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TMI Blog2012 (12) TMI 328X X X X Extracts X X X X X X X X Extracts X X X X ..... conditions, it has to be ascertained whether it was a “work contract” or a “Development Contract”& whether under the agreement the assessee had been given full authority to develop the land & AO has to examine about the “profit” or “loss” arising from the said project. CIT(A) has passed the order finding justification only on the issue of ownership of the land based on the development agreement and has unjustly allowed the claim of the assessee - set aside the order of the learned CIT(A) and remit back the case to the file of ht e learned CIT(A) to pass appropriate order - in favour of Revenue. - ITA No.23/Ahd/2011 - - - Dated:- 23-7-2012 - SHRI G. C. GUPTA AND SHRI A. MOHAN ALANKAMONY, JJ. Appellant by Shri Rahul Kuma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essing Officer. 4. It is therefore, prayed that the order of the ld. Commissioner of Income-tax(A)-XV, Ahmedabad may be set-aside and that of the Assessing Officer be restored. 3. The assessee, Shri Ambalal Nandas Patel, proprietor of Mayur Estate Developers filed his return of income on 06-11-2007 declaring income of Rs.3,13,990/- after claiming deduction of Rs.1,14,75,237/- u/s. 80 IB(10) of the Act. The case was selected for scrutiny and order was passed u/s 143(3) of the Act on 18-12-2009 wherein disallowance was made by not granting deduction u/s 80 IB (10) of the Act. The learned AO after examining the issue in detail came to such conclusion due to the following reasons: 1. The Assessee is not both developer and builder as requ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and to someone else. As such, the assessee s submission in this respect is rejected. 4. The assessee carried the matter before the learned CIT(A). The learned CIT(A) allowed the deduction claimed by the assessee. The relevant portion of the order of the learned CIT(A) is reproduced herein below: 6. It is seen that the objection of the AO for disallowance of 80IB (10) deduction is that the appellant is not the owner of the land. This objection of the AO has to be seen in the light of the tests laid down by Hon ble ITAT Bench A Ahmedabad decision dated 7.11.2008 in the case of M/s. Shakti Corporation, Baroda in ITA No.1503/Ahd/2008 in AY 2005-06. After going through rival submissions I find that the appellant practically purchased the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bmitted a paper book containing 1 to 114 pages along with argument summary dated 08-05-2012 and prayed that the order of the learned CIT(A) may be upheld. 7. We have heard both the parties and carefully perused the materials brought before us by both the parties in particular written submission and argument summary presented by the learned AR. After examining the order of the learned CIT(A) we are of the opinion that the learned CIT(A) has passed the order finding justification only on the issue of ownership of the land based on the development agreement and has unjustly allowed the claim of the assessee. The learned AO has stated various reasons for disallowing the claim u/s 80 IB of the Act as extracted herein above. For granting deduct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deration and whether it was a fixed amount or depend upon the profits of the project. Likewise, the AO has to ascertain that whether the assessee was given a fixed percentage as remuneration for the said project in lieu of granting permission to construct the residential units or to earn profit as a project developer. (i) The AO has to ascertain the position of the possession over the land during the construction period. (j) For the purpose of construction the AO has to examine the financial arrangements. (k) The AO has to examine the procedure for raising of funds either by private placement or by financial institutions. (l) The risk element connected with the said housing project has also to be examined. (m) The Assessing Offi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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