2015 (10) TMI 1499

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....uction of housing project approved by the Ahmedabad Municipal Corporation. In the return filed on 27.9.2008 for the Asstt.Year 2008-09, the assessee had shown total income of Rs. 1,28,070/- after claiming deduction under section 80IB(10) of the Act for Rs. 3,38,66,040/- In the assessment framed under section 143(3) of the Act on 16.12.2010, the AO disallowed the claim of deduction under section 80IB(10) to the assessee for the following reasons: "i) The land is not in the name of the firm. Ownership of land is an essential element which carries with it the right to develop the land and build housing projects thereon. AO says that the developer first should purchase the land and then take necessary permission to construct. (ii) Appellant i....

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.... the fact whether it is able to sell the units. Possession of the land was also given to appellant developer and risks associated with housing" project were borne by appellant. It is added that the appellant has not earned remuneration at fixed rate. On the main issue of ownership of land and approval being in the name of landowner for claim of deduction u/s. 80IB (10), it is seen that although, the issue was decided in favor of the appellant and against revenue by the order of the Jurisdictional in the case of Radhe Developers vs ITO ward 3(2) Baroda No 2482/Ahd/2006 A bench Ahmedabad, however the decision was partly modified by the subsequent decision in the case of ITO vs M/s. Shakti Corporation ITA No. 1503/AHD/2008 dated 07/11/2008 whe....

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....tent that both parties shall exercise joint control over the construction/development and be accountable to each other for their respective acts with reference to the project. 4.5. It is seen that the entire risk is of the appellant who is developing the project and there is no agreement for fixed remuneration as a contractor. In the instant case, the appellant has purchased the land for fixed consideration and has developed the housing project on its own cost and there is no joint venture with the land owner and thus in terms of decision in the case of M/s. Shakti Corporation and the ratio of the decision of ITAT, Ahmedabad in the case of Radhe Developers the AO is directed to allow deduction u/s.80IB(10) to the appellant." 5. The DR rel....