TaxTMI 
TaxTMI 
2014 (10) TMI 425
X X X X Extracts X X X X
X X X X Extracts X X X X
....ggrieved by the aforesaid order of Ld. CIT(A), assessee is now in appeal before us and has raised the following grounds:- "1. The Ld.CIT (A)-V, Baroda has erred in law and in facts holding that the appellant is not a Builder and Developer, who is not assuming the entrepreneurial risk and that the business undertaken by it is in the nature of a Works Contractor. 2. The Ld. CIT (A)- V, Baroda has erred in law and in facts holding that appellant, though developing and building residential houses cannot be said to have fulfilled the conditions for the claim of deduction u/s 80IB(10) as in sale of the houses, the appellant has executed the sale deed of the incomplete house and that the execution of construction agreement for construction of the incomplete house would render the appellant ineligible for the claim of deduction u/s 80IB(10) and that such act would tantamount to undertaking the business as a Works Contractor and that the profit from such business is ineligible for the claim of the deduction u/s 80IB(10). 3. The Ld. ClT(A)-V, Baroda has erred in law and in facts in denying to the appellant the claim of deduction u/s 80IB(10) amounting to Rs. 8,03,273 despite the appellant....
X X X X Extracts X X X X
X X X X Extracts X X X X
....eduction under sub-section 10 of section 80IB must comprise of residential units viz flats, bungalows or tenements. Explanation below sub section 10 clarifies that deduction under sub-section 10 of section 80IB is not available to any undertaking which execute the housing project as a works contract awarded by any person. Therefore, whatever may be the dictionary meaning of the term builder and developer, a builder and developer within the meaning of provisions of section 80IB of the IT Act is one who is executing the housing project on its own and not as a contractor of anybody and who is eligible for deduction u/s. 80IB of the IT Act. In the subsequent discussion whenever the term builder or developer is used it will be used in reference to a builder or developer who is eligible for deduction u/s. 80IB. In view of the above discussion, the position is very clear in respect of an enterprise which is developing and building a housing project as by itself. It is eligible for deduction under sub-section 10 of section 80IB. The position is also very clear in respect of an enterprise which is developing and building a housing project as a works contract by some other person. It is not....
X X X X Extracts X X X X
X X X X Extracts X X X X
....esidential plots only and complete rest of the work as a contractor of the plot owners. Deduction u/s 80IB(10) is not available in respect of development of a scheme consisting of residential plots. If we consider the housing project as a whole it is clear that the housing project is partly developed and built by the appellant on its own and the later part of the housing project is completed under works contracts awarded by plot purchasers. Role of the appellant as developer and builder of the project gets over as soon as residential plots are sold to individual purchasers with all the rights in the plot. A contractor of individual plot owners, who is constructing houses, cannot claim that he is still a developer and builder of the housing project and he is entitled to claim deduction u/s 80IB(10) of the IT Act. If we consider gross receipts of the entire project it wilt be very clear that more than 75% of the receipts of the project come from works contracts. Under these circumstances, I am of the opinion that it cannot be held that project as a whole has been primarily developed and built by the appellant itself within the meaning of the provisions of section 80IB of the IT Act b....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... submission that the project on which the assessee is claiming the deduction u/s. 80IB(10) is the same project and the aforesaid submission of the assessee has not been controverted by the Revenue by bringing any contrary material on record. With respect to the argument of the Revenue that the land was sold separately and the construction work was undertaken by a separate agreement, we find that on identical issue in the case of Satsang Developers(surpa), the Coordinate Bench of Tribunal in ITA No. 1011 & 2498/Ahd/2012 dated 12-11- 2013 was decided by the Co-ordinate Bench of Tribunal by holding as under:- "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 assesse had entered into an agreement for a sale ....