TMI Blog2009 (11) TMI 914X X X X Extracts X X X X X X X X Extracts X X X X ..... section 80IB(10), and the undertaking developing and building housing projects approved by the local authority as referred to in section 80lB(10), not permitting such splitting between the assessee and the person who is granted approval by the local authority for developing and building housing projects, as presumed by the CIT(A). 3. The Id CIT(A) failed to abide by the scheme of section 80IB based on complete identity between the assessee as referred to in section 8OlB(1), on the one hand, and the entity fulfilling the conditions laid down in sections 801B(3), 801B(9), 801B(11) and 801B(I1AA), besides section 80IB(10), on the other. 4. The Id CIT(A) failed to appreciate that the land being integral part of any housing project, the assessee, without owning the land component, could not pass on full title over dwelling units to the customers so as to derive profits from developing and building housing projects and this integration is further fortified by the requirement of approval by the local authority as well as grant of completion certificate by the local authority under clause (ii) of the Explanation below section 80IB(10), both of which are granted to the landowner, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wn u/s 80IB(10) of the Act. It was pointed out that the ground is a legal ground and must be admitted. On merit it was contended that in view of Explanation (i) added u/s 80IB(10)(a), the housing project shall be deemed to have been approved on the date when the first approval was obtained i.e. 25-10-2000. The assessee should have completed the project before March, 2008 which has not been done and, therefore, the assessee is not entitled for the deduction u/s 80IB(10) even for non-compliance with the condition (a) as stipulated u/s 80IB(10). For the other grounds, the learned DR vehemently contended that the matter be restored to the file of the AO to look into the Explanation added by the Finance Act, 2009 as well as the decision of this Tribunal in the case of M/s Shakti Corporation in ITA No. 1503/Ahd/2008 and others dated 07-11-2008. 3 After carefully considering the submissions made by the learned DR, we are of the view that the additional ground taken by the learned DR since is a legal ground and, therefore, it should be admitted. Accordingly, we admit the same. 4 The only issue involved in this appeal filed by the Revenue and also in the additional ground taken by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a complaint is maintainable under the Act for a prayer seeking delivery of completion certificate and C D Forms in regard to a building and whether the prayer for completion certificate / C D Forms involves a prayer for rectification of the deficiencies in the building so as to secure the completion certificate and C D Forms. The facts involved in the case of Faqir Chand Gulati (supra) are that the assessee is the owner of the premises at L-3, Kailash Colony, New Delhi. He entered into a collaboration agreement dated 17-5-1991 with Uppal Agencies Pvt. Ltd. [ the Builder hereinafter]. The terms of the agreement, in brief were as under: [i] The owner shall place at the disposal of the builder, vacant possession of the remises and authorize the builder to secure necessary sanctions, permissions and approvals for demolition of the existing building and construction and completion of a new building. [iii] The builder shall demolish the existing structure and construct a residential building consisting of ground, first and second floors, at its cost and expense. [iv] The builder will have the right to appoint Architects, contractors, subcontractors etc. [v] ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ilder for completing the formalities relating to the agreement shall thereafter be returned to the owner, who shall however, make available the same for reference by the owners of the other floors. (xiii) The agreement and the power of attorney executed by the owner in favour of the builder are irrevocable. In the event of neglect, failure, default on the part of the owner or the builder, the affected party shall have the right to specific performance of the said agreement at the cost and risk of the defaulting party who shall also be liable to pay damages. [xiv] The agreement is not a partnership and shall not be deemed to be a partnership between the owner and the builder. 