TMI Blog2015 (9) TMI 495X X X X Extracts X X X X X X X X Extracts X X X X ..... of the projects, the assessee has acted for fixed price for executing the work as in the case of works contract the work is awarded at a fixed consideration. Thus, the assessee cannot be held to be a mere contractor. Further, the assessee has not only constructed the houses but it has developed the roads, electrical work and also water connection system in whole of the project. There is no requirement that the project shall be approved in the name of assessee or assessee shall be land owner - Assessee is a developer as assessee has undertaken not only the development of the house but also of the road, water and electricity - Decided in favour of assessee. - ITA Nos.371, 372/Ind/2012, 435/Ind/2010, 373 & 374/Ind/2012 & 365/Ind/2013 - - - Dated:- 30-7-2015 - D. T. Garasia, JM And B. C. Meena, AM, JJ. For the Appellant : Shri Ashish Goyal and Shri N D Patwa For the Respondent : Shri Rahul Raman ORDER Per Bench ITA Nos.371 to 374/Ind/2012 emanate from the common order of the learned CIT(A), Raipur, Camp at Bhopal, dated 30.3.2012. ITA No. 435/Ind/Ind/2010 emanates from the order of the learned CIT(A) Bhopal, dated 9.3.2010 and ITA No. 365/Ind/2013 emanates fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7 the Assessing Officer found that the assessee has not fulfilled the required conditions of section 80IB(10) of the Act and the Assessing Officer recorded certain failure on the part of the assessee for not fulfilling the conditions as narrated u/s 80IB(10) of the Act which also include the built up area and amended provisions of the Act. The reassessment was not based on change of opinion but based on new material came into knowledge of the Assessing Officer during the assessment proceedings for the assessment year 2006-07. Considering all these aspects, we hold that the Assessing Officer was having sufficient material to make a belief for reopening of the assessment proceedings. Therefore, we dismiss this ground of the assessee. 7. Now we will decide the issue of claim of deduction u/s 80IB(10) of the Act. From a perusal of various orders for various assessment years, we find that the assessee has been denied the benefit of deduction u/s 80IB(10) of the Act on the issue of built up area, commercial area, holding the assessee as a contractor, not getting the completion certificate, approval is not in the name of the assessee and land is also not in the name of the assessee. On ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d pass only upon execution of a duly registered sale deed. However, for the limited purpose of these proceedings, one is not concerned with the question of passing of the title of the property but only examining whether for the purpose of benefit under s. 80IB(10), the assessee could be considered as the owner of the land in question. For the limited purpose of deduction u/s 80IB(10), the assessee had satisfied the condition of ownership also, even if it was necessary. The Tribunal committed no error in holding that the assesses were entitled to the benefit u/s 80IB(10) even where the title of the lands had not passed on to the assessee and in some case, the development permissions may also have been obtained in the name of the original land owners. It is not even the case of the Revenue that other conditions of s. 80IB were not fulfilled. In the case of CIT vs. Shital Corporation, (2014) 369 ITR 476 (Guj) Hon'ble Gujarat High Court held as under :- Section 80IB(10) of the Income-tax Act, 1961 provides for deductions to an undertaking engaged in the business of developing and constructing housing projects under certain circumstances. It does not provide that the land ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ver, we would like to extract the following discussion from the judgment dated 25.07.2014 of the Bombay High Court in ITA Nos. 201 and 308 of 2012 where this very aspect is answered in the following manner : 36.There is yet another reason for coming to the aforesaid conclusion. Take a scenario where an assessee following the project completion method of accounting, has completed the housing project approved by the local authority complying with all the conditions as set out in section 80IB(10) as it stood prior to Ist April, 2005. If we were to accept the argument of the Revenue, then in that event, despite having completed the entrie construction prior to Ist April, 2005 and complying with all the conditions of section 80IB(10) as it stood then, the assessee would be disentitled to the entire deduction claimed in respect of such housing project merely because he offered his profits to tax in the A.Y. 2005-06 and denied the same from A.Y. 2005-06 and thereafter. It could never have been the intention of the Legislature that the deduction under section 80IB(10) available to a particular assessee would be determined on the basis of the accounting method followed. This, to our min ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e said provision was brought into force. 22. At this juncture, we would like to quote the following passage from Commissioner of Income Tax, U.P. vs. M/s Shah Sadiq and Sons (1987) 3 Hon'ble Supreme Court 516 : 14. Under the Income Tax Act of 1922, the assessee was entitled to carry forward the losses of the speculation business and set off such losses against profits made from that business in future years. The right of carrying forward and set off accrued to the assessee under the Act of 1922. A right which had accrued and had become vested continued to be capable of being enforced notwithstanding the repeal of the statute under which that right accrued unless the repealing statute took away such right expressly or by necessary implication. This is the effect of section 6 of the General Clauses Act, 1897. 