder in the meaning and context of the said term includes all the present and future partners/partners from time to time of the said Firm of the Party of the Third Part, who are alive, and heirs, successors, guardians, etc., of everybody. 1. Whereas The Party of the Second Part the confirming party are the original owners of the land described in Schedule below and is on their names in Government record. 2. The Party of the Second Part the conf....
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....e proceedings at Government and Semi-Government and Municipal Corporation Office and in legal Courts and at other places on behalf of The Party of the First and Second Part on necessary applications and written statements, replies and in the forms all that is to be done by Developer-cum-Building Contractor and for that hereby the authority and powers are given to him in spite of that in future if any Specific Power of Attorney is to be obtained at that time. The Party of the First and Second Part shall have to execute that in favour of Developer-cum-Building Contractor.' 16. By clause 14 of this Agreement the possession is to be with the Developer-cum-Building Contractor, i.e., assessee-firm and it reads as under:- '14. The land described in schedule below and the construction done on it, its actual possession shall be with Developer-cum-Building Contractor till the completion of this scheme and moreover till the total implementation of this agreement on the said land and the construction over it there shall be a contractual lien of the Developer-cum-Building Contractor.' 17. Vide clause No. 16 of this Agreement, the parties of the first and second part of this agreement h....
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.... Amount (Rs.) 1. VMC charges paid to Vadodara Municipal Corporation 2000-01 65,532 2. VMC charges paid to Vadodara Municipal Corporation 2001-02 31,116 3. VUDA charges paid to Vadodara Development Authority 2000-01 46,508 4. Electricity charges paid to GEB for getting electricity connection to its project 2000-01 1,99,944 19. The assessee commenced the work to develop which included the development of sites, laying roads within the housing complex, providing for compound-walls of the housing complex, streetlights, drainage, etc.; that simultaneously the construction commenced the work of the housing work; that the cost of the entire Development and the Construction is substantially made out by the assessee-firm initially and partially recovered from the customers who are desirous to purchase any residential houses, i.e., the prospective buyers; and that the size of plot on which the project is developed is, definitely, in excess of one acre and the size of each residential house is less than 1500 sq.ft. 20. On these undisputed facts we have to examine the provisions of the section 80-IB(10) of the Act. Before discussing the prov....
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....ect on or after the 1st day of October, 1998, and completes the same before the 31st day of March, 2001; (b )the project is on the size of a plot of land which has minimum area of one acre; and (c )the residential unit has a maximum built-up area of one thousand square feet where such residential unit is situated within the cities of Delhi or Mumbai or within twenty-five kilometers from the municipal limits of these cities and one thousand and five hundred square feet at any other place.' 23. For enacting this provision, the Notes on Clauses to the Finance Bill, 1999 has explained that the provision also seeks to provide that for approved housing projects the profits which are fully deductible, the built-up area in regions other than outside twenty-five kms. of municipal limits of Delhi and Mumbai, does not exceed one thousand five hundred square feet. 24. Further, the Memo contained in Finance Bill, 1999 has explained the provisions brought by the Legislature with effect from 1st April, 2000 and the same reads as under : 'Tax Incentive for Promotion of Housing Liberalization of tax holiday to approved housing projects-Under section 80-IA of the Income-tax Act, pr....
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....ereby that for the assessment years 2002-03, 2003-04 and 2004-05, the assessment years with which we are concerned, there was no outer time-limit for completion of the project. There have been certain further amendments in this section by Finance (No. 2) Act, 2004 with effect from 1-4-2005, but we are not concerned with these amendments insofar as all these appeals are concerned. Therefore, we are not dealing with the same. 27. A bare reading of this provisions of section 80-IB(10), as they stood in the years under consideration, the requirements for claiming deduction for housing projects are that (i) there must be an undertaking developing and building housing project; (ii) such housing project is approved by the local authority; (iii) the development and construction of housing project has commenced on or after 1-10-1998; (iv) the housing project is on a size of a plot of land which has minimum area of one acre; and (v) the residential unit developed and built has a built-up area of 1,000 sq. ft. if it is situated in Delhi and Mumbai or within 25 km. of municipal limit of these cities and 1,500 sq. ft. at any other places. There is no other condition, which is to be complied ....
