9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2015 (11) TMI 120 - AT - Income TaxClaim of deduction u/s. 80IB(10) - A.O denied the deduction mainly for the reason that according to the A.O, Assessee was a Developer but a Contractor - CIT(A) allowed the claim - Held that - CIT(A) while granting relief to the Assessee has given a finding that the land cost was debited by the Assessee to its Profit and Loss account, the entire risk and control over the residential unit of the two schemes developed by the Assessee was of the Assessee. She has further given a finding that the tests laid down in the case of Shakti Corporation 2008 (11) TMI 436 - ITAT AHMEDABAD to claim deduction u/s. 80IB(10) stand fulfilled in the case of Assessee. With respect to the area in case of certain flats where it was held by DVO to be in excess of 1500 sq. ft., Ld. CIT(A) has given a finding that in view of the definition of built up area , the areas of the flats did not exceed the area of 1500 sq. ft. because balcony/veranda could not be included in the built up area of 1500 sq. ft. prescribed by the statute. She has further held that commercial construction has not been found to have been incurred by the Assessee and that Assessee was eligible for deduction u/s. 80IB(10) of the Act. Before us, Revenue has not placed any material on record to controvert the findings of ld. CIT(A). In view of these aforesaid facts, we find no reason to interfere with the order of ld. CIT(A) - Decided in favour of assessee.
Issues Involved:
1. Granting of claim of deduction under Section 80IB(10) of the Income Tax Act. 2. Determination of whether the Assessee was a "Developer" or merely a "Contractor." 3. Compliance with conditions of Section 80IB(10) regarding land ownership and project execution. 4. Inclusion of balcony/veranda in the built-up area for the purpose of Section 80IB(10). 5. Commercial space restrictions applicability. Issue-wise Detailed Analysis: 1. Granting of Claim of Deduction under Section 80IB(10): The primary issue was whether the Assessee was entitled to claim a deduction under Section 80IB(10) of the Income Tax Act. The Assessee, a partnership firm engaged in land development and construction of housing projects, claimed a deduction of Rs. 38,99,189/- for the Assessment Year (A.Y.) 2006-07. The Assessing Officer (A.O.) denied this claim, but the Commissioner of Income Tax (Appeals) [CIT(A)] allowed it. The Revenue appealed against this decision. 2. Determination of Whether the Assessee was a "Developer" or Merely a "Contractor": The A.O. argued that the Assessee acted merely as a contractor since the housing project was approved in the name of the landowners, Jagnath (Saraspur) Shops & Housing Cooperative Society Ltd., and not in the Assessee's name. The CIT(A) disagreed, stating that the Development Agreement dated 15.04.2004 granted dominant control over the project to the Assessee, making it the "Developer" rather than a "Contractor." The Tribunal upheld CIT(A)'s view, noting that the Assessee bore the entire risk and control over the project, thus fulfilling the criteria to be considered a "Developer." 3. Compliance with Conditions of Section 80IB(10) Regarding Land Ownership and Project Execution: The A.O. contended that since the land was owned by the Cooperative Society and not the Assessee, the conditions for Section 80IB(10) were not met. The CIT(A) noted that the Assessee had practically purchased the land (as the land cost was debited in the Profit & Loss account) and had dominant control over the project as per the Development Agreement. The Tribunal agreed with CIT(A), emphasizing that the Assessee's dominant control and responsibility for the project execution qualified it for the deduction under Section 80IB(10). 4. Inclusion of Balcony/Veranda in the Built-up Area for the Purpose of Section 80IB(10): The A.O. argued that some residential units exceeded the 1500 sq.ft. limit due to the inclusion of balcony/veranda in the built-up area. The CIT(A) referenced the ITAT Mumbai decision in the case of Sheth Developers, which stated that for projects approved before 01.04.2005, the balcony/veranda should not be included in the built-up area. Since the Assessee's project was approved on 17.05.2004, the CIT(A) held that the built-up area did not exceed the statutory limit. The Tribunal upheld this interpretation. 5. Commercial Space Restrictions Applicability: The A.O. did not find any commercial construction incurred by the Assessee. The CIT(A) and the Tribunal concurred, noting that the amendment introducing commercial space restrictions was not applicable to the Assessee's project, which was approved before the amendment took effect. Conclusion: The Tribunal dismissed the Revenue's appeal, affirming the CIT(A)'s decision to allow the Assessee's claim for deduction under Section 80IB(10) for A.Y. 2006-07. The Tribunal found that the Assessee met the necessary conditions, including being a "Developer" with dominant control over the project, and that the built-up area calculations were correctly interpreted. The same reasoning applied to the appeals for A.Y. 2007-08 and 2008-09, which were also dismissed.
|
