9911796707
TMI Blog2015 (9) TMI 606X X X X Extracts X X X X X X X X Extracts X X X X ..... y of the facts of the case. 3. The ld.CIT(A) erred on facts and in laws in disallow the deduction on the ground that appellant had constructed the shop where the profit from it had been offered for tax in the return of income." 3. Brief facts of the case are that the AO disallowed claim for deduction under section 80IB for the assessment years 2000-01, 2001-02, 2002-03 and Asstt.Year 2006-07 of Rs. 11,24,990/- each and for the Asstt.Year 2003-04 & 2004-05 of Rs. 21,86,870/- each, on the ground that the assessee has received development charges at the rate of 25% of the total receipts from the members and labour charges at the rate of Rs. 700/- per sq.yard. According to the AO, deduction under section 80IB is allowable to the assessee to carry on the business of development and construction of house building. Further, the assessee has not incurred expenditure, such as purchase of cement, purchase of steel, labour expenses etc., and there is no opening stock as well as work-in-progress. Thus, the assessee was not carrying on the work of development and construction of house building, but carrying on as a contractor/agent. 4. On appeal, the CIT(A) confirmed the action of the AO by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lause (6) of the agreement provides that the assessee was to appoint engineer for the scheme, and enter into agreement with the engineer. It further provides that for the purchase of land, on which the construction was to be done, the amount was to be given by the assessee, and during the construction period, if any finance was required, the assessee was free to obtain loan from banks/financial institutions. The clause no.(8) of the agreement provides that for construction of the scheme, the assessee will purchase the building material, and make payment for it, to appoint contractor and take necessary decision in this regard. Further, the clause (10) provides that the assessee shall have right of construction, total scheme book, development, organization of the said scheme, to place a revised plan or to revise the plan for additional construction to be made in future on receipt of the FSI. The assessee was to give receipts for payment, to give allotment letter and to give possession to members, and also have to remove defaulting members, and cancel their allotment. Further, clause (16) provides for payment of development charges to the assessee on the basis of units booked at the r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... taking into consideration these facts he was of the view that the facts and circumstances as taken into consideration by his predecessor in 2000-01 assessment year in his order dated 27.1.2006 needs to be followed. Being also of the view that the deduction u/s 80IB(10) which has been claimed in continuity with the earlier years, the facts and circumstances continued to be the same, he directed the A.O. to allow the deduction u/s 80IB for the assessment year under consideration also. For ready reference, we reproduce the specific finding addressing the facts and circumstances taken into consideration by the CIT(A) in 2000-01 assessment year which have been reproduced in page 3 of the impugned order and considered to be the .same in the year under consideration also:- "The relevant portion of the appellate order of my ld. predecessor given in Appeal No. CIT(A)-XV/ITO. Wd.9(1)/78/05-06 dated 27/01/2006 is reproduced as under: "I have considered the submissions of the Authorised Representative carefully. The appellant is a supervision and labour contractor. During the year in appeal the appellant has carried out labour contract work and supervision work for construction of flats f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tipulating certain conditions. Thus the society in this case has entrusted the construction and labour work to the appellant firm as per the terms and conditions laid down in the development and labour agreement. In a normal course of construction business, the society has to bear the expenses in respect of Electricity connections, wire lines and legal expense incurred for the land etc., as the A.B.C. connections are to be obtained in the name of the society. Land is also purchased by the society. Hence for such work, development charges have been fixed at the rate of 23% in addition to Rs. 700/- for labour charges, which has been fixed in the guise of profit and such type of agreements are common in the construction business. Further the profit declared by the appellant is substantially higher than the presumptive profit as per section 44 AD of the Income-tax Act. If members could not be booked for the vacant premises, then such vacant premises are to be held by the appellant as per Clause No.3 of the development agreement. For the construction of scheme, necessary building materials have been purchased and payments have been made and the labour contractor has been appointed for c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... identical and no distinguishing fact despite specific opportunities could be pointed out by the Department, respectfully following the order of the Ahmedabad Bench, we dismiss the departmental appeal." 8. In the result, appeal in ITA No. 1086/ Ahd / 2007 by the Department is dismissed." 7. Keeping in view the facts and circumstances of the case, as the housing project and related agreement is the same which was in the Assessment Year 2002-03 and 2003-04 in the years involved in the present appeal and the fact that the decision of the Tribunal in the case of Radhe Developers which was relied upon by the Tribunal in the above quoted order has since been affirmed by the Hon'ble Gujarat High Court in the case of CIT Vs. Radhe Developers (2012) 341 ITR 403, we set aside the orders of the lower authorities and allow the claim for deduction u/s. 80IB(10) to the assessee for Rs. 17,48,939/- in Assessment Year 2000-01, Rs. 35,53,660/- in Assessment Year 2001-02 and Rs. 9,56,170/- in Assessment Year 2006-07." 8 We, thus, find that the facts in the present appeal are similar as were in the case of M/s.Skyland Developers (supra) except that in the instant case, it has also been allege ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cts having residential units with commercial units to the extent permitted therein. Clause (d) has been introduced, which provides that the built-up area of the shops and other commercial establishments included in the housing project should not exceed 3 per cent. (with effect from April 1, 2005) of the aggregate built up area of housing project or 5,000 sq. ft., whichever is higher or 2000 sq. ft., whichever is less from April 1, 2010. The amendment could not be held to be retrospective as there was no explicit and specific wording expressing retrospectivity and even if it is assumed for the sake of argument that it is to be read by implication that does not appear to be reasonable. A taxing statute granting incentives for promoting economic growth and development should be liberally construed to facilitate and advance the objectives of the provision. When there are two possibilities of interpretation of a taxing statute, that which is favourable to the assessee should be always preferred. Moreover, the Government of India, Ministry of Finance, Department of Revenue issued Instruction No. 4 of 2009 to all Chief Commissioners of Income-tax and all Directors- General of Income-tax t ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
