TMI Blog2010 (8) TMI 928X X X X Extracts X X X X X X X X Extracts X X X X ..... he case, the learned CIT(A) erred in allowing the deduction u/s 80IB(10) of ₹ 8,23,065/- as claimed by the assessee. 1(ii) The learned CIT(A) erred in not appreciating that the approval for developing and building housing projects was granted to the original owners of the land and not to the assessee, who acted only as an agent for execution of the projects, which rights were obtained by the assessee firm from the original owners. 1(iii) The learned CIT(A) also failed to appreciate that the land being an essential and intrinsic part of developing and building of a housing project, approval is granted by the local authority to the owner of the land for developing and building housing projects, and any other person, to whom he entrusts the works connected with the execution of the project instead of taking it up himself, cannot be said to be an undertaking developing and building housing projects approved by the local authority within the meaning of section 80IB(10) of the Act. Relief claimed in appeal. The order of the CIT(A) on the above issue be set aside and that of the AO be restored. 3. The Assessing Officer[AO in short] noticed that in the return declar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e AO disallowed the claim for deduction u/s 80IB(10) of the Act. 4. On appeal, the ld. CIT(A) concluded in the case of M/s Shreeji Developers, in the following terms 4.3. I have carefully examined the facts of the case, submissions of the appellant and perused the arguments of the Assessing officer. On the main issue of deduction u/s. 80IB (10), it is seen that although, the issue was decided in favor of the appellant and against revenue by the order of the Jurisdictional ITAT, in the case of Radhe Developers vs ITO ward 3(2) Baroda No 2482/Ahd/2006 A bench Ahmedabad, however the decision was partly modified by the subsequent decision in the case of ITO vs. M/s. Shakti Corporation ITA No. 1503./AHD/2008 dated 07-11-2008 wherein, the Hon'ble ITAT has indicated that the benefit under 80IB(10) would be available if the developer has dominant control over the project and has developed the land at its own cost and risk and the benefit would be denied if the assessee had entered into an agreement for a fixed remuneration as a contractor to construct or develop the project on behalf of the land owner. Further, Hon'ble Apex Court in the case of Faqir Chand Gulati vs. Uppal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... restored by the ITAT to the file of the AO in the assessee s own case for the AY 2004-05 in view of decision dated 7.11.2008 of the ITAT in ITO vs. Shakti Corporation Others in ITA no.1503/Ahd./2008. In pursuance to directions of the ITAT, the AO found that the assessee alone was responsible for the risk and cost involved in the development of housing project. Consequently, adopting the view taken in Shakti Corporation(supra), the AO allowed their claim vide order dated 9.11.2009 in the AY 2004-05. Like wise, the ld. AR on behalf of M/s Delight Developers supported the view taken by the ld. CIT(A) in the light of decision of the ITAT in the case of M/s Shakti Corporation. The ld. AR on behalf of M/s Sun Developers, Shri S.N.Soparkar contended that a similar claim has been allowed by the ITAT in their order dated 18.9.2008 in ITA no.2638/Ahd./2008 in their own case for the AY 2005-06. Like wise in the case of M/s Shreenath Infrastructure, the ld. AR supported the findings of the ld. CIT(A) in the light of decision of the TAT in the case of M/s Shakti Corporation(supra). 6. We have heard both the parties and gone through the facts of the case. We find that the ITAT while adjudic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tire ground floor (consisting of three bedrooms with attached bathrooms, one drawing-cum-dining, one store room, one kitchen) with one servant room under the overhead water tank on rear terrace and one parking space, as his share in consideration of his having made available the land. The builder shall also pay a sum of ₹ 8 lakhs as non-refundable consideration to the owner. [vii] The remaining part of the building (the entire first and second floors and two servant rooms and two car parking spaces) shall belong to the builder as its share of the building in consideration of having spent the cost of construction of the entire building and all other services rendered by him under the agreement. [viii] The owner and the builder shall be entitled to undivided and indivisible share in the land, proportionate to their right in the building, that is, an undivided one-third share in the land shall belong to the owner and two third share shall belong to the developer. [ix] The builder shall be entitled to either retain or sell its share of the building. The owner shall execute necessary documents for transferring the share corresponding to the builder s portion of the buildi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts. The Builder did not comply with the same. The landowner therefore filed a complaint before the District Consumer Disputes Redressal Forum. The District Consumer Disputes Redressal Forum dismissed the complaint as not maintainable under the Consumer Protection Act, 1986 