8 The land owner alleges that the Builder made several unauthorized deviations during the construction from the sanctioned plan of Municipal Corporation of Delhi due to which the land owner received a number of notices from Municipal Corporation of Delhi and vide order dated 16-1-1991, Municipal Corporation of Delhi directed to seal the premises and the premises were de-sealed subsequently to enable the Builder to rectify the deviations. The Builder delivered the Ground Floor to the landowner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... building. Thereafter, the land owner and builder share the constructed area. The builder delivers the owner s share to the land-holder and retains the Builder s share . The land-holder sells/transfers undivided share/s in the land corresponding to the Builder s share of the building to the builder or his nominees. As a result each Apartment owner becomes the owner of the Apartment with corresponding undivided share in the land and an undivided share in the common areas of the building. In such a contract, the owner s share may be a single apartment or several apartments. The land-holder who gets some apartments may retain the same or may dispose of his share of apartments with corresponding undivided shares to others. The usual feature of these agreements is that the land-holder will have no say or control in the construction. Nor will he have any say as to whom and at what cost the builder s share of apartments are to be dealt with or disposed of. His only right is to demand delivery of his share of constructed area in accordance with the specifications. The builders contend that such agreements are neither contracts for construction, nor contracts for sale of apartments, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a consideration for such construction, flowing from the landowner to the builder (in the form of sale of an undivided share in the land and permission to construct and own the upper floors). To adjust the value of the extent of land to be transferred, there is also payment of cash consideration by the builder. But the important aspect is the availment of services of the builder by the land-owner of a house construction (construction of owner s share of the building) for a consideration. To that extent, the land-owner is a consumer, the builder is a service-provider and if there is deficiency in service in regard to construction, the dispute raised by the land owner will be a consumer dispute. We may mention that it makes no difference for this purpose whether the collaboration agreement is for construction and delivery of one apartment or one floor to the owner or whether it is for construction and delivery of multiple apartments or more than one floor to the owner. The principle would be the same and the contract will be considered as one for house construction for consideration. The deciding factor is not the number of apartments deliverable to the land owner, but whether the ag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en in the body of the agreement will not make the transaction a joint venture, if there are no provisions for shared control of interest or enterprise and shared liability for losses. 22. The State Commission and National Commission have proceeded on an assumption, which appears to be clearly baseless, that wherever there is an agreement for development of a property between the property owner and builder under which the constructed area is to be divided, it would automatically amount to a joint venture and there is no question of the landholder availing the service of the builder for consideration. Reliance was placed on two decisions, the first being that of the National Commission in C Narasimha Rao v. K R Neelakandan - I (1994) CPJ 160 and the second being that of the Delhi State Commission in Har Sarup Gupta v. Mis. Kailash Nath Associates - II (1995) CPJ 275. In C Narasimha Rao, there was an agreement between the landowners and a builder for construction of a building and sharing of the constructed area. The old building was demolished, but the builder failed to complete the construction of a new building and hand over the owner s share of flats. The landowners preferr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Hon'ble Supreme Court for deciding the nature of the agreement (document): (1) Title or nomenclature given to the agreement / document / instrument does not decide the nature of the agreement. (2) The name given to the agreement usually gives some indication of the nature of the agreement / document / instrument. (3) The nature of the agreement has to be decided with reference to the terms and conditions agreed to between the parties who have entered into the agreement or executed the document or instrument as these terms and conditions express the intention of the parties. (4) Even the nomenclature given in the body of the agreement / document / instrument is also not determinative of the nature and character of the agreement / document / instrument. On the facts of this case, the Hon'ble Supreme Court observed that the land owner has to do nothing except to the extent he has to receive the constructed area by way of consideration from the Builder / Developer. The Hon'ble Supreme Court came to the conclusion that the basic purpose of the agreement to construct a house or apartment by the Builder for the owner and, therefore, the agreement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hers v Smt. Gowramma and Others [Appeal (civil) No.2874 of 2001, dated 14-12-2007] on which the learned Senior Advocate has heavily relied. We find that in this case the Hon'ble Supreme Court on the applicability of the judgment has held as under: A decision is a precedent on its own facts. Each case presents its own features. It is not everything said by a Judge while giving a judgment that constitutes a precedent. The only thing in a Judge s decision binding a party is the principle upon which the case is decided