2015 (5) TMI 1006 - AT - Income Tax

Deduction under section 80IB(10) - CIT(A) allowed the claim - Held that - CIT(A) has given a finding that the entire risk for development of the project was taken by the assessee and the assessee was not paid remuneration as contractor. The assessee purchased the land for fixed consideration and developed the housing project on its own cost, and there was no joint venture with the land owner. This finding of the CIT(A) has not been controverted by the DR by bringing any positive material on record. Further, no material was also brought on record to show why the decision of the Tribunal in the case of Shakti Corporation (2008 (11) TMI 436 - ITAT AHMEDABAD) and Radhe Developers (2007 (6) TMI 316 - ITAT AHMEDABAD ) should not have been followed by the CIT(A). In the absence of the same, we find no good reason to interfere with the order of the CIT(A), which is confirmed and the ground of the appeal of the Revenue is dismissed. - Decided in favour of assessee

Summary

Issues involved:
Appeal against CIT(A)'s order directing deduction under section 80IB(10) of the Act.

Analysis:
1. The Revenue appealed against the CIT(A)'s decision to allow the assessee's claim for deduction under section 80IB(10) of the Act amounting to Rs. 3,61,25,632.
2. The Revenue's contention was that the assessee, engaged in housing project development, did not meet the ownership criteria of the land essential for claiming the deduction.
3. The AO disallowed the deduction citing reasons like the land not being in the firm's name and the appellant acting as an agent for land consideration collection and a contractor for construction.
4. However, the CIT(A) allowed the deduction after considering that the appellant had dominant control over the project, bore all risks, purchased the land, and developed the housing project without a fixed remuneration agreement.
5. The CIT(A) based the decision on the development agreement, the Tribunal's precedent in the case of Shakti Corporation and Radhe Developers, and the absence of joint venture with the landowner.
6. The Tribunal found the CIT(A)'s analysis sound as the appellant took all development risks, purchased the land, and did not have a joint venture with the landowner.
7. The Revenue's appeal was dismissed as no new material was presented to challenge the CIT(A)'s findings or the Tribunal's previous decisions.

This detailed analysis covers the key issues and the decision-making process involved in the legal judgment.