holding that the landowner was not a consumer. The appeal filed before the State Commission, Delhi was dismissed as not maintainable. Revision petition was filed before the National Commission. The landowner contended that non-completion of the building as per sanctioned plan and making deviations on a large scale resulting in non-issue of completion certificate and C D Forms amounted to deficiency in services and accordingly the complaint would have been allowed. The National Commission dismissed the Revision petition by observing that the agreement was in the nature of joint-venture and the transaction did not have any element of hiring the services of the builder within the meaning of section 2(1)(d)(ii) of the Act. The said order was challenged before the Hon'ble Supreme Court by Special Leave. The Hon'ble Supreme Court took the view that the landowner s complaint is maintainable and directed the D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... haring the benefits of the projects. The question is whether such agreements are truly joint-ventures in the legal sense. 19. What then is the nature of the agreement between the appellant and the first respondent? Appellant is the owner of the land. He wants a new house, but is not able to construct a new house for himself either on account of paucity of funds or lack of expertise or resources. He, therefore, enters into an agreement with the builder. He asks the builder to construct a house and give it to him. He says that as he does not have the money to pay for the construction and will therefore permit the builder to construct and own additional floor/s as consideration. He also agrees to transfer an undivided share in the land corresponding to the additional floor/s which falls to the share of the builder. As a result, instead of being the full owner of the land with an old building, he becomes a co-owner of the land with a one-third share in the land and absolute owner of the ground floor of the newly constructed building and agrees that the builder will become the owner of the upper floors with corresponding two-third share in the land. As the cost of the undivided two ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ill be different. In a true joint venture agreement between the land-owner and another (whether a recognized builder or fund provider), the land-owner is a true partner or co-adventurer in the venture where the land owner has a say or control in the construction and participates in the business and management of the joint venture, and has a share in the profit/loss of the venture. In such a case, the land owner is not a consumer nor is the other co- adventurer in the joint venture, a service provider. The land owner himself is responsible for the construction as a co-adventurer in the venture. But such true joint ventures are comparatively rare. What is more prevalent are agreements of the nature found in this case, which are a hybrid agreement for construction for consideration and sale and are pseudo joint-ventures. Normally a professional builder who develops properties of others is not interested in sharing the control and management of the business or the control over the construction with the land owners. Except assuring the land owner a certain constructed area and/or certain cash consideration, the builder ensures absolute control in himself, only assuring the quality of co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... does not amount to a claim based on deficiency of service and therefore such a claim would fall outside the scope of the Consumer Protection Act. The said decision is wholly inapplicable, as it dealt with a different question. In Har Swamp Gupta, the State Commission was concerned with a claim of the landowners for compensation alleging that the builder had not built the flats in terms of the contract under which the landowners were entitled to 36% and the builder was entitled to 64% of the built up area. The State Commission held that the complaint was not maintainable on the ground that on similar facts the National Commission in Narasimha Rao s case (supra) had held that the fora under the Consumer Protection Act did not have jurisdiction. But Narasimha Rao (supra), as noticed above, was not similar on facts, nor did it lay down any such proposition. Har Swamp Gupta is clearly wrongly decided. 23. We may notice here that if there is a breach by the landowner of his obligations, the builder will have to approach a civil court as the landowner is not providing any service to the builder but merely undertakes certain obligations towards the builder, breach of which would furnis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a in accordance with the specifications. Therefore, the Hon'ble Supreme Court after having lengthy and pain taking discussion came to the conclusion that the contract entered into even though is titled as collaboration agreement is in fact a contract for house construction for the consideration and accordingly took the view that the land owner is a consumer and the Builder is a service provider. The remedy is available to the land owner against the Builder for the deficiency in the service. The Hon'ble Supreme Court also made it clear that the agreement of the nature under dispute is not joint venture which can be regarded to be outside the scope of consumer disputes. 