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TMI Blog2015 (2) TMI 198X X X X Extracts X X X X X X X X Extracts X X X X ..... 6-07, Revenue has filed the appeal on the following ground: "1. On the facts and in the circumstances of the case and in law, the learned CIT (A) erred in allowing deduction of Rs. 12,21,790/- u/s. 80IB(10) of the Income-tax Act without appreciating the fact that the legal relationship between the assessee and the end user of the units was that of 'work contract'." 2.2 In ITA No. 52/Ahd/2013 for A.Y. 2007-08, Revenue has filed the appeal on the following ground: "1. On the facts and in the circumstances of the case and in law, the learned CIT (A) erred in allowing deduction of Rs. 9,41,940/- u/s. 80IB(10) of the Income-tax Act without appreciating the fact that the legal relationship between the assessee and the end user of the units was that of 'work contract'." 3. In this case, for A.Y. 2005-06 assessee filed return of income on 21/10/2005 declaring total income at Rs. Nil. Order u/s 143(3) r.w.s. 147 of the IT Act was passed on 27/10/2011 assessing total income at Rs. 19,33,110/-. The case was later on reopened u/s 147 of the Act. Notice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .A approval of the construction from local authority, drawing, passing thereof etc. As per Assessing Officer, partnership firm had come into existence with 12 partners from 01/04/2004 during the previous year relevant to A.Y. 2005-06 and partnership deed was amended on 06/05/2005 so as to include incoming partners in place of the outgoing partners. As per Assessing Officer, it was further amended on 07/03/2006 so as to include one partner in place of a deceased partner and none of these partnership deeds mentioned the status of land required for the housing project undertaken by assessee. Assessing Officer observed from the copies of purchase deed of land that land was purchased earlier on 20/06/2003 i.e. prior to the constitution of the firm by four persons who happened to be the partners in the initial partnership deed executed on 01/04/2006 constituting the firm in the name and style of "Prarambh Associates" and the lay out and details of the residential building plan approved by the Town Planning Officer, Nadiad on 02/08/2004 also mentions the names of four persons as owners who had purchased the land on 20/06/2003. Assessing Officer observed that at no point of time assessee f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d claimed deduction u/s 80IB(10) amounting to Rs. 19,33,109/- on the construction of housing project named "Prarambh Associates". Assessing Officer has disallowed the claim of assessee on the ground that assessee firm is not the owner of land at relevant point of time on which project was constructed and permission from local authority was not accorded in the name of assessee firm. According to ld. Authorized Representative, all conditions of section 80IB(10)of the Act have been satisfied by assessee. Assessing Officer had not appreciated the facts in a proper perspective before denying benefit of section 80IB(10) of the Act. Assessing Officer had stated that land on which housing project was developed is not owned by assessee firm. In this regard, stand of assessee has been that land on which housing project was developed was owned by the partners of assessee firm who had duly introduced land through their capital account in the firm. As per assessee, it is an accepted practice that the land owned by the partners can be introduced in the firm and it becomes the property of firm. Further, introduction of land as capital in the firm is treated as transfer as per section 45(3) of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ; "45. Under the circumstances, we are of the opinion that the Tribunal committed no error in holding that the assessees were entitled to the benefit under Section 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." 5.1. It is evident from the above that for the purpose of claiming deduction u/s 80IB(10) of the Act, it is not necessary for assessee to own the land. Such condition is not mentioned in the relevant section. In view of above, CIT(A) was justified in holding that the land on which the housing project was developed was owned by the partners of assessee firm who had introduced the land through their capital account in the firm. These partners in their declaration dated 17-10-2012 has duly certified that each of them had introduced land as capital worth Rs. 82,042/- (i.e. l/4th - land cost + land related expenses viz stamp duty, registration and other expenses in the partnership firm and same were reflected in schedule-E of the financial statement of A.Y. 2005-0 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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