and for this reason it is important to analyze a decision and isolate from it the ratio decidendi. According to the well-settled theory of precedents, every decision contains three basic postulates (i) findings of material facts, direct and inferential. An inferential finding of fact is the inference which the Judge draws from the direct, or perceptible facts; (ii) statements of the principles of law applicable to the legal problems disclosed by the facts; and (iii) judgment based on the combined effect of the above. A decision is an authority for what it actually decides. What is of the essence in a decision is its ratio and not every o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... qualification in new circumstances. Megarry, J. in (1971) 1 WLR 1062 observed: One must not, of course, construe even a reserved judgment of Russell L.J. as if it were an Act of Parliament. And, in Herrington v British Railways Board (1972 (2) WLR 537) Lord Morris said: There is always peril in treating the words of a speech or judgment as though they are words in a legislative enactment, and it is to be remembered that judicial utterances made in the setting of the facts of a particular case. Circumstantial flexibility, one additional or different fact may make a world of difference between conclusions in two cases. Disposal of cases by blindly placing reliance on a decision is not proper. The following words of Lord Denning in the matter of applying precedents have become locus classicus: Each case depends on its own facts and a close similarity between one case and another is not enough because even a single significant detail may alter the entire aspect, in deciding such cases, one should avoid the temptation to decide cases (as said by Cordozo) by matching the colour of one case against the colour of another. To decide therefore, on which side of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... paper book. This agreement has been entered into on 26-2-2004 with the nomenclature Agreement for Development . The preamble of the agreement states that out of the said land F. Plot No. 375 Paiki, the powers to develop the land 6985 sq. meters = 75158 sq. ft. are given by the landowner Party of the First Part to the Party of the Second Part Developer (the assessee) and for that purpose, cost of the land is fixed upon calculating at the rate of ₹ 121/- per sq. ft. being ₹ 90,94,190/-. Out of the said amount, ₹ 1,00,000/- has been paid by the Developer to the landowner. The remaining amount of ₹ 89,94,190/- is to be paid by the Party of the Second Part to the Party of the First Part within the period of 33 months in equal instalments of three months. It is also mentioned in the said agreement that for constructing buildings for residential as well as commercial purpose over the land mentioned in this agreement, the Vadodara Municipal Corporation has granted Rajachiththi No. L/96/2003 datd 28-07-2003. The assessee has to perform the following acts over the said land including construction: (1) That the Party of the Second Part (Assessee) shall upon obta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is of present Agreement, if the Party of the Second Part Developers will organize any scheme or project over the aforesaid property, in which may accept the complete amounts as stated in this agreement for shops, offices, flats, etc. will be constructed for which we shall execute the Sale Deed in favour of members as and when you may intimate and cause registration and witnessing, etc. on the sale deeds in the Office of the Sub Registrar by presenting the same. However, the stamp, registration charges and other expenses for the same shall be borne by you, the Party of the Second Part or the purchasers of the said offices, shops, flats, houses, etc. (7) That for the houses, shops, flats, etc. that are to be constructed over the said land for which the Party of the second Part is to register them as members and can upon executing Agreements to Sale, etc. accept the money and issue receipts to the members. Same way, you can remove all obstructions that may come during the period of making the develop it. (8) If required, the Party of the Second, will raise necessary capital for making development and construction over the said land and can obtain the loan from the bank ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , there is no easement right of any one over the said property nor it is under acquisition and we have not previously executed any Agreement to sale or any other writing to sell the said property in favour of any one else and not transferred, assigned the same in any manner. In spite of the same, if any third person comes forward raising right, claim or charge than we the Party of the First Part shall be bound to remove the same at my cost. Thus, by giving assurance, binding and trust that the property as described hereinabove is having complete clear and marketable title, the Development agreement for the aforesaid property is executed in favour of the Developer herein. (15) That the physical possession of the said land for performing development activity over the land is handed over by the Party of the First Part herein to the Party of the Second Part herein. 