9. We agree with the contentions of the learned AR that the decision is a precedent on its own facts. A decision cannot be applied universally without looking to the facts and the issue involved in the decision. If the questions involved in both the decisions are different, one decision cannot be followed while deciding the other case. If the facts involved in both the cases are different, the decision involved in one case cannot be applied in the other case. How a judgment has to be read, the Hon'ble S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hanwanti Devi and Ors. (1996 (6) SCC 44)). A case is a precedent and binding for what it explicitly decides and no more. The words used by the Judges in their judgments are not to be read as if they are words in Act of Parliament. In Quinn v Leathem (1901) AC 495 (H.L.), Earl of Halsbury LC observed that every judgment must be read as applicable to the particular facts proved or assumed to be proved, since the generality of the expressions which are found there are not intended to be exposition of the whole law but governed and qualified by the particular facts of the case in which such expressions are found and a case is only an authority for what it actually decides. Courts should not place reliance on decisions without discussing as to how the factual situation fits in with the fact situation of the decision on which reliance is placed. Observations of Courts are neither to be read as Euclid s theorems nor as provisions of the statute and that too taken out of their context. These observations must be read in the context in which they appear to have been stated. Judgments of Courts are not to be construed as statutes. To interpret words, phrases and provisions of a statute, i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich could impede it. 10 Now the question before us is whether the decision of the Hon'ble Supreme Court in the case of Faqir Chand Gulati (supra) will be applicable in the case of the assessee or not or can it be regarded to be the precedent for deciding the issue involved in the cases before us for which the Ld. Senior Advocate took all the pains for traveling from Ahemadabad to Baroda and made us read and understand the whole judgement delivered by the Hon ble Apex Court in the case of Fakir chand Gulati and that of this tribunal in the case of Radhe developers vis a vis the facts of both the cases. The case of Faqir chand gulati(supra) has been decided the Hon'ble Supreme Court when a Special Leave Petition has been filed against the order of National Commission dismissing the complaint of the assessee being not maintainable under the Consumer Protection Act, 1986. The issue involved relates to whether the complaint under the Consumer Protection Act, 1986 is maintainable or not. While deciding this issue, the Hon'ble Supreme Court has gone through the agreement entered into by the landowner with the Builder for the development of the property. The agreement was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rtificate, Completion Certificate, can get the revised maps prepared and for which, the complete powers are given to the Party of the Second Part. (2) The entire responsibility for carrying all legal proceedings in respect of aforesaid land shall be that of the Party :f the Second Part and for that purpose, the Party of the First Part are bound to subscribe signatures, consents, affidavits, if and when found necessary. However, the entire expenses that may be required to be incurred by the Second Party on the same cannot be recovered from the Party of the First Part. With this clear-cut condition, this land is entrusted to you for making the development. (3) On the basis of this Agreement, the Party of the Second Part herein is entitled to make advertisement by displaying the board r in any other manner for the scheme over the land mentioned in the schedule. (4) The Party of the Second Part Developers can register the members for the new construction that may be made over the said land/property, can issue receipt to the members, can issue allotment letter to the members, can execute the Agreement to Sale, can hand over the possession, can execute Tripartie Agreement, but t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e carried out by the Developer and if required, the Party of the First Part has to extend necessary cooperation and assistance as a land owner. The expenses for the said works is to be borne by the Party of the Second Part Developer. (10) From the date of this Agreement, you, the Party of the Second Part is bound to pay tax, land revenue, special cess, etc. in the offices of the Vadodara Municipal Corporation, Government, Semi Government and whatever tax, land revenue, education cess, special cess, etc. are outstanding prior to the date of this Agreement, the same are and shall be paid by us, the Party of the First Part as a land owner. (11) That for the buildings that may be constructed over the said land, the Party of the Second Part Developer can give a suitable name to the project as deemed fit and for which the Party of the First Part shall not raise any objection or dispute. (12) That for performing development