TMI Blog2018 (11) TMI 1885X X X X Extracts X X X X X X X X Extracts X X X X ..... r seeking deduction under section 80IB(10) of the Act. Therefore, in view of the above discussion we set aside the order of the CIT(A) holding that the assessee is not entitled for deduction under section 80IB(10) of the Act. Whether assessee is not entitled to deduction u/s. 80IB in view, inter alia of the provisions of Section 80AC wherein it is provided that the assessee is required to file return of income on or before the date specified in Section 139(1)? - As identical issue has already been decided in the case of Uma Developers ( [ 2016 (9) TMI 992 - ITAT MUMBAI] wherein it was categorically held that the claim of the assessee cannot be disallowed under section 80IB(10) of the Act only on the ground that the return of income was filed beyond the period stipulated under section 139(1) of the Act in view of the provisions of Section 80AC of the Act as the same is beyond the scope of Section 139(1) of the Act the submission of return within time as specified under sub section (4) of section 139 has to be taken as sufficient compliance for the provision of the Income Tax Act, 1961, as it was expounded that the sub section (1) and sub section (4) of section 139 have to be r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lage Kavesar within the Panchayat Samiti of Thane District, and Zilla Parishad of Thane. From and out of this 13000 square meters of land the Assessee handed over 1550.10 square meters of land to the Government through Thane Municipal Corporation. The remaining land of 11449.90 square meters was retained by the Assessee for developing a housing project, 'Housing for Weaker Section'. It was also submitted that the assessee entered into a Development Agreement with M/s. Lalani Developers on 14th November 2006 on such terms and conditions as recited in the said Development Agreement. One of the conditions was that the Assessee would be entitled to a Built-up Area of 35% of the entire project which comprised of 72 Flats. The assessee has sold these flats and the profit earned on these flats is claimed as deduction under section 80IB(10) of Act. During the year in question the assessee has sold seven residential flats for a total consideration of ₹ 2,85,55,365/- and the net income from business after deducting expenses is arrived at ₹ 2,79,01,503/-. This amount of ₹ 2,79,01,503/ is claimed as deduction under section 80IB(10) of the Act. The AO has recited vario ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bad in law and on facts. 5. On the other hand, the learned D.R. relied upon the orders passed by the Revenue authorities. 6. We have heard both the parties, perused the record and orders of the Revenue authorities. From the record we found the 'development of a housing project' commences with the acquisition of land, conversion of land, approvals from various appropriate authorities, plan sanctions, commencement of civil construction supported by commencement certificate, completion of the civil construction and finally it has to end with the obtaining of occupancy certificate from the appropriate authorities. As per the assessee the concept of constructing tenements for weaker section was conceived by him way back in 2002. Being an absolute owner of a parcel of converted-land, the assessee moved an application in the prescribed form for construction of dwelling units for weaker section and low group of the society, as per the guidelines issued by the Government of Maharashtra under Government Resolution No. 1086/2340/XIII dated 22nd August 1996. This application was moved to the Secretary to the Government of Maharashtra, Housing and Special Assistance Department, M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... surances to the Owner. From the record we noticed that the property was never parted to the Developer directly or indirectly. The assessee continued to have the control over the entire property in question and this is evident from Clause No. 28 recited at Pages 28 and 29 which is reproduced as under: - It is express intention of the parties that by execution these presents the Owner is not transferring or intending to transfer to the Developers the ownership or possession of the said property or any part thereof to the Developers. This Agreement is also not a lease nor an agreement to sell the said property nor it is intended to give the possession of the said property to the Developers under the Section 53-A of the Transfer of Property Act, 1882. It is agreed and expressly clarified that bare permission and licence will be given to the Developers to enter upon the said property for the construction of the said building and sell all flats, offices, garages, shops, car parking spaces under the stilt/covered/open in the said new building/s upon the terms, conditions and provisions herein contained. The assessee also received an Interest Free Refundable Security Deposit of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ingly. The approval and initial sanctions were received in August 2005. It was only when the question of requirement of expertise in construction activity and want of funds to enable the project arose, that M/s. Lalani Developers were short-listed and granted Development Rights. It is the submission of the assessee that his nomenclature continued to be that of a Developer in-spite of executing a Development Agreement in favor of M/s. Lalani Developers. The assessee is therefore eligible for