2012 (12) TMI 328

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....issioner of Income-tax (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.1,14,75,237/- u/s. 80 IB (10) of the Act. 2. The ld. Commissioner of Income-tax (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 Dhan Vihar Cooperative Housing Society Ltd., which is a separate legal entity in the eye of law and the assessee entered into the project by a development agreement with the Society. The entire responsibility to execute the house project and abide by the terms and conditions of its approval right from the inception of the project till its comple....

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....of construction of the project. 3. The assessee has not sold any unit to the purchaser but the Society has executed the sale deeds as a seller and the assessee joined only as a confirming party to the transaction. This also proves that the assessee was merely a contractor/agent of the society. 4. As per the Amendment to section 80 IB by the Fiancé Act 2009, a works contractor who executes the work awarded by any person is not eligible for the deduction u/s. 80IB. Any person includes the Dhan Vihar Co.Op. Housing Society Ltd., which is a legal entity. 5. Apart from the above, the assessee's contention that the land is owned by himself and his family members since long is found to be baseless. No doubt the assessee and his family me....

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.... or loss will be of the party of the third part known as Mayur Estate Developer." The AO has not challenged that the appellant violated any of the conditions stipulated from clause (a) to (d) of section 80 IB (10) and the appellant as per the terms and conditions of Development Agreement has to pay the land cost and also to develop the project at his own cost and risk and enjoy the subsequent profit or suffer the loss, in my view it is eligible for deduction. The AO is directed to allow the deduction claimed u/s. 80 IB (10)." 5. The learned DR stoutly argued stating that the AO had stated various reasons for disallowing the claim of the assessee u/s 80 IB(10) of the Act, however, the learned CIT(A) by his cryptic order has allowed the cla....

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....to be ascertained whether it was a "work contract" or a "Development Contract". (c ) On the basis of the terms and conditions, it has to be examined that which of the party had taken full responsibility for execution of the said development project. (d) Whether under the agreement the assessee had been given full authority to develop the land and to construct residential units. The AO has to examine the fact in respect of engagement of professionals, such as, architect for designing and architectural work. (e) The AO has to examine the responsibility of enrolment of members and collection of charges required to be made from the buyers of the residential units. (f) The AO has to examine about the "profit" or "loss" arising from the said p....