12 If the facts and the terms and conditions of this agreement are compared with the decision of the Hon'ble Supreme Court in the case of Faqir Chand Gulati (supra), we noted that in this case there is no agreement to share the constructed area. This agreement relates only to purchase part of the land from the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... facts in that case as are appearing 3 The briefly stated facts are that the assessee had developed and built a housing project on a land at Revenue Survey No.648 belonging to one Shri Ghanshyambhai A Patel Others, through Power of Attorney holder Mahendrabhai A Patel, who are the owners of the land. The assessee-firm had entered into a development and construction agreement with (1) Shri Vinodbhai Nathabhai Patel (HUF), (2) Shri Bhailalbhai Nathabhai Patel HUF, (3) Harishbhai Nathabhai Patel HUF and (4) Shri Hasmukhbhai Nathabhai Patel through their partner Shri Chetankumar Rameshbhai Jogi. The development and construction agreement and Banakhat Agreement are both dated 18-05-2000. There was a Tri-party development agreement revealing that the land owners agreed to get the land developed through the assessee-firm and also agreed that the assessee-firm would make the members i.e. prospective buyers and collect the land consideration at the rate mentioned in the agreement. The project was approved by the local authority, Baroda Municipal Corporation (hereinafter referred to as BMC on 17-07-2000. The approval was in the name of the said owners of the land. As the assessee-fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and by the change of user, appoint the architects to prepare the building plans, get them approved with the local authority, and to construct the houses in the form of tenements and flats. The Developer would carry out the construction on his own, namely, carry out all necessary statutory formalities for construction, buy material for construction, employ labour or an agency which would supply labourers and thereupon complete the construction. The Developer would then sell the houses to the prospective buyers. The Developer would buy land and get it transferred in his name even before the plans are placed. 10 However, the other mode in many cases is that land is not purchased at that stage by executing deed of conveyance, i.e. saledeed. This is because of variety of reasons, namely, because such conveyance would entail payment of stamp duty, because of litigation, prohibition against execution of conveyance-deed immediately, etc. In some cases, the land may be conveyed directly in favour of Cooperative Housing Societies or Non Trading Corporations or Developers. Therefore, if the land is conveyed to a developer, what the developer does is that he enters into an agreement titl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... referred to as GTP UDR ). Rule 9 thereof prescribes application for development permission under Section 27 to be in Form-C and that permission to be granted under Section 29 to be in Form-D. On looking at Form-C, it is clear that such an application can be made by anyone, not necessarily Owner. Similarly, permission for development could be granted to whoever has applied for the permission; not necessarily only the Owner. 12 We may also refer to at this stage, the General Development Control Regulations (GDCR) as notified by VUDA in pursuance of provisions of Section 12(2) (m) and Section 13(2) (c) of the TP Act which govern the activity of construction in and around the city of Vadodara. Clause 2 of GDCR gives definitions. The term owner in Clause 2.32 includes Developers . Therefore, in GDCR whenever there is a reference to the term Owner it would always include Developers developing any property. Clause-3 of GDCR prescribes procedure for acquiring development permission. Application has to be made in Form No.1 which can be filed by anyone including Developer . Thus a Developer has a right to apply for development permission and to carry on all construction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... corporated in agreement to sale/sale deed by part with internal understanding for which the seller will give consent. As the land is covered by the Laws of Urban Land Ceiling Act, Rules and Regulation there under the party of the Second Part. Before Competent Authority and Additional Collector Baroda has put the said land has declared on dt. /06/93. The said land to be kept as free hold. The said land lay out plan, development permission to construct by the order dt: 14/1/96 No. L/152/95-96 the Baroda Deputy City Development Authority and permission to construct is granted by Baroda Municipal Corporation. The owners of the land, executors of agreement to sale, by dt: 7/9/81 has passed the deed of agreement to sale favouring consenting party. Therefore they are taken as consenting party, in present agreement to sale. At the time of making agreement to sale we land owners, the executors have received full amount towards the sale price of the land and therefore the party of Third Part is made consenting party and therefore the amount of sale price is to be given to the consenting party by the purchaser as per this agreement to sale. 