2016 (2) TMI 464

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...., Ahmedabad has erred in law and on facts in directing the Assessing Officer to allow the assessee's claim for deduction of Rs. 1,38,55,701/- u/s.80-IB(10) of the Act. 2) The Ld.Commissioner of Income-tax(A)-I, 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 Society namely Parimal (Ghodasar) Co-op. Housing Society, which are separate legal entity in the eye of law and the assessee entered into the project by a development agreement with the Society. The entire responsibility to execute the housing project(s) and abide by the terms and conditions of its approval right from the inception of the project(s) till its completi....

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..... The ld.Sr.DR vehemently argued that the ld.CIT(A) was not justified in deleting the addition. He submitted that the assessee is not entitled for the deduction claimed u/s.80-IB(10) of the Act. He supported the order of the AO. 3.1. On the contrary, ld.counsel for the assessee supported the order of the ld.CIT(A) and submitted that the issue is squarely covered in favour of assessee by the decision of the Coordinate Bench in the case of Radhe Developers vs. ITO(supra). He also placed reliance on the decision of the Coordinate Bench (ITAT 'A' Bench Ahmedabad) in the case of ITO vs. M/s. Vasudev Developers in ITA No.1868/Ahd/2011 for AY 2008-09, dated 08/05/2015. 3.2. In rejoinder, the ld.Sr.DR submitted that even otherwise als....

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....reement they have carried out the development work. Thus, appellant in present case has acquired dominant control over the land and as per banakhat agreement entered with society; developer was bound to pay amount for acquiring the land irrespective of 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 favour of the appellant and against revenue by the order of the Jurisdictional....

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....vices." (ii) On the other hand, an agreement between the owner of a land and a builder, for construction of apartments and sale of those apartments so as to share the profits in a particular ratio may be a joint venture, if the agreement discloses an intent that both parties shall exercise joint control over the construction/development and the 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 ....