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TMI Blog2012 (7) TMI 45X X X X Extracts X X X X X X X X Extracts X X X X ..... imed deduction u/s 80IB(10) which was disallowed by the A.O. on the ground that the assessee was not the owner of the property. The permission was not granted in the assessee's name. The approval of Baroda Municipal Corporation was granted in the name of original land owner and not in the name of assessee's developers. The original land owner had acquired the services of assessee firm for development and construction of project. In view of the A.O. since the fundamental condition for the approval for development and construction must be accorded in the assessee's name was not satisfied, the assessee was not eligible to claim deduction u/s 80IB(10) of the I.T. Act. 4. Before ld. CIT(A) the assessee's submission was that similar issue came b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Developer will be vest with the landowner only. The interest of the Developer will be restricted only for the fixed remuneration for which he would be rendering the services. The decision in the case of Radhe Developers (supra) has not dealt with such situation. The proposition of law laid down in the case of Radhe Developers cannot be applied universally without looking into the development agreement entered into by the Developer along with the landowner. In the case of Shakti Corporation since the assessee has filed copy of the development agreement and crux of the agreement is that the assessee has purchased the land and has developed the housing project at its own, therefore, we are of the view that the assessee will be entitled ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of assessment year 2006-07 and 2007-08 in assessee's own case, the assessee's appeal was allowed on identical facts. 5. Taking into consideration the submission of the assessee ld. CIT(A) allowed the appeal of the assessee directing the A.O. to accept the claim of the assessee u/s 80IB(10) of the Act by observing as under:- "I have considered the submission of the Authorized Representative and the order of the Assessing Officer. The decision of the Hon'ble ITAT in the case of M/s Shakti Corporation and Others and the guidelines laid down has also been considered. Accordingly, the comments of Assessing Officer was called for after carrying out due verification of facts. The Assessing Officer vide his report dated 30.08.2011, has s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Gujarat High Court, will not preclude the appellant from getting relief at the level of CIT(A). Therefore, for the year under consideration, following the above mentioned judgments of Hon'ble Ahmedabad ITAT, the claim of the appellant for deduction u/s 80IB(10) is allowed." Since the ld. CIT(A) has given relief to the assessee by placing reliance on the decisions of Hon'ble ITAT Ahmedabad in the case of ITO and Otrs. Vs. Shakti Corporation Baroda in ITA No.1503/Ahd/2008 which in turn was passed by Hon'ble ITAT following the decision of Hon'ble Apex Court in the case of Faquir Chand Gulati (supra), we feel no need to interfere with the order passed by ld. CIT(A) and the same is hereby upheld. This ground of the revenue is dismissed. 6. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the claim on the ground that these do not constitute business income and not eligible for deduction u/s 80IB(10) of the Act. Sale of Scrap: It may be mentioned that the AO has accepted the sale of scrap represents scrap generated during construction activity. This sale of scrap is directly connected to the business of the Appellant and therefore deduction u/s 80IB(10) is allowable on the same. The scrap is generated during the construction activity and therefore derived from the business of housing project. We therefore submit that deduction u/s 80IB(10) is allowable on the same. We rely on the decision of Mira Industries reported in 87 ITD 475 (Ahd) wherein it has been held that sale of scrap generated during the manufacturing process ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amount cannot be excluded. It is the income included in the gross amount which is required to be excluded. We therefore request you kind office to direct the AO to reduce the net income after verification and not the gross income." 7. After taking into consideration these submission of the assessee ld. CIT(A) deleted this addition by observing as under:- "I have considered the submissions of the learned Authorized Representative and the order of the Assessing Officer. In view of the details submitted above the nature of these "other income" and case laws cited, the contention of the Authorized Representative is accepted with respect to Sundry Balances written off Rs.8,70,077/- and interest received on delayed payment Rs.4,36,561/- ..... X X X X Extracts X X X X X X X X Extracts X X X X
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