TaxTMI 
TaxTMI 
TaxTMI 
2019 (2) TMI 906
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....n be disallowed on the ground that the assessee had entrusted the development to another company by execution of a Joint Development Agreement? ii. Alternately, whether the execution of a Joint Development Agreement, in terms whereof an assessee incorporated for the purpose of developing real estate makes over possession of land to the Contractee for development, by execution of purchase deeds in return for completed flats in the buildings to be constructed, disentitles himself to the benefit of tax holiday under Section 80IB (10) of the Income Tax Act, 1961? iii. Whether a Bench of the Tribunal can disregard a prior decision of a Bench of the Tribunal of co-ordinate strength?" 3.The facts, which are necessary for taking a decision in this appeal, are as follows: 3.1.The assessee is a Company engaged in the business of real estate and for the assessment year under consideration (2010-11), return of income was filed on 30.09.2010, declaring the assessable income as 'Nil', after claiming deduction under Section 80IB(10) of the Act at Rs. 27,76,97,278/-. In the said return of income, the assessee computed book profits under Section 115JB of the Act at Rs. 27,79,97,773/-.....
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.... land and the project plan was in the name of the assessee. The Tribunal opined that the Joint Development Agreement cannot be constituted as a Joint Venture so as to grant deduction under Section 80IB (10) of the Act and even if it is presumed that it is a joint venture, the deduction under Section 80IB(10) of the Act can be granted to the joint venture, which is the association of person consisting the assessee and M/s.ETA and not to the present assessee. Further, the Tribunal pointed out that the assessee was not engaged in construction of housing project and have not incurred any expenditure for construction of housing flats and the development of projects. 6.We are to test the correctness of the reasons assigned by the Tribunal while reversing the order passed by the CIT(A). We need not labour much to decide the issue, as there are several decisions of the Division Bench of this High Court and other High Courts, which have considered a similar issue. First of such decisions being that of the High Court of Karnataka in the case of CIT vs. Shravanee Constructions, [2012] 22 taxmann.com 250 (Kar.). We refer to this decision at the first instant because, the facts are identical. ....
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.... desirous of developing the property by putting up residential and commercial complex consisting of flats and apartments. M/s.ETA, which has been described as a builder of the joint development agreement offered to develop the property by putting up multistoreyed building complex at their own cost and to allot 33.33% of total built up area to the owners and take for themselves 66.67% built up area in lieu of the value of the land provided by the assessee. Further, the agreement stated that the assessee in consideration of the builder agreeing to allot 33.33% of the total built up area to be constructed on the property, have agreed to convey 66.67% of undivided interest of land to the builder or to their nominee/nominees and accordingly, mutually agreed to the terms and conditions set down in the agreement. Further, the agreement stated that the assessee shall get necessary orders from Chennai Metropolitan Development Authority (CMDA) for reclassifying the project land for enabling construction of residential complex with minimum FSI of 1.5 and both parties will endeavour to achieve the maximum FSI of 2.5. All expenses in respect of obtaining reclassification shall be borne by the a....
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....roject, which qualifies for a deduction under Section 80IB of the Income Tax Act. As rightly pointed out by learned Senior Counsel appearing for the assessee, a bare reading of Section 80IB of the Income Tax Act shows that the deduction contemplated therein is oriented towards the project and not with reference to an assessee. It is no doubt true that the project has to be done by the assessee, but then, when the deduction is specific enough as regards the particular activity, we fail to see how one should assume any significance in the matter of considering a deduction." The above decision was followed by another Division Bench in Income tax Officer vs. Doshi Enterprise, [2013] 55 taxmann.com 500 (Mad.). 10.Similar decision was taken by a Division Bench in the case of CIT vs. Ceebros Property Development (P.) Ltd., [2014] 41 taxmann.com 263 (Madras). 11.In CIT vs. Radhe Developers, [2012] 17 taxmann.com 156 (Gujarat), the substantial question of law, which was framed for consideration was whether the Tribunal was right in law in allowing deduction under Section 80IB(10) read with Section 80IB(1) to the assessee, when the approval by the local authority as well as completion cer....
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....ase of development, the developer is also entitled to claim deduction and ownership is not the criteria. Unfortunately, in the instant case, the Revenue took a reverse stand contrary to the consistent stand taken by them before this Court and other High Courts, which was rejected by the High courts and affirmed by the Hon'ble Supreme Court. 15.We may point out that the decision of the Division Bench in the case of Sanghvi and Doshi Enterprise (supra) was affirmed by the Hon'ble Supreme Court as reported in (2017) 84 taxmann.com 241 (SC). 16.Mrs.R.Hemalatha, learned Senior Standing Counsel referred to the decision in the case of Mangalore Ganesh Beedi Works vs. CIT, (2015) 378 ITR 0640 (SC) in support of her contention that the High Court will not be justified in upsetting the finding of fact arrived at by the Tribunal, particularly, in the absence of substantial questions of law being framed in this regard. 17.We are of the view that this decision will not render any assistance to the case of the Revenue, since the Tribunal had not recorded any reason for reversing the finding of the CIT(A), which had gone into the facts of the case and appreciated the terms of the agree....