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....n entered into for development and building housing project; or be the assessee a contractor for developing and building housing project or an owner of the land. 30. What is the meaning of the term develop, developer, developing, development, we can find the answer in certain dictionaries, including the Law Dictionary. (a )The Webster's Encyclopedia Unabridged Dictionary of the English Language gives following meanings of the term 'developer' as: 1. One who or that which develops; 2. A person who invests in and develops the urban or Suburban potentialities of real estate. (b )Oxford Advanced Learners Dictionary of Current English Fourth Indian Edition gives meaning of the term 'developer' as person or company that develops land. (c )Random House Dictionary of the English Language, the following definitions can be found : Develop : (a )To bring out the capabilities or possibilities of; bring to a more advanced or effective state. (b )To cause to grow or expand. Developer : (a )The act or process of developing; progress (b )Synonym : Expansion, elaboration, growth, evolution, unfolding, maturing, maturation. (d )Webster Dictionary, the following defin....
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....ers, but Developer is working for himself in order to exploit the potential of its business in his own interest and, therefore, option for all business risks associated with the business of development of real estate including developing and building of housing projects. As per the provisions of section 2(1)(g) of Regulation of Employment and Conditions of Service Act (27 of 1996), the term 'Contractor' means a person who undertakes to produce a given result for any establishment, other than a mere supply of goods or articles of manufacture, by the employment of building workers or who supplies building workers for any work of the establishment; and includes a sub-contractor. 32. In these circumstances, in our opinion, the assessee is entitled to deduction under section 80-IB(10) as it had developed and built the housing project; it had started construction after 1-4-1998; the project is on the size of a plot of land which has a minimum area of one acre and the maximum built-up area of the residential units are not more than 1500 sq. ft., the property being situated in Baroda, a city other than Delhi and Mumbai. 33. It may also be born in mind the deduction is not exclusively....
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....ection 53A of the Transfer of Property Act, 1882 referred to in the aforesaid section of the Income-tax Act, reads as under :- '53A. Where any person contracts to transfer for consideration any immovable property by writing signed by him or on his behalf from which the terms necessary to constitute the transfer can be ascertained with reasonable certainty, and the transferee has, in part performance of the contract, taken possession of the property or any part thereof, or the transferee, being already in possession, continues in possession in part performance of the contract and has done some act in furtherance of the contract, and the transferee has performed or is willing to perform his part of the contract, then, notwithstanding that the contract, though required to be registered, has not been registered, or, where there is an instrument of transfer, that the transfer has not been completed in the manner prescribed therefor by the law for the time being in force, the transferor or any person claiming under him shall be debarred from enforcing against the transferee and persons claiming under him any right in respect of the property of which the transferee has taken o....
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...., therefore, raise any arguable question of law and the said application was rightly rejected by the High Court. In the circumstances, even though we are unable to agree with the reasons given in the impugned order, we are in agreement with the order of the High Court dismissing the application filed by the assessee under section 256(2) of the Act." 38. The argument is totally misconceived as in the present case, the assessee has performed his part of the contract in regard to 'Agreement to Sale' and 'Development Agreement' and paid part of consideration to perform his part and carried out development activities by constructing a housing project as per agreement. This being a tri-party agreement, i.e., the Development Agreement which has passed on a valid and rightful title to the prospective buyers, in no way it can be said that facts of case before the Supreme Court would apply to the present case. 39. We may refer to the provisions of section 10(20A) of the Income-tax Act providing that : "Any income of an authority constituted in India by or under any law enacted either for the purpose of dealing with and satisfying the need for housing accommodation or for the purpose of....
