TMI Blog2012 (10) TMI 571X X X X Extracts X X X X X X X X Extracts X X X X ..... the project was not being developed by the assessee. We are of the opinion that in this situation, assessee’s claim u/s 80- IB(10) was not hit by the Explanation added thereto vide Finance (No.2) Act, 2009 with retrospective effect from 1.4.2001. Issue decides in favour of assessee Deemed dividend u/s 2(22)(e) - Assessee had received a loan from Company wherein partners of the assessee-firm also Directors – Held that:- Assessee did produce number of evidence, which inter alia included journal entry passed reversing earlier sales made to the said company, which resulted in the debit balance turning into a credit balance. Such particulars were never produced by the assessee before AO. Issue remand back to AO. - I.T.A. Nos. 945 & 946/Mds/2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Nagar, Velachery, Chennai-42. Assessee was following completed contract method for accounting the revenue. Assessee had entered into an agreement with land owners and a power of attorney obtained by one of its partners from the land owners. But for the power of attorney, no conveyance deed was executed in assessee s name. As per the A.O., the power of attorney was executed in the name of one of the partners of the assessee-firm and such partner was not holding the power for and on behalf of assessee-firm. Permission from local body was also taken by this partner and not by assessee-firm. Completion certificate was also issued to the said partner and not to the firm. As per the Assessing Officer, Explanation to Section 80- IB(10) inserted by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g to him, assessee was not a contractor simpliciter, nor a builder simpliciter, nor a developer simpliciter, but, assessee was a developer, builder and also a contractor. Assessee had invested money for purchasing of the land and the land agreement dated 31st December, 2004 and sale agreement between the land owners and Managing Partner of the assessee-firm clearly proved this. Assessee was a firm constituted in 1996 and was in the business of developers and builders since that date and the project as a whole was under the control of the assessee. Assessee was enjoying possession of property, constructing flat and handing over the flats to ultimate customers who were the prospective flat buyers. Plan sanction obtained from competent authori ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by it. All the development costs of the project were also charged in the assessee-firm. Just because assessee-firm entered into separate agreements with prospective flat buyers for construction of flats, we cannot say that the project was not being developed by the assessee. Assessee was in possession of the property after obtaining the power of attorney. Development work was carried on by the assessee and it had exclusive rights to determine the sale price of the flat and sell the flat. What went to original owner of the land was only the cost of the land and nothing more. We are of the opinion that in this situation, assessee s claim under Section 80- IB(10) was not hit by the Explanation added thereto vide Finance (No.2) Act, 2009 wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on and deleted the addition made. 11. Now before us, learned D.R. submitted that nothing was produced by the assessee before the Assessing Officer to prove that the transactions with the said company were in the course of its business. CIT(Appeals) had accepted the claim without giving an opportunity to the Assessing Officer, while considering the fresh submissions of the assessee and there was violation of Rule 46A of Income-tax Rules, 1962. 12. Per contra, learned A.R. fairly admitted that the matter required a fresh look by the Assessing Officer. 13. We have perused the orders and heard the rival submissions. Before the Assessing Officer, assessee did not produce any explanation when a proposal was made that the sum of Rs. 1,83,38, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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