14 The relevant terms and conditio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ements, replies and in the forms all that is to be done by Developer-cum-Building Contractor. The relevant sub-clauses (8) (9) read as under: 8. That the said Developer cum Building Contractor in order to complete the scheme in order step by step but in prescribed time period, The Party of the First and Second Part and all the members desirous in joining in the scheme Developer cum Building Contractor whenever and wherever they need the signatures and admissions, they shall have to give that to the Developer cum Building Contractor and in special circumstances Developer cum Building Contractor in order to complete the scheme in order step by step but in prescribed time period, shall be entitled to receive General Power of Attorney form The Party of the First and Second Part. 9. In order to complete the scheme as per arrangement plan and in prescribed time period, Developer cum Building Contractor has to all the proceedings at Government and Semi-government and Municipal Corporation Office and in legal Courts and at other places on behalf of The Party of the First and Second Part on necessary applications and written statements, replies and in the forms all that is to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee-firm has also paid consideration of ₹ 56 lacs during the two Financial Years; i.e. 2000-01 2001-02; that the assessee-firm has to obtain necessary approvals from the local authorities; i.e. BMC on behalf of the land-owners and all the expenses for such purposes are to be incurred by the assessee; that the assessee-firm has engaged the firm of Architect and also incurred expenses towards the charges payable to Corporation, etc. for obtaining the approvals; that even from the books of account, it is noticed that for obtaining the approval, the assessee-firm has paid the developmental charges to various regulating agencies, i.e. VUDA, BMC and GEB (Gujarat Electricity Board), etc.; and that these expenses are incurred by the assessee-firm and the Assessing Officer has brought out the complete details year-wise in his assessment orders at page No.5 reading as under:- Sr.No. Particulars Financial Year Amount (Rs.) 1. VMC charges paid to Vadodara Municipal Corporation 2000-01 65,532/- 2. VMC charg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itions that (i) the size of the plot of land was a minimum area of one acre, and the residential unit has a built up area not exceeding 1000 Sq. ft; and (ii) the undertaking commenced development and construction of the housing project on or after 1st October, 1998, and completed the same before 31st March, 2001. 22 Section 80IA was later split into and spread in two sections- 80IA and 80IB by the Finance Act, 1999 with effect from 1st April 2000. The housing project fell in S. 80IB and forms part of sub-section (10) of Sec. 80IB. It grants deduction in respect of profit and gains from certain industrial undertaking other than infrastructure development undertakings. The relevant provision brought out reads as under: 80-IB. Deduction in respect of profits and gains from certain industrial Undertakings other than infrastructure development undertakings. (10) The amount of profits in case of an undertaking developing and building housing projects approved by a local authority, shall be hundred per cent of the profits derived in any previous year relevant to any assessment year from such housing project if,- (a) such undertaking has commenced or commences development ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... umbai, and the area within 25 km. from the municipal limit thereof does not exceed 1000 Sq. ft. and for other places the built up area of residential unit does not exceed 1500 Sq. ft. A provision is also made whereby any undertaking of an Indian company, which is entitled to deduction under this section is transferred, before the expiry of the period specified in this section, to another Indian company in a scheme of amalgamation or demerger (a) no deduction to be admissible under this section to the amalgamating or the demerged company for the previous year in which the amalgamation or the demerger takes place; and (b) the provisions of this section to apply to the amalgamated or resulting company as they would have applied to the amalgamating or demerged company as if the amalgamation or demerger had not taken place. 26 The sub-section (10) relating to housing project was amended from time to time. Firstly, by Finance Act, 2000 w.e.f. 1st April, 2000 extending the outer limit for completion of the housing project on or before 31st March, 2002 as against 31st March, 2001 originally enacted. This sub-section was again amended by Finance Act, 2003 removing the time limit for comp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owner and the undertaking developing and building housing project, are two different entities would not make any difference. The deduction would be eligible to the person who is developing and building housing project and not to the mere owner thereof. 