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TMI Blog2012 (8) TMI 66X X X X Extracts X X X X X X X X Extracts X X X X ..... lopment of the housing projects, the assessee should not be allowed deduction u/s.80IB(10) - it has to be ascertained whether it was a “work contract” or a “Development Contract - in favour of revenue for statistical purposes. - I.T.A. No.3265/Ahd/2009 - - - Dated:- 22-6-2012 - SHRI MUKUL Kr.SHRAWAT, AND SHRI T.R. MEENA, JJ. Appellant by : Shri Samir Tekriwal, Sr.D.R. Respondent by : Shri P.M.Mehta O R D E R PER SHRI MUKUL Kr. SHRAWAT, JUDICIAL MEMBER : This is an appeal filed by the Revenue arising from the order of the ld.CIT(A)-II, Baroda dated 18.9.2009 and the grounds raised are reproduced below:- 1. On the facts and in the circumstances of the case and in law, the ld.CIT(Appeals) erred in allowing the d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s further fortified by the requirement of approval by the local authority as well as grant of completion certificate by the local authority under clause (ii) of the Explanation below section 80IB(10), both of which are granted to the landowner, thus treating him alone as running the undertaking from the beginning to the end. 5. The ld.CIT(Appeals) erred in dispensing with the ownership of land intrinsically linked with the approval by the local authority, also in disregard of section 80IB(10)(b) providing for the condition of minimum size of the plot of land, which can be fulfilled only by the landowner and the person getting approval from the local authority. 6. The ld.CIT(Appeals) erred in making assumption regarding passing on of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... land owners. The consideration as per assessee paid to the land owners amounted to Rs.1,45,87,350/-. It was contested that the entire risks and responsibilities of the said housing project was borne by the assessee firm. Ld.CIT(A) has referred the decision of M/s.Shakti Corporation bearing ITA No.1503/Ahd/2008 order dated 07.11.2008. Ld.CIT(A) has also made an observation that although the land was not registered in the name of the assessee-developer, but the total cost of the land of Rs.1,45,87.350/- was paid to the land-owners. The ld.CIT(A) has therefore held that the control over the land was with the assessee and the assessee had undertaken the risks for the development of the said project and the cost borne by the assessee for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re the assessee has entered into the agreement for a fixed remuneration merely as a contractor to construct or develop the housing project on behalf of the landowner. The agreement entered into in that case will not entitle the Developer to have the dominant control over the project and all the risks involved therein will vest with the landowner only. The interest of the Developer will be restricted only for the fixed remuneration for which he would be rendering the services. The decision in the case of Radhe Developers (supra) has not dealt with such situation. The proposition of law laid down in the case of Radhe Developers cannot be applied universally without looking into the development agreement entered into by the Developer along w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r and has got the fixed consideration from the landowner for the development of the housing projects, the assessee should not be allowed deduction u/s.80IB(10) to the assessee. 5. On examination of the facts and in the light of the view already taken by us, we hereby restore this issue back to the file of the AO to redecide in the light of the following directions:- (a) The relevant terms of development agreement are to be examined so as to ascertain the terms on which the assessee was granted right of construction of a housing project. (b) On the basis of the terms and conditions, it has to be ascertained whether it was a work contract or a Development Contract . (c) On the basis of the terms and conditions, it has to be examin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by financial institutions. (l) The risk element connected with the said housing project has also to be examined. (m) The Assessing Officer has to examine the size of the plot on which project is constructed. (n) The Assessing Officer has to examine built-up area of sanctioned unit whether will in the prescribed limit. 6. In addition to the above guidelines, once the matter is going back for reconsideration, then the agreements connected to the land and the details of the approval granted by the local authority permitting to development of the housing project can also be examined if deem fit. Since the Hon ble High Court has given the verdict in favour of the assessee after due ascertainment of these basic facts, therefore it is a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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