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TMI Blog2012 (8) TMI 66X X X X Extracts X X X X X X X X Extracts X X X X ..... ed approval by the local authority to carry on the business of an undertaking developing and building housing projects, in contravention of a plain reading of section 80IB(10) r.w.s. 80IB(1), Explanation to section 80IB(10) and rule 18BBB. 2. The ld.CIT(Appeals) failed to make a combined reading of section 80IB(1), which is the substantive provision, and section 80IB(10), which is a machinery provision, postulating complete identity between the assessee as referred to in section 80IB(1), and the undertaking developing and building housing projects approved by the local authority as referred to in section 80IB(10), not permitting such splitting between the assessee and the person who is granted approval by the local authority for developing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l from the local authority for developing ad building of housing projects to the person with whom he enters into agreement for execution of such projects, without there being any provision in section 80IB for such passing on, as contained in section 80HHC(1A). 2. Facts in brief as emerged from the corresponding assessment order passed u/s.143(3) of the I.T.Act dated 10.12.2008 were that the assessee firm is engaged in building construction activities. The assessee has claimed a deduction u/s.80IB(10) of the Act of Rs.29,11,158/-. The observation of the AO was that the assessee was not the owner of the land. It has also been noted by the AO that the assessee had not taken the approval of the housing project from the local authority. It was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... artners have developed the project, hence entitled for the claim of deduction u/s.80IB(10) of the Act. 4. With this brief background we have heard both the sides. From the side of the Revenue, ld.Sr.DR Mr.Samir Tekriwal appeared and placed reliance on the observations of the AO. He has mentioned that even if the order of the Hon'ble Gujarat High Court is to be followed, as pronounced in the case of CIT vs. Radhe Developers 341 ITR 433(Guj.), the assessee is under obligation to substantiate its claim of deduction u/s.80IB(10) of the Act in the light of the observations/directions made by the Hon'ble High Court. We have been informed that in assessee's own case for immediate preceding assessment year, i.e. A.Y. 2005-06 by ITAT Ahmedabad "D" ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see 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 for the deduction u/s.80IB(10). The decision of the Hon'ble Supreme Court in the case of Faquir Chand Gulati (supra) will not assist the Revenue, as the agreement is not sharing of the constructed area. In other cases the copy of agreement since has not been submitted before us, if submitted, the terms and conditions of the agreement were not specifically argued before and placed before us, we therefore, in the interest of justice and fair play to both the parties set aside the order of the CIT(A) and restore al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the said development project. (d) Whether under the agreement the assessee had been given full authority to develop the land and to construct residential units. The AO has to examine the fact in respect of engagement of professionals, such as, architect for designing and architectural work. (e) The AO has to examine the responsibility of enrolment of members and collection of charges required to be made from the buyers of the residential units. (f) The AO has to examine about the "profit" or "loss" arising from the said project. (g) Though the ownership of land has been held as not the only criteria for allowing the claim u/s.80IB(10) but the domain over the land and the control over the project has to be examined by the AO. (h) Whet ..... X X X X Extracts X X X X X X X X Extracts X X X X
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