29 It is also the case of the Revenue that the assessee was a mere contractor developing and building housing project and therefore, it could not be a developer. We fail to understand as to how such a situation could emerge. A person who enters into a contract with another person is no doubt a contractor. Having entered into agreements with landowners for development and building the housing project, was obviously a contractor but it does not derogate the assessee for being a developer, as well. The term contractor is not essentially contradictory to the term developer. As stated above it is the undertaking that develops or builds the housing project that is entitled to deduction irrespective of the fact whether that it is the owner or not or whether it is the contractor thereof. The requirement for claiming deduction is that such an undertaking must develop and build housing project, be it on their own land or on the land of othe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... veloping and building of housing projects within the meaning of section 80-IB(10) of the Act. In the present case in hand, the land owner has not made any conscious attempt to develop the property except ensuring their rights as land-owner so that the sale value of the land could be realized to them as per the terms of Agreement to Sale and the Development Agreement . The land-owners no doubt, have not thrown themselves into development of property. It is only the assessee who is developing the property. Throwing itself into the business of development and building of housing projects by taking all risks associated with the business by engaging architects, structural consultants, designing and planning of the housing schemes, payment of development charges, obtaining necessary permissions, approving plans, hiring machinery and equipments, hiring engineers, appointing contractors, etc. No doubt, the permission has been obtained in the name of the registered land-owners, but the same have been obtained by the assessee-firm through its partners who are holding Power of Attorney of the respective land-owners. It is a fact that the assessee is a Developer and not a Contractor as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns of this section shall, as far as may be, apply to the amalgamated or the resulting company as they would have applied to the amalgamating or the demerged company if the amalgamation or demerger had not taken place. 34 Even if that is so required, the assessee in the present case can also be said to be the owner of the land as it had made part payment to the land-owners during the Financial Years 2000-01 2001-02 for an amount of ₹ 56 lacs, and taken the possession of the land for development and building the housing project and satisfy that condition as well of being the owner of the land in view of provisions of section 2(47) (v) of the Act. When the assessee has taken on the possession of immovable property or retained it in part performance of a contract of a nature referred to in section 53A of the Act of the Transfer of Property Act, 1882 it amounts to transfer under section 2(47)(v), which reads as under:- (47) transfer , in relation to a capital asset, includes,- (i) (ii) (iii) (iv) (iva) (v) any transaction involving the allowing of the possession of any immovable property to be taken or retained in part performa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his section, be allowed, in computing the total income of the assessee, a deduction from such profits and gains of an amount equal to such percentage and for such number of assessment years as specified in this section. 37 The ld. DR relied on the decision of the Supreme Court in the case of V.S.M.R. Jagadishchandran (Decd.) 227 ITR 240 (SC), observing at page No.243 that It has been held that where a mortgage was created by the previous owner during his time and the same was subsisting on the date of his death, the successor obtains only the mortgagor's interest in the property and by discharging the mortgage debt he acquires the mortgagee's interest in the property and, therefore, the amount paid to clear off the mortgage is the cost of acquisition of the mortgagee's interest in the property which is deductible as cost of acquisition under section 48 of the Act. In the present case, we find that the mortgage was created by the assessee himself. It is not a case where the property had been mortgaged by the previous owner and the assessee had acquired only the mortgagor's interest in the property mortgaged and by clearing the same he had acquired the interest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n to provide housing accommodation. It is the second alternative in the clause under which the appellant seeks shelter to be absolved from the liability to pay income-tax. As per that alternative, if the authority is constituted for the purpose of planning or development or improvement of any city or town or village or a combination of them, the income of such authority is not exigible to income-tax. 40 In the case of Tamil Nadu Civil Supplies Corporation Ltd. 249 ITR 214 (SC) referred to by the ld. DR, the Supreme Court has considered the issue as under:- The assessee before it had purchased certain houses from the Housing Board and had made part payment thereof. It had acquired possession of the houses but the deed of conveyance was not executed until after the financial year in question. Even so, the assessee's claim for depreciation of the buildings, which it had used for the purpose of its business, was upheld on the basis that it had acquired dominion over the buildings. We will assume the correctness of the judgment but', on the facts found, it is not possible to reach the conclusion that the assessee had acquired dominion over the mills in question. