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TMI Blog2013 (8) TMI 112X X X X Extracts X X X X X X X X Extracts X X X X ..... B(10) - Interest received from the purchases on delayed payments - Income from development of housing project - Tribunal deleted disallowance - Held that:- during the course of business in developing housing project, assessee had made payments to the suppliers towards various purchases made. On such payments, the assessee would occasionally deduct some amounts and pay the bill. Difference between the bill amount and payment actually made would be the amount generated during the course of business. Assessee therefore, contended that same should form part of eligible deduction under section 80IB(10) of the Act - as is likely to happen in any business of similar nature, the supply of material may be found wanting at a later stage. They may eit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rest on delayed payments and income by way of amount written off out of payments to contracts/suppliers and employees which was not directly derived from the sale of residential units or part of cost of the unit and was shown by the assessee himself as 'other income'?" 2. Insofar as question (A) is concerned, same is possible of summary disposal. It pertains to Revenue's stand that assessee cannot claim deduction under section 80-IB(10) of the Income Tax Act, 1961 since the land on which the housing project was developed by the assessee did not belong to him. Tribunal relied on the decision in case of Radhe Developers. By a detailed judgment this Court had upheld the Tribunal's judgment in case of CIT v. Radhe Developers in 341 ITR 403, m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cessary financial arrangements for which purpose he could raise funds from the financial institutions, banks etc. The land owners agreed to give necessary signatures, agreements, and even power of attorney to facilitate the work of the developer. In short, the assessee had undertaken the entire task of development, construction and sale of the housing units to be located on the land belonging to the original land owners. It was also agreed between the parties that the assessee would be entitled to use the full FSI as per the existing rules and regulations. However, in future, rules be amended and additional FSI be available, the assessee would have the full right to use the same also. The sale proceeds of the units allotted by the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... agination can it be said that the assessee acted only as a works contractor..." 3. Such a question is therefore, not required to be considered. 4. Coming to question (B), Revenue's stand is that a total sum of Rs.11,05,556/- did not represent the assessee's claim from development of housing project and such amount therefore, was not eligible for deduction under section 80-IB(10) of the Act. Such amount included a sum of Rs.4.36 lakhs (rounded off) towards interest received from the purchases on delayed payments and a sum of Rs.8.70 lakhs (rounded off) towards balances written of in case of contractors and suppliers. CIT (Appeals) however, deleted such addition on the ground that both the amounts were part of the assessee's income derive ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n this ground were either covered by the decisions of Hon'ble ITAT, Ahmedabad Bench or of the jurisdictional High Court and earlier decision of ld. CIT(A) which were not appealed against by the Revenue, we feel no need to interfere with the order of ld. CIT(A) and the same is hereby upheld. This ground of the Revenue is also dismissed." 5. Insofar as interest received on delayed payments by the purchaser, we find that a similar issue had come up before this Court in case of Nirma Industries Ltd. v. Deputy Commissioner of Income-tax reported in (2006) 283 ITR 402(Guj) in context of deduction under section 80-I of the Act. The Court held and observed that : "However, the parties having made elaborate submissions the matter may be exa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rawn by revenue is artificial in nature and is neither in consonance with law nor commercial practice." 6. With respect to the remaining amount covered under the discussion, balance written off out of the payments to contractors and suppliers, we notice that assessee had consistently taken a stand that : "The amounts have been generated during the course of business. In case of supplier payments sometimes the Appellant deducts some amounts and pays the bills. Since the amounts are generated during the course of business the same are eligible for deduction u/s. 80-IB(10) of the Act." 7. It would thus emerge that during the course of business in developing housing project, assessee had made payments to the suppliers towards various ..... X X X X Extracts X X X X X X X X Extracts X X X X
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