2016 (7) TMI 381 - AT - Income Tax

Deduction u/s.80IB(10) - denial of the claim of deduction u/s.80IB(10) by the AO mainly for the reason that the assessee was not the owner of the land and the permission for the construction was not obtained by the assessee and the risk and reward of the project was not of the assessee - Held that - We find that the ld.CIT(A) after considering the submissions of the assessee and after perusing the Development Agreement has given a finding that the assessee has practically purchased the land and bore the entire cost and risk for developing the project, had invested in the cost of land and had acquired dominant control over the land. She has further given a finding that the assessee has fulfilled all the required conditions laid down u/s.80IB(10) of the Act for claiming the deduction in the light of the decision of Tribunal in the case of M/s.Shakti Corporation (2008 (11) TMI 436 - ITAT AHMEDABAD ). Before us, Revenue has not placed on record any contrary binding decision in its support nor could controvert the findings of the ld.CIT(A). In view of the aforesaid facts, we find no reason to interfere with the order of the ld.CIT(A). Thus, this ground of Revenue is dismissed. - Decided in favour of assessee

Summary

Issues:
Appeal filed by Revenue against order of Commissioner of Income-Tax (Appeals) for Assessment Year 2006-07 regarding deduction u/s.80IB(10) of the Act. Cross-Objection filed by Assessee in response to Revenue's appeal.

Analysis:
The case involved an appeal by the Revenue and a Cross-Objection by the Assessee against the order of the Commissioner of Income-Tax (Appeals) for Assessment Year 2006-07 regarding the deduction u/s.80IB(10) of the Act. The Revenue contended that the deduction allowed by the Commissioner was erroneous as the Assessee was not the owner of the land where the construction activities took place. The Assessee, on the other hand, argued that all conditions for claiming the deduction were fulfilled, citing a previous decision by the ITAT Ahmedabad. The main issue revolved around whether the Assessee had acquired dominant control over the land and bore the risks and costs of the project, as required for claiming the deduction.

The Assessing Officer (AO) had denied the deduction u/s.80IB(10) to the Assessee, stating that the Assessee was not the owner of the land and did not have necessary permissions for construction. However, the Commissioner of Income-Tax (Appeals) allowed the claim by analyzing the Development Agreement and finding that the Assessee had practically purchased the land, borne all costs and risks, and acquired dominant control over the land. The Commissioner concluded that the Assessee met all conditions for claiming the deduction u/s.80IB(10) based on the ITAT Ahmedabad's decision in a similar case.

During the appeal, the Revenue argued that the Assessee did not bear the entire risk and reward of the project, which is a prerequisite for claiming the deduction. The Assessee, supported by the ITAT's previous decision, maintained that they fulfilled all conditions and should be entitled to the deduction. The ITAT, after reviewing the arguments and evidence, upheld the Commissioner's decision, stating that the Assessee had indeed fulfilled all necessary conditions and had acquired dominant control over the project, as required by law.

In the final judgment, the ITAT dismissed the Revenue's appeal and the Assessee's Cross-Objection, upholding the decision of the Commissioner of Income-Tax (Appeals) in favor of the Assessee. The ITAT found no reason to interfere with the Commissioner's order, as the Assessee had met all conditions for claiming the deduction u/s.80IB(10) based on the evidence presented and the ITAT's previous decision.