TMI Blog2017 (5) TMI 63X X X X Extracts X X X X X X X X Extracts X X X X ..... rightly held the assessee to have undertaken all risk and reward in developing the abovestated residential project so as to be eligible for Section 80IB(10) deduction in question. - Decided against revenue - ITA Nos. 1742 & 1743/Ahd/2013 - - - Dated:- 28-4-2017 - SHRI S. S. GODARA, JUDICIAL MEMBER AND SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER For The Revenue : Shri Om Prakash Meena, Sr. D.R. For The Assessee : None ORDER PER S. S. GODARA, JUDICIAL MEMBER These two Revenue s appeals for assessment year 2008-09 2009-10 arise against the CIT(A)-XV, Ahmedabad s separate orders; both dated 04.03.2013 in case nos. CIT(A)-XV/ITO/9(2)/368/10-11 CIT(A)- XV/ITO/9(2)/413/11-12, reversing Assessing Officer s action in disallowing Section 80IB(10) deductions of ₹ 45,47,315/- and ₹ 14,78,516/-; respectively, in proceedings u/s. 143(3) of the Income Tax Act, 1961, in short the Act . Case called twice. None appears at assessee s behest despite service of RPAD notice(s) dated 06.03.2017. It is accordingly proceeded ex parte. 2. The Revenue pleads the following substantive grounds in the above former appeal: 1a). The Ld. Commissioner of Inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctive effect squarely applied in facts of the instant case. He therefore declined the impugned deduction. 4. The CIT(A) reverses Assessing Officer s above narrated findings as under: 5. I have perused the facts of the case as enumerated by A.O. and as submitted by appellant. I have perused the case laws relied on by A.O. as well as appellant. After careful consideration of facts, submission and contention of both A.O. as well as of appellant, ground wise adjudication is as follows: 5.1 Before adjudication following important observation required considerations. (a) The A.O. after discussing in detail, summarized the facts and given reasons for disallowances u/s. 80IB (10) of the Act mainly on account of non ownership of land so developed. The A.O. supported the contention that both permission to develop project and Building use permission was not in the name of developer. (b) The appellant is treated as work contractor by A.O. on the basis of development agreement and appellant's reliance on Hon'ble ITAT, Ahmedabad. Orders in the case of Radhe Developers and Shakti Corporation were summarily rejected with the contention that department has not acce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contentions of the appellant as raised in various sub-grounds. This includes that A.O. failed to consider and appreciate the detailed explanation given by appellant during the course of asst. proceedings highlighting the facts that he fulfilled all the requisite conditions for eligibility of claim u/s.80IB (10) of the Act. The involvement of appellant fund thereby risk undertaken by appellant for development of housing project is not controverted by A.O. The A.O. simply raised two issues for disallowances i.e. the ownership of land and appellant is a work contractor. On the other hand, the A.O. discarded the appellant's submission based on facts as well as legal proposition that dominion control over land with all the risk of development was that of appellant and it is only for some technical purpose the land owner was in picture for obtaining permission for development and other signatory functions. (ii) I am also inclined to accept the contention of the appellant that ratio of case laws relied on by appellant are squarely applicable in the facts of the appellant. The appellant also provided details and explanation in a tabular form in respect of various guidelines give ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntial units in 14128 sq. m. of land and in the permission for development the name of Shri Ashokbhai Sunderbhai Patel Chairman/Secretary and others being earlier land owner who initially applied for development appears but those land owner sold the land to Shri Ishwarbhai with whom appellant has development agreement but due to terms and condition no new permission for development is required since this permission is granted to land owner as per land record at the time of permission. The Building Use certificate is issued in the name of land owner Shri Natwarbhai I. Patel as per the terms of the permission for development for the same area and for the same number of residential units. When the permission for development and Building Use certificates are considered in the light of the development agreements, it would clarify that the property numbers are same as has been mentioned by ADDA and that there is no objection from the side of the landowner. Therefore, it is clear that the building plans have been sanctioned in respect of the land developed by the assessee through the agreement to sell and the development agreements in question. The details on record supports the case of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... greement. It was the agreements under which the assessee was entitled to develop the housing project on the land on its own cost and in the manner in which the assessee might have decided. It is not in dispute that the assessee being a developer constructed the housing project as per the development agreements by incurring total expenditure and received the sale consideration. Therefore, the assessee is able to satisfy the requirement of section 80 IB (10) of the IT Act. It is highlighted that once plan is approved by AUDA on papers submitted by the assessee and others, it would be deemed approval of construction of housing units in favor of the assessee, more so, when the assessee entered into agreements for developing the whole of the property. Therefore, objection of the authorities below, the name of the assessee is not mentioned in the permission or development agreement as works contract are not sustainable in law. The facts of the case, if considered in the light of the decisions of ITAT Ahmedabad Bench in the cases of Radhe Developers, Shakti Corporation as upheld by Hon'ble Gujarat high court in the case of Radhe Developers 341 ITR 403 and also in the case of C.I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts. It has come on record that the assessee had placed the above development agreement before the Assessing Officer as well as the CIT(A). The CIT(A) finds in lower appellate order that it is the assessee developer who has incurred total expenditure and received the sale consideration. We afforded ample opportunity to the Revenue to rebut this clinching finding by reading the corresponding terms in above development agreement. We notice that the same does not even form part of the case records. This clinching factor makes us to conclude that the learned CIT(A) has rightly held the assessee to have undertaken all risk and reward in developing the abovestated residential project so as to be eligible for Section 80IB(10) deduction in question. The Revenue s sole substantive ground as well as its appeal ITA No.1742/Ahd/2013 is declined. 6. Same order to follow in Revenue s latter appeal ITA No.1743/Ahd/2013 since we have already made it clear in preceding paragraphs that the issue involved herein is the same and identical as adjudicated in former appeal. 7. These two Revenue s appeals are dismissed. [Pronounced in the open Court on this the 28th day of April, 2017.] - - Ta ..... X X X X Extracts X X X X X X X X Extracts X X X X
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