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2015 (7) TMI 199 - ITAT AHMEDABAD

2015 (7) TMI 199 - ITAT AHMEDABAD - TMI - Deduction u/s 80IB(10) - Held that:- Issue is now fully covered in favour of the assessee for grant of deduction u/s 80IB(10) of the IT Act because the assessee has acquired dominant right over the land and has developed the housing project by incurring all the expenses and taking all risks involved thereof. The crux of the matter would be that assessee has acquired the land in question and has developed the housing project at its own cost as per the req .....

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uthorities below should not have rejected the claim of the assessee at least on alternate contention that the assessee would be entitled for deduction u/s 80IB (10) of the IT Act on pro rata basis. However, we have held that the extension of the 4 units is not done by the assessee and that open area is not part of balcony/verandah, therefore, according to the submission of the assessee, the built up area of the assessee was within the prescribed limit, therefore, there is no need to give further .....

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assessee. - Decided in favour of assessee. - ITA No. 1968/Ahd/2011 - Dated:- 30-4-2015 - Shailendra Kumar Yadav, JM And Anil Chaturvedi, AM,JJ. For the Appellant : Shri D P Gupta, CIT-DR For the Respondent : Shri P M Mehta, AR ORDER Per Shailendra Kumar Yadav, Judicial Member This appeal has been filed by the Revenue against the order of the Commissioner of Income Tax (Appeals)-XV, Ahmedabad dated 13.06.2011 for Assessment Year 2008-09, on the following grounds:- 1. The Ld. Commissioner of Incom .....

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hich are separate legal entities in the eye of law and the assessee entered into the project by a development agreement with them. The entire responsibility to execute the housing project(s) and abide by the terms and conditions of its approval right from the inception of the project(s) till its completion rests with the Society. Assessee was just a contractor of the land constructing housing projects and not a developer. 3. On the facts and in the circumstances of the case, the Ld. Commissioner .....

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1 Matter was carried before the First Appellate Authority, wherein various contentions were raised on behalf of assessee and having gone through the same, CIT(A) observed that the ITAT in assessee's own case for the Assessment Year 2007-08 has decided the similar issue, by observing as under:- "7. We have examined the facts of the present case in the light of the decision in the case of M/s. Amaltas Associates (supra) and find that the assessee has satisfied all the requirements of sect .....

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lso debited in the profit & loss account of the assessee. The sale consideration is not disputed and the confirmation of the societies from their accounts, copies of their bank account and copy of the bank account of the assessee and ledger accounts from the accounts of the assessee have been filed on record. It is also claimed that the assessee has also entered into agreement to sell the land with the societies on 23-5-2006 which is mentioned in the submission of the assessee reproduced in .....

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development of the property in question. The assessee is also entitled to receive the sale consideration and shall accept all the payments from the buyers. The details of the same are filed on record to show that even in the sale deeds the name of the assessee is mentioned along with history as to how the property has been developed by the assessee as a developer and that the entire sale consideration is received by the assessee. The learned Counsel for the assessee also submitted that AUDA has .....

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me of one of the societies as per the terms of the permission for development for the same area and for the same number of residential units. When the permission for development and Building Use certificates are considered in the light of the development agreements, it would clarify that the property numbers are same as has been mentioned by AUDA and that there is no objection from the side of the societies. Therefore, it is clear that the building plans have been sanctioned in respect of the la .....

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, therefore, prove that the assessee undertaken to develop the building housing project in question. These facts would show and prove that the assessee made the payments of sale consideration of the property in question and the details of the sale proceeds received from the buyers have also been mentioned in the total sale proceeds in the books of accounts of the assessee. The facts of the case and evidences on record would prove that the assessee entered into development agreements and agreemen .....

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ng project. The societies were not left with any right, interest or title in the development which was carried out by the assessee. The motives of the societies were not to develop, construct or carrying out any business as a builder or developer and practically nothing was left with them. For all intent and purposes, the assessee has acquired dominant rights over the land and the assessee can deal in the land in the manner in which the assessee might have liked. The terms and conditions entered .....

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regarded to be the joint venture or collaboration agreement. It was the agreements under which the assessee was entitled to develop the housing project on the land on its own cost and in the manner in which the assessee might have decided. The authorities below rejected the claim of the assessee because out of 324 units, 4 residential units have built up area in excess of 1500 sq. ft., on two grounds that additional construction have been carried out and if open terrace area is added the constru .....

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g Use permission has been granted which was below 1500 sq. ft. After giving possession on sale to the occupants, the occupants might have made some additions which are also confirmed by the DVO in his report PB-293. Therefore, the assessee would not be responsible for the later development after receipt of sale consideration. Even, the owners of the flats who have purchased the residential units from the assessee have given confirmation for raising additional construction after receiving the sal .....

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g the claim of the assessee by taking the open terrace as balcony/verandah. It was, therefore, held that open terrace cannot be included in the built up area. With regard to the discrepancy of survey numbers mentioned in the approval and B. U. permission issued by AUDA, learned Counsel for the assessee explained that there was inadvertent mistake in English translation and if the original is taken into consideration no discrepancy is noted. The learned Counsel for the assessee explained that dev .....

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granted for 324 residential units and on the same basis Building Use permission is granted for 324 residential units developed by the assessee which were as per the terms and conditions stipulated in the development permission and that there was no objection from the side of the societies, we do not find any discrepancy for any survey number for construction of the property in question. We may also note here that the competent authorities would never grant permission to raise construction witho .....

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the raising of the construction by the assessee in their property. The huge housing complex can never be raised in a day or in a night, it would take long period, therefore, there would be bound to be objection from the owner of the land if their lands have been encroached by the assessee. However, the AO has not made out any such case against the assessee. Moreover, requirement of section 80IB (10) of the IT Act is that the assessee had undertaken development and building housing project which .....

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d by the authorities below with regard to the survey numbers. It is not in dispute that the assessee being a developer constructed the housing project as per the development agreements by incurring total expenditure and received the sale consideration. Therefore, the assessee is able to satisfy the requirement of section 80 IB (10) of the IT Act. We may also note that once plan is approved by AUDA on papers submitted by the assessee and others, it would be deemed approval of construction of hous .....

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e issue is now fully covered in favour of the assessee for grant of deduction u/s 80IB(10) of the IT Act because the assessee has acquired dominant right over the land and has developed the housing project by incurring all the expenses and taking all risks involved thereof. The crux of the matter would be that assessee has acquired the land in question and has developed the housing project at its own cost as per the requirement of section 80IB (10) of the IT Act. Therefore, we are of the view th .....

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