TMI Blog2014 (1) TMI 1361X X X X Extracts X X X X X X X X Extracts X X X X ..... al evidence which requires opportunity for verification and examination by the Assessing Officer – The issue has been restored for fresh adjudication. Whether the assessee be treated as developer for deduction u/s 80IB(10) – Held that:- The assessee has got substantial right for developing the land as a developer and there is entire transfer of right to the assessee for development of the property - The assessee is also substantially entitled to sell the entire units and will also appropriate all the sale proceeds - Out of the said sale proceeds, the assessee was entitled for 95% of the receipts – Decision in case of CIT v/s Radhe Developers [2011 (12) TMI 248 - GUJARAT HIGH COURT] followed - The assessee need not be a land owner but should have substantial right to develop the property with all the risk and responsibility - The assessee can be held to be a developer for the purpose of claiming deduction under section 80IB(10) – Decided against Revenue. - ITA No. 5633/Mum./2010 - - - Dated:- 15-1-2014 - Shri P. M. Jagtap And Shri Amit Shukla,JJ. For the Petitioner : Mr. Sanjiv M. Shah For the Respondent : Mr. Surendra Kumar ORDER Per Amit Shukla, J. M. The p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under section 80IB(10). In response, the assessee submitted that the approval letter from the CIDCO was obtained on 12th January 1998 approving the project as "Residential" which was amended on 28th August 1998. A certificate was also filed stating that the plot area was more than one acre and residential units have a built-up area of less than 1,000 sq.ft. Besides this, certificate from local authority i.e., Nalasopara Nagar Parishad was also filed, wherein it was certified that the project was completed before 31 st March 2007. However, from the details submitted by the assessee, the Assessing Officer observed that firstly, it is not clear as to whether the project has commenced before 1st October 1998, or after, secondly, the land was not owned by the assessee as the project was sanctioned by the CIDCO in the name of Rajaram Mahapadi who is the power of attorney holder from the land owner Mr. Nipun Ishwardas Thakkar, and lastly, the assessee is mere a sub-developer. On this point, the Assessing Officer further sought clarification from the assessee in response to which assessee submitted that for availing the benefit under section 80IB(10) the claimant need not be the owner of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oject before 31st March 2007 and this is a sufficient requirement because in any case, the project was approved before 1st April 2004 and was completed before 31st March 2008. The assessee submitted copies of Profit Loss account and Balance Sheet filed along with the return of income, for the assessment year 2000- 01, to show that for the first time the assessee has claimed expenditure in respect of this project during the financial year 1999 which, inter-alia, means that expenditure had been incurred only from 1st April 1999 on wards. 5. Regarding the second issue that the assessee cannot be held to be the developer, the assessee submitted that it had a substantial right to sell the flats on his own and the developer and the owner were paid 1 % and 3 % of the sale proceeds. Further, the assessee need not be owner of the land for claiming deduction under section 80IB(10). It is sufficient that the assessee is a developer. 6. The learned Commissioner (Appeals) held that the provisions of section 80IB(10) provides that the undertaking should have commenced the development / construction of the housing project and/or after 1st October 1998 and completed such construction before ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t years 1999-2000 and 2000-01, as the assessee also had opening work-in-progress which is evident from Page-42 and 43 of the paper book. He also drew our attention to Page-15 and 16 of the paper book which is a copy of the Balance Sheet and the Profit Loss account as on 31st March 1999 wherein there is a closing work-in-progress. From this, it cannot be inferred that there is no opening work-in-progress in the assessment year 2000-01 in respect of this project. Thus, the finding of the learned Commissioner (Appeals) cannot be blindly relied upon. He also submitted that the learned Commissioner (Appeals) has not considered the Explanation to section 80IB(10) while adjudicating the issue as to whether the assessee is a contractor or a developer. Thus, the order of the learned Commissioner (Appeals) should be set aside and/or the matter should be restored back to the file of the learned Commissioner (Appeals) to give opportunity to the Assessing Officer on the additional evidence filed by the assessee before the learned Commissioner (Appeals) to be properly examined. 9. On the other hand, the learned Counsel submitted that first of all the additional ground no.1, should not be adm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nced before 1st October 1998 or after the said date. Before the Assessing Officer, the assessee had stated that the project was sanctioned / approved by the CIDCO on 12 th January 1998 and later on amended on 28th August 1998 and therefore, the construction of the project had started much after the said date. However, the Assessing Officer has categorically noted that the assessee could not submit any document to substantiate that the assessee had commenced the project after 1st October 1998. The learned Commissioner (Appeals), on a perusal of the audited Balance Sheet and Profit Loss account for the assessment year 2000-01, has given a finding that the project had started after 1st April 1999 i.e., much after 1st October 1998, therefore, benefit of section 80IB(10) cannot be denied. On a perusal of these audited Balance Sheet for the assessment years 1999-2000 and 2000-01, which were filed for the first time before the learned Commissioner (Appeals), it is seen that prima-facie it cannot be inferred that there was no opening work-in- progress with regard to these particular project as apparently there is no clear cut demarcation of work-in-progress of old and new projects. From ..... X X X X Extracts X X X X X X X X Extracts X X X X
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