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... more interests are vested for his own benefit . . . . In the same dictionary, the term ownership has been defined to mean, inter alia, a collection of rights to use and enjoy property, including right to transmit it to others .... The right of one or more persons to possess and use a thing to the exclusion of others. The right by which a thing belongs to some one in particular, to the exclusion of all other persons. The exclusive right of possession, enjoyment and disposal ; involving as an essential attribute the right to control, handle, and dispose. Dias on Jurisprudence (4th edition, at page 400) states : The position, therefore, seems to be that the idea of ownership of land is essentially one of the 'better right' to be in possession and to obtain it, whereas, with chattels the concept is a more absolute one. Actual possession implies a right to retain it until the contrary is proved, and to that extent a possessor is presumed to be owner. Stroud's Judicial Dictionary gives several definitions and illustrations of ownership. One such definition is that the owner or proprietor of a property is the person in whom (with his or her assent) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . B. Jodha Mal Kuthiala v. CIT [1971] 82 ITR 570 (SC), it was held for the purpose of section 9 of the Indian Income-tax Act, 1922, that the owner must be the person who can exercise the rights of the owner, not on behalf of the owner but in his own right. We may usefully extract and reproduce the following classic statement of law from Perry v. Clissold [1907] AC 73 (PC) quoted with approval in Nair Service Society Ltd. v. K. C. Alexander, AIR 1968 SC 1165 : It cannot be disputed that a person in possession of land in the assumed character of owner and exercising peaceably the ordinary rights of ownership has a perfectly good title against all the world but the rightful owner. And if the rightful owner does not come forward and assert his title by the process of law within the period prescribed by the provisions of the statute of limitation applicable to the case, his right is for ever extinguished and the possessory owner acquires an absolute title. Podar Cement's case [1997] 226 ITR 625 (SC), is under the Income-tax Act and has to be taken as a trend-setter in the concept of ownership. Assistance from the law laid down therein can be taken for finding out the me ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Agreement to Sale as well as Development Agreement . It shows that the assessee was in full possession of the land for the Development of Housing Project and has carried out all the activities of a complete housing project by taking all risks associated with this business. The assessee is engaged in complete infrastructure including engaging architects, structural consultants, designing and planning of the housing schemes, payment of development charges, obtaining necessary permissions, on behalf of the land owners, got the plans approved, hiring of machinery and equipments, hiring engineers, appointing contractors, etc. 44 As discussed above and in view of the case-law of the Supreme Court in the case of Mysore Minerals Ltd (supra), wherein it has been categorically observed as regards to ownership that anyone in possession of property in his own title exercising such dominion over the property as would enable others being excluded there from and having the right to use and occupy the property and/or to enjoy its usufruct in his own right would be the owner of the buildings though a formal deed of title might not have been executed and registered as contemplated by the Tra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion of the Hon'ble Supreme Court in the case of Faqir Chand Gulati (supra) will not assist the Revenue, as the agreement is not sharing of the constructed area. In other cases the copy of agreement since has not been submitted before us, if submitted , the terms and conditions of the agreement were not specifically argued before and placed before us, we therefore, in the interest of justice and fair play to both the parties set aside the order of the CIT(A) and restore all other appeals to the file of the AO with the direction that the AO shall look into the agreement entered into by each of the assessees with the landowner and decide whether the assessee has in fact purchased the land for a fixed consideration from the landowner and has developed the housing project at its own cost and risks involved in the project. In case the AO finds that practically the land has been bought by the Developer and Developer has all dominant control over the project and has developed the land at his own cost and risks, the AO