15. In this case the 'saving' provision in the repealing statute is not exhaustive of the rights which are saved or which survive the repeal of the statute under which such right had accrued. In other words, whatever rights are expressly saved by the 'savings' provision stand saves. But that does not mean that rights which are not saved by the ' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ompany Law provisions for depreciation in the Income Tax Act, held that incorporation of an early Act into a latter is a legislative device adopted for the sake of convenience in order to avoid verbatim reproduction of the provisions of the earlier Act into the latter. When an earlier Act or certain provisions are incorporated into a latter Act, the provision so incorporated becomes part and parcel of the latter Act as if they had been bodily transposed into it. He further submitted that obtaining the completion certificate from the Municipal Corporation is beyond the control of the assessee. For this proposition, he relied on the decision of the Hon'ble ITAT, G-Bench in the case of ACIT vs. Surendra Developers. He submitted that asking for completion certificate when there is no mandate in the Income Tax provisions to enforce such compliance from the local authority then it is impossibility which has been put on the assessee. Therefore, the assessee cannot be made to/compel to do something which is impossible to do. For this proposition, he relied on the following decisions :- - LIC of India vs. CIT; 219 ITR 410 (SC) - Cochin State Power Light Corporation Vs. State of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is beyond the control of the assessee. Therefore, considering various decision of the Hon'ble ITAT and High Courts, we decide this issue in favour of the assessee. 13. In the case of CHD Developers Ltd. vs. ACIT, Circle 3(1), New Delhi, wherein Hon'ble Delhi High Court has held as under :- The assessee is expected to complete the project as per the approved plan at a particular point of time and the assessee is not expected to do or to fulfill the conditions which are not in existence at the relevant point of time or made compulsory after making some amendment in the Act from the future date. Since the assessee was to complete the project on or before and 31.03.2009 and request was duly made with the Competent Authority on 05.11.2009 mentioning that the project has been completed and completion certificate may be issued and if the same is not issued by the Competent Authority the assessee should not be penalized for the same unless and until some contrary facts are brought on record evidencing that the assessee contravened the conditions contained in the approval granted by such Competent Authority. As per sub-section (10) of section 80IB(10), the benefit will be hun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r on the Architect's completion certificate filed before the local authority is a relevant one. In the instant case, the said date is 25.03.2008 and the appellant filed requisite form before the local authority intimating the completion of the project. The said certificate/intimation was accepted by the local authority without any amendments or objects. Local authority has not raised any queries on the quality construction of the building or the completion of the same as per the plans approved by such authority. In such circumstances, in our opinion, the delay in obtaining the completion certificate on 10.10.2008 is certainly not attributable to the appellant and obtaining the said certificate before 31.03.2008 is beyond the control of the appellant. The appellant's job includes the completion of the building in accordance with the approval plans and intimation of the same to the local authority by way of filing the requisite forms together with the completion certificate given by the Architect, the specialist in the matter and the appellant has done his job scrupulously in this case. However, the local authority has neither objected to the said application of the appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re works contractor, we hold that the Finance (No. 2) Act, 2009 has introduced Explanation to section 80IB(10) with effect from 1.4.2001 wherein it has been provided as under :- Explanation - for the removal of doubts, it is hereby declared that nothing contained in this subsection shall apply to any undertaking which executed the housing project as a works contract awarded by any person (including the Central or State Government) 15. The facts of the assessee's case show that the assessee was not a mere work contractor but it was a developer of the project. In none of the projects, the assessee has acted for fixed price for executing the work as in the case of works contract the work is awarded at a fixed consideration. Thus, the assessee cannot be held to be a mere contractor. Further, the assessee has not only constructed the houses but it has developed the roads, electrical work and also water connection system in whole of the project. With regard to the agreement of construction of the houses and registry of land, we hold that the ITAT, Indore Bench, in the case of Paras Housing Private Limited; 22 ITJ 273, Indore Trib. has held as under :- 7. As per the prevai ..... X X X X Extracts X X X X X X X X Extracts X X X X
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