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THE COMMISSIONER OF INCOME TAX-I Versus DEEP DEVELOPERS

2016 (7) TMI 527 - GUJARAT HIGH COURT

Deduction u/s.80IB(10) r.w.s. 80IB(1)- title of lands not passed - Held that:- Considering the decision of this Court in the case of Radhe Developers (2011 (12) TMI 248 - GUJARAT HIGH COURT) and Swastik Associates (2014 (5) TMI 708 - GUJARAT HIGH COURT), the questions, which are raised in the present appeals are required to be answered in favour of the assessee as held that assessees are entitled to benefit under section 80IB(10) even where title of lands had not passed on to assessees and in so .....

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6 - MR. KS JHAVERI AND MR. G.R.UDHWANI, JJ. FOR THE APPELLANT : MR KM PARIKH, ADVOCATE FOR THE OPPONENT : MR MANISH SHAH, ADVOCATE ORAL JUDGMENT (PER : HONOURABLE MR.JUSTICE KS JHAVERI) 1. Being aggrieved and dissatisfied with the impugned judgment and order passed by the Income Tax Appellate Tribunal, Ahmedabad Bench A (hereinafter referred to as the Tribunal ), the revenue has preferred the present Tax Appeals assailing the following orders: Tax Appeal No. Date of Tribunal s order ITA No. Asse .....

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7 2003-04 460/2009 29.02.2008 4249/Ahd/2007 2004-05 729/2009 25.04.2008 371/Ahd/2008 2004-05 733/2009 07/11/08 1503/Ahd/2008 2005-06 1708/2009 24.04.2009 1297/Ahd/2005 2001-02 548/2008 29.06.2007 2445/Ahd/2006 2003-04 1.1 These matters were admitted by this Court for consideration of the following substantial question of law: TAX APPEAL Nos. 547, 548, 551, 559, 560, 562, 563, 571, 576, 578, 579, 757 of 2008 & 1708, 733 OF 2009 Whether, on the facts and in the circumstances of the case, the A .....

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Tribunal is right in law and on facts in holding that the assessee has fulfilled the conditions as laid down in the provisions of Section 80IB(10) of the Act as regards commencement of development and construction of housing project on or after the 1st day of October, 1998? B. Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in law in allowing deduction u/s.80IB(10) r.w.s. 80IB(1) to the assessee when the approval by the local authority as well as com .....

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authority as well as completion certificate was not granted to the assessee but to the landowner and the rights and the obligations under the said approval were not transferable, and when the transfer of dwelling units in favour of the end-users was made by the landowner and not by the assessee. (B) Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in law in allowing deduction u/s.80IB(10) r.w.s.80ib(1) to the assessee on profit derived from sale of unu .....

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approval of the local authority in this case was not given to the assessee but it was given to the landowner with whom the assessee had entered into what is termed as a development agreement for the construction of the housing project and accordingly the Assessing Officer disallowed this deduction. On appeal before the CIT(A) by the assessee, the CIT(A) confirmed the order passed by the Assessing Officer. 2.1 On further appeal before the Tribunal by the assessee, by impugned judgment and orders .....

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retation of section 80IB(10) without appreciating that this is only a machinery provision and the substantive provision for the relevant deduction is Section 80IB(1) which must be read along with the former. He submitted that the undertaking of the assessee and it is the housing project of the assessee s undertaking that has tobe approved by the local authority. 4. Mr. Manish Shah, learned advocate appearing for the assessee submitted that the Tribunal is justified in reversing the order of CIT( .....

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of Property Act would lead to a situation where the land would be for the purpose of Income Tax Act deemed to have been transferred to the assessee. In that view of the matter, for the purpose of income derived from such property, the assessee would be the owner of the land for the purpose of the said Act. It is true that the title in the land had not yet passed on to the assessee. It is equally true that such title would pass only upon execution of a duly registered sale deed. However, we are, .....

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en understood differently in different context. For the limited purpose of deduction under Section 80IB(10) of the Act, the assessee had satisfied the condition of ownership also; even if it was necessary. 42. In the case of Shakti Corporation similarly the assessee had entered into a development agreement with the land owners on similar terms and conditions. It is true that there were certain minor differences, however, in so far as all material aspects are concerned, we see no significant or m .....

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loss or as the case may be take home the profits, it becomes abundantly clear that the project was being developed by him at his own risk and cost and not that of the land owners. Assessee thus was not working as a works contract. Introduction of the Explanation to Section 80IB(10) therefore in this group of cases also will have no effect. 45. Under the circumstances, we are of the opinion that the Tribunal committed no error in holding that the assessees were entitled to the benefit under Secti .....

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