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TMI Blog2012 (8) TMI 509X X X X Extracts X X X X X X X X Extracts X X X X ..... nd made substantial investment for promotion of the project - the assessee could establish that it was a project developer which satisfied the conditions specified in Section 80- IB (10) as disallowance could not have been done considering the assessee as a mere works contractor The term “works contract” in the Act is an inclusive definition. It does not include merely a works contract as normally understood. It has a wide definition which includes “any agreement” for carrying out building or construction activity for cash, deferred payment or other valuable consideration. The definition as given in that Act does not make any distinction based on as to who carries on the construction activity - in favour of assessee. - I.T.A. No. 1411/M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esidential units. As per the assessee, it had contributed capital and taken loans for promotion and development of the project. It had raised working capital and term loan from City Union Bank. As per the assessee, it had obtained approval from Chennai Metropolitan Development Authority (CMDA) and also obtained all the approvals and permissions required, in its name. It was only after getting approvals, assessee offered to sell proposed dwelling units and started projects. After completion of projects, assessee obtained completion certificate from CMDA. The residential units were handed over to buyers after completion of projects. It clearly showed that the assessee is in development of the project and not a mere works contractor. According ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re. The residential units were within the area mentioned in the Section. He also noted that the decision of co-ordinate Bench of this Tribunal in the case of Smt. C. Rajini (supra) supported the assessee s case. He thus directed the A.O. to allow the claim of the assessee. 4. Now before us, learned D.R. submitted that Explanation to Section 80-IB(10) of the Act clearly excluded a works contractor. Here, the assessee first entered into agreement for sale of undivided share of land. Separate agreements were entered for sale of undivided share land and construction of flats with the prospective buyers and the second agreement clearly showed that it was merely a works contractor for flat construction. Therefore, assessee could not be given th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch land and for construction of flats therein. But, this would not mean that assessee was not a developer of the project or that assessee was only a contractor. Assessee had obtained loans in its name and made substantial investment for promotion of the project. In our opinion, assessee would not be caught within the meaning of Explanation to Section 80-IB(10) inserted by the Finance Act, 2009 with effect from 1.1.2001. Said Explanation reads as under:- For the removal of doubts it is hereby declared that nothing contained in this sub-section shall apply to any undertaking which executes the housing project as a works contract awarded by any person (including the Central or State Government. 7. In a similar situation, in a case of Smt ..... X X X X Extracts X X X X X X X X Extracts X X X X
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