TaxTMI 
TaxTMI 
2018 (11) TMI 1885
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..... 2,79,01.503/- claimed under section 80IB(10) of the Income Tax Act, 1961 (hereinafter "the Act"). Therefore we thought it fit to decide the same through the present consolidated order. 4. Brief facts of the case are that the assessee had claimed deduction under section 80IB(10) of the Act. However, the AO disallowed the said deduction by holding that the assessee is merely an owner and not a developer and therefore not qualified for seeking deduction under section 80IB(10) of the Act. The assessee submitted that as per section 80IB(10) of the Act it is provided that assessee, who is the engaged in developing and building housing project shall be entitled to claim 100% deduction of the profit derived in the previous for such housing project. It was submitted that the assessee was the absolute owner of the immovable property comprising of land admeasuring 13000 square meters bearing Survey No. 199/4 and situated at Village Kavesar within the Panchayat Samiti of Thane District, and Zilla Parishad of Thane. From and out of this 13000 square meters of land the Assessee handed over 1550.10 square meters of land to the Government through Thane Municipal Corporation. The remaining land ....
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....allows a deduction which is profit linked incentive. In this case the assessee has not derived a profit from the eligible business. The assessee was owner of the land on which the eligible project was constructed. The assessee sold its development rights and earned capital gain on it which cannot be claimed as operational profit from eligible business. Coincidently the example given by the Supreme Court has said in example that it is operational profit from ship business which gets deduction under the provisions of Section 80IB of the Income Tax Act, 1961. The owner of ship will not get deduction under 80IB. Similarly in this case owner of land (assessee) is not eligible for deduction u/s. 80IB(10) of the Income Tax Act, 1961. Therefore deduction under section 801B(10) of the I. T. Act, 1961 is not allowed on this business receipts." The assessee prayed that the Order of Assessment for A.Y. 2011-12 is bad in law and on facts. 5. On the other hand, the learned D.R. relied upon the orders passed by the Revenue authorities. 6. We have heard both the parties, perused the record and orders of the Revenue authorities. From the record we found the 'development of a housing project&....
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....re project was developed by him. The assessee has only given the Development Rights to the Developer; to put up a civil construction at his own cost, an entire cost till the completion of the entire project for which he is parted with 65% of the Built-up Area as his remuneration or re-imbursement of cost. The assessee has retained the remaining 35% of the said Built-up Area for himself. Clause - G recited at Page No.4 of the Development Agreement categorically specifies that the Developer has approached the assessee (Owner) for the Grant of Development Rights for consideration. The said clause is reproduced below: - "The Developer being desirous of developing the said property, have requested the Owner to grant them development rights at or for the consideration set out herein in respect of the said property and in this behalf the Developers have made certain representations and given certain assurances to the Owner." From the record we noticed that the property was never parted to the Developer directly or indirectly. The assessee continued to have the control over the entire property in question and this is evident from Clause No. 28 recited at Pages 28 and 29 which is reprodu....
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....ngs at his own cost; and the remaining is retained by the assessee. The assessee has also received an Interest Free Refundable Security Deposit of Rs. 50,00,000/- from the Developer which is to be refunded after the completion of the project and on procurement of occupation certificate from the appropriate authorities. The assessee has not surrendered the property to the Developers and has only given bare permission and licence to the Developer to enter upon the said property for the construction of the proposed buildings. The assessee has sold his share of residential flats and has claimed the income on sale of such flats as deduction under section 80IB(10) of the Act. The assessee has proved beyond doubt that the concept of constructing dwelling units for the weaker sections was conceived by him in the Year 2002 and the process of getting appropriate sanctions was commenced accordingly. The approval and initial sanctions were received in August 2005. It was only when the question of requirement of expertise in construction activity and want of funds to enable the project arose, that M/s. Lalani Developers were short-listed and granted Development Rights. It is the submission of t....
