TMI Blog2016 (3) TMI 251X X X X Extracts X X X X X X X X Extracts X X X X ..... ting the net profits @ 12% of the Revenue from Kailash Developers is called for - Decided against assessee Denial of deduction u/s.80IB(10) - Non obtaining completion certificate within a period of 4 years - Held that:- When the housing project was approved on 10.03.2004 by the competent authority, condition for obtaining completion certificate within a period of 4 years from the date of approval being eligible for deduction u/s.80IB(10) of the Act was not applicable and therefore assessee was eligible for deduction u/s.80IB(10) of the Act - See ITO vs. Saket Corporation [2015 (6) TMI 460 - GUJARAT HIGH COURT ] - Decided against revenue - ITA No. 563 & 564/AHD/2012 - - - Dated:- 29-2-2016 - Shri Anil Chaturvedi, Accountant Member And Shri S. S. Godara, Judicial Member For the Appellant : Shri S. N. Soparkar, AR For the Respondent : Shri Albinus Tirkey, Sr. D.R. ORDER Per Anil Chaturvedi, Accountant Member These two appeals filed by the Assessee are against the order of CIT(A)-XV, Ahmedabad dated 24.01.2011 for A.Ys. 2007-08 2008-09. 2. The relevant facts as culled out from the material on record are as under. 3. Assessee is an individual and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 13 passed in ITA Nos. 563 and 564/AHD/2012 with respect to the assessment year 2007-08 and 2008- 09, by which, the learned Tribunal has dismissed the said appeals on the ground of limitation. 2.1. Being aggrieved and dissatisfied with two separate orders of CIT(A) dated 24.1.2011 for me assessment year 2007-08 and 22.7.2011 for me assessment year 2008-09, the common appellant herein -assessee preferred appeals before the learned ITAT being ITA Nos. 563 of 2012 and 564 of 2012. There was a delay of 328 days in preferring the appeal against the order passed by the learned CIT(A) with respect to assessment year 2007-08 and there was a delay of 158 days in preferring the appeal against the order passed by the learned CIT (A) with respect to assessment year 2008-09. The assessee requested the learned Tribunal to condone the delay by submitting that earlier tax matter were being looked after by a Chartered Accountant M/s. J M. Patel Brothers and even after losing the appeal before the learned CIT(A), he did not advise the assessee to file further appeal before the Tribunal. It was further stated in the affidavit that subsequently the assessee came to know about losing in the appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Collector, Land Acquisition, Anantnag and Another vs. Mst. Katiji and Others reported in (1987) 2 SCC 107 ordinarily a litigant does not stand to benefit by lodging an appeal late. It is further observed by the Hon ble Supreme Court that refusing to condone delay can result in a meritorious matter being thrown out at the very threshold and cause of justice being defeated. As against this when delay is condoned the highest that can happen is that a cause would be decided on merits after hearing the parties. 4.0. Considering the aforesaid principles laid down by the Hon ble Supreme Court and the facts of the case on hand, we are of the view that learned Tribunal ought to have condoned the delay and ought to have decided and disposed of the appeals on merit rather than dismissing the same on the ground of limitation 5.0. In view of the above and for the reasons stated above, both these appeals succeed and the impugned common order passed by the ITAT dated 22.3.2013 in ITA Nos. 563 and 564/AHD/2012 with respect to the assessment year 2007-08 and 2008-09 is hereby quashed and set aside and the delay caused in preferring the respective appeals is hereby condoned and the mat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee had debited ₹ 24,24,000/- in the Profit and Loss account of Kailash Developers towards land leveling expenses up to 07.10.2006. A.O also noticed that Assessee had procured construction material, wooden items doors etc. prior to 07.10.2006. He was therefore of the view that when the land was not ready for construction till 07.10.2006, the incurring of expenditure towards construction material, purchase of wooden items, doors etc. for the purpose of project cannot be accepted and the expenditure shown by the Assessee was not at all reliable and that the major part of purchases made for Kailash Developer was incurred prior to the land being ready for construction and the expenditure was diverted to Yuvraj Project to reduce the profits of the taxable project. He accordingly rejected the books of accounts of Kailash Developer and thereafter made the estimation of net profit at 25% of the total receipts of ₹ 1,66,50,000/- and worked out the net profit at ₹ 41,62,500/- and after giving credit of the net profit of ₹ 9,25,589/- that was declared by the Assessee, made addition of balance amount of ₹ 32,36,911/-. Aggrieved by the order of A.O., Assessee carr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd is without any basis and therefore the same needs to be deleted. Ld. D.R. on the other hand supported the order of A.O. and CIT(A) and further pointed to the findings of ld. CIT(A) wherein it is noted that despite opportunities granted to assessee, assessee neither produced the books of accounts or vouchers of expenses of the two concerns nor furnished any convincing explanation for land leveling expenses bills of October 2006. He thus supported the order of lower authorities. 