activity over the said land as well as for the publicity of the said scheme/project, the Party of the Second Part can print brochures, etc. and can publish advertisement, etc. of the same in the daily newspaper and prior to making construction over the said la ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lso handed over the physical possession to the Builder for carrying out the development of the project. The landowner does not have any right, interest, title in the development so carried out except to the extent he has to receive the consideration from the assessee. The assessee is entitled to publicize the project, print brochures, etc. and can sell the project at its own right. All the expenses have to be incurred by the assessee for carrying out the construction, etc. The land owner has to do nothing except to the extent he has to receive consideration from the assessee. His motive is not to develop, construct or carry on the business as a Builder or Developer. Practically no right in the land remains with the owner. For whole practical purpose the assessee acquired dominant right over the land and he can deal with the land in the manner in which he may like. Thus, the terms and conditions entered into, in our opinion, give all dominant control and rights over the land to the assessee. The assessee, in our opinion, will be constructing the building at its own cost and will remain the owner of the building at its own without any interference from the landowner. The landowner do ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act and accordingly not entitled to the deduction. 4 The CIT(A) dismissed the assessee s appeal vide discussion in paragraph Nos.15 16 of his order in the following manner: 15 Therefore, the deduction u/s 80IB(10) read with section 80IB(1) and rule 18-BBB is admissible only to such assessees as are deriving profits from an undertaking of building and housing projects approved by the local authority, and for such approval, the assessee must legally own the land which is an inalienable constituent of any housing project. The person doing only the work of developing and constructing the building structure on the authority of the approval granted to the landowner cannot be said to be in the business of an undertaking developing and building housing project, not only on account of not being the owner of the land, a necessary constituent of the housing project, but also on account of not having been granted the approval to execute the project in his own right, because that involves obligation that can be discharged only by the person to whom the approval is granted. The case laws relied upon are all distinguishable on facts and hence are not applicable to the present case. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd-owner would be entitled to receive his consideration either immediately or over a fixed period, irrespective of whether or not the land is actually developed by the Developer. The land-owner gives all his rights over the land and gives full authority to the developer to enjoy the land in the manner of his choice. The Agreement would also specifically authorize the developer to develop the land, construct tenements thereon, book members and hand over possession to one or more allottees. For all purposes, therefore, the land-owner extinguishes his interest in this land in favour of Developer on execution of this Development Agreement. 11 In the cases of the present assessee land situated at Vadodara, i.e. area comprising of the City of Baroda and around it, is declared as Urban Development Area within the meaning of Section 2(xxix) of the GTP UDA and the constructions carried out in and around Vadodara are governed by the provisions of the GTP UDA. The provisions of section 26 of the GTP UDA restricts everyone from carrying on development/construction over any land without the permission of the appropriate authority, i.e., Vadodara Urban Development Authority (VUDA), Sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o comply with the Regulations whether or not he is the Owner . This becomes further clear when one examines Clause-25, which pertains to penalties. Finally when the construction is completed the application for occupancy permission has to be made in form No.7 pursuant to Regulation No.6.2 (b) and that Building Completion Certificate is given by the authority in Form No.10 pursuant to Regulation No.7 in relation to development. Therefore, what is material is the development of the real estate and not, who has carried out the same. 13 It is a fact that the land was not registered in its name. It is also true that the assessee had the approval granted by local authority, i.e. BMC which stands in the name of the owner of the land. But on perusal of the Development and Construction agreement it is very clearl that the land owners have agreed to get their land developed through the assessee-firm for construction of housing project. From the translated copy of approval of local authority, i.e. BMC dated 17/07/2000 we find that it is in the name of Shri Ghanshyambhap A.Patel Others through Power of Attorney holder Mahendrabhai A.Patel and in this approval letter, land owners is shown ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d Part or You the said Firm or Developer-Builder in the meaning and context of the said term includes all the present and future partners/partners from time to time of the said Firm of the Party of the Third Part, who are alive, and heirs, successors, guardians, etc. of everybody. 