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TMI Blog2014 (4) TMI 30X X X X Extracts X X X X X X X X Extracts X X X X ..... sees were entitled to the benefit u/s 80IB(10) of the Act even where the title of the lands had not passed on to the assessees and in some cases, the development permissions may also have been obtained in the name of the original land owners – thus, the assessees were entitled to the benefit u/s 80IB(10) even where the title of the lands had not passed on to the assessees and in some cases, the development permissions may also have been obtained in the name of the original land owners – Decided against Revenue. - Tax Appeal No. 171 of 2014 - - - Dated:- 18-3-2014 - Akil Kureshi And Sonia Gokani,JJ. For the Petitioner : Mr. Sudhir M. Mehta, Advocate ORDER (Per : Honourable Mr. Justice Akil Kureshi) Revenue is in appeal against the judgment of the Income Tax Appellate Tribunal dated 14.8.2013 raising following questions for our consideration: Whether on the facts and circumstances of the case and as per law, the ITAT is right in upholding the decision of CIT(A) of deleting the additions of Rs.1,59,29,339/- made on account of disallowance of deduction claimed u/s.80IB(10) of the IT Act, since the assessee failed to comply with the provisions of Sec.80IB(10) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Developer: a. The act or process of developing; progress. b. Synonym: Expansion, elaboration, growth, evolution, unfolding, maturing, maturation. d. Webster Dictionary,the following definitions emerge: a. To realize the potential of; b. To aid in the growth of Strength, develop the biceps, c. To bring into being: make active (develop a business) d. To convert ( a tract of land) for specific purpose, as by building extensively. e. Law lexicon Dictionary: The following definitions could be seen: Development a. To act, process or result of development or growing or causing to grow; the state of being developed. b. Happening. 32. Section 80IB(10) of the Act thus provides for deductions to an undertaking engaged in the business of developing and constructing housing projects under certain circumstances noted above. It does not provide that the land must be owned by the assessee seeking such deductions. 33. It is well settled that while interpreting the statute, particularly, the taxing statute, nothing can be read into the provisions which has not been provided by the Legislature. The condition which is not made part of Section 80IB(10) of the Act, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sits and also raise demands from the members for dues and execute such demands through legal procedure. In case, for some reason, the member already admitted is deleted, the assessee would have the full right to include new member in place of outgoing member. He had to make necessary 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 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 in favour of the members enrolled would be appropriated towards the land price. Eventually after paying off the land owner and the erstwhile proposed purchasers, the sur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assing of the title of the property, but are only examining whether for the purpose of benefit under Section 80IB (10) of the Act, the assessee could be considered as the owner of the land in question. As held by the Apex Court in the case of Mysore Minerals Ltd. vs Commissioner of Income Tax (supra), and in the case of Commissioner of Income-Tax vs. Podar Cement Pvt. Ltd. and others (supra), the ownership has been understood differently in different context. For the limited purpose of deduction under Section 80IB(10) of the Act, the assessee had satisfied the condition of ownership also; even if it was necessary. 42. In the case of Shakti Corporation similarly the assessee had entered into a development agreement with the land owners on similar terms and conditions. It is true that there were certain minor differences, however, in so far as all material aspects are concerned, we see no significant or material difference. Here also assessee was given full rights to develop the land by putting up the housing project at its own risk and cost. Entire profit flowing therefrom was to be received by the assessee. It is true that the agreement provided that the assessee would receive r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase of Larsen Toubro Ltd v. State of Karnataka, (2014) 1 SCC 708, the question needs reconsideration. We have perused the decision in the case of Larsen Toubro Ltd (supra). It was rendered in a reference made to a Larger Bench for consideration whether the judgment of the Supreme Court in the case of Raheja Development Corporation, (2005) 5 SCC 162 needs reconsideration. The decision in the case of Raheja Development Corporation (supra) was rendered in the background of definition of the term works contract contained in the Karnataka Sales Tax Act. Even the decision of in the case of Larsen Toubro Ltd (supra) was rendered in the context of sales tax/VAT of the said State. The Supreme Court while upholding the ratio of the decision in the case or Raheja Development Corporation (supra), further laid down certain principles for judging when a contract for construction can be stated to be a works contract and in the process when the materials used in execution of such contracts can be exigible to sales tax/VAT. The decision in the case of Raheja Development Corporation was pointed out to this Court in the case of Radhe Developers (supra). Under the circumstances, we do not f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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