TMI Blog2011 (8) TMI 1294X X X X Extracts X X X X X X X X Extracts X X X X ..... Officer to allow the deduction to the assessee on the ground that the assessee has purchased the land for a fixed consideration from the landowner and has developed the house project at its own cost and risks involved, in respect of issue regarding deduction u/s. 80-IB(10) r.w.s. 80IB(1) claimed by the assessee, without appreciating the fact that the approval by the local authority as well as completion certificate was not granted to the assessee but to the land owner and the rights and obligation under the said approval were not transferable, and that transfer of dwelling units in favour of the end-users was made by the landowner and not by the assessee. 2. With prejudice, the Ld. CIT (A) erred in allowing deduction u/s. 80IB(10) in res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be outside the ambit of provisions of section 80IB (10) as it is not the profit derived from activities of development and construction. In essence deduction u/s. 80IB (10) was denied and in the alternate the deduction on sale of unutilized FSI was disallowed. 5. By impugned order the CIT (A) allowed both grounds in favour of the assessee by following the decision of Co-ordinate Bench in the case of Radhe Developers and others. After going through this decision, we find that similar issue came up before the Hon ble ITAT, Ahmedabad, in ITA No.2482/AHD/2006 in the case of M/s. Radhe Developers and others in which appellant was also one of the party. The ITAT, Ahmedabad held that for the purpose of claiming deduction u/s. 80IB (10) OF TH ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the mere owner thereof. 29. It is also the case of the Revenue that the assessee was a mere contractor developing and building housing project and therefore, it could not be a developer. We fail to understand as to how such a situation could emerge. A person who enters into a contract with another person is no doubt a contractor. Having entered into agreements with landowners for development and building the housing project, was obviously a contractor but it does not derogate the assessee for being a developer, as well. The term contractor is not essentially contradictory to the term developer. As stated above it is the undertaking that develops or builds the housing project that is entitled to deduction irrespective of the fact whet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... question of calculating the profitability on FSI as the same has not been contemplated u/s. 80IB (10) OF THE Act. On verification of the sale deed executed in favour of buyers of the residential houses, it is clear that the assessee had made this sale deed for sale of plot of land. Further, on verification of development agreement with the land owner, we find that here also the reference is with respect to land area only. In both the documents assessee had not acquired rights and has not relinquished rights with reference to FSI. Further, on verification of approved map for each unit is with reference to built up area only. Under the circumstances, the assessee has never dealt with FSI, both in terms of acquiring rights in the land and for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elopers (supra) will not apply in a case where the assessee has entered into the agreement for a fixed remuneration merely as a contractor to construct or develop the housing project on behalf of the landowner. The agreement entered into in that case will not entitle the developer to have the dominant control over the project and all the risks involved therein will vest with the landowner only. The interest of the Developer will be restricted only for the fixed remuneration for which he would be rendering the services. The decision in the case of Radhe Developers (supra) has not dealt with such situation. The proposition of law laid down in the case of Radhe Developers cannot be applied universally without looking into the development agree ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee u/s. 80IB(10). In case the Assessing Officer find that the Developer has acted on behalf of the landowner and has got the fixed consideration from the landowner for the development of the housing project, the assessee should not be allowed deduction u/s. 80IB (10). The case of M/s. Radhe Developers Other (includes the case of the appellant) vide order in ITA No.2482/AHD/2006 dated 29-06-2007. The facts and circumstances of the assessee are identical to the cases decided by Hon ble ITAT, Ahmedabad. Also all the pleas raised by the Assessing Officer have been effectively dealt with and discussed in the said order and thereafter Hon ble ITAT has allowed the deduction under section 80IB (10). Respectfully following the decision of Ho ..... X X X X Extracts X X X X X X X X Extracts X X X X
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