1. Whereas The Party of the Second Part the confirming party are the original owners of the land described in Schedule below and is on their names in Government record. 2. The Party of the Second Part the confirming party as landlords had executed an Agreement of sale for the land described in Schedule below in favour of The Party of the First Part on 7-9-81 at the rate of ₹ 18/- per Sq.Ft. and subject to the other conditions mentioned therein. Accordingly the Party of the First Part as decided full consideration price is paid to the Second Part the confirming party i.e. to landlords and therefore, landlords registered Sale Deed/the First Part or nominee / s of the party of the First part are in actual possession of the land described. 3. The Party of the Third Part are connected with the construction of business since many years and have experience of constructing residential houses. 4. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t reads as under:- 14. The land described in schedule below and the construction done on it, its actual possession shall be with Developer cum Building Contractor till the completion of this scheme and moreover till the total implementation of this agreement on the said land and the construction over it there shall be a contractual lien of the Developer cum Building Contractor. 17 Vide clause No.16 of this Agreement the parties of the first and second part of this agreement have handed over all the responsibilities of the scheme to the Developer-cum-Building Contractor. It reads as under: 16 The party of the First and Second Part have handed over all the responsibilities of the scheme to the Developer cum Building Contractor so at present to the party of the first part as per rules and regulations he is getting F S I but in future it changes taken place in rules and regulations of F S I in such circumstances other than the present scheme on the land if special construction is allowed then for such additional work other than total construction made, as per rules and regulations by getting passed the plans form V M C Vadodara to do the construction all the rights and auth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enced the work to develop which included the development of sites, laying roads within the housing complex, providing for compound-walls of the housing complex, streetlights, drainage, etc.; that simultaneously the construction commenced the work of the housing work; that the cost of the entire Development and the Construction is substantially made out by the assessee-firm initially and partially recovered from the customers who are desirous to purchase any residential houses, i.e. the prospective buyers; and that the size of plot on which the project is developed is, definitely, in excess of one acre and the size of each residential house is less than 1500 Sq. ft. 20 On these undisputed facts we have to examine the provisions of the section 80-IB(10) of the Act. Before discussing the provisions appearing in the impugned years, it would be relevant to have a look the legislative history of the provision. The deduction for housing project was introduced for the first time in Asst. Year 1999-2000 by inserting sub-section (4F) in Section 80IA of the Act and the deduction was as per provisions of Sec.80IA(1) in respect of any profits and gains of such undertaking. The said section 8 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l limits of these cities and one thousand and five hundred square feet at any other place. 23 For enacting this provision, the Notes on Clauses to the Finance Bill, 1999 has explained that the provision also seeks to provide that for approved housing projects the profits which are fully deductible, the built-up area in regions other than outside twenty-five km. of municipal limits of Delhi and Mumbai, does not exceed one thousand five hundred square feet. 24 Further, the Memo contained in Finance Bill, 1999 has explained the provisions brought by the legislature w.e.f. 1st April, 2000 and the same reads as under: TAX INCENTIVE FOR PROMOTION OF HOUSING Liberalization of tax holiday to approved housing projects-Under s. 80-IA of the IT Act, profits of approved housing projects where the development and construction commences on or after 1st Oct., 1998 and is completed by 31st March, 2001 are fully deductible. The conditions necessary for claiming the benefit are that the approved housing project should be on minimum area of one acre and should have dwelling units with a maximum built-up area of 1,000 sq.ft. It is proposed to modify the existing benefits to provide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ame. 27 A bare reading of this provisions of S. 80IB (10), as they stood in the years under consideration, the requirements for claiming deduction for housing projects are that (i) there must be an undertaking developing and building housing project; (ii) such housing project is approved by the local authority; (iii) the development and construction of housing project has commenced on or after 1st day of October, 1998; (iv) the housing project is on a size of a plot of land which has minimum area of one acre; and (v) the residential unit developed and built has a built up area of 1000 sq. ft. if it is situated in Delhi and Mumbai or within 25 km. of municipal limit of these cities and 1500 Sq. ft. at any other places. There is no other condition, which is to be complied with by an assessee for claiming the deduction on profits of the housing project. 