should allow the deduction to the assessee u/s 80IB(10). In case the AO finds that the Developer has acted on behalf of the landowner and has got the fixed consideration ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g project should not exceed the limit specified therein. Since the housing project in the case of the assessee is in Vadodara, therefore, the maximum built-up area of each residential unit can not exceed 1500 sq. ft. This is the golden rule of interpretation that when the language of section is simple, clear and is subject to one interpretation, the Court can not do the violence to the language of the section. In our opinion, if the assessee has to claim the deduction u/s 80IB (10), he has to comply with all the conditions mentioned u/s 80IB (10). In case the assessee fails to comply with any of the conditions, the assessee will not be entitled for the deduction. All the conditions stated in the section are cumulative and are not mutually exclusive. The section does not talk of proportionate relief to be allowed to the assessee only in respect of residential unit which although are within the housing project but exceeds the maximum limits specified u/s 80IB (10)(i)(c). The learned AR before us has relied upon the various decisions to which we have gone into. In the case ITO vs. Air Developers 123 TTJ 959 (Nag), the Nagpur Bench of the Tribunal, following the decision of the ITAT Ko ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dred per cent of the profits from the housing project is deductible or is not at all deductible, if the assessee fails to comply with any of the conditions mentioned therein. The intention of the Legislature was to develop the lower income group housing and therefore the maximum built-up area of each residential unit in such project has been prescribed. Any project if fails to comply with this condition, can not be eligible for the deduction u/s 80IB (10). What has to be seen, in our opinion, is whether the project undertaken by the assessee is eligible or not. The housing project becomes eligible for deduction only if all the conditions stated therein are satisfied. Not fulfilling even a single condition will not make the housing project to be eligible project u/s 80IB (10). Similar view has been taken by the Mumbai Bench of this Tribunal in the case of Lokid Developers, Thane vs. DCIT 105 TTJ 657, which was vehemently relied on by the learned DR. The rule of liberal interpretation can not hold good when it impairs the legislative requirements and spirits of the provisions. Our aforesaid view is duly supported by the following decisions: - Ipca Laboratories v DCIT 266 IT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... there was transfer of tools and implements worth ₹ 3500/-. The main ground for rejection of the claim was establishing of business in a building which was used previously for business. The First Appellate Authority did not agree with the ITO as according to him, taking premises on lease could not be held to amount to transfer of building as the building in which the undertaking was set up was not purchased but taken on lease only. It was also held that since it was admitted that the value of the building could not be included in the capital computation for the purpose of section 15C, the value of which would be negligible as compared to the value of the assets installed, the assessee was entitled to claim the benefit. It rejected the contention of the Revenue that, since the premises in question were earlier used for the purpose of business, the assessee was disentitled from claiming the benefit. Under these facts and circumstances, when the matter traveled to the Supreme Court, the Hon'ble Supreme Court has held as under:- Section 15C of the Indian Income-tax Act, 1922, read as a whole, is a provision directed towards encouraging industrialization by permitting an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owhere permitted the assessee to avail of the deduction if it is attached with certain conditions and the assessee fails to comply with the conditions. The issue before the Hon ble High Court was with reference to the interpretation of the restriction, not relating to noncompliance of the conditions by the assessee. In our opinion, this decision of the Hon'ble Supreme Court will not apply to the facts of the case before us. If the question relates to the interpretation of the condition, the question of liberal interpretation would have arisen. Lord Denning said: We do not sit here to pull the language of the Parliament to pieces and make nonsense of it. That is an easy thing to do. We sit here to find out the intention of Parliament and carry it out. We do this better by filling in the gaps and making sense of the enactment than by opening to destructive analysis. Viscount Simons called it a naked usurpation of the legislative function under the thin guise of interpretation. In our opinion, the intention of legislature is a very slippery phrase. When the language of the statute is transparently plain, it is wrong to make it colour according to the temper of time. Whe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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