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TMI Blog2012 (8) TMI 509X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee, engaged in property development business, had filed its return for the impugned assessment year claiming deduction of Rs. 6,72,70,165/- under Section 80-IB of the Act. During the course of assessment proceedings, it was noted by the Assessing Officer that assessee was selling undivided share of land to the respective buyers and thereafter, entering into contracts with prospective buyers for constructing flats. As per the A.O., owners of the undivided share of land had entered into contracts for construction of flats with the assessee and payments received by the assessee from such owners were as per the terms of such agreements with them. According to him, Explanation to Section 80-IB(10) of the Act clearly excluded works contrac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and assessee was only a contractor who had agreed to construct flats for the proposed owners of the undivided share of land. In this view of the matter, A.O. denied deduction under Section 80-IB(10) of the Act. 3. In its appeal before CIT(Appeals), argument of the assessee was that it had satisfied all the conditions mentioned in Section 80-IB(10) of the Act and the claim was unjustifiably denied. Reliance was placed on the decision of a co-ordinate Bench of this Tribunal in the case of ACIT v. Smt. C. Rajini [9 ITR (Trib.) 487]. CIT(Appeals) was appreciative of this contention of the assessee. According to him, assessee had satisfied all the conditions required for deduction under Section 80- IB(10) of the Act. As per CIT(Appeals), assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e perused the orders and heard the rival submissions. The investment made by the assessee for the project and the source for such investment were as under:- Particulars Amount (Rs.) Investment in Land during FY 2005-05 1,15,58,524 Investment in Development of Project from FY 2004-05 to 2006-07 5,63,02,852 Total Sources 6,78,61,376 Share Capital & share deposit money 9,07,000 Unsecured Loan from Promoters & Relatives 89,07,342 Demand Loan & Over Draft from City Union Bank 5,51,70,156 Advance from Customers 28,76,878 Total 6,78,61,376 None of these figures have been disputed or rebutted by the Revenue. It is also not disputed that assessee had purchased the land. It might be true that assessee had entered into individual a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nstruct for cash, deferred payment or other valuable consideration. Therefore, the ratio of that decision cannot at all applied to the facts of the given case which is under Incometax Act."
8. In our opinion, here the assessee could establish that it was a project developer which satisfied the conditions specified in Section 80- IB(10) of the Act. The disallowance could not have been done considering the assessee as a mere works contractor. Disallowance was rightly deleted by the CIT(A). We do not find any reason to interfere with the order of CIT(Appeals).
9. In the result, appeal filed by the Revenue is dismissed.
The order was pronounced in the Court on Monday, the 25th of June, 2012, at Chennai. X X X X Extracts X X X X X X X X Extracts X X X X
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