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TMI Blog2014 (5) TMI 221X X X X Extracts X X X X X X X X Extracts X X X X ..... GH COURT] - the assessee was entitled to the benefit u/s 80-IB (10) even where the title of the lands had not passed on to the assessee and in some cases, the development permissions may also have been obtained in the name of the original land owner - ownership of land is not a necessary condition for claiming the deduction u/s 80IB(10) - Assessee has acquired dominant control over the land, Assessee is responsible for incurring all the expenses and taking all the risks involved - Assessee is not a contractor - Revenue could not controvert the findings of CIT(A) – thus, there is no reason to interfere in the order of the CIT(A) – Decided against Revenue. - I.T. A. Nos. 2293/AHD/2012 & 2095/AHD/13, ITA Nos. 2944/AHD/2011 & 2563/AHD/2012 - - - Dated:- 2-5-2014 - Shri G. C. Gupta And Shri Anil Chaturvedi, A.M.,JJ. For the Appellant : Shri S. N. Soparkar For the Respondent : Shri D. R. Vaishnav, CIT D. R. ORDER Per Shri Anil Chaturvedi,A. M. 1. These are 4 appeals of which 2 appeals are of Assessee and 2 appeals are of Revenue. Before us at the outset it was submitted that though the appeals are of different years but the issue involved in all the ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... egarding ownership of land and transfer of land to unit holders by the land owners as well as the approval of the project not being in the name of the assessee was covered in Assessee s favour but however he disallowed the claim of the Assessee of deduction u/s 801B(10) of the Act for the reason that Assessee had entered into two deals namely sale deed and construction agreement for construction of unit and therefore the Assessee was doing construction as per the terms of contract and therefore was not entitled to deduction. He thus confirmed the order of AO by holding as under;- 5. I have considered the appellant s submission and the A.O s observations. The grounds relating to ownership of land and transfer of land to unit holders by the land owners as well as the approval for the project being not in the name of the appellant, on which the A.O has disallowed the deduction u/s 80IB(10) are covered in favour of the appellant by the decisions of CIT(A)-IV, Ahmedabad in the appellant s own case for the assessment year 2008-09. But so far as the fact that appellant is working as contractor of the persons who have purchased the plots from the appellant, is concerned, the appella ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... per terms of the contract. It is only rendering a service. 5.1. Under such circumstances, the appellant is acting as a Contractor for the owner of the plots of land and hence it is not entitled for deduction u/s 80IB (10) as claimed in the return of income. The plea that such agreements were entered into in order to save the stamp duty also makes the actions of the appellant against law. The appellant wants to evade stamp duty causing loss to exchequer and at the same time, wants to avail of deduction u/s 80IB(10). 6. Aggrieved by the order of CIT(A), Assessee is now in appeal before us. 7. Before us, the Ld A.R. reiterated the submissions made before CIT(A). He further submitted that the issue is covered in favour of the Assessee by the decision of Hon ble Ahmedabad Tribunal in the case of Satsang Developers in ITA No 1011, 2498 and 1221/Ahd/2012. He further submitted that the facts of the case in Assessee s case and the decision relied upon are similar. He pointed to the relevant findings of Tribunal and also placed on record the copy of the aforesaid decision. The Ld. DR on the other hand relied on the order of AO and CIT(A). 8. We have heard the rival submissions an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... DCIT vs. SMR Builders (P.)Ltd. (2012)24 Taxman.com 194 (Hyd.) 2. Sky Builders Developers vs. ITO (2011)14 Taxman.com 78 (Indore) 3. M/s.Vardhman Builders and Developers vs. ITO ITA No.559/Ind/2010 dated 09/05/2012 4. Raghava Estates Vs. Dy.CIT ITA Nos.248 49/Vizag/2009 dated 04/08/2011 5.2. He submitted that in the case of Vardhman Builders Developers (supra) also, the assessee had entered into a separate agreement for sale of land and separate agreement for construction of housing on such land and under these facts, it was held by the Tribunal in that case that merely because of two separate agreements, the claim of the assessee for deduction u/s.80-IB (10) of the Act cannot be declined if other conditions are being satisfied. 