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2015 (9) TMI 68 - ITAT AHMEDABAD

2015 (9) TMI 68 - ITAT AHMEDABAD - TMI - Deduction under section 80IB(10) - Held that:- Entrepreneurial risk in the present case was undisputedly borne by the assessee, we confirm the stand taken by the ld CIT(A) and grant of deduction under section 80IB(10) to the assessee, and decline to interfere in the matter. See Shri Umeya Corporation vs. Income Tax Officer [2015 (9) TMI 108 - ITAT AHMEDABAD] - Decided in favour of assessee. - ITA Nos.2598 & 2599/Ahd/2011 - Dated:- 21-8-2015 - Pramod Kumar .....

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by this common order, for the sake of convenience. 3. Since common grounds have been raised by the appellant in both these appeals, therefore, for the sake of convenience, the grounds raised in ITA No.2598/Ahd/2011 for A.Y. 2007-08 are reproduced as under :- ITA No.2598/Ahd/2011 for A.Y. 2007-08 1) The Ld. Commissioner of Income-tax (Appeals)-XV, Ahmedabad has erred in law and on facts in directing the Assessing Officer to allow the assessee s claim for deduction of ₹ 79,69,534 u/s. 80IB( .....

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he entire responsibility to execute the housing project and abide by the terms and conditions of its approval right from the inception of the project till its completion rests with the Societies. Assessee was just a contractor AND not a developer. 3) On the facts and in the circumstances of the case, the Ld. Commissioner of Income Tax (Appeals)-XV, Ahmedabad ought to have upheld the order of the Assessing Officer. 4) It is therefore, prayed that the order of the Ld. Commissioner of Income Tax (A .....

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he land belonged to Darshan Twins Co-operative Housing Society Limited and Shyam (Bopal) Co-operative Housing Society Limited. It was in this backdrop and for this reason that deduction under section 80IB(10) of the Act was declined to the assessee. However, when the matter was carried in appeal before the ld. CIT(A), she reversed the action of the Assessing Officer and allowed deduction under section 80IB(10) of the Act by observing, inter alia, as follows :- 16. After going through rival submi .....

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ted 7.6.2011/21.7.2011 a Gram Panchayat can issue BU permission and the appellant has produced certificate from the Gram Panchayat that project was completed in the year 2007-08, i.e. well within 4 years from the end of the financial year 2005-06 when development permission was received by the appellant. And even if taxes were to be collected from F. Y. 2009-10 then too the appellant completed the project within time and therefore there is no justification for denying 80IB(10) on this ground. 17 .....

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ve heard the rival contentions, perused the material on record and duly considered facts of the case in the light of the applicable legal position. 7. We find that the issue in appeal is now covered, in favour of the assessee, by a rather recent decision of the co-ordinate bench, in the case of Shri Umeya Corporation vs. Income Tax Officer (ITA No.211/Ahd/2010; order dated 07.07.2015) wherein the Tribunal has observed as follows :- 6. We find that, in the case of CIT Vs Radhe Developers [(2012) .....

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does not provide that the land must be owned by the assessee seeking such deductions. 33. It is well settled that while interpreting the statute, particularly, the taxing statute, nothing can be read into the provisions which has not been provided by the legislature. The condition which is not made part of s. 80-IB(10) of the Act, namely that of owning the land, which the assessee develops, cannot be supplied by any purported legislative intent. 34. We have reproduced relevant terms of developm .....

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essee. It can thus be seen that the assessee had developed the housing project. The fact that the assessee may not have owned the land would be of no consequence. (Emphasis, by underlining, supplied by us) 7. In our humble understanding, therefore, in order to answer the question as to whether the condition precedent for deduction under section 80IB has been satisfied inasmuch as whether or not the assessee is engaged in developing and building housing projects , all that is material is whether .....

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s by buying, on outright basis, and constructing residential units thereon could probably be the simplest business models in this line of activity, but merely because there is an improvisation in the business model or because the assessee has adopted some other business models for the purpose of developing and building housing project does not vitiate fundamental character of the business activity as long as the risks and rewards of developing the housing project, in substance, remain with the a .....

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of deduction under section 80IB(10) to any particular business model that an entrepreneur adopts in the course of developing and constructing housing project. 8. As regards learned CIT(A) s reliance on the decision of a larger bench of this Tribunal, in the case of B T Patil & Sons (Belgaum) Constructions Pvt Ltd vs ACIT [(2010) 1 ITR (Tribunal) 703 (Mum)], what has been referred to by her is the view of the three member bench resolving the point of difference between the members of the div .....

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unt Hon ble Bombay High Court s specific directions in the case before the Tribunal, the Tribunal s final order had, inter alia, concluded as follows: ……….while giving effect to the opinion of Third Member u/s.255(4) of the Act, we take view in conformity with order of jurisdictional High Court in case of ABG Heavy Industries Ltd. (supra) available at this time though contrary to the opinion expressed by the Third Member. So in view of above discussion, following the ratio o .....

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determining eligibility of deduction under section 80 IB (10), but that is all that the authorities below have found fault with. The objections of the authorities below are thus devoid of legally sustainable merits. In view of the above discussions, and bearing in I.T.A. No.: 211(Ahd) of 2010 Assessment year: 2006-07 Page 6 of 7 mind entirety of the case, we are of the considered view that the stand of the authorities below, in declining deduction under section 80IB (10) and on the facts of this .....

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