28 The contention of the Revenue Authorities that to claim deduction u/s.80IB(10), there is a condition precedent that the assessee must be owner of the land on which housing project is constructed has no force. We do not find any such condition as appearing in the provisions of the section extracted above. A plain reading of sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... term developer as: 1.One who or that which develops; 2.A person who invests in and develops the urban or Suburban potentialities of real estate b. Oxford Advanced Learners Dictionary of Current English Fourth Indian Edition gives meaning of the term developer as person or company that develops land. c. Random House Dictionary of the English Language, the following definitions can be found: Develop: a. To bring out the capabilities or possibilities of; bring to a more advanced or effective state. b. To cause to grow or expand. Developer: a. The act or process of developing; progress b. Synonym: Expansion, elaboration, growth, evolution, unfolding, maturing, maturation. d. Webster Dictionary, the following definitions emerge: a. To realize the potential of; b. To aid in the growth of: Strengthen, develop the biceps c. To bring into being: make active (develop a business) d. To convert (a tract of land) for specific purpose, as by building extensively e. Law lexicon Dictionary, the following definitions could be seen: Development a. To act, process or result of development or growing or causing to grow; the state of bein ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... undertakes to produce a given result for any establishment, other than a mere supply of goods or articles of manufacture, by the employment of building workers or who supplies building workers for any work of the establishment; and includes a sub-contractor. 32 In these circumstances, in our opinion, the assessee is entitled to deduction u/s. 80IB(10) as it had developed and built the housing project; it had started construction after 1st day of April 1998; the project is on the size of a plot of land which has a minimum area of one acre and the maximum built up area of the residential units are not more than 1500 Sq. ft., the property being situated in Baroda, a city other than Delhi and Mumbai. 33 It may also be born in mind the deduction is not exclusively to an assessee but to an undertaking developing and building housing project, be it developed as a contractor or as an owner. This fact is evident on the bare reading of sub-sec.(1) of Sec.80IB, sub-sec.(2) of Sec.80IB, which provides that this section applies to an industrial undertaking which fulfills all the following conditions viz., and sub-section (12) which allows the deduction to the amended or resulting ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ken possession of the property or any part thereof, or the transferee, being already in possession, continues in possession in part performance of the contract and has done some act in furtherance of the contract, and the transferee has performed or is willing to perform his part of the contract, then, notwithstanding that the contract, though required to be registered, has not been registered, or, where there is an instrument of transfer, that the transfer has not been completed in the manner prescribed therefor by the law for the time being in force, the transferor or any person claiming under him shall be debarred from enforcing against the transferee and persons claiming under him any right in respect of the property of which the transferee has taken or continued in possession, other than a right expressly provided by the terms of the contract: Provided that nothing in this section shall affect the rights or a transferee for consideration who has no notice of the contract or of the part performance thereof. 36 In view of above provisions of the Transfer of Property Act, vis- -vis, the Income-tax Act to get the correct import of section 80-IB(10) of the Act we have to read a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case, the assessee has performed his part of the contract in regard to Agreement to Sale and Development Agreement and paid part of consideration to perform his part and carried out development activities by constructing a housing project as per agreement. This being a tri-party agreement, i.e. the Development Agreement which has passed on a valid and rightful title to the prospective buyers, in no way it can be said that facts of case before the Supreme Court would apply to the present case. 39 We may refer to the provisions of Section 10(20A) of the Income-tax Act providing that : Any income of an authority constituted in India by or under any law enacted either for the purpose of dealing with and satisfying the need for housing accommodation or for the purpose of planning, development or improvement of cities, towns and villages, or for both. The Supreme court while interpreting the provisions of section 10(20A) of the Act, the purpose of which is almost similar to the present section 80IB, held in the case of Gujarat Industrial Development Corporation Others (227 ITR 414), at page No.417 as under:- Any income falling within the ambit of the said clause woul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the case of Mysore Minerals Ltd. 239 ITR 775 (SC), wherein by relying on the decision of CIT v/s. Podar Cement Pvt.Ltd.