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....1 in all, the persons who undertook this undertaking are entitled to the benefit of section 80IB (10) of the Act in proportion to the share to which they are entitled to in the built up area. In that view of the matter, the contention of the revenue that the assessee did not undertake any developmental or building activity and therefore, he cannot individually claim the benefit has no substance. That is not the requirement of law. Keeping in mind, the object with which this provision is introduced when all persons who have made investments in this housing project which is for the benefit of middle and lower class people and when they have complied with all the conditions prescribed under the aforesaid provision, both of them are entitled to hundred percent benefit of tax deduction as provided under the said provision. In that view of the matter, there was no merit in these appeals. Conclusion It is not merely building housing project, which attracts the provision of section 80IB (10) but the developing and building housing project, which attracts the provision." 8. We also get support by the order of the Coordinate Bench of the Tribunal in the case of Abdul Khader vs. ACIT (2....
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....esar, District Thane, admeasuring area about 3-4-0 (a-g-a) along with by Mr. Hasan Kasam Abba as per Sale Deed dated- 05.01.1967 duly registered before the Office of the Sub-Registrar of Assurances, Thane as per Document bearing No. 23 of Book - 1. 24.04.1967 & 27.12.1967 Moved an application for the conversion of the said land from Agriculture to Non-Agriculture use. 10.04.1968 Received permission from the Additional Collector, Thane for converting the said land to Non-Agriculture vide Order No. RB.TV.NAP.SR.44/WS-938 dated 10th April 1968. 26.02.1970 Entered into an Indenture of Partition where the Conjoint Owner Mr. Hasan Kasam Abba has released/relinquished all his Undivided Share, Right, Title and Interest in the Property. This Partition Deed is duly registered before the Office of the Sub-Registrar of Assurance, Mumbai under Sr. No. Bom/1776/1/8/1970. By virtue of this Deed, the said Mr. Hussein Ismail Dawoodani is seized & possessed of the entire property. 22.07.2002 Appointed M/s. Joshi Deshware & Associates for obtaining NOG (No Objection Certificate) from Urban Land Ceiling Department for the proposed development on the land in question. 04.10.2002 Received or....
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.... Ismail Dawoodani for surrendering 3283 square feet of built-up area comprising of five flats of which three flats are surrendered by the Developer and two flats are surrendered by the Owner of the land. 07.10.2009 Occupancy Certificate dated 7th October 2009 for B Wing, C Wing and D Wing issued by Thane Municipal Corporation. 31.03.2012 Occupancy' Certificate dated 7th October 2009 for A Wing issued by Thane Municipal Corporation. 10. After considering the facts and circumstances of the present case we are of the view that Section 80IB(10) of the Act clearly speaks about the deduction "in the case of an undertaking developing and building housing project" and such a development of housing project is not possible without contribution of land and specified pre-approved sanction. In the present case the process of acquisition of land by the assessee, conversion from agricultural to non-agricultural, seeking statutory approvals by the assessee for the purpose of construction of dwelling units/houses for weaker sections from the Government of Maharasthra, appropriate plan sanctions, and finally the grant of bare permission and licence to the developer to enter upon the propert....
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....by the learned CIT(A) while allowing the assessee's appeal (supra), we observe that the learned CIT(A) has considered at length the issue of whether the AO's disallowance of the assessee's claim for deduction under section 80IB(10) of the Act, for the reason that the return of income for A.Y. 2012-13 was filed beyond the due date stipulated under section 139(1) of the Act (but was filed within the time allowed under section 139(4) of the Act), in view of the provisions of section 80AC of the Act is beyond the scope of the provisions of section 143(1) of the Act. We concur with the view of the learned CIT(A) that as per the ratio of the decisions of the Hon'ble Bombay High Court in Trustees of Tulsidas Gopalji Charitable & Chaleshwar Temple Trust (supra) and of the Coordinate Bench n the Yash Developers (supra), even in cases where the return of income is filed beyond the due date stipulated under section 139(1) of the Act, the deduction should not be disallowed under section 143(1) of the Act merely in view of the provisions of section 80C of the Act. We also find on a perusal of the provisions of section 143(1) of the Act, that the AO's action in disallowing the assessee's cla....