TaxTMI 
TaxTMI 
2012 (11) TMI 1090
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....icer, while completing the assessments under section 143(3) of the Act for the assessment years 2007-08 and 2009-10 and the assessments under section 143(3), read with section 147 of the Act for the assessment years 2006-07 and 2008-09, observed that the assessee is not eligible for the deduction under section 80IB(10) of the Act. In opinion of the Assessing Officer the assessee is not engaged in the activity of "developing or building" housing projects. Accordingly, the Assessing Officer disallowed the claim of the assessee and taxed the entire amount of profit. Aggrieved against the assessment orders, the assessee preferred appeals for the respective assessment years before the Commissioner of Income-tax(Appeals). Without prejudice to its original claim, the assessee raised an alternate plea before the Commissioner of Income-tax(Appeals) that in case the assessee is not treated as developer or builder of the project for allowing the benefit under the provisions of section 80IB(10) of the Act, the land of the assessee may be treated as investment, i.e. capital asset, and the gains arising from the transfer of 58% share in the undivided land in favour of M/s.Citilights Ptoperties P....
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....r the construction of flats the assessee will be entitled to sell its share of 42% of flats to the prospective buyers. The learned counsel for the assessee submitted that in accordance with the agreement between the parties, 159 flats came to the share of the assessee. The agreements with respect to the sale of flats falling into the share of the assessee were executed by the assessee with the prospective buyers of flats. Statutory permissions were granted in the name of the assessee, although the same were got on behalf of the assessee through its authorized Power of Attorney. The assessee was very much involved in the development of the land on which flats were constructed. 6. The learned counsel for the assessee further contended that the Assessing Officer as well as the Commissioner of Income-tax(Appeals) had erred in coming to the conclusion that the assessee is not a developer and it is a case of transfer of land as no risk was undertaken by the assessee. The learned counsel submitted that the Commissioner of Income-tax(Appeals) accepted the alternate plea of the assessee with regard to the treatment of the amount received by the assessee from the sale of its 58% share in ....
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....the Commissioner of Income-tax(Appeals) has erred in allowing the assessee to claim capital gains on the income generated on transfer of land to the extent of 58% share in the undivided land. The learned Departmental Representative further submitted that for claiming any new deduction/claim of capital gains arising from the transfer of land the assessee has to file a revised return of income and the revised return is to be filed within the time limit prescribed under section 139(5) of the Act. The learned Departmental Representative contended that the assessee has failed to file the revised return within the prescribed time limit and thus the revised return filed by the assessee cannot be taken into consideration. The learned Departmental Representative contended that the Commissioner of Income-tax(Appeals) has erred in directing the Assessing Officer to adopt the sale consideration of the flats sold as per the actual rates/consideration and not at the rates at which the broker had proposed to arrange the buyers with whom the assessee entered into agreement on 9-1-2008. The Commissioner of Incometax( Appeals) has further erred in not bifurcating the sale consideration for sale of l....
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....hereof. 9. The Commissioner of Income-tax(Appeals) has held that the assessee is not a developer and builder of the project, as the assessee has not invested money in the project and had not shared risks and responsibilities to acquire the character of a builder and developer. The assessee has sold 58% share in the undivided land and in consideration thereof has got 159 flats, i.e. 42% share of the total flats constructed. Therefore, the assessee is not entitled to claim the benefit of section 80IB(10). We do not agree with the finding of the Commissioner of Incometax( Appeals) on the issue. Undisputedly, the assessee has initially invested a sum of Rs. 1.75 crores to develop the land to make it fit for the construction of the building. Thereafter, the assessee entered into an agreement with M/s.Citilights Properties Pvt. Ltd. for the construction and development of residential flats on the land. The modalities were finalized and a series of agreements were executed between the parties for the smooth execution of the housing project. It cannot be said that the assessee did not undertake any risk or contributed capital for the construction of the building project. The assessee co....
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.... assessee has made a statement at bar that the co-venturer of the assessee, i.e. M/s.Citilights Properties Pvt. Ltd., has claimed benefit under section 80IB qua its share only. The learned Departmental Representative could not controvert the statement of the counsel for the assessee. In our considered opinion, the assessee can be treated as a builder and developer and thus, would be entitled to claim benefit under section 80IB. 10. Our view is further fortified by the judgment of the Hon'ble Karnataka High Court in the case of CIT vs. M/s.Shravanee Constructions, cited supra. The Hon'ble High Court, while adjudicating similar issue, held therein that keeping in mind the object with which the provision of section 80IB(10) is introduced when all persons who have made investments in that housing project which is for the benefit of middle and lower class people and when they have complied with all the conditions prescribed under the aforesaid provision, both of them are entitled to hundred per cent benefit of tax deduction as provided under the said provision. The contention of the Revenue that the assessee did not undertake any developmental or building activity and therefore it ca....