[1997] (226 ITR 625)[SC], the Supreme Court has elaborately discussed and defined the word owner and finally held as under:- Section 32 of the Income-tax Act confers a benefit on the assessee. The provision should be so interpreted and the words used therein should be assigned such meaning as would enable the assessee securing the benefit intended to be given by the Legislature to the assessee. It is also well-settled that where there are two possible interpretations of a taxing provision the one which is favourable to the assessee should be preferred. What is ownership ? The terms own , ownership , owned , are generic and relative terms. They have a wide and also a narrow connotation, The meaning would depend on the context in which the terms are used Black's Law Dictionary (6th edition), defines owner as under: Owner, The person in whom is vested the ownership, dominion, or title of property ; proprietor. He who has dominion of a thing, real or personal, corporeal or incorporeal, which he has a right to enjoy and do with as he pleases, ev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 127, 149 (SC) is, was held that the word 'own' is a generic term, embracing within itself several gradations of title, dependent on the circumstances, and it does not necessarily mean ownership in fee simple ; it means, 'to possess, to have or hold as property' . In CIT v. Podar Cement Pvt. Ltd. [1997] 226 ITR 625 (SC), the question which came up for consideration before this court was whether the rental income from the house property which had come to vest in the assessee, but as to which the assessee was not legal owner for want of deed of title, was liable to be assessed as income from house property or as income from other sources. To be assessable as income from house property within the meaning of section 22 of the Act the property should be such of which the assessee is the owner . This court upon a juristic analysis of the underlying scheme of the Act and resorting to contextual and purposive interpretation, also having reviewed several conflicting decisions of different High Courts, held that the liability to be assessed was fixed on a person who receives or is entitled to receive the income from the property in his own right. Vide para. 55, this court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, etc. Building owned by the assessee the expression as occurring in section 32(1) of the Income-tax Act means the person who having acquired possession over the building in his own right uses the same for the purposes of the business or profession though a legal title has not been conveyed to him consistently with the requirements of laws such as the Transfer of Property Act and the Registration Act, etc., but nevertheless is entitled to hold the property to the exclusion of all others. 43 In view of decision of the Supreme Court in the case of Mysore Minerals Ltd.(supra), wherein the term owned in section 32 has been given a wider meaning by holding that if an assessee was in possession of a property and had acquired dominion over it to the exclusion of others, he would be entitled depreciation u/s.32 irrespective of the legal title. In the present case the Development Agreement and Agreement to Sale the undertaking developing and building housing projects and claiming deduction of profits from such housing project, there is, definitely, a dominion of the Developer over the land to the exclusion of others inasmuch as possession of the land is given to the Developer b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as legal proposition laid down by the Supreme Court in the case of Mysore Minerals Ltd.(supra), we hold that the assessee is entitled for claim of deduction on the profit derived from Construction and Development of Residential Housing Project. 16 The facts involved in the case of the assessee are similar to the facts in the case of Radhe Developers (supra) and accordingly we are of the view that the assessee has acquired the dominant over the land and has developed the housing project by incurring all the expenses and taking all the risks involved therein. We may mention here that, in our opinion, the decision in the case of Radhe Developers (supra) will not apply in a case where the assessee has entered into the agreement for a fixed remuneration merely as a contractor to construct or develop th housing project on behalf of the landowner. The agreement entered into in that case will not entitle the Developer to have the dominant control over the project and all the risks involved therein will 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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