TaxTMI 
TaxTMI 
2015 (6) TMI 836
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....910/- u/s. 80IB(10) of the Act. 2. The Id. 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 Suraj (Ghodasar) Owners Association, which is a separate legal entity in the eye of law and the assessee entered into the project by a development agreement with them. The entire responsibility to execute the housing project and abide by the terms and conditions of its approval right from the inception of the project till its completion rests with them. Assessee was just a contractor of the land constructing 34 residential bungalows (Pushparaj Bungalows) AND not a developer." 2. Facts in brief as emerged fro....
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.... on, behalf of the Association (iv) the assessee was allowed to retain the consideration received for construction and charge the land cost to the Association. In other words the Association was formed for group housing of the members and was supposed to construct and transfer the houses to the members, (v) According to the Development Agreement, since the Association had no experience of construction, the assessee was allowed to construct the houses on behalf of the Association as per the terms narrated in the agreement according to the approved plan of the Association." 2.1 In short, the AO's objection was that the assessee was not the owner of the land and that the permission was issued in the name of the Chairman of the said Associatio....
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.... per the agreement entered with the Association) the assessee is not eligible for deduction under section 80 IB(10) as per the amendment brought to the section 80IB by the Finance Act 2009 w.e.f. 1.4.2001 which is reproduced below." 2.2 Since, the claim of deduction u/s.80IB(10) was denied; therefore, the matter was carried before the First Appellate Authority. 3. Learned CIT(A) has examined the evidences and facts and thereupon discussed the decision of M/s. Shakti Corporation and held as under: "5. It is seen that the AO has not disputed that the appellant did not fulfill any of the conditions specified in section 801B(10) from clause (a) to (d) with respect to the approvals from the local authority, completion of project within the sp....
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....rned Sr.D.R., Mr. Dinesh Singh, has placed reliance on the findings of the AO and argued that the land in question was neither practically nor theoretically purchased by the Assessee. In fact, the land was purchased by a separate legal entity. The cost of construction and other expenses were collected by the assessee from the members. The funds being collected from the members; hence, there was no risk undertaken by the assessee. By placing reliance on the legal proposition as held by the AO, learned DR has pleaded that the learned CIT(A) has wrongly allowed the claimed. 5. From the side of the respondent-assessee, learned AR, Smt. Aarti N. Shah has supported the order of CIT(A) and filed a compilation containing the Audit Report along wit....
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....e highlighted before us were as under: "3. All plans, elevations, sections and drawings of erections and premises to be created as a part of development of the said property have been approved by the Ahmedabad Municipal Corporation Authority and the specification/s of the construction and all the building materials to be used therein shall be decided/arranged by the Developer/Builder at its own cost and expenses and the development of the said property shall be made strictly in accordance with the plans duly sanctioned by the said authority and subject to the law for the time being in force. 4. The Developer/Builder shall be entitled to develop the said property either alone or jointly with other or others or through any contractor as the....
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....ce between the gross amount received from the members towards construction of bungalows (+) development of basic common infrastructure amenities and the total cost incurred by the developer towards building material, labour, construction, interest, other charges. Meaning thereby the developer was required to bear all costs and expenditure for the completion of the scheme. In one of the clause, it was agreed upon that all the finances for the purpose of construction shall be arranged by the said developer. With this background of the agreement, our attention has been drawn on the ledger account of the society as maintained in the books of accounts of the assessee to demonstrate that on 12th of February, 2005 a sum of Rs. 10 lac was paid to t....