TMI Blog2018 (1) TMI 977X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Act. Benefit of section 80IB(10) - whether can only be granted to an AOP and not to the assessee - Held that:- No merit in this contention of the Revenue. The assessee and M/s. Brahma Builders, the two constituents of Brahma Skyline JV had agreed to share gross receipts of the joint venture in the ratio of 32% and 68% and not the net profits. The joint venture was merely used as conduit to facilitate execution of housing project work, the actual work was done by the two members of JV. All the expenditure for the execution of project was incurred by the individual members and not the joint venture. Therefore, the deduction was rightly claimed by the members - Eligibility of deduction u/s. 80IB(10) to the assessee confirmed - Decided against revenue - ITA No.1503/PUN/2014 - - - Dated:- 10-1-2018 - SHRI D. KARUNAKARA RAO, AM AND SHRI VIKAS AWASTHY, JM For The Assessee : Shri Pramod Shingte For The Revenue : Shri Rajeev Kumar ORDER PER VIKAS AWASTHY, JM : This appeal by the Revenue is directed against the order of Commissioner of Income Tax (Appeals)-II, Pune dated 31-03-2014 for the assessment year 2009-10. 2. The brief facts of the case a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 40,000 sq.ft. only and did not play any role as builder developer in respect of construction of housing project on 4,63,103 sq.ft of land on which deduction u/s.80IB(10) was claimed and not allowed. 3) The learned Commissioner of Income-tax (Appeals) erred in not appreciating that the claim of deduction u/s.80IB(10) could only be considered in the hands of AOP and as no return of income had been filed by the AOP, the same could not be considered and the revenue sharing arrangements at 32:68 was intended to compensate the two members of Joint Venture for their respective contribution expenses incurred. 4) The appellant craves leave to add, alter or amend any or all the grounds of appeal. 4. Shri Pramod Shingte appearing on behalf of the assessee submitted that the assessee had acquired land at Kondhwa Khurd, Pune from Kausar Baug Co-op. Housing Society vide development agreement dated 12-05-2005. As per the agreement the assessee was required to construct flats with a total area of 2,40,000 sq. ft. for the members of the society. The assessee constructed the flats on the area as agreed mutually between the said parties and the balance land admeasuring 4,63,103 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oner of Income Tax Vs. M/s. Sri Lakshmi Brick Industries in ITA Nos. 1644 to 1647/Mds/2012 for assessment years 2006-07 to 2009-10 decided on 22-11-2012; v. Deputy Commissioner of Income Tax Vs. M/s. AKS Housing Development Co. P. Ltd. in ITA No. 1766/Mds/2012 for assessment year 2009-10 decided on 30-11-2012. 5. On the other hand Shri Rajeev Kumar representing the Department vehemently defended the order of Assessing Officer in denying the benefit of deduction u/s. 80IB(10) of the Act. The ld. DR submitted that the assessee is not engaged in development of a housing project. Moreover, it is Brahma Skyline (JV) that has developed the housing project and not the assessee. The ld. DR prayed for reversing the findings of Commissioner of Income Tax (Appeals) and restoring the order of Assessing Officer. 6. We have heard the submissions made by the representatives of rival sides and have perused the orders of authorities below. We have also considered various decisions on which the ld. AR of assessee has placed reliance to support his contentions. The Revenue in appeal has primarily assailed the action of Commissioner of Income Tax (Appeals) in holding that the assessee is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... out its obligation as a builder developer in the development of 2,40,000 sq.ft. area and, therefore, the inference drawn on the part of the Assessing Officer to conclude that the appellant merely introduced land and did not carry out the development of the property so as to be eligible to claim deduction u/s 80IB (10) of the Act is prima facie not correct. The Assessing Officer appears to have only considered the second part of the development of the property wherein the appellant entered into the JV agreement with Bramha Builders without taking into consideration the fact that the execution of the second part of the property was not possible without the construction of 2,40,000 sq.ft area at the cost of the appellant firm and handing over the residential flats to the members of the Kausar baug housing society. 3.4.2 Further on perusal of the clauses of the JV agreement dated 21-03- 2006 entered into between the appellant and Bramha Builders, it becomes apparent that the appellant entered into a JV for jointly developing the property on the terms and conditions set out in the agreement. The appellant has pointed out the various events and also filed the related documents to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esidential flats to the owners of the plot. Thus the Assessing Officer's observation and reasoning in denying the claim of deduction u/s. 80IB(10), that the appellant merely introduced land and not performed the role of builders and developer of the housing project is not correct. 8. We concur with the findings of Commissioner of Income Tax (Appeals) in holding that the assessee was not merely contributor of the land but was engaged in the development of housing project. That apart, it is a well settled law that owner of the land as well as developer of the land both are eligible for claiming deduction u/s. 80IB(10) in respect of housing project where the owner contributes the land and the other party develops the housing project. 9. The Hon‟ble Karnataka High Court in the case of Commissioner of Income Tax Vs. Shravanee Constructions (supra) has held that it is not merely building housing project, which attracts provisions of section 80IB(10), it is developing and building housing project, which attracts said provisions. The Hon‟ble High Court in the facts of the case held as under : 8. In terms of the agreement, which are not in dispute, the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Income Tax Vs. M/s. Lakshmi Brick Industries (supra) and Deputy Commissioner of Income Tax Vs. M/s. AKS Housing Development Co. P. Ltd. (supra) granted benefit of deduction u/s. 80IB(10) to the owner of the land. 10. In the present case, as is emanating from records the assessee has also contributed towards the development of housing project. Apart from contributing land, the assessee was purportedly instrumental in removing of encumbrances from land and marketing of flats. Thus, the assessee is also eligible for claiming deduction u/s. 80IB(10) of the Act. 11. The second contention of the Revenue is that benefit of section 80IB(10) can only be granted to an AOP and not to the assessee. We do not find any merit in this contention of the Revenue. The assessee and M/s. Brahma Builders, the two constituents of Brahma Skyline JV had agreed to share gross receipts of the joint venture in the ratio of 32% and 68% and not the net profits. The joint venture was merely used as conduit to facilitate execution of housing project work, the actual work was done by the two members of JV. It is further relevant to note that all the expenditure for the execution of project was incurred b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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