11. We have heard the rival submissions and perused the material on record. The issue in the present case is estimation of income of assessee from a project, the profits of which are taxable. We find that ld. CIT(A) while deciding the issue has noted and given a finding that assessee did not produce the books of accounts nor vouchers of the two concerns either during assessment proceedings and did not produce it even during appellate proceedings though the assessee was specifically asked to produce the same. It is also noted by ld. CIT(A) that assessee has not given any convincing explanation of land leveling expenses bills of October 2006 on one hand and purchase of Shutter bills of April/May 2010 nor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s is called for and thus, this ground of assessee is dismissed. 12. Ground No.2 is with respect to denial of deduction u/s.80IB(10) of the Act. 12.1 A.O. noted that assessee has claimed deduction of ₹ 8,67,417/- u/s.80IB(10) of the Act. A.O. on perusing the details and documents furnished by assessee noticed that assessee had entered into agreement with land owners for construction of housing project, the land being owned by landowners, application for housing plan was made by land owners and the permission for development was also received by them and not the assessee. He was therefore of the view that since the assessee has only executed the work as per the terms and conditions of agreement entered by it with landowners and that since the assessee was merely a contractor for the purpose of construction, the assessee was not eligible for deduction u/s.80IB(10) of the Act. He accordingly denied the claim of deduction u/s.80IB(10) of the Act. Aggrieved by the order of A.O., the matter was carried before the ld. CIT(A) who upheld the order of A.O. by holding as under: 12. The point of ownership of land not entitling the appellant for the deduction has to be seen in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... filled. As per Explanation (ii) given below clause (a) of section 80IB(10) the date of completion of construction of the housing project shall be taken to be the date on which the completion certification in respect of such housing project is issued by the local authority. In this case the appellant received original development permission from AUDA dated 28.3.2004 for which the lay-out plan approved by the local authority dated 28.3.2003 was submitted. After this the appellant obtained Revised development permission dated 1.4.2004 which was submitted and also the revised plan approved by the local authority dated 1.4.2004 in which 117 residential units comprising tenements from Block A to L were approved for construction on plot of land with area of 15985 sq.mtrs., whereas in the original 114 residential units comprising tenements and row houses were approved on the same plot of land. The proofs given like one electricity bill of May 2005 of flat owner (one Shri K.R. Patel ) of residential unit - B-22 - of Yuvraj Park scheme and property tax valuation by New Naroda Village Panchayat of the same person (K.R. Pate!) - residential unit owner of building number A-1 - of Yuvraj Park da ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r taken by the eassessee as it was approved in 2003 which is also in line with the Explanation (i) to Section 80IB(10) of the Act and for this proposition, he also relied on the decision of Hon ble Gujarat High Court in the case of ITO vs. Saket Corp. (T. A. No. 107 of 2015). He also placed on record a copy of the same. He therefore submitted that assessee has rightly claimed deduction u/s.80IB(10) of the Act and the same be allowed. Ld. D.R. on the other hand supported the order of A.O. and ld. CIT(A). 15. We have heard the rival submissions and perused the material on record. The issue in the present ground is with respect to denial of deduction u/s.80IB(10) of the Act. The A.O. had denied the deduction mainly for the reason that assessee is not the owner of land, approvals for development of project was obtained by landowners and not the assessee and that the assessee had merely acted as a contractor. On the issue of denial of deduction u/s.80IB(10) of the Act for the aforesaid reasons, we find that by now the issue is well settled ,more so, by the decision of Hon ble Gujarat High Court in the case of CIT vs. Radhe Developers (supra) and other cases. The Hon ble High Court in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on ble ITAT had relied on the decision of Hon ble Delhi High Court in the case of CIT vs. CHD Developers (2014) 362 ITR 177 (Del). Hon ble Gujarat High Court has upheld the order of Tribunal by holding that no error was committed by Tribunal in holding that assessee was entitled to claim deduction u/s.80IB(10) of the Act. Before us, Revenue has not placed any material on record to point out any distinguishing feature in the case of Saket Corpn. (supra) nor has pointed out as to how the ratio of the aforesaid decision rendered by Hon ble Gujarat High Court would not be applicable to the facts of present case nor has placed on record any contrary binding decision. In view of the aforesaid facts, we are of the view that assessee is eligible for deduction u/s.80IB(10) of the Act and thus allow this ground of assessee. 16. In the result, the appeal of assessee is partly allowed. ITA No.564/Ahd/2012 17. We now proceed with ITA No.564/Ahd/2012 for A.Y. 2008-09. The ground raised by assessee reads as under: 1. The Ld. CIT(A) erred on facts and in law in confirming disallowance of ₹ 1,60,060/- u/s.80IB(10) without appreciating the deduction u/s 80IB(10) for the very same ..... X X X X Extracts X X X X X X X X Extracts X X X X
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