TaxTMI 
TaxTMI 
TaxTMI 
2015 (10) TMI 474
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.... Rs. 5,09,35,824/-, u/s.80IB(10) of the Act, for one of its housing projects called County- 1, in such return of income. During the course of assessment proceedings, AO had vide letter dt.16.06.2011, required the assessee to file the GPA executed in its favour by M/s. Chamundeswari Build Tech P. Ltd, pursuant to which assessee had constructed residential units. AO also mentioned in such letter that assessee firm was not having any right, title and interest over the property on which construction was being done and assessee was acting only as a contractor. Reply if any given by the assessee, on this query of the AO is not forthcoming from the records before us. However it seems assessee had filed a letter dt.18.08.2011 inter alia justifying ....
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....t, he was not clear as to whether it were a part of County -I or County -II. Further as per the assessee, it had never acted as a building contractor and no money was received from the land owner for construction. Assessee pointed out that it was in possession of GPA for the land, having all powers to develop the land. As per the assessee, the consideration of Rs. 1.60 Crores stood paid to the original land owner. Contention of the assessee was that the sale agreement with the buyers clearly brought out that assessee was a developer and the owner was a confirming party. As per the assessee it had shown the cost of purchase of land and full sale proceeds when the developed units were sold, in its books of account. Land ownership, as per the ....
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....he CIT assessee was only a contractor and for this reason also not eligible for claiming deduction u/s.80IB(10) of the Act. 05. Now before us, Ld. AR strongly assailing the order of CIT submitted that even presuming some of the units had built-up area in excess of 1,500 sft, deduction claimed u/s.80IB(10) could not be denied. Reliance was placed on a coordinate bench decision in the case of DCIT v. Brigade Enterprises (P) Ltd [(2008) 14 DTR 037]. Vis-a-vis requirement of legal ownership over the land, Ld. AR relying on the judgments of Hon'ble Gujarat High Court in the cases of CIT v. Radhe Developers [341 ITR 403] and CIT v. Shree Ram Construction [TA.430 of 2013, dt.10.12.2012], submitted that such ownership over the land was not an esse....
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.... per the Ld. DR, both the parties were interested persons and there was no inter-se arrangement. Placing reliance on GPA placed at paper book page 53, Ld. DR submitted that Managing Director of Chamundeswari Buildtek P. Ltd, who was the owner of the property, was M. Ashok Kumar. Beneficiary of the GPA was the assessee, who was a partnership firm and the managing partner of the said firm was also the very same Ashok Kumar. According to him, the GPA executed by the very same person in his own favour could not be given much sanctity. It was only a method of siphoning the profits. AO had not applied his mind to these aspects. As per the Ld. DR some of the units definitely had built-up area in excess of 1500 sft and this came to the notice of th....
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...., and this read as under 2. The assessee firm having two projects one is covered by 80IB and another one is non 80IB. On comparison of cost of project per sq.ft., the cost of project in respect of 80IB case (county I) comes to Rs. 2.981/- per sq.ft. and cost of non 80IB project (county II) comes to Rs. 3,950/-. The assessee has been asked to explain the same vide this office letter dated 16.06.2011. In response to the above, the assessee's AR has explained vide his letter dated 18.08.2011 which is filed on 23.09.2010 stating that the cost of non 80IB project is more because it is a premium construction with good quality fittings and better amenities and interiors. The area of construction is more in respect of 80IB project and area of ....
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.... that the vendor was Chamundeswari Buildtek P. Ltd and the buyers were actually buying the plots from them. Agreements entered by such buyers with the assessee for construction of residential units were separate. These aspects have not been looked into by the AO. These were very relevant in deciding whether the assessee was a developer or only a contractor. When the AO does not make the enquiries that is lawfully expected of him and which any prudent man would have done, if placed in similar circumstances, it would definitely render the order erroneous and prejudicial to the interests of Revenue. Not only was there units which had built-up area in excess of 1500 sft, but also the agreements and the power of attorney did have a bearing on th....