a claim of deduction under section 80IB(10) of the Act. The assessee has given permission to the developer to enter upon the said property for construction of the proposed building in accordance with the sanctioned plans itself goes to show that obtaining sanction and putting up proposal for construction on the said land is a part of development activity . Thus in this way also the income earned from this development activity is allowable under section 80IB(10) of the Act. In this regard we draw strength from the judgement of the Hon'ble Karnataka High Court in the case of CIT vs. Sharvanee Constructions (2012) 209 Taxman 6 (Kar) in which it was held as under: - It is not merely buildin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Conclusion It is not merely building housing project, which attracts the provision of section 80IB (10) but the developing and building housing project, which attracts the provision. 8. We also get support by the order of the Coordinate Bench of the Tribunal in the case of Abdul Khader vs. ACIT (2012) 137 ITD 188 (Bang.) wherein it was held as under: - On Joint reading of S. 80IB(10) and explanation thereto it is clear that deduction as is allowable to an undertaking developing and building housing project approved, it is nowhere mentioned that for claiming this deduction, construction has to be carried out by undertaker, moreover explanation clarified, any undertaking which executed housing project as works contract awarded by any person is not eligible for claiming said deduction which clearly shows even if any undertaking is constructing housing project under a works contract entered by person is not eligible for deduction. Only reason for denying the deduction u/s 80IB(10) to assessee was assessee had not carried out any construction activity. Assessee made contribution of his capital in shape of land and incurred initial expenses for development and building ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ded Share, Right, Title and Interest in the Property. This Partition Deed is duly registered before the Office of the Sub-Registrar of Assurance, Mumbai under Sr. No. Bom/1776/1/8/1970. By virtue of this Deed, the said Mr. Hussein Ismail Dawoodani is seized possessed of the entire property. 22.07.2002 Appointed M/s. Joshi Deshware Associates for obtaining NOG (No Objection Certificate) from Urban Land Ceiling Department for the proposed development on the land in question. 04.10.2002 Received order u/s. 8(4) of ULC Act for the land bearing no. 194/3 (3870 square meters), 195/2 (320 square meters), 199/4 (13000 square meters) the total area of the 3 plots were 17190. Out of the said area 11973 square meters is declared as surplus area. 07.11.2002 Application filed before the Secretary, Housing and Special Assistance Department, Government of Maharashtra, Mantralaya, Mumbai (through the Competent Authority (ULC) Urban Agglomeration) for construction of tenements for weaker section of society under section 20 of the Urban Land (Ceiling Regulation) Act 1976 as per gui ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 07.10.2009 Occupancy Certificate dated 7th October 2009 for B Wing, C Wing and D Wing issued by Thane Municipal Corporation. 31.03.2012 Occupancy' Certificate dated 7th October 2009 for A Wing issued by Thane Municipal Corporation. 10. After considering the facts and circumstances of the present case we are of the view that Section 80IB(10) of the Act clearly speaks about the deduction in the case of an undertaking developing and building housing project and such a development of housing project is not possible without contribution of land and specified pre-approved sanction. In the present case the process of acquisition of land by the assessee, conversion from agricultural to non-agricultural, seeking statutory approvals by the assessee for the purpose of construction of dwelling units/houses for weaker sections from the Government of Maharasthra, appropriate plan sanctions, and finally the grant of bare permission and licence to the developer to enter upon the property for construction of the said building was also falls within the ambit of undertaking of development and building housing projects̶ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the issue of whether the AO s disallowance of the assessee s claim for deduction under section 80IB(10) of the Act, for the reason that the return of income for A.Y. 2012-13 was filed beyond the due date stipulated under section 139(1) of the Act (but was filed within the time allowed under section 139(4) of the Act), in view of the provisions of section 80AC of the Act is beyond the scope of the provisions of section 143(1) of the Act. We concur with the view of the learned CIT(A) that as per the ratio of the decisions of the Hon'ble Bombay High Court in Trustees of Tulsidas Gopalji Charitable Chaleshwar Temple Trust (supra) and of the Coordinate Bench n the Yash Developers (supra), even in cases where the return of income is filed beyond the due date stipulated under section 139(1) of the Act, the deduction should not be disallowed under section 143(1) of the Act merely in view of the provisions of section 80C of the Act. We also find on a perusal of the provisions of section 143(1) of the Act, that the AO s action in disallowing the assessee s claim for deduction under section 80IB(10) of the Act, since the return of income was filed beyond the period stipulated under sec ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
