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2015 (10) TMI 1499 - ITAT AHMEDABAD

2015 (10) TMI 1499 - ITAT AHMEDABAD - TMI - Claim of deduction under section 80IB(10) - CIT(A) allowed the claim - Held that:- CIT(A) after analyzing the development agreement, and thereafter following the decision of the Ahmedabad Bench of the Tribunal in the case of Shakti Corporation (2008 (11) TMI 436 - ITAT AHMEDABAD) and Radhe Developers (2007 (6) TMI 316 - ITAT AHMEDABAD ) has allowed the claim of deduction under section 80IB(10) to the assessee. We find that the CIT(A) has given a findin .....

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bunal in the case of Shakti Corporation (supra) and the Radhe Developers (supra) should not have been followed by the CIT(A). In the absence of the same, we find no good reason to interfere with the order of the CIT(A), which is confirmed and the ground of the appeal of the Revenue is dismissed. - Decided in favour of assessee. - ITA No.1871/Ahd/2011 - Dated:- 8-5-2015 - N S Saini, AM And S S Godara, JM,JJ. For the Appellant : Shri D C Mishra, Sr. DR For the Respondent : None ORDER Per N S Saini .....

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e return filed on 27.9.2008 for the Asstt.Year 2008-09, the assessee had shown total income of ₹ 1,28,070/- after claiming deduction under section 80IB(10) of the Act for ₹ 3,38,66,040/- In the assessment framed under section 143(3) of the Act on 16.12.2010, the AO disallowed the claim of deduction under section 80IB(10) to the assessee for the following reasons: "i) The land is not in the name of the firm. Ownership of land is an essential element which carries with it the righ .....

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pellant is not a builder or developer but a contractor and is acting for and on behalf of the Co-op. society and the appellant is not eligible for deduction under section 80IB." 4. On appeal, the CIT(A) allowed the deduction under section 80IB(10) of the Act to the assessee by observing as under: "4.4 I have carefully examined the facts of the case, submissions of the appellant and perused the arguments of the Assessing officer. The AO's arguments are mainly based on two grounds i. .....

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present case has acquired dominant control over the land and 'as per banakhat agreement entered with society; developer was bound to pay amount for acquiring the land irrespective of the fact whether it is able to sell the units. Possession of the land was also given to appellant developer and risks associated with housing" project were borne by appellant. It is added that the appellant has not earned remuneration at fixed rate. On the main issue of ownership of land and approval being .....

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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 Agencies Pvt. Ltd. & Anr. (Civil Appeal No. 3302 of 2005) dated 10/07/2008 has held that i) A de .....

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y as to whom and at what cost the builder's share of apartments are to be dealt with or disposed of. Such an agreement is not a "joint venture" in the legal sense. It is a contract for services." ii) On the other hand, an agreement between the owner of a land and a builder, for construction of apartments and sale of those apartments so as to share the profits in a particular ratio may be a joint venture, if the agreement discloses an intent that both parties shall exercise joi .....

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