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TMI Blog2017 (2) TMI 1124X X X X Extracts X X X X X X X X Extracts X X X X ..... g the course of scrutiny assessment proceedings, the Assessing Officer noticed that the assessee is not owner of the land and that he has only worked as contractor. It was noted by the Assessing Officer that a piece of land, having an area of 8991 sq. meters, was purchased by Raj Chandra Co-operative Housing Society Limited and the assessee has entered into a development agreement with the said housing society. The relevant observations of the Assessing Officer, as set out in paragraph no. 2.4 of the Assessment Order, are as follows :- "2.4 Assessee entered into a Development Agreement with Raj Chandra Co. Op. Housing Soc. Ltd. (proposed) on 26.08.2005. As per the terms of the agreement, (i) the assessee was given possession of the land fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... above. (e) Therefore, in the instant case, the assessee is a mere builder who has entered into an agreement with the Society for construction of the housing project as per the approval obtained by the Society for construction on the land owned by the Society. (f) It therefore follows that the assessee is not the Developer of the project as it is not the designer, creator and owner of the housing project. (g) Therefore, it is clear that the assessee is mere builder and does not satisfy the primary requirement of the section that the assessee must develop and build a housing project. Since the assessee had simply done the work of civil construction related to the housing project (as per the agreement entered with the Society) the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot eligible for the deduction u/s 80IB. Any person includes the Raj Chandra Co. Op. Housing Soc. Ltd., which is a legal entity. 2.25 Thus, the assessee has failed to satisfy the conditions of section 80IB(10). Therefore, no deduction under this section is allowed. Penalty proceedings u/s 271(1)(c) are initiated for furnishing inaccurate particulars of income. Subject to above discussion, the total income of the assessee is determined as under: Total Income as per computation Rs. NIL Add: Disallowance of deduction claimed u/s.80IB(10) of the Act (as discussed above) Rs.34,76,223/- Assessed Total Income Rs.34,76,223/- i.e. Rs.34,76,220/-" 5. Aggrieved, assessee carried the matter in appeal before the learned CI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. It does not provide that the land must be owned by the assessee seeking such deductions. 33. It is well settled that while interpreting the statute, particularly, the taxing statute, nothing can be read into the provisions which has not been provided by the legislature. The condition which is not made part of s. 80-IB(10) of the Act, namely that of owning the land, which the assessee develops, cannot be supplied by any purported legislative intent. 34. We have reproduced relevant terms of development agreements in both the sets of cases. It can be seen from the terms and conditions that the assessee had taken full responsibilities for execution of the development projects. Under the agreements, the assessee had full authority to deve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee has adopted some other business models for the purpose of developing and building housing project does not vitiate fundamental character of the business activity as long as the risks and rewards of developing the housing project, in substance, remain with the assessee. It is difficult, if not altogether impossible, to visualize all the business models that an assessee may use in this dynamic commercial world even as, in substance, the fundamental character of the business remains the same, but certainly such modalities or complexities of business models cannot come in the way of eligibility for an incentive which is for the purpose of 'developing and building a housing project'. There is no justification, conceptual or legal, in restri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o of jurisdictional High Court in case of ABG Heavy Industries Ltd. (supra), the Assessing Officer is directed to allow deduction u/s.80IA(4) of the Act to the assessee with regard to the projects in question for both the years. 9. It is not even the case of the Assessing Officer that the assessee did not assume the entrepreneurship risks of the housing project. The format of arrangements for transfer of built up unit, and business model of the assessee for that purpose, is not decisive factor for determining eligibility of deduction under section 80 IB (10), but that is all that the authorities below have found fault with. The objections of the authorities below are thus devoid of legally sustainable merits. In view of the above discussi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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