TaxTMI 
TaxTMI 
2016 (1) TMI 348
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....of Rs. 1,18,97,366/- u/s. 80IB(10) of the Act. 2). The ld. 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 Shri Laljibhai Haribhai Sudani, who is a separate legal entity in the eye of law and the assessee entered into the project by a development agreement with the land owner. An assessee is a work contractor who was awarded the contract by the land owner. 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 the land owner. Assessee was just a contractor of the land cons....
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.... person is not eligible for deduction u/s.80IB. On the contrary, ld. CIT(A) allowed the claim by following the decision of the co-ordinate Bench rendered in case of M/s. Shakti Corporation, Baroda in ITA No. 1503/Ahd/2008. 3. The only effective ground is against deletion of disallowance of claim of deduction u/s.80IB(10) of Rs. 1,18,97,366/-. Ld. Sr. D.R. vehemently argued that the Assessing Officer has given categorical finding that the assessee is neither a land owner nor a developer he is merely a contractor who had executed the project of construction under a developer agreement. He submitted that as per agreement, the person who carries out the construction as a work contractor is not eligible for the deduction u/s.80IB(10) of the Act....
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....2. The Assessee entered into the project by a Development Agreement with the land owner and construction was done as per the agreement and hence the assessee is merely a contractor for the purposes of construction of the project. 3. The assessee has not sold any unit to the purchaser but the land owner has executed the sale deeds as a seller. This also proves that the assessee was merely a contractor/ agent of the land owner. 4. As per the Amendment to section 80IB by the Finance Act 2009, a works contractor who executes the work awarded by any person is not eligible for the deduction u/s 80IB. 2.24 Thus, the assessee has failed to satisfy the conditions of section 80IB(10). Therefore, no deduction under this section is allowed. Penal....
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.... and having acquired dominant control of the land and has developed the land at its own cost and risk then the deduction should be allowed. For this Hon'ble ITAT has directed the Development Agreement to be referred to. Perusal of the Development Agreement dated 7.5.2004 shows that the Development Agreement was signed by the appellant consisting of 3 partners viz. 1. Pareshbhai Nanubhai Siroya 2. Prafulbhai Shambubhai Patel 3. Rajendrabhai Haribhai Jogani (the first party) land Laljibhai Haribhia Sudani (the second party). Clause 1 states that the possession of the property had been handed over to the first party. Clause 2 states that all material required for carrying out development would be brought by the first party. Clause 3 stat....
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....ent agreement and observed that as per Clause 1, the possession of the property has been handed over the assessee. As per Clause 2, all materials required for carrying out development would be brought by the assessee. As per Clause 3, all the expenses would be borne by the assessee. Clause 10 authorizes the first authority to sell bungalow to any person. The revenue has not disputed the fact that the entire amount has been demonstrated by the assessee. The possession of the land was given to the assessee. The assessee incurred all cost and was liable for any risk or consequences. The assessee was also authorized to dispose of the sale of bungalow as per his own risk. The aforementioned observation of ld. CIT(A) is not contradicted by the Re....