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TMI Blog2014 (10) TMI 425X X X X Extracts X X X X X X X X Extracts X X X X ..... he name of plot-owners on payment of subsequent installments - the assessee had also developed various public amenities within the project – the assessee is eligible for deduction u/s 80IB – Decided in favour of assessee. - ITA No. 44/Ahd/2013 - - - Dated:- 27-8-2014 - Sri G. C. Gupta And Shri Anil Chaturvedi,JJ. For the Petitioner : Sri D. K. Mishra, Sr. D.R. For the Respondent : Sri Mukund Bakshi, A.R. ORDER Per : Anil Chaturvedi, Accountant Member:- This appeal is filed by the Assessee against the order of Ld. CIT(A)- V Baroda dated 26-10-2012 for A.Y. 2007-08. 2. The facts as culled out from the material on record are as under. 3 The assessee is a partnership firm stated to be engaged in the business of building construction. Assessee electronically filed its return of income for A.Y. 2007-08 on 14-11-2007 declaring total income at Rs. Nil after claiming deduction of ₹ 1,31,273/- u/s. 80IB(10) of the Act. The case was selected for scrutiny and thereafter the assessment was framed u/s. 143(3) vide order dated 31-12-2009 and the total income was determined at ₹ 12,43,770/-. Aggrieved by the order of AO, Assessee carried the matt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uction u/s. 80IB(10) for the reason that the assessee was not the owner of the land on which the construction activities were carried out, assessee had not taken the approval of the housing project from the local authority, the land owners had sold the pieces of land to unit holders directly and assessee was merely a confirming party, assessee has acted merely as a contractor as it entered into construction agreement with the unit holders and the assessee had never sold the house to the unit holders as there was no registered document in respect thereof. He was therefore of the view that assessee was not eligible for deduction u/s. 80IB(10) of the Act as the assessee was not fulfilling the prescribed conditions stipulated under the Act and therefore denied the claim of deduction u/s. 80IB(10) of the Act. Aggrieved by the order of AO, assessee carried the matter before Ld. CIT(A). Ld. CIT(A) upheld the order of AO by holding as under:- 4.3.5 Deduction u/s 80IB(10) is available in respect of development and building of a housing project. Clause (b) of sub-section 10 of section 80IB prescribes the minimum size of plot of land for the project and clause(c) of sub-section 10 of sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onwards the purchaser and his legal heirs are full owner of the land described in the schedule and they are entitled to use, manage mortgage, sell or gift it. From this point onwards the seller and his legal heirs have no share, title or interest in the land. Thus, the plot purchaser gets full rights and control over the property on execution of the sale deed and becomes its absolute owner. After execution of sale deed, the appellant has entered into a separate written construction agreement with the plot purchaser for construction of building on the said plot. It does not matter that construction has been as per uniform design got approved by the appellant from concerned authorities because such a condition can always be imposed on the plot purchasers. Moreover, the purchaser had an option to make changes. By entering into a construction agreement with the plot purchaser the appellant has made himself a contractor of the plot purchaser. Thus, there is no sale of residential houses by the appellant in a housing project rather there is a sale of developed residential plots only (by the land owners at the instance of the appellant). There is not a single instance where a fully const ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vant findings of Ld. CIT(A) and the copy of which is placed at page 33 of the paper book. With respect to the denial of deduction by Ld. CIT(A) for the reason that the assessee had sold fully residential plots and the rest of the work was completed as a contractor, he placed reliance on the decision in the case of Satsang Developers in ITA No. 1011 2498/Ahd/2012. He therefore submitted that assessee is eligible for deduction u/s. 80IB(10). Ld. DR on the other hand submitted that there is nothing on record to demonstrate that the project on which the assessee was claiming deduction u/s. 80IB(10) was housing project and further submitted that the facts in the case of Satsang Developers(supra) are distinguishable and therefore do not apply to the present case. He thus supported the order of AO and Ld. CIT(A). 7. We have heard the rival submissions and perused the material on record. We find that AO had denied the claim of deduction u/s. 80IB(10) to the assessee for the reason that the assessee was not the owner of the land and was merely a contractor. Before us assessee had submitted that in earlier years i.e. A.Y. 2004-05 the assessee s claim for deduction u/s. 80IB(10) was allo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 80-IB(10) of the Act. Similarly, in the case of Raghava Estates vs. Dy.ClT (supra) on which reliance was placed by the ld. 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 asscssee 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 identical. In that case, it was noted by the Tribunal that the assessee had chosen to register the plot in the name of the buyer on payment of specified amount in order to achieve cost saving and to ensure reliability and thereafter, the assessee had needed to construct the house as per building plan obtained in the name of plot-owners on payment of subsequent installments. It is also noted that the assessee had also developed various public amenities within the project. Thereafter, it was held by the Tribunal that on a totality of a fact, the Tribunal is of the view that the assessee has undertaken developing and building housing projects as per the scheme provided in section 80-IB (10) ..... X X X X Extracts X X X X X X X X Extracts X X X X
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