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TMI Blog2012 (11) TMI 234X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs.67,32,850/- on the ground that assessee has not fulfilled all the prescribed conditions laid down u/s 80IB of the Act. The A.O. has discussed this issue in paras 4 to 9 of his order and final finding is in paras 8 and 9 which read as under:- "8. To conclude, the deduction u/s 80IB (10) r.w.s. 80IB(1) and Rule 18BBB is admissible only to such assessee as are deriving profits from an undertaking of building and housing projects approved by the local authority, and for such approval, the assessee must legally own the land which is an inalienable constituent of any housing project. The person doing only the work of developing and constructing the building structure on the authority of the approval granted to the land owner cannot be said to be in the business of an undertaking developing and building housing projects, not only on account of not being the owner of the land, a necessary constituent of the housing project, but also an account of not having been granted the approval to execute the projects in his own right, because that involves obligations that can be discharge only by the person to whom the approval is granted. 9. Since the assessee is not the owner of land and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... over the project. All risks and reward involved with the project vest with the developer and the landowner is only entitled to a fixed remuneration. The appellant has developed the various projects in the year under consideration particulars of which was submitted to the ld. A.O. vide its letter dated nil placed at page no.25 to 33 of the Paper Book wherein the appellant has submitted the relevant documents justifying the claim and also the copy of the development agreements by which the appellant has purchased the property from the landowners. The appellant has entered into two development agreements: (A) The first agreement, the copy of which is placed at Page No.82 to 87 is with Smt. Rambaben Bholabhai Patel & Others with respect to land situated at Sayajipura R.S. No.328, 329, 330, 339, 340/paiki, 350, 337, 538, 540, 541, 543/1, 543/2, 334, 338. The agreement is titled "Development Agreement' on which the housing project in respect of which deduction u/s 80IB(10) is claimed is discussed as under: (The brief discussion on the clauses of the agreement is not reproduced for brevity. Reference may be made to page-7 to 10 of the written submission of the ld. Counsel) (B) The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de in respect of the project developed on these plots of land, the particulars of which is submitted to the Id.AO. as mentioned above and the copies of the complete particulars is placed at Page Nos. 34 to 79 of the Paper Book. 5. After taking into consideration these submissions of the assessee Ld. CIT(A) allowed the appeal of the assessee by holding that assessee firm has fulfilled all the conditions as laid down u/s 80IB(10) of the Act and was entitled to deduction u/s 80IB(10) of the Act of Rs.67,32,850/- by observing as under:- 4.2 I have carefully considered the submission of the Ld. Counsel as well as the finding of Officer recorded in the assessment order on this issue. I have considered the report of the Assessing Officer dated 27.08.2009 and remand report dated 03.11.200 and also considered the counter comments of the Ld. Counsel. I have also considered the main clauses of both the development agreements, various approvals granted by Vadodara Municipal Corporation for the relevant projects and the completion certificates issued by the Vadodara Municipal Corporation in this respect. The appellant during the course of assessment proceedings had furnished all the details r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed this particular point on which a specific report was called for while sending his report dated 03.11.2009. The deduction under any provisions of the Act including the provisions of sec. 80IB(10) of the Act cannot be disallowed only by ignoring the decision of the Jurisdictional Tribunal but can only be disallowed if, the conditions laid down therein are not fulfilled. The reasons given by the Assessing Officer for denying the deduction u/s 80IB of the Act to the appellant in his order had already been adjudicated by the Hon'ble Ahmedabad Tribunal in the case of M/s Radhe Developers & Ors. vs. I.T.O. & Ors. (supra). The relevant finding of the aforesaid decision of M/s Radhe Developers & Ors. vs. I.T.O. & Ors. (supra) is reproduced here under for the sake of convenience: " A bare reading of the-provisions of s. 80-1 B(10), as they stood in the years under consideration, shows that the requirements for claiming deduction for housing projects are that- (i) there must be an undertaking developing and building housing project (ii) such housing project is approved by the local authority (iii) the development and construction of housing project has commenced on or after 1 day of Oc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere under for the sake of convenience: "The facts involved in the case of the assessee are similar to the facts in the case of Radhe Developers (supra) and accordingly, we are of the view that the assessee has acquired the dominance over the land and has developed the housing project by incurring all the expenses and taking all the risks involved therein. We may mention here that, in our opinion, the decision in the case of Radhe Developers (supra) will not apply in a case where 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ground that assessee is not the owner of the land and the approval of local authority is not in the name of the assessee but in the name of the land owners and thus the conditions laid down u/s 80IB(10) are not fulfilled. However, in appellate proceedings, ld. CIT(A) found after carefully going through the relevant clauses of development agreements and other documents filed before the A.O. as well as before him that the assessee had acquired dominance over the land and the land was under the possession of the assessee. The assessee firm was de-facto land owner for all practical purposes and has also developed housing project by incurring all the expenses and taking all the risk involved therein. Thus, the assessee firm was not merely contractor of the land owner for fixed remuneration. He further found that land owners were to get only the price of land fixed by the development agreement and not to get any profit of the project. He, therefore, was of the view that assessee had fulfilled all the conditions as laid down u/s 80IB(10) of the Act. This view of ld. CIT(A) is in conformity with the principles laid down in the case of Radhe Developers and Others Vs. ITO and M/s Shakti Corp ..... X X X X Extracts X X X X X X X X Extracts X X X X
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