TaxTMI 
TaxTMI 
2014 (5) TMI 221
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....onically filed its return of income for AY 2009-10 on 20.8.2009 declaring total income of Rs 64,93,620/-. The case was selected for scrutiny and thereafter the assessment was framed u/s 143(3) vide order dated 21.11.2011 and the total income was determined at Rs 4,42,07,590/-. Aggrieved by the order of AO, Assessee carried the matter before CIT(A). CIT(A) vide order dated 11.7.2012 dismissed the appeal of the assessee. Aggrieved by the order of CIT(A), Assessee is now in appeal before us. The effective ground raised by the Assessee reads as under:- 1. Ld. CIT(A) erred in law and on facts in confirming disallowance of deduction claimed u/s 80IB(10) of the Act holding that the conditions laid down under the section were not fulfilled by the appellant. The order of ld. CIT(A) being bad in law deserved to be quashed. 4. Though the assessee has raised several grounds, the only effective ground is with respect to allowability of deduction u/s 80IB(10) of the Act. 5. During the course of assessment proceedings, AO noticed that Assessee had claimed profit earned on the project known as Narayan Gardens and Surya Narayan aggregating to Rs 3,77,13,968/- as exempt u/s 801B(10) of the Act. A....
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....ant acting as a conforming party. ii) Sale consideration for the plot of land specified. iii) Plot No., location and area of the land is specified. iv) The purchaser had become the absolute owner and occupier of the said property and entitled to transfer the said property by way of sale, mortgage, gift or otherwise, and the vendors and the conforming party have released and relinquished all their right, title, and interest in the said property in favour of the purchaser. v) The purchaser is to pay all taxes etc. in respect of the land after the date of sale deed. The "Construction Agreement" for Units has the following features, i) It: states that the employer, who is the owner of the plot, is constructing a residential building in the plot as per the plan and specification attached to the contract. The appellant who has been termed as builder, has agreed to execute such construction for a specified amount. ii) It is a bi-partite agreement between the land owner (ultimate purchaser of the units) and the appellant/ for the construction of each unit individually. iii) The contracts provides for any work which is not included in the plan or specifications, for which builders i....
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....onstruction agreement" for the construction the unit and therefore according to him, the Assessee was a contractor and therefore not eligible for deduction u/s 8018(10). We also find that on identical facts, the co-ordinate Bench of the tribunal in the case of Satsang Developers (ITA No 1011, 2498 and 1221 of 2012 order dated 12.11.2013 has allowed the deduction to assessee by holding as under:- 4.2. In addition to above two objections, the Id.CIT (A) has raised one more objection that the assessee has sold the land to the Unit holders separately and has done the construction of units under separate agreement/contract and, therefore, the assessee is not eligible for deduction u/s.80-IB(10) of the Act because as per ld.CIT(A), profit earned by the assessee in respect of sale of land is not eligible for deduction u/s.80-IB(10) of the Act and similarly, the profit earned by the assessee for construction activities is not eligible for deduction u/s.80-IB(10) because the assessee is doing the construction as a contractor for a work and not as a builder or developer and, therefore, the assessee is not eligible for deduction u/s.80-IB(10) of the Act. Against these objections of ld.CIT (A....
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....fied unit and registration of flat in semi-finished condition is only to facilitate the convenience of the parties and agreement for development and completion of balance work in relation to the flats is only an incidental formality and this cannot be viewed as fatal to the claim of the assessee for deduction u/s.80-IB(10) of the Act. It was also held by the Tribunal that the entire work from the stage of the commencement to the stage of making the residential unit habitable have been carried out by the assessee only and, therefore, assessee is eligible for deduction u/s.80-IB(l 0) of the Act. 9.2. Now we take up the third and last objection of Id.CIT (A) that the assesse had sold the land separately and undertook the construction work as per a separate agreement and, therefore the assessee is not a builder or a developer but a land dealer and contractor. In this regard, in our considered opinion, the issue involved is squarely covered in favour of assessee by the decision of ITAT Indore Bench rendered in the case of M/s.Vardhman Builders and Developers vs. ITO (supra). It is noted by the Tribunal in that case that the assessee had entered into an agreement for a sale of land and ....
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.... the construction in the present case and hence respectfully following these decisions, we decide the issue in favour of the assessee. There is no other objection of the ld. CIT(A) regarding allowability of deduction to the assessee u/s. 80IB(10) of the Act. Hence, we direct the A.O to grant the deduction to the assessee u/s. 80IB(10) of the Act. 9. Before us, the Revenue could did not place any contrary decision on record nor could distinguish the facts of the case which was relied by the Assessee. In view of the aforesaid facts, we respectfully following the aforesaid decision of the co-ordinate Bench of the Tribunal, in the case of Satsang Developers (supra) hold that Assessee is eligible for deduction u/s 80IB(10). Thus this ground of Assessee is allowed. 10. This the appeal of Assessee is allowed. ITA no 2095/AHD/2013 (AY 2010-11) (Assessee's appeal). 11. The grounds raised by Assessee reads as under:- 1. Ld. CIT (A) erred in law and on facts in confirming disallowance of deduction claimed u/s 80IB (10) of the Act holding that the conditions laid down under the section were not fulfilled by the appellant. The order of Ld. CIT (A) being bad in law deserves to be quashed. ....
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....ssessee and therefore the assessee was not eligible for deduction. In the first appeal against the order of AO, CIT(A) following the decision of Hon'ble Gujarat High Court in the case of Radhe Developers (2017) 17 taxmann.com 156 (Guj) and the decision of Ahmedabad Tribunal in the case of Shakti Corporation (ITA No 1503/Ahd/2008) deleted the addition by holding as under:- 7.1 It is a fact that the appellant has fulfilled all the conditions required for availing deduction u/s 80IB(10). The only dispute, based on which the deduction as claimed by the appellant has been disallowed by the AO, is regarding ownership of the land. The ownership of land on which the housing project has been developed is legally not in the name of the appellant and accordingly approval has been granted by the Local Authority in the name of the land owners and not in the name of the appellant being developer of the housing project. The issue that needs to be decided is as to whether the ownership of land is an essential condition for the purpose of deduction u/s 80IB(10). The section 80IB(10) does not specifically mention such condition to be fulfilled. The A.O has concluded that for claim of such deduc....
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.... under:.................................. 7.4 So far as the present case is concerned, on perusal of relevant clauses of the Development Agreements, it is quite clear that the appellant has acquired dominant control over the land. The land owner is being paid price consideration for the land over a period of time. The appellant is responsible for incurring all expenses and taking all risks involved therein. The appellant firm is not merely a contractor of the land owner for fixed remuneration, for the land owners are eligible to get price of the land fixed by the development agreements and do not get any share in the development profits of the land. Thus the firm has dominant control over land with all risks and liabilities and all profit and relation to the development of the project is vested with the appellant firm. 7.5 In view of the above, the appellant firm has fulfilled all conditions as-required u/s 80IB(10) of the Act in view of the decisions of Hon'ble ITAT, Ahmedabad in the case of Radhe Developers as well as subsequent decision in-the case of M/s Shakti Corporation and others and the decision of Hon'ble High Court of Gujarat in the case of Radhe Developers. Th....