TaxTMI 
TaxTMI 
2011 (12) TMI 356
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....onsideration the appellant company entered into 'development agreement' with Kalptaru Park Millennium Co-op. Housing Ltd. for the purpose of developing housing project. The appellant, claiming to be developer claimed deduction under s. 80-IB(10) of the IT Act, 1961 amounting to Rs.4,23,89,356 on the net profit earned by it at Rs.4,53,00,578. However, after discussing the issue at length in the assessment order and also relying upon various decisions, the AO has rejected the appellant's claim of deduction under s. 80-IB(10) holding that the appellant is not a developer." 3. Being aggrieved, the assessee carried the matter in appeal before learned CIT(A). Before CIT(A), reliance was placed on the Tribunal decision rendered in the case of Radhe Developers and Ors. vs. ITO (2008) 113 TTJ (Ahd) 300 and another Tribunal decision of Mumbai Bench in the case of Patel Engineering Ltd. vs. Dy. CIT (2004) 84 TTJ (Mumbai) 646. Learned CIT(A) has obtained remand report of the AO and in the remand report, the AO placed reliance on the subsequent Tribunal decision of Ahmedabad Bench rendered in the case of ITO vs. Shakti Corporation in ITA No. 1503/Ahd/2008 in which earlier Tribunal decis....
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....ence assessee is not eligible for deduction under s. 80-IB. 6. We have considered the rival submissions, perused the material on record and have gone through the orders of authorities below and the judgements cited by both the sides. We find that the decision of CIT(A) in the present case is as per paras 8.1.2-8.1.5, which are reproduced below: "8.1.2 In other words the issue to be adjudicated upon in the instant case is whether the appellant is a developer and builder or whether the appellant is a contractor for works. The AO held, vide para 3.28 of the assessment order as under: '3.28. To sum up, a reading of the various clauses of the agreement entered into by Kalpataru Society with the assessee company, it is clear that the assessee company has entered into only a contract for services for which it is being paid in the manner specified in cl. 15 of the said agreement. Therefore, it cannot be termed as the developer of the said housing project. Deduction under s. 80-IB(10) claimed by the assessee to the tune of Rs.4,23,89,356 is therefore disallowed leading to an addition of Rs.4,23,89,356 to the returned income.' In the remand report also, the AO....
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....f the appellant and the society had no risk whatsoever in this regard. I am of the view that AO's reliance on cl. 15 of the development agreement (quoted above) to say that the appellant is not a developer is misplaced. In fact, the said clause makes it amply clear that the entire financial risk and the surplus or deficit in the venture shall rest with the appellant. 8.1.5 Besides the transactions pertaining to the project have been entered in entirety in the books of accounts of the appellant. The co-operative society did not account for any receipts or expenditure in connection with the building of houses. In these circumstances, I am of the considered opinion that the appellant performed the role of a developer and builder in respect of the project under consideration. By no stretch of imagination the appellant can be termed as contractor for works, much less they can be termed as an agent of co-operative society. In the light of the above discussion, I hold that the appellant is a developer and builder, entitled to deduction under s. 80-IB(10) of the IT Act, 1961. The action of the AO in disallowing the claim for the said deduction is not in accordance with the provisio....
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....penses of every discretion whatsoever to be incurred or paid for obtaining approvals or sanction to the layout plans, construction plans, revised plans from Taluka Panchayat or from any other concerned authority or authorities. Cost and expenses to be incurred for obtaining all and every permissions, certificates, approvals, sanctions as may be necessary to be obtained from any authority or authorities whatsoever in any of the matters of evolving, implementing and carrying out the scheme or generally under this agreement. The interest and other charges required to be paid upon finance that may be raised Or arranged from any source whatsoever including that raised by the developer/builder itself, as also upon any investments already made for timely completion of the project. Remuneration or charges to be payable to the consultants like architects, engineers, structural engineers, contractors, supervisors, drainage consultants, electrical consultants, project consultants etc. in any form whatsoever. All costs, charges and expenses of every discretion whatsoever to be paid or incurred in any of the matters relating to the scheme not specifically provided herein....