TMI Blog2013 (3) TMI 859X X X X Extracts X X X X X X X X Extracts X X X X ..... me-tax Act, 1961. 2. The assessee is a company engaged in business as builders and promoters of residential flats. In computing the taxable income for the impugned assessment year 2005-06, the assessee has claimed the deduction proposed under section 80-IB(10) of the Income-tax Act, 1961. The return filed by the assessee was initially processed under section 143(1) of the Act. Thereafter, the case was selected for scrutiny and the assessment was completed under section 143(3) on 30-11-2007. Afterwards, it was noticed that the claim for deduction made by the assessee should not have been accepted. According to the Assessing Officer, the assessee is not entitled for that deduction. The first reason pointed out by the Assessing Officer is t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e us. 5. The first ground raised by the Revenue is that the Commissioner of Income-tax (Appeals) has erred in holding that the assessee is not only a builder but also a developer of the property and it had fulfilled all the conditions laid down in section 80-IB(10) of the Act. 6. It is the case of the Revenue that the assessee, as a power of attorney holder of land owners, had transferred the undivided share of the property to the prospective buyers and thereafter the prospective buyers entered into a construction agreement with the assessee for building their flats. According to the Revenue, the prospective buyers are the real owners of the land and the assessee was entrusted with the works contract for construction of flats. If the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roperty in the name and style Vimalachal in Vepery, Poonamallee High Road, Chennai. The terms of agreement stated that the assessee had agreed to build an extent of 1,91,990 sft. super built-up area on the said property. The owner of the property, namely, M/s. Hotel Mullai Pvt. Ltd. would be paid a sum of ₹ 600/- per sft., worked out on the super built-up area, towards the sale of proportionate undivided share of the land transferred to the buyer. Clause 4 of the agreement stated that the assessee, as a builder, would collect the cost of the land and pay the same to the owner. In terms of the agreement thus reached between the parties, a deed of power of attorney was given to the assessee by the owner of the property for carrying on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made on the basis of properly executed agreements including power of attorney. 11. In all the above decisions the Hon ble jurisdictional High Court has upheld the contentions of the assessees that the legal ownership of the land is not an inevitable criterion to qualify an assessee as a developer and builder of housing projects, provided the other statutory conditions are satisfied. It is to be seen that the assessee in the present case is following a widely approved business model employed in the business of housing development projects, not only in the State of Tamil Nadu, but also almost throughout the country. It is a common practice that the developers of the project identify suitable land and enter into agreements with the land o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee company, has obtained the approval and the completion certificate in respect of the housing project developed and completed by the assessee-company and she was acting only in her fiduciary capacity recognized in law. There cannot be a dividing line between the assessee-company and its directors as far as these procedural matters are concerned. 14. The next ground raised by the revenue is that the Commissioner of Income-tax (Appeals) has not appreciated the fact that the assessment was reopened based on information. 15. In the course of the scrutiny assessment made under section 143(3), the claim of deduction made by the assessee under section 80-IB was sufficiently considered by the assessing authority. The assessing auth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under section 147 in this case. He allowed the contention of the assessee. 16. On going through the records of the case, we find that the Commissioner of Income-tax (Appeals) is justified in coming to his conclusion that the reassessment was made only on the basis of a change of opinion. In the first assessment itself, the Assessing Officer had called for all the relevant details regarding the claim of deduction made by the assessee under section 80-IB(10). The reply filed by the assessee contained all the necessary details sought for by the Assessing Officer. Every aspect of the issue was considered by the Assessing Officer in detail. Thereafter, no fresh material has been brought on record before the assessing authority. The assessing ..... X X X X Extracts X X X X X X X X Extracts X X X X
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