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2015 (11) TMI 1208 - ITAT AHMEDABAD

2015 (11) TMI 1208 - ITAT AHMEDABAD - TMI - Eligibility for deduction u/s 80IB(10) - profit from housing projects constructed by the assessee - Held that:- assessee is entitled to deduction under section 80IB(10) because the activity of the development has been carried on by the assessee contractor-cum- developer as per the agreement entered into with the land owners. Therefore, since the facts and circumstances of the case remain identical and distinguishing facts have not been brought on recor .....

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t was framed under section 143(3) r.w.s. 254 of the I.T. Act, 1961 (herein after referred to as the Act) on 25.9.2007 by ITO, Wd-9(1), Ahmedabad. Assessee has raised following grounds of appeal :- 1. The ld. CIT(A) erred in law and on facts in determining the appellant role was supervision contractor on fixed rate and ignored the cogent evidence and thereby rejected the deduction u/s 80IB(10) of the Act where the appellant case covered by Shakti Corporation. 2. The ld. CIT(A) erred on facts in m .....

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ment of land for housing project(s). It filed its return of income on 31.08.2005 declaring total income of ₹ 36,890/- for AY 2005-06, along with audit report in form No.10CCB claiming deduction u/s 80IB(10) of the Act. The case was selected for scrutiny assessment under CASS. Notice u/s 143(2) was served upon the assessee and assessment proceeding was initiated. AO framed the assessment order by disallowing the claim of deduction of ₹ 18,07,624/- made by assessee u/s 80IB(10) of the .....

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ks contractor who has to perform specific duties is fixed at the inception of the project and the same does not alter significantly during the project. Thus, it is clear that appellant does not fulfill the criteria laid down by the Gujarat High Court to be eligible for deduction u/s 80IB whereas the High Court had held that the entries risk of the project has to be the person constructing the project to qualify as a developer and be eligible for deduction u/s 80IB of the Act. 6. In view of the a .....

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08.12.1998. The partners of the firm have been engaged in construction activities since last 10 years. 2) That the Kailasnath Co-op. Hous. Soc. Ltd. and other two soeicieties (for short the society), which are registered under the co-operative Societies Act, 1962, owns a land, which admj.10040 sq.mts. situate at final plot no.123 of T.P. Scheme no.1, in city area. 3) The appellant and the society enter into agreement for a development and construction of above mentioned land, which executed on 2 .....

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return of income for the year under consideration along with audit report. TDS certificates etc., on total income at ₹ 95776/- after claiming a deduction of ₹ 4516771/- under the provisions of section 80IB(10) of the Income-tax Act. 6) During the course of assessment proceedings, appellant had furnished all the details called for by the ld. AO including agreement of construction and development. The ld. AO has verified the books of account vouchers, bills etc. completely. 7) That th .....

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please be deleted. So far as the three conditions stipulate in the said provision have been fulfilled by the appellant and accepted by the ld. AO. • That the appellant entered into agreement with society for carrying out the development and construction works as per approved plan by AUDA. • The society land area is more then 1 acre (1040 sq.mts) • The appellant had been carrying out the development and construction activity since December, 1999. The appellant has been entitled to .....

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fulfilled. From the perusal of development and construction agreement it is abundantly clear that the activities carried out by the appellant has been in the nature of development of land and construction of residential units. The society had given following powers to appellant for the construction of residential units. a. To prepare approach road for development of land and construction of residences. b. To carry out necessary procedure in AUDA for approval of N.A. permission for development of .....

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been heard and decided in favour of assessee by the co-ordinate Bench for AYs.2002-03 & 2003-04 in ITA Nos.1986 & 1087/Ahd/2007 vide order dated 11th March, 2008. He also submitted that similar issues came up in assessee s own case before the Tribunal for AYs 2000-01, 2001-02 & 2006-07 which were decided in favour of assessee by the Tribunal in ITA Nos.1991, 1992 & 1993/Ahd/2011 vide its order dated 9.6.2011 (copies of orders placed on record). 5. On the other hand, the ld. DR r .....

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ssessee. The order passed by the co-ordinate Bench in ITA Nos.1191,1192 & 1193/Ahd/2011 dated 9.6.2014 is the latest order which has also discussed the order passed by the co-ordinate Bench in ITA Nos.1086 & 1087/Ahd/2007 for AYs 2002-03 & 2003-04, dated 11.3.2008. Relevant portion of the order dated 9.6.2014 passed by the co-ordinate Bench reads as below :- 6. We find that the Tribunal in Assessment Year 2002-03 and 2003- 04 vide order dated 11.03.2008 has held as under: 6. The CIT( .....

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6 needs to be followed. Being also of the view that the deduction u/s 80IB(10) which has been claimed in continuity with the earlier years, the facts and circumstances continued to be the same, he directed the A.O. to allow the deduction u/s 80IB for the assessment year under consideration also. For ready reference, we reproduce the specific finding addressing the facts and circumstances taken into consideration by the CIT(A) in 2000-01 assessment year which have been reproduced in page 3 of the .....

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tion of flats for the three Co. Op. Housing societies i.e. Pink City (Ranip) Co. Op. Housing Society Ltd., Kailasnath (Ranip) Co. Op. Housing Society Ltd. and Prakarsh (Ranip) Co. Op. Housing Society Ltd. I find that the appellant has satisfied all the three conditions required for deduction u/s. 80IB of the I. T. Act. The appellant has provided the funds to the societies for acquiring the land in their names and the societies had paid the sale consideration to original land owners. The appellan .....

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n local newspapers to attract the members for booking. The appellant had prepared ground water tank, approach road and construction lift at the site of housing project. The appellant had appointed the RCC contractors and other labor contractor and experts to carry out the construction and development works. The appellant had also purchased the building materials and made payments to the respective parties. In view of these facts, I agree with the Authorised Representative that the appellant' .....

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se of construction business, for erecting the building as per plan, the society has to entrust such very difficult task to experienced contractor/developer, as the members of society do not have any knowledge or expertise in construction and development work and for effective and timely completion of scheme such society engaged reliable and experienced developer/contractor and labour contractor; by an agreement by stipulating certain conditions. Thus the society in this case has entrusted the co .....

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addition to ₹ 700/- for labour charges, which has been fixed in the guise of profit and such type of agreements are common in the construction business. Further the profit declared by the appellant is substantially higher than the presumptive profit as per section 44 AD of the Income-tax Act. If members could not be booked for the vacant premises, then such vacant premises are to be held by the appellant as per Clause No.3 of the development agreement. For the construction of scheme, nece .....

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ried out the work of development and construction, as there was no other person who has done the work, and therefore, the appellant is entitled to deduction u/s. 801B of the I.T. Act. Further it has been held by ITAT, Mumbai in the case of Patel Engineering Ltd. vs. DCIT (2004) reported in 84 TTJ (Mum.) 646/94 ITD 411 ™ that merely because State Government paid for development of infrastructure facility carried out by the assessee as contractor, it cannot be said that the assessee had no d .....

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the parties have been heard although the Ld. D.R. placed reliance on the assessment order, however, confronted with the order of the Tribunal in the case of Radhe Developers which has consistently been followed by the Ahmedabad Bench in the case of contractors who have been held to be entitled to deduction u/s 80IB which has been denied solely on the ground that the land was not owned by the developer. The activity of the development has been carried on by the contractor-developer as per the ag .....

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