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2018 (3) TMI 1733 - AT - Income TaxDisallowance of deduction u/s 80IB(10) - basic condition for availing the deduction were not fulfilled by the assessee - assessee is not a Developer but only a land owner and the Project was not completed within the stipulated time period - CIT- A allowed claim - HELD THAT - As decided in assessee s own case 2015 (12) TMI 564 - ITAT JAIPUR no error or illegality in the impugned order of ld. CIT (A) in allowing the claim of the assessee under section 80IB (10) as held if the development plans and other approvals are in the name of assessee its claim for deduction u/s 80(IB) cannot be denied on the basis that some other agency was involved in construction. This is quite understandable as for all practical purposes the assessee retains the status of a developer of housing project in the record of JDA other concerned regulatory laws and agencies of govt. related to housing and urban development and IT department takes a view which is at variance with concerned govt. departments. Before parting with we may clarify that a clarification was also sought from the parties regarding the capital gain under section 45(2) on account of conversion of the land in question to stock-in-trade and the assessee has filed the details showing the capital gain offered to tax. Accordingly in view of the above facts and circumstances of the case the appeal of the revenue has no merit - Decided in favour of assessee.
Issues Involved:
1. Disallowance of deduction under section 80IB(10) of the Income Tax Act. 2. Whether the assessee fulfilled the basic conditions for availing deduction under section 80IB(10). Issue-Wise Detailed Analysis: 1. Disallowance of deduction under section 80IB(10) of the Income Tax Act: The revenue challenged the order of the CIT (A)-I, Jaipur, which allowed the assessee's claim for deduction under section 80IB(10). The Assessing Officer (AO) had disallowed this deduction on two primary grounds: the assessee was not a developer but merely a landowner, and the housing project was not completed within the stipulated time period. The CIT (A) allowed the deduction by following the Tribunal's order for the earlier assessment years in the assessee's own case. The Tribunal noted that the identical issue had been previously considered and decided in favor of the assessee for the assessment years 2009-10 to 2011-12 and 2012-13. The Hon’ble Jurisdictional High Court upheld the Tribunal's decision, confirming the CIT (A)'s findings. The High Court observed that the AO's disallowance was based on the incorrect assumption that the assessee was merely a landowner and not a developer, and that the project was not completed within the stipulated time. The Tribunal reiterated that the assessee had undertaken various activities crucial for the development of the housing project, including obtaining land conversion for residential use, coordinating with local authorities for plan sanctions, and developing the necessary infrastructure. The Tribunal emphasized that the assessee retained rights of supervision and transfer of flats, which substantiated their role as a developer. 2. Whether the assessee fulfilled the basic conditions for availing deduction under section 80IB(10): The AO had also disallowed the deduction on the grounds that the assessee violated the provisions of clauses (e) and (f) of section 80IB(10), which were introduced w.e.f. 01.04.2010. The CIT (A) found that the flats in question were allotted before these provisions came into force, and hence, there was no violation. The Tribunal upheld the CIT (A)'s determination that the flats were allotted pursuant to an agreement to sell dated 14.07.2009, before the new provisions were applicable. The Tribunal further noted that the assessee had provided sufficient evidence, including agreement copies, to support their claim. The Tribunal also referenced several judicial precedents that supported the assessee's eligibility for deduction under section 80IB(10), despite the involvement of a development agreement with another builder. It was highlighted that the assessee's comprehensive involvement in the project, from land conversion to obtaining necessary approvals and infrastructure development, qualified them as a developer. In conclusion, the Tribunal found no error or illegality in the CIT (A)'s order allowing the deduction under section 80IB(10). The Tribunal dismissed the revenue's appeal, affirming the assessee's eligibility for the deduction based on consistent judicial findings and the principle of consistency. Judgment: The appeal of the Revenue was dismissed, and the order of the CIT (A) allowing the deduction under section 80IB(10) was upheld. The decision was pronounced in the open court on 22/03/2018.
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