5.3. He further submitted that in the case of DCIT vs. SMR Builders (P) Ltd. (supra) also, the facts were that the assessee had sold flats in a semi-finished stage. In that case, the AO had noted that as per the sale-deed, the assessee-company has sol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upra) also, the assessee sold the land along with semi-finished structure to the buyers and as per separate agreement, agreed for construction for completion of balance work. Hence, the facts of this case are also similar because in that case also, the land was sold separately along with partial and unfinished construction of flats and, thereafter, construction agreement was entered into to carry out the balance construction work and under these facts, it was held by the Tribunal in that case that such agreement for construction to complete the balance work is only an incidental facilitation to protect interest of the parties and therefore, the assessee is eligible for deduction u/s.80-IB(10) of the Act. Similarly, in the case of Raghava Estates vs. Dy.CIT (supra) on which reliance was placed by the Id.AR of the assessee, the facts are similar. In that case also, the assessee had sold the plots separately and thereafter, constructed the houses and under these facts, the Revenue held that the assessee has to be considered as a mere contractor and, therefore, the assessee is not eligible for deduction u/s.80-IB (10) of the Act. This goes to show that the facts in that case were ident ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r on date of sale overlooking the fact that all the risk and costs of developing housing project is entirely of the appellant, and two separate agreements of land and construction does not render it 'contract for work'. This action of Ld. CIT (A) on erroneous interpretation of facts be quashed and deduction claimed be granted to the appellant. 3. Ld. CIT (A) erred in law and on facts in rejecting the claim of the appellant on entirely different interpretation of facts though holding the appellant eligible to claim deduction as held by jurisdictional High Court judgment in Radhe Developers (341ITR 403) identical to the facts before him. 12. Both the parties before us submitted that the facts of the case in the year under appeal are identical to that of AY 2009-10 except for the amounts. We also find that CIT(A) while upholding the disallowance made by A.O has held that the issue involved in the year under appeal are identical to that of AY 2009-10. 13. While deciding the issue in appeal for AY 2009-10 hereinabove, we have held that Assessee is eligible for deduction u/s 80IB(10). We for the similar reasons stated hereinabove, while deciding the appeal for A.Y. 09-10 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which is the prime objective of section 80IB(10). If we make the legal ownership compulsory for deduction u/s 80IB(10), this will simply obstruct the development of housing projects mainly because the legal land owner may not have the expertise to develop housing projects on the said land and the developer may not have sufficient funds to purchase the land and then develop the projects. Therefore, the, condition of legal ownership of land has been deliberately not brought into the statute so that the purpose of u/s 80IB(10) to provide low cost housing to middle class investors does not get defeated since inception itself. Further, this issue has already been decided by the Hon'ble ITAT, Ahmedabad in the case of Radhe Developers Others in [2008J23SOT420. The gist of the findings are reproduced as under for the sake of convenience: .. 7.2 In view of the above, ownership of land is not a necessary condition for claiming deduction u/s 80IB(10) of the Act. Moreover, the Hon ble High Court of Gujarat in the above case CIT vs. Radhe Developers [2012] 17 taxman.com 156 (Guj) has held that the Tribunal committed no error in holding that the assessee was entitled to the benefit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eted. This ground of appeal is accordingly allowed. 17. Aggrieved by the order of CIT(A), Revenue is now in appeal before us. Before us, ld. D.R. relied on the order of A.O and on the other hand ld. A.R. supported the order of CIT(A). 18. We have heard the rival submissions and perused the material on record. In the present case, Assessee was denied the deduction by the AO u/s 801B(10) for the reason that the Assessee was not the owner of land and had acted as a contractor. CIT(A) while deleting the denial of deduction and relying on the decision of Radhe Developers (supra) has noted that ownership of land is not a necessary condition for claiming the deduction u/s 80IB(10). He has further noted that Assessee has acquired dominant control over the land, Assessee is responsible for incurring all the expenses and taking all the risks involved therein. Further he has given a finding of fact that Assessee is not a contractor. Before us Revenue could not controvert the findings of CIT(A) nor has brought any contrary binding decision in its support. In view of the aforesaid facts, we find no reason to interfere with the order of CIT(A) and thus this ground of Revenue is dismissed. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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