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2015 (11) TMI 120 - ITAT AHMEDABAD

2015 (11) TMI 120 - ITAT AHMEDABAD - TMI - Claim of deduction u/s. 80IB(10) - A.O denied the deduction mainly for the reason that according to the A.O, Assessee was a "Developer" but a Contractor - CIT(A) allowed the claim - Held that:- CIT(A) while granting relief to the Assessee has given a finding that the land cost was debited by the Assessee to its Profit and Loss account, the entire risk and control over the residential unit of the two schemes developed by the Assessee was of the Assessee. .....

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t be included in the built up area of 1500 sq. ft. prescribed by the statute. She has further held that commercial construction has not been found to have been incurred by the Assessee and that Assessee was eligible for deduction u/s. 80IB(10) of the Act. Before us, Revenue has not placed any material on record to controvert the findings of ld. CIT(A). In view of these aforesaid facts, we find no reason to interfere with the order of ld. CIT(A) - Decided in favour of assessee. - ITA No. 2436 to .....

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and circumstances of all the cases are similar except for the assessment years and amounts and the submissions are also common for all the appeals and therefore all the appeals can be heard together. We therefore proceed to dispose of all the appeals together for the sake of convenience and proceed with the facts in A.Y. 2006-07 in ITA No. 2436/Ahd/2011. 3. Assessee is a partnership firm stated to be engaged in the business of land development and construction of housing project. Assessee filed .....

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order dated 29.07.2011 allowed the claim of deduction u/s. 80IB(10) of the Act. Aggrieved by the aforesaid order of ld. CIT(A), Revenue is now in appeal before us and has raised the following grounds:- 1. The Ld. Commissioner of Income-tax (A)-XV, Ahmedabad has erred in law and on facts in deleting the disallowance amounting to ₹ 38,99,189/- made by the Assessing Officer u/s 801B(10) of the Act. 2. The Id. Commissioner of Income-tax (A)-XV, Ahmedabad has erred in holding that the assessee .....

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ety. Assessee was just a contractor of the land owners constructing 144 residential units ('A' block) of the scheme titled 'Prerna Bungalows' and 107 residential units ('B' block) of the scheme titled 'Prarthana bungalows' 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. .....

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ons of the Assessee were not found acceptable to the A.O as A.O was of the view that since the housing project was approved by Local Authority in the name of the land owners Jagnath (Saraspur) Shops & Housing Co.op. Society Ltd. and the B.U. permission was also obtained by the society, the Assessee had merely acted as a Contractor and was not the owner of the land. He therefore held that Assessee cannot be considered to be a "Developer" as per the provisions of Section 80IB(10) of .....

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reement dated 15.4.2004 entered into between the Cooperative Housing Society as Party of One part and Jay Mahakali Infrastructure Pvt.Ltd. and Balaji Corporation as the said firms as Party of the Other part states as under: "7. It has been decided to give all powers and authority as per the details mentioned above to the party of the other part for doing all the procedures including upto the stage of completion of the scheme and giving possessions to the members of the scheme to be develope .....

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lopment of the said property including completing the while schemes consisting of residential units etc. in "Prarthana Bungalows" and "Prerna Bungalows" on behalf of the party of the one part and in context to the same the terms and conditions have been mutually decided by and between the party of the one part and party of the other part as detailed in Conditions-A and Conditions-B hereto." 9. Clause 3(B), 3(C) and 3(D) of the Conditions listed for M/s. Balaji Corporatio .....

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ly upon the recommendation of the party of the other part the persons intending to become member in the said scheme shall been rolled as the members in the said scheme and the society shall issue share certificates to such enrolled members in consonance with the instructions of the party of the other part. Clause 3(D): The party of the other part will have to accept money towards the share for the land and construction from the persons enrolled in the project. Out of such monies received by the .....

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en the parties and the party of the one part willingly accepts this responsibility. " Clause 7 of the Conditions entered by the society with Balaji Corporation in the agreement dated 15.4.2004 states: "7. Party of the other part shall hold the physical possession with it of the land as well as whatever construction is put up on the said land, till the completion of the project and further till the agreement for the land as well as construction upon it is not completely executed, the co .....

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to the society for issuing to the member the share certificate towards such land and construction on it and thereupon the party of the one part will issue such a certificate to such member for enrolling him as a member." 10. Thus the tests laid down by Hon'ble ITAT 'A' bench, Ahmedabad in the case of Shakti Corporation stand fulfilled that the appellant should have practically purchased the land (in this case land cost was to be transferred to the society as per Development Agre .....

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ng itself from the deduction u/s.80IB(10) just because the approvals for construction etc. were issued by the local authority in the name of the cooperative housing society. 11. The contention of the AO that the appellant received fixed consideration is totally misplaced because the words "remuneration" and "5 per cent" have been picked up from clause 15 of the Development Agreement dated 15.4.2004 by the AO. But this clause 15 has been rightly argued by the Id.ARs pertains n .....

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'ble ITAT Bench 'A' Ahmedabad decision dated 7.11.2008 in the case of Shakti Corporation Baroda in AY 2005-06 (ITA No.1503/Ahd/2008) and is found having invested in cost of land and having acquired dominant control over the project bearing the entire cost and risk of execution. With respect to built-up area limit of some units exceeding 1500 sq.ft.limit because veranda / balcony is included in them while calculating built-up area limit the case of the appellant is covered by the Hon& .....

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ial construction has not been found incurred by the appellant and no other condition has been disputed by the AO, therefore both on law and facts the appellant is found eligible for deduction u/s.80IB(10). The AO is directed to allow the same. 6. Aggrieved by the aforesaid order of ld. CIT(A), Revenue is now in appeal before us. 7. Before us, ld. D.R. supported the order of A.O. He further submitted that ld. CIT(A) did not obtain the comments of A.O on the DVO report called by her. He therefore .....

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Sarkar Builders reported in (2015) 57 Taxman.com 313 (SC). He also placed on record the copy of the aforesaid decision. He thus supported the order of ld. CIT(A). 8. We have heard the rival submissions and perused the material on record. In the present case, A.O had denied the deduction of claim u/s. 80IB(10) of the Act mainly for the reason that according to the A.O, Assessee was a "Developer" but a Contractor. We find that ld. CIT(A) while granting relief to the Assessee has given a .....

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