9911796707
TMI Blog2017 (2) TMI 1187X X X X Extracts X X X X X X X X Extracts X X X X ..... M/s.Mahalaxmi Corporation, in this appeal order was passed by CIT(A) on 28/03/2012. The facts accept variation in the quantum and details of land on which assesse has raised theconstructions are common. Therefore all,these appeal are heard together and I deemed it appropriate to disposed of them by this common order. 5. Brief facts in the case of M/s.Mahalaxmi Corporation are that land comprising in plot no.91 of the TPS No.40 Naroda-II having area of 7,059 Sq. meters at Naroda, Ahmedabad was purchased by the co-owners of the land i.e 1) ShriIshwarbhaiValjibhai Desai, 2) ShriAmratbhaiValjibhai Desai, 3) Smt. LilubenValjibhai Desai, 4) Smt. MadhvibenIshwarbhai Desai, 5) Smt. LaxmibenAmaratbhai Desai, 6) ShriRajeshbhaiAmratbhai Desai. 6. The Assessee firm has constructed housing project known as Akashganga Bungalow Part-II on this land and claimed deduction under section 80IB(10)of the Act. 7. The Ld. Assessing Officer has rejected this claim and reasons assigned by the Assessing Officer are being summarized by the Ld. CIT(A) on page 9 of the impugned order they read as under. 1. "The Assessee is not both developer and builder as required by the provision of section 80IB(10). A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s on this point. I cannot do better than to extract the details finding record by the first Ld. Authority on this issue. The findings read as under:- ''14. Considering all these facts, I am inclines to accept the contension of the appellant. 15. (A) Hon'ble Gujarat High Court in its landmark judgement dated 13.12.2011 in the case of Radhe Developers, Shakti Corporation and Others vs. CIT at Para 4 and Para 5 illustrate the basic facts of the case of M/s. Radhe Developers. At para 7, Hon'ble ITAT's order dated 29.6.2007 was summarized wherein it was held that firstly for deduction u/s.80IB(10) of the Act it is not necessary that the assessee must be the owner of the land and secondly looking to the provisions contained in Section 2(47) of the Act read with Section 53A of the Transfer of Property Act, by virtue of the development agreement and the agreement to sell, the assessee had, for the purpose of Income tax, become the owner of the land. (B) At Para 8.3 & 8.4., it considered Hon'ble ITAT Order dated 7.11.2008 in the case of M/s. Shakti Corporation wherein Hon'ble ITAT differently (different than M/s. Radhe Developers case) held that considering the t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r that required alertness and skill being absent they themselves are not in a position to place a project or scheme on the land mentioned in schedule in such circumstances to The Party of the Third part over and above the right to purchase the rights of Agreement of Sale on dt.18-05- 2000 they have also decided to give all rights along with constructing anddeveloping on the said land mentioned in schedule by this Agreement dt.18-05--2000. Clause 11(3):The said Developer cum Building Contractor is authorized to admit the persons who are willing to join in the scheme to get the houses of fixed area and in this manner to admit the respective member in the scheme or at the time of admission of such member as per the scheme the fixed amount of contribution of construction and other amounts and incidental expenses that the admitting members shall have to pay as admission fees the receipt of deposit or a clear receipt ofamount contribution shall have to be given, moreover Developer cum Building Contractor has given full right authority also to decide the price of houses of this scheme a to execute necessary agreements with the purchasers houses. Clause 11(11): That the said Develope ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction that may be made over the said land/property, can issue receipt to the members, can issue allotment letter to the members, can execute the Agreement to sale, can hand over the possession, can execute Tripartite Agreement, but the entire responsibility for the same shall be that of the party of the Second Part. Cluase-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 Agreement 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. Clause-10:From the date of this Agreement, you, the Party of theSecond Part is bound to pay tax, land revenue, special cess etc. in the offices of the Vadodara Municipal Corporation, Government, Semi Government and whatever tax, land revenue, education cess, special cess, etc. are outstanding prior to be the date of this Agreement, the same are and shall be paid by us, theparty of the First part as a land owner. (F) After considering the provisions of section 80IB(1) and 80IB(10) in respect of question of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... agreement of sale entered into between the parties. Such conditions would immediately reveal that the owner of the land had received part of sale consideration. In lieu thereof he had granted development permission to the assessee. He had also parted with the possession of the land. The development of the land was to be done entirely by the assessee by constructing residential units thereon as per the plans approved by the local authority. It was specified that the assessee would bring in technical knowledge and skill required for execution of such project. The assessee had to pay the fees to the Architects and Engineers. Additionally, assessee was also authorized to appoint any other Architect or Engineer, legal adviser and other professionals. He would appoint Sub-contractor or labour contractor for execution of the work. The assessee was authorized to admit the persons willing to join the scheme. The assessee was authorised to receive the contributions and other deposits and also raise demands from the members for dues and execute such demands through legal procedure. In case, for some reason, the member already admitted is deleted, the assessee would have the full right to incl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (2010) 324 ITR 199 under the head "Contract of work or a contract of sale" and Hon'ble Supreme Court judgement in the case of State of Andhra Pradesh vs. M/s. Kone Elevators AIR 2005 SC 1581, the Hon'ble Gujarat High Court at para 38 held that - "38. In the present case, as already held the assessee had undertaken the development of housing project at its own risk and cost. The land owner had accepted only the full price of the land and nothing further. The entire risk of investment and expenditure was that of the assessee. Resultantly, profit and loss also would accrue to the assessee alone. In that view of the matter, the Addition of the Explanation to Section 801B with retrospective effect of 1.4.2001 would have no material bearing in the cases on hand. We may recall that the said Explanation introduced by Finance (No.2)Act, 2009 provided as under:- [Explanation- For the removal of doubts, it is hereby declared that nothing contained in this sub-section shall apply to any undertaking which executes the housing project as a works contract awarded by any person (including the Central or State Government)]." (J) Finally after considering the ratio of various case ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
