TaxTMI 
TaxTMI 
2016 (8) TMI 316
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....ssioner of Income-tax (Appeals)-XV, Ahmedabad has erred in law and on facts in directing the Assessing Officer to allow the Assessee's claim for deduction of Rs. 2,02,19,004/- u/s 80IB(10) of the I.T. Act 2. The Ld. Commissioner of Income-tax (Appeals)-XV, Ahmedabad has erred in holding that the assessee fulfills the conditions laid down for claiming deduction u/80IB(10) even when the land was in the names of (1) Shukan Villas for Sakal Co-operative Hsg. Society Ltd., Vibhag-19 (New Name : Shukan Vilas Co-op Hsg Society Ltd) and (2) Sulay Raw House for Sakal Cooperative Hsg Society Ltd, Vibhag-13 (New Name : Sulay Co-op Hsg Society Ltd.) which are separate legal entities in the eye of law and the assessee entered into the project by a dev....
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....ssessee entered into the project by a development agreement with the Societies. 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 societies. The local Authority had granted permission for development to the Societies. Assessee was just a contractor of the land owners and not a developer. 3. Ld. Counsel for the assessee, at the outset, contended that the issue in question is squarely covered in favour of the assessee by ITAT judgement in the case of Narayan Realty Limited vs. DCIT - ITA Nos.2293/Ahd/2012 & 2095/Ahd/2013 vide order dated 02.05.2014, wherein the issue about eligibility of deduction under sec....
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.... is not eligible for deduction u/s.80-IB(10) of the Act because as per ld.CIT(A), profit earned by the assessee in respect of sale of land is not eligible for deduction u/s.80-IB(10) of the Act and similarly, the profit earned by the assessee for construction activities is not eligible for deduction u/s.80-IB(10) because the assessee is doing the construction as a contractor for a work and not as a builder or developer and, therefore, the assessee is not eligible for deduction u/s.80-IB(10) of the Act. Against these objections of ld.CIT (A), the assessee is in appeal before us. 5.2 Regarding the 3r objection that the assessee has sold land to the unit holders separately and has done the construction units under a project agreement/contra....
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....ever been considered as a residential unit. It was also noted by the AO in that case that on the same date when the sale deed was executed, a construction agreement was also entered into with the transferee for further construction of the same flats by the builder company itself. He submitted that the facts in the present case are similar. He also pointed out that in that case, it was held by the Tribunal that the stand of the Revenue with regard to the semifinished condition of the flats is devoid of any merit in as much as what is sought to be constructed and sold by the assessee is a residential units and what is sought to be purchased by the buyer is the ownership of the specified unit and registration of flat in semi-finished condition....
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....also, the assessee sold the land along with semi-finished structure to the buyers and as per separate agreement, agreed for construction for completion of balance work. Hence, the facts of this case are also similar because in that case also, the land was sold separately along with partial and unfinished construction of flats and, thereafter, construction agreement was entered into to carry out the balance construction work and under these facts, it was held by the Tribunal in that case that such agreement for construction to complete the balance work is only an incidental facilitation to protect interest of the parties and therefore, the assessee is eligible for deduction u/s.80-IB(10) of the Act. Similarly, in the case of Raghava Estates ....
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....deduction to the assessee u/s. 80IB(10) of the Act. Hence, we direct the A.O to grant the deduction to the assessee u/s. 80IB(10) of the Act. 9. Before us, the Revenue could did not place any contrary decision on record nor could distinguish the facts of the case which was relied by the Assessee. In view of the aforesaid facts, we respectfully following the aforesaid decision of the co-ordinate Bench of the Tribunal, in the case of Satsang Developers (supra) hold that Assessee is eligible for deduction u/s 80IB(10). Thus this ground of Assessee is allowed. 10. This the appeal of Assessee is allowed." 3.1 Ld. Counsel for the assessee also drew our attention to the judgment of Hon'ble Jurisdictional High Court in the case of CIT vs. Rad....