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2016 (4) TMI 171 - HC - Income TaxDenial of relief under Section 80IB - Held that:- As the owner of the land is concerned, the assessee actually acted as the developer. They had undertaken the following activities namely (i) engagement of architects (ii) preparation of building plans for approval (iii) coordinating with the Local Body for the grant of building plan approval (iv) identification of purchasers of flats and (v) entering into agreements of construction with them. All the above activities cannot be undertaken, if a person was merely a contractor. Therefore, primarily, the view taken by the Tribunal appears to be wholly unsustainable. Drawing our attention to the Explanation inserted towards the end of Sub-Section (10) of Section 80IB, it is contended by the learned Standing Counsel for the Department that the benefit of Section 80IB is not available to any undertaking, which executes a housing project or a works contract awarded by any person. This Explanation was inserted by Finance Act 2/2001 with effect from 1.4.2001. But unfortunately for the Department, the above Explanation has no application to the case on hand. The assessee did not execute a housing project as a works contract for the owner of the land. The relationship that the assessee had with the purchasers of undivided shares has been misunderstood as the relationship that they had with the owner of the land. Therefore, the Tribunal was wrong in holding the appellant to be a mere contractor. - Decided in favour of assessee.
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