TaxTMI 
TaxTMI 
2016 (3) TMI 1058
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....partnership firm stated to be engaged in the business of development and construction of housing projects. Assessee electronically filed its return of income for A.Y. 2008-09 on 26.06.2008 declaring total income at Rs. Nil after claiming deduction of Rs. 1,22,73,851/- u/s.80IB(10) of the Act. The case was selected for scrutiny and thereafter assessment was framed u/s.143(3) of the Act vide order dated 23.11.2010 and total income was determined at Rs. 1,22,73,851/- by disallowing the claim of deduction u/s.80IB(10) of the Act. Aggrieved by the order of Assessing Officer, assessee carried the matter before the CIT(A) who vide order dated 20th October, 2011 deleted the addition. Aggrieved by the order of ld. CIT(A), Revenue is now in appeal be....
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....der. Perusal of the assessment order shows that the deduction was denied by the AO because in his view the appellant was a 'works contractor' and executed the work awarded by Gangotri Tenament(Nikol) Cooperative Housing Society, through the development agreement entered by it with the society. According to the AO the assessee is not a developer primarily because it did not own the land on which the project was constructed and it constructed the project as per work contract awarded by the society and was thus hit by the Explanation introduced vide Finance Act 2009 according to which a person who executes a works contract cannot be allowed the deduction u/s.80IB(10). According to the AO the approvals for construction of residential un....
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....8 in the case of M/s.Shakti Corporation, Baroda in ITA No.1503/Ahd/2008 in AY 2005-06 wherein Hon'ble ITAT has held that where the appellant is found having practically purchased the land and has borne the risk of development deduction should be allowed. 7. The submission of the appellant dated 2.5.2011 in which it was stated that the funds to the Cooperative Housing Society were made available by the appellant was sent to the AO for remand report. Remand report of the AO was received vide letter dated 7.9.2011. Counter comments of the appellant on remand report were received vide letter dated 17.10.2011. 8. The AO in his report dated 7.9.2011 stated : " four different cheques have been issued on 16.9.2004 whi....
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..... To examine these arguments the Development Agreement has to be referred to as stated by Hon'ble ITAT 'A' bench Ahmedabad in the case of Shakti Corporation wherein in para 16 of the order it has been directed that the Development Agreement should be referred to for concluding whether the appellant is in the dominant control of the land or not and whether the project is developed at its cost and risk. Hon'ble ITAT has held that where the appellant is found having practically purchased the land and has borne the risk of development deduction should be allowed. 10. The Development Agreement dated 16.10.2004 shows that the dominant control is that of the appellant, for instance page 2 of the Development Agreement states: ....
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....rty is responsible to admit the members of the society and for that purpose, the second party free to do the necessary procedure. The Society shall not admit any member/enroll nay member without permission of the Developer-second party. Clause (15) The Second Party is authorized to collect the agreed consideration from the member against the construction of the housing unit. Until the receipt of the agreed consideration, the Second Party, developer shall have 'Contractual Lien' on the land owned to the Society alias the Second Party shall have absolute possession on the land and that clear consent is given by the First Party." 11. As the appellant has not been found violating any of the conditions stipulated from claus....