9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2015 (7) TMI 293 - AT - Income TaxEligibility for deduction u/s 80IB(10) - CIT(A) observed that AO failed to consider and appreciate the detailed explanation given by the assessee during the course of assessment proceedings highlighting the facts that he fulfilled all the requisite conditions for eligibility of claim u/s 80IB(10) and allowed claim - Held that - The terms and conditions entered into between the assessee and the society as per the development agreements provided all the dominant control and rights over the land to the assessee and the assessee developed and constructed the housing project at its own cost and would remain owner of the building without any interference from the society. The development agreements in question did not provide that the assessee would be working as a contractor or agent on behalf of the society. The assessee acquired the land in question and has developed the housing project at its own cost as per requirement of section 80IB(10) of the Act. The assessee has developed and constructed the housing project as per the development agreements by incurring total expenditure and received the sale consideration. The assessee satisfied the requirements of provisions of section 80(IB)(10). Moreover once plan is approved by AUDA on papers submitted by assessee and others, it would be deemed approval of construction of housing units in favour of the assessee, more so, when assessee entered into agreements for developing the whole of the property. In view of the above, CIT(A) was justified in granting deduction because assessee has acquired right of developing housing project, incurring total expenditure and taking all risks thereof. There is no infirmity in the order of CIT(A). So we are inclined to uphold the same. - Decided against revenue. Disallowance u/s 40(a)(ia) - Non deduction of TDS on labour/transport charges - CIT(A) deleted the disallowance - Held that - there is no infirmity order of CIT(A) who has allowed the disallowance by following the decision of the Tribunal in the case of Kanubhai Ramjibhai Makwana (2010 (12) TMI 172 - ITAT, AHMEDABAD) wherein it has been held that in case TDS has been deposited on or before due date of filing of return, the same is allowable. - Decided against revenue.
Issues Involved:
1. Eligibility for deduction under section 80IB(10) of the Income Tax Act. 2. Ownership and development rights of the land. 3. Classification of the assessee as a contractor or developer. 4. Compliance with the conditions laid down by the Hon'ble Gujarat High Court in Radhe Developers. 5. Disallowance under section 40(a)(ia) of the Act for non-compliance with TDS payment timelines. Issue-wise Detailed Analysis: 1. Eligibility for Deduction under Section 80IB(10): The primary issue in all appeals was whether the assessee was eligible for deduction under section 80IB(10) of the Income Tax Act. The CIT(A) had directed the Assessing Officer to allow the assessee's claim for deduction, which was challenged by the Revenue. The CIT(A) observed that the assessee fulfilled all the conditions for eligibility under section 80IB(10), including the involvement of the assessee's funds and the risks undertaken for the development of the housing project. The CIT(A) noted that the assessee had acquired all substantive development rights and was responsible for the entire development of the housing project, which included incurring all expenditures and receiving the entire sale consideration from the buyers. 2. Ownership and Development Rights of the Land: The Revenue contended that the assessee was not the owner of the land and hence not eligible for deduction under section 80IB(10). The CIT(A) found that the assessee had dominion control over the land and the development project, even though the land was formally in the name of the Dhan Vihar Co-op. Housing Society Ltd. The CIT(A) emphasized that there is no stipulation in section 80IB(10) requiring the developer to be the owner of the land. The CIT(A) concluded that the assessee had acquired rights over the project and land through development agreements and was responsible for all aspects of the development. 3. Classification of the Assessee as a Contractor or Developer: The Revenue argued that the assessee was merely a contractor and not a developer, as the development agreement indicated that the society retained ownership of the land and the project. The CIT(A) disagreed, stating that the assessee had taken on the full responsibility for the development and construction of the housing project, including financial arrangements, risk management, and profit realization, which are characteristics of a developer rather than a contractor. 4. Compliance with Conditions Laid Down by the Hon'ble Gujarat High Court in Radhe Developers: The Revenue claimed that the CIT(A) did not adhere to the guidelines laid down by the Hon'ble Gujarat High Court in Radhe Developers. The CIT(A) examined the facts in light of these guidelines and found that the assessee satisfied all the conditions for claiming deduction under section 80IB(10). The CIT(A) noted that the assessee had full authority to develop the land, engaged professionals, enrolled members, collected charges, and bore the risk of profit or loss from the project. 5. Disallowance under Section 40(a)(ia) for Non-compliance with TDS Payment Timelines: In the appeal for the Assessment Year 2008-09, the Revenue challenged the deletion of disallowance of Rs. 27,44,214/- made by the Assessing Officer under section 40(a)(ia) for late deposit of TDS. The CIT(A) allowed the deduction, following the decision of the ITAT Ahmedabad in the case of Kanubhai Ramjibhai Makwana, which held that TDS deposited on or before the due date of filing the return is allowable. The Tribunal upheld the CIT(A)'s decision, finding no infirmity in the order. Conclusion: The Tribunal upheld the CIT(A)'s orders allowing the assessee's claims for deduction under section 80IB(10) and deleting the disallowance under section 40(a)(ia). The appeals of the Revenue were dismissed, affirming that the assessee satisfied all the conditions for claiming the deductions and was rightly classified as a developer.
|
