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TMI Blog2022 (7) TMI 683X X X X Extracts X X X X X X X X Extracts X X X X ..... g these appeals en masse. 3. Grounds of appeal raised by the assessee in lead case in ITA No. 2102/AHD/2016 for AY.2010-11 are as follows: "1. On the facts and circumstances of the case as well as law on the subject, the learned Commissioner of Income Tax (Appeals) has erred in confirming the action of assessing officer of passing order u/s 143(3) of the Act served on 03.04.2013 upon the assessee beyond the statutory time limit prescribed u/s 153(1)(a) of the Act which is thus bad in law, illegal, void ab initio and without jurisdiction and hence, the assessment is liable to be annulled. 2. On the facts and circumstances of the case as well as law on the subject, the learned Commissioner of Income Tax (Appeals) has erred in confirming the action of assessing officer in disallowing deduction claimed u/s 80IB(10) of the IT. Act amounting to Rs. 44,85,887/-. 3. On the facts and circumstances of the case as well as law on the subject, the learned Commissioner of Income Tax (Appeals) has erred in confirming the action of assessing officer of making addition of entire development and/ or construction receipts of Rs. 69,06,611/- as alleged unrecorded receipts. 4. It is therefore ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er under section 143(3) was passed beyond the statutory limit. The assessment order passed under section 143(3) of the Act dated 31.03.2013, was served on the assessee, on 03.04.2013, that does not mean that order was passed on 03.04.2013. The service of assessment order on the assessee is a different thing altogether. Therefore, we dismiss the ground no.1 raised by the assessee. 7. Ground No.2 raised by the assessee relates to disallowance of deduction claimed by the assessee under section 80IB(10) of the Act, amounting to Rs.44,85,887/-. This is a common ground in all three appeals of the assessee (that is, in ITA Nos.2102 to 2104/Ahd/2016), which is related to rejection of assessee's claim under section 80IB(10) of the Act. Therefore, we adjudicate said common ground No.2 by taking lead case in ITA No.2102/Ahd/2016. 8. Succinct facts qua common ground No.2 are that during the year under consideration, the assessee is engaged in the business of construction of residential houses. The assessee company has shown gross receipts of Rs.11,33,57,647/- and gross profit at Rs.2,48,65,246/- which is @ 21.94%. The assessee company has claimed deduction of Rs.44,85,887/- u/s 80IB(10) of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2009 but sale deeds were executed in the current year is of no use. Since the assessee has treated the sale, only on the registration, then it has to be taken as allotted in the current year only. (II)Apart from that, during the appellate proceedings for A.Y. 2009-10, the assessee company has submitted supplementary agreement dated 22.10.2008, to establish that it is an undertaking engaged in developing and building housing projects. The ld.CIT(A)-1, Surat, while deciding the appeal for A.Y. 2009-10 has opined in paras 6.2 to 6.4 of the order dated 01.02.2013 as under: "The assessee further stated that built up area of each unit is not more than 1500 Sq. feet. The supplementary Development Agreement dated 22.10.2008 (clause- 12) is relied upon by the assessee company to establish that it is an undertaking engaged in developing & building, housing projects. The relevant para reproduced by the assessee on page-4 of its submission dated 27.11.2011 addressed to the Assessing Officer is reproduced herein under:- "This supplementary Deed is one of the part of registered Development Deed Regi. On 20.04.2007 at Sub-Registrar Office, Bardoli Book No.l, Regi. No. 1046. Mr. Nitin Gopal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a 'Construction Contractor' therefore not eligible for deduction u/s 80IB(10) of the Act. Aggrieved, by the order of ld CIT(A), the assessee is in further appeal before us. 12. Shri Sapnesh Seth, Learned Counsel for the assessee submitted that assessee is bearing the risk and rewards of the project and submitted supplementary Agreement, dated 22.10.2008, stating that plots shall be sold to the purchasers and the purchasers will get the construction work done by the assessee. Therefore, ld Counsel contended that assessee's claim is genuine and assessee is entitled to claim deduction under section 80IB(10) of the Act, therefore deduction should be allowed to the assessee. 13. On the other hand, Ld DR for the Revenue pleads that assessee has failed to satisfy the conditions laid down under section 80IB(10) of the Act. The assessee is not bearing the risk/right of profits/losses. The original owner of land would have the right to sell the developed plots, therefore assessee- company is a 'Construction Contractor' and therefore not entitled to claim deduction u/s 80IB(10) of the Act. 14. The ld DR also pointed out that letter dated 09.07.2008 of Nagar Niyojan (town pl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... udgment of Hon`ble Supreme Court in the case of Commissioner of Customs (Import), vs M/S. Dilip Kumar And Company, Civil appeal No.3327 of 2007, dated 30 July, 2018, wherein it was held that: "52. To sum up, we answer the reference holding as under (1) Exemption notification should be interpreted strictly; the burden of proving applicability would be on the assessee to show that his case comes within the parameters of the exemption clause or exemption notification. (2) When there is ambiguity in exemption notification which is subject to strict interpretation, the benefit of such ambiguity cannot be claimed by the subject, assessee and it must be interpreted in favour of the revenue. (3) The ratio in Sun Export case (supra) is not correct and all the decisions which took similar view as in Sun Export Case (supra) stand overruled." 17. In the light of the above facts and circumstances, we note that assessee company has violated the basic conditions as laid down under sec. 80IB(10) of the Act. At the cost of repetition, we reproduce the brief objections of assessing officer: "a) The assessee cannot be considered an undertaking, developing and / building housing projects. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT V. Abhishek Corporation (supra) has upheld the net profit at 1.31% as declared by the assessee in that case. The net profit rate disclosed at 4.55% during the assessment year under consideration by the assessee in books of accounts and considering the facts that the project undertaken by the assessee comes under deduction of section 80IB(10) of the Act, hence, there may not be any intention to disclose the lower rate of profit. Considering these facts, and taking in to account net profit in construction business, it would be reasonable to estimate 6% of net profit on total on-money receipts of Rs.4,72,02,368. Accordingly, the AO is directed to tax net profit @6% on total on-money receipts of Rs.4,72,02,368. In view of these facts and circumstances, the Ground No. 4 to 6 of appeal are partly allowed." 22. We note that as the issue is squarely covered in assessee's own case wherein the Co-ordinate Bench held that it would be reasonable to estimate 6% on net profit on total on-money receipts. We note that addition of development/construction receipts of Rs.69,06,611/- was made by the assessing officer, treating it alleged unrecorded receipts/on-money. Accordingly, Assessing offi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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