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.... there is nothing on record which indicated that the assessee had acquired dominion over the mills in question on which depreciation was claimed in order to the findings of the Tribunal available. In view of these facts, the Supreme Court has dismissed the appeal of the assessee. 42. We may refer to decisions referred to by the ld. counsel for the assessee in the case of Supreme Court in the case of Mysore Minerals Ltd. 239 ITR 775, wherein by relying on the decision of CIT v. Podar Cement (P.) Ltd. [1997] 226 ITR 625, the Supreme Court has elaborately discussed and defined the word "owner" and finally held as under:- 'Section 32 of the Income-tax Act confers a benefit on the assessee. The provision should be so interpreted and the words used therein should be assigned such meaning as would enable the assessee securing the benefit intended to be given by the Legislature to the assessee. It is also well-settled that where there are two possible interpretations of a taxing provision the one which is favourable to the assessee should be preferred. What is ownership ? The terms "own", "ownership", "owned", are generic and relative terms. They have a wide and also a narrow conn....
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.... "'Owner' applies 'to every person in possession or receipt either of the whole, or of any part, of the rents or profits of any land or tenement; or in the occupation of such land or tenement, other than as a tenant from year to year or for any less term or as a tenant at will'." In State of U.P. v. Renusagar Power Company [1991] 70 Comp. Cas. 127, 149 (SC) is, was held that "the word 'own' is a generic term, embracing within itself several gradations of title, dependent on the circumstances, and it does not necessarily mean ownership in fee simple; it means, 'to possess, to have or hold as property'." In CIT v. Podar Cement (P.) Ltd. [1997] 226 ITR 625 (SC), the question which came up for consideration before this Court was whether the rental income from the house property which had come to vest in the assessee, but as to which the assessee was not legal owner for want of deed of title, was liable to be assessed as income from house property or as income from other sources. To be assessable as income from house property within the meaning of section 22 of the Act the property should be such "of which the assessee is the owner". This Court upon a juristic analysis of the un....
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....rs being excluded therefrom and having the right to use and occupy the property and/or to enjoy its usufruct in his own right would be the owner of the buildings though a formal deed of title may not have been executed and registered as contemplated by the Transfer of Property Act, the Registration Act, etc. "Building owned by the assessee" the expression as occurring in section 32(1) of the Income-tax Act means the person who having acquired possession over the building in his own right uses the same for the purposes of the business or profession though a legal title has not been conveyed to him consistently with the requirements of laws such as the Transfer of Property Act and the Registration Act, etc., but nevertheless is entitled to hold the property to the exclusion of all others.' 43. In view of decision of the Supreme Court in the case of Mysore Minerals Ltd. (supra), wherein the term "owned" in section 32 has been given a wider meaning by holding that if an assessee was in possession of a property and had acquired dominion over it to the exclusion of others, he would be entitled depreciation under section 32 irrespective of the legal title. In the present case, the 'Dev....
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....tion 80-IB(10) of the Act, to claim deduction on the profit derived from construction and development of residential housing project. There is no explicit condition enumerated in section 80-IB(10) of the Act as regards to requirement of ownership for the claim of deduction. In view of above facts and circumstances of the case as well as legal proposition laid down by the Supreme Court in the case of Mysore Minerals Ltd. (supra), we hold that the assessee is entitled for claim of deduction on the profit derived from Construction and Development of Residential Housing Project." [Emphasis supplied] 16. The facts involved in the case of the assessee are similar to the facts in the case of Radhe Developers (supra) and, accordingly, we are of the view that the assessee has acquired the dominant over the land and has developed the housing project by incurring all the expenses and taking all the risks involved therein. We may mention here that, in our opinion, the decision in the case of Radhe Developers (supra) will not apply in a case where the assessee has entered into the agreement for a fixed remuneration merely as a contractor to construct or develop the housing project on behalf ....