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TMI Blog2012 (12) TMI 17X X X X Extracts X X X X X X X X Extracts X X X X ..... of scrap after examining these aspects. AO may decide afresh - Decided in favor of assessee for statistical purposes. - ITA No.2183/Ahd/2010 & ITA No.3300/Ahd/2009 and C.O.No.01/Ahd/2010 - - - Dated:- 20-7-2012 - Shri, A.K.Garodia and Shri Kul Bharat, JJ. By Appellant Shri Bhavin Marfatia, AR By Respondent Shri O.P. Beotheia, SR-DR ORDER PER Kul Bharat, Judicial Member:- These two appeals of the Revenue and Cross Objection (CO) of the assessee are directed against the different orders of Ld. Commissioner of Income-tax (Appeals)-II, Baroda of different date i.e. 30-09-2009 and 15-04- 2010 for the assessment years 2006-07 and 2007-08. First we take up ITA No.3300/Ahd/2009 A.Y. 06-07 of the Revenue. 2. The Revenue has raised the following grounds of appeal:- 1. On the facts and in the circumstances of the case and in law, the ld. CIT(Appeals) erred in allowing the deduction u/s. 80IB(10) to the assessee, who was not granted approval by the local authority to carry o the business of an undertaking developing and building housing projects, in contravention of a plain reading of section 80IB(10), r.w.s. 80IB(1), Explanation to Section 80Ib(1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proceeds attributable to the sale of unutilized FSI and not to the dwelling units in the housing projects, which could not be termed as profits derived from developing and building housing projects in terms of this provision. 3. The fact stated in brief are that assessee is a partnership firm engaged in the business of Real Estate Developers had claimed deduction u/s.80IB(10) being the assessment year. The said claim was disallowed vide order u/s. 143(3) of the Income-tax Act, 1961 (hereinafter referred to as the Act ) dated 20-12-2007 after making detailed discussion in respect of the said claim, from the scrutiny of the return of income and documents, it was found that for the A.Y. 2006-07 also the assessee had claimed deduction u/s. 80IB(10) of the Act. The assessee had constructed housing project and showed net profit of Rs.2,87,14,538/- as having been derived from the development and building of housing projects and claimed deduction u/s. 80IB(10) of the Act amounting to Rs.2,87,14,538/-. However, it was noticed from the records that the land is not owned by the assessee-firm. Further, the approval of the local authority was also not in the name of assessee-firm. The sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Prathan Vatika Pratham Residency and the claim of deduction u/s. 80IB(10) was found tenable, and thus allowed. However, in the case of Pratham Avenue and PRatham Upavan projects assessee has acquired the land developments rights and not the owner of the land. As such for the detailed discussion given in the body of the assessment order (Page Nos. 2 to 16), the claim of the assessee u/s. 80IB(1) with respect to these two projects was disallowed. Further, thought the assessee is responsible for the risk and costs involved in both these projects as envisaged in the development rights/agreements and since the department has no accepted the decision of the Hon ble ITAT in the case of M/s Radhe Developers and M/s. Shakti Corporation and the matter is subjudice before the High Court of Gujarat, the contention put forth by the assessee has not accepted as concluded at para 25 of the assessment order. Since the Assessing Officer, after due verification, has stated that the assessee is responsible for the risk and costs involved in both these projects, the conditions prescribed in the Shakkti Corporation case cited above, have been met. Hence, as held by Hon ble Ahmedabad ITAT in the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evenue s appeal in ITA No.3300/Ahd/2009 and taking a consistent view, this issue of Revenue s appeal is dismissed. 12. In the result, Revenue s appeal is dismissed. Coming to assessee s CO No.01/Ahd/2010. 13. The assessee has raised the following ground of the CO:- 1. The learned CIT(A) erred in fact and I law in confirming the action of the AO in reopening the assessment by invoking the provisions of section 147 of the Income tax Act, 1961 and completing the assessment commenced under invalid exercise of powers u/s. 147 of the Act. 2. The learned CIT(A) erred in facts and in law in confirming the action f the AO in disallowing deduction on the following amounts on the ground that they do not constitute business income and not eligible for deduction u/s. 80IB(10) of the Act. i) Sale of bricks Rs.6,46,369/- ii) Sale of Bitumen Rs.1,31,291/- iii) Miscellaneous Income Rs. 33,263/- Rs.8,10,923/- 2.1 The learned AO erred in fact and in law in reducing the gross income instead of net income while computing deduction u/s. 80IB(10) of the Act. 14. First ground is against invoking the provisions of Section 147 of the Act and c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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