9911796707
TMI Blog2011 (12) TMI 356X X X X Extracts X X X X X X X X Extracts X X X X ..... S.K. Gupta, for the Revenue M.G. Patel, for the Assessee ORDER A.K. Garodia, Accountant Member 1. This is Revenue's appeal directed against the order of learned CIT(A)-XI, Ahmedabad, dt. 9th Nov., 2009 for the asst. yr. 2006-07. The grounds raised by the Revenue are as under: "The learned CIT(A)-XI, Ahmedabad has erred in law and on facts in deleting addition of Rs.23,89,356 made on account of disallowance of deduction under s. 80-IB of the Act. On the facts and in the circumstances of the case, the learned CIT(A)-XI, Ahmedabad ought to have upheld the order of the AO. It is therefore prayed that the order of the learned CIT(A)-XI, Ahmedabad may be set aside and that of the AO be restored." 2. The brief facts till the assessment stage are noted by learned CIT(A) in para 3 of his order which is reproduced below: "3. The facts of the case are that during the assessment year under consideration the appellant company entered into 'development agreement' with Kalptaru Park Millennium Co-op. Housing Ltd. for the purpose of developing housing project. The appellant, claiming to be developer claimed deduction under s. 80-IB(10) of the IT Act, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntract is very wide as per Karnataka Sales-tax Act and therefore, this judgment is not applicable for income-tax purposes. Reliance was placed by him on the following judgments: (a) Amaltas Associates vs. ITO 11 Taxman.com 420 (Aha); (b) ITO vs. Sarthi Consultancy (P) Ltd. (ITA Nos. 798/Ahd/2009 and 934/Ahd/2009); (c) Nikha Associates vs. ITO 12 Taxman.com 76 (Ahd)(Trib); (d) Asstt. CIT vs. Smt. C. Rajini (2011) 140 TTJ (Chennai) 218: (2011) 58 DTR (Chennai)(Trib) 554: 9 Taxman.com 115 (Chennai)(Trib). 5. In the rejoinder, it was submitted by the learned Departmental Representative that there is no definition of work contract in IT Act and hence, guidelines can be imported form other statute. It is also submitted that the definition in Karnataka Sales-tax Act is not different. It was submitted that as per Explanation to s. 80-IB(10), works contract is specifically excluded and hence assessee is not eligible for deduction under s. 80-IB. 6. We have considered the rival submissions, perused the material on record and have gone through the orders of authorities below and the judgements cited by both the sides. We find that the decision of CIT(A) in the present ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... consideration received from the society for development of the project was not fixed. 8.1.4 I have considered the facts of the case, the findings in the assessment order, the submissions of the AO, vide the remand report, the written submissions and arguments of the appellant and finally the case laws relied upon by the appellant. I have gone through the agreement of development entered into between the appellant and M/s Kalpataru Park Millenium Co-op. Housing Society. The terms of the agreement make it clear that the entire responsibility for executing the housing project, including obtaining local authority's approval, designing and building the houses, financing the project, getting the members for the housing project, collecting the sale consideration etc., was to be borne by the appellant Profit or loss, i.e. the difference between the receipts and expenditure was of the appellant and the society had no risk whatsoever in this regard. I am of the view that AO's reliance on cl. 15 of the development agreement (quoted above) to say that the appellant is not a developer is misplaced. In fact, the said clause makes it amply clear that the entire financial risk and the surplus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amp duty, legal fees and other charges and expenses paid or incurred to be paid for purchase or acquisition thereof and also including the interest paid and/or to be paid on amount borrowed for the said purpose and/or late payment to land owners for the purchase of the said land. (b) The cost to be incurred for construction, which shall include for labour, material, erection, installation or construction of infrastructures, common amenities facilities and services. (c) Cost and expenses to be incurred for making arrangement for water supply, drainage, electricity and other facilities and services to be provided in the scheme, which shall include the laying of cables, pipelines, other installation charges, security deposits, scrutiny fees or any other amount to be paid or expenses to be incurred', in any form whatsoever. Cost and expenses of every discretion whatsoever to be incurred or paid for obtaining approvals or sanction to the layout plans, construction plans, revised plans from Taluka Panchayat or from any other concerned authority or authorities. Cost and expenses to be incurred for obtaining all and every permissions, certificates, approvals, sanctions as m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent agreement with the owner of the land and this issue was not before the Hon'ble apex Court as to whether the assessee is a developer or not. The decision of the Hon'ble apex Court in that case is merely on this aspect as to whether the assessee is liable to pay turnover tax under the Karnataka Sales-tax Act or not. While deciding the issue, the Hon'ble apex Court has proceeded on the basis of the definition of the works contract in Karnataka Sales-tax Act. Admittedly, there is no definition of the works contract in the IT Act. It is also noted by the Hon'ble apex Court in that case that the definition of the works contract in Karnataka Sales-tax Act is very wide and not restricted to a works contract as normally understood. It is also observed that it is a wide definition to include any agreement for carrying out building or construction activities for cash, deferred payment or other valuable consideration. It is observed by the Hon'ble apex Court that even if the owner of the property enters into an agreement to construct for cash, deferred payment or other valuable consideration for somebody else, it will be works contract. If this definition of works contract is imported as i ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
