TMI Blog2017 (12) TMI 419X X X X Extracts X X X X X X X X Extracts X X X X ..... our of assessee. - ITA Nos. 1147 to 1149/Ahd/2011 And ITA Nos. 344 And 1671/Ahd/2013 - - - Dated:- 20-9-2017 - SHRI PRAMOD KUMAR, ACCOUNTANT MEMBER AND SHRI S. S. GODARA, JUDICIAL MEMBER For The Assessee : Shri M. K. Patel, A.R. For The Revenue : Shri Roopchand, Sr. D.R. ORDER PER S. S. GODARA, JUDICIAL MEMBER These five assessee s appeals for assessment years 2000-01 to 2003-04 2005-06 emanate from the CIT(A)-XV, Ahmedabad s separate orders dated 31.01.2011 in first three assessment years and dated 16.11.2012 and 05.03.2013 in latter two assessment years in case nos. CIT(A)-XV/9(3)/415/09-10, CIT(A)- XV/9(3)/419/09-10, CIT(A)-XV/9(3)/418/09-10, CIT(A)-XV/9(1)/467/11-12 CIT(A)-XV/ITO/9(1)/398/10-11, upholding Assessing Officer s identical action disallowing Section 80IB(10) deduction(s) of ₹ 4,66,913/-, ₹ 26,02,618/-, ₹ 40,58,946/-, ₹ 45,68,013/- and ₹ 20,70,360/-; respectively, in proceedings u/s. 143(3) r.w.s. 254 of the Income Tax Act, 1961; in short the Act . Heard both sides. Case files perused. 2. Learned representatives inform us at the outset that the sole substantive issue in all five instant appeals ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... purchased the land for a fixed consideration from the land owner and has developed the housing project at its own cost and risks involved in the project. In the event the AO finds that the land had been purchased by the undertaking of the taxpayer and has all the dominant control over the project and developed the land at his own cost and risks, the AO should allow the deduction u/s.80IB(10) of the Act, in accordance with law. In case the AO finds that the undertaking of the tax payer has acted on behalf of the land owner and has got only the fixed consideration from the land owner for the development of the housing project, the tax payer would not be entitled to any deduction u/s.80IB(10) of the Act. With these directions, ground no.l in both the appeals is disposed of as indicated hereinbefore. (Emphasis supplied) 4. The assessing authority took up consequential proceeding. The assessee filed its relevant document comprising of approved plan, Section 10CCB audit report, development permissions/Raja Chitti, local authorities BU sanction as well as its development agreement dated 06.03.2000 entered into with the owner society M/s. Saundarya Co-operative Housing Society Ltd. fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s above action disallowing assessee s deduction claim. 7. We have heard rival submissions. We have already indicated that the sole question arising for our apt adjudication is whether or not the assessee is entitled for Section 80IB(10) deduction in above set of facts. It is no more in dispute that Section 80IB(10) deduction does not envisage ownership of the plot in question relevant to a housing project as per this tribunal s decision in Radhe Developers case (supra). Hon ble jurisdictional high court has upheld the same in its judgment reported as CIT vs. Radhe Developers (2012) 341 ITR 483 (Guj.). We are informed that hon ble apex court has declined Revenue s Special Leave Petition as well on 27.07.2012 in a group case titled as ITO vs. Shri Gokul Corporation. 8. We further find that another co-ordinate bench decision in case of Shri Umeya Corporation vs. ITO ITA No.211/Ahd/2010 decided on July 7,2015 further holds that it is the entrepreneurial risk involved in development of a housing project than ownership of the project land which forms the decisive factor for the purpose of raising Section 80IB(10) deduction claim. Learned co-ordinate bench decision settles the issu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r from clause 13 or the Development Agreement), but at the very beginning of the Development agreement it has been mentioned that the Owner of the land is not the Developer, that the developer (appellant) had been appointed to develop / build by constructing tenements of the said properties along with the work of development of basic common infrastructure facilities, fid/ease refer to clause 1 of the Development Agreement) . Clause 2 of the Development Agreement states as under: The said Owner shall sell / allot to the desiring persons the plot/s either by himself or through the Developer/Builder being the party of the Second Part. Thus in this case the land was never purchased by the appellant, neither any investment was made by the appellant towards cost of land. The appellant acted as an Agent / Contractor of the land owners and constructed the housing projects on the authority given by the land owners. 2 Reliance is placed on Hon'ble IT AT Mumbai Larger Bench, Mumbai decision in the case of M/s. B.T. Patil Sons Belgaum Construction Private Limited dated 26.10.2009 (ITA No.1408 1409 / PN / 2003 AY 2000-2001 and 2001-02) where 80IA deduction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ojects under certain circumstances noted above. 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. 80-18(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 develop the land as per his discretion. The assessee could engage professional help for designing and architectural work. Assessee would enroll members and collect charges. Profit or loss which may result from execution of the project belonged entirely to the assessee. It can thus be seen that the assessee had developed the housing project. The fact that the assessee may not have owned th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the division bench. However, this view was stillborn, and its relevance is confined to academic significance, for the reason that that while giving effect to the majority view, vide order dated 28th February, 2013 and on somewhat peculiar fact situation in this case, the final order of the Tribunal did not endorse these views. Quite to the contrary, following Hon'ble Bombay High Court decision in the case of CIT Vs ABG Heavy Industries Ltd and Ors [(2010) 322 ITR 323 (Bom)] and upon by taking into account Hon'ble Bombay High Court's specific directions in the case before the Tribunal, the Tribunal's final order had, inter alia, concluded as follows: ....... while giving effect to the opinion of Third Member u/s.255(4) of the Act, we take view in conformity with order of jurisdictional High Court in case of ABG Heavy Industries Ltd. (supra) available at this time though contrary to the opinion expressed by the Third Member. So in view of above discussion, following the ratio 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 th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... they will collect amount by cash or by cheque in favour of firm name and afterwards the first party will return this amount to second party. ( D) Till the completion of all the units and handling over the possession of all the units. That means Party of the first part has full right whether to enter or to not enter the name as member in the second party till full payment of the unit receive by first party. And first party will hold the possession of any unregistered units or vacant units and for that second party will not have any objections. And Party of the first part will hold the possession of the unit till they receives the full amount of units and second party do not have any objection. ( E) Party of the first, part will give only the list of the member, unit as when it booked to second party. Party of the second part will registered that unit holder as a member of the society as when it is inform by first party in written and by giving the full details of the payment to Second party. And it is also dearly mention trial' second party will not enter the name of the unit holder as a member of the society till they make the full payments of the unit as well ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... N) Party of the first part has right to show any papers regarding Land, property, Construction, Plans agreements to the unit holder if require, and they also have, right to make any Agreement, Declaration, Statement on Oath etc. with any person, firm, company who came to become a unit holder of the Said Scheme. ( O) Second party has to pay the Development Charges to the first party on the basis of the Units they have booked. The development charge will be at the rate of 15% of the total receipts from the Members. First party has a right to collect 15% as a development Charges said Development charges is in addition to Labour Charges for which separate Agreement has been made. ( P) Party of the first part can do any activity if require for obtaining loan to the members who will join the said Scheme and the second party will give the full support. And if for the Whole Scheme general loan is to be require from any institute and if at that time units of the said Scheme is to be mortgage 'then party of the second part will give a full support. ( Q) Second party will agree to make any alteration in construction of unit or to provide special facility if any sugges ..... X X X X Extracts X X X X X X X X Extracts X X X X
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