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TMI Blog2016 (2) TMI 489X X X X Extracts X X X X X X X X Extracts X X X X ..... ject is jointly developed by both the parties ie., the owners of the land and the assessee firm on the land extending more than one acre(106 cents) as stipulated under the Act. No other associate concern of the assessee has claimed the benefit of Section-80IB (10) of the Act on the same project as the entire profit was declared in the hands of the assessee firm and deduction claimed accordingly. As the assessee has executed the project undertaking the risks and rewards and therefore, the claim of Section-80IB(10) of the Act is justified. Needless to mention that "the appellant need not be the landowner for claiming deduction uls.80-IB(10) of the Act and further the approvals or the completion certificate need not be in the name of the appellant who is the developer of the property" as held by the decisions cited by the assessee supra. Hence, we hereby direct the Ld. Assessing Officer to grant deduction U/s.80IB (10) of the Act to the assessee. - Decided in favour of assessee - ITA No. 1133/Mds./2015 - - - Dated:- 18-12-2015 - A. Mohan Alankamony, AM And Challa Nagendra Prasad, JM For the Petitioner : Mr T Banusekar, CA For the Respondent : Mr Joe Sabastian, CIT-DR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... araylakshmi Properties Pvt Ltd., represented by its Managing Director Shri D.L.Madhusudhan entered into joint venture on 21.12.2005 with the assessee firm represented by its partner Shri V.G.Rajendran for development of flats in Noolamburbur village on the land brought in by the first four partners of the assessee firm. Since the first four partners of the assessee firm contributed the land to the project they were entitled for 50% of the constructed area. The project was approved by CMDA on 20/3/2007 and the approval letter was issued to M/s.Ishwaraylakshmi Properties Pvt. Ltd., for construction of the flats. The approval information downloaded from CMDA by the Ld. Assessing Officer is reproduced herein below for reference:- 1 6 9 M/s.Ishwaray Lakshmi Properties Pvt. Ltd Rep.by D.L.Madhu sudhan 3 others S.No.97/1A,1 B,1C 1D, Noolambur village, Mogappair Ambattur Salai Chennai. B/Spl Building/1 07-AC/ 10 Lr.No.B3/ 27473/05 dt.20.3.07 Still + 2 floors (2 blocks) Residen tial building with 60 dwelling units EN3/72 92/07 dt.31.12 .2008 EC/North/ 169/20/08 dt.31.12. 2008 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ks of accounts were produced to examine the veracity of the claim of the appellant for taking the full responsibility of the projects and the risk associated therein, confirmed the order of the Ld. Assessing Officer. 5. Before us, the Ld. A.R made the following submissions:- 1. The appellant is a partnership firm engaged in the business of development of residential apartments. In the return of income filed for the assessment year 2010-11 the appellant had admitted a gross total income of ₹ 7,94,98,817/- and claimed deduction u/s.80-lB(1 0) of ₹ 7,94,98,817/-. 2. The appellant had developed a housing project consisting of stilt floor plus four floors in 2 blocks comprising 60 dwelling units at Nolambur, Mogappair. The said project was developed in a land admeasuring 1.06 acres. 3. The said land was owned by 4 individuals namely Smt.D.G.Lakshmi, Shri.D.L.Madhusudhan, Smt.D.V.Kasturi and Shri.G.Damodharan. The said four land owners had given a general power of attorney to M/s. lswaryalaxmi Properties Pvt Ltd represented by its Managing Director Shri.D.L.Madhusudhan. 4. The 4 land owners through their power agent entered into a joint venture developm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deduction under Section 80IB(10). Going through the decision of the Gujarat High Court, we have no hesitation in holding that we are in respectful agreement with the law declared by the Gujarat High Court. 11. Attention is further invited to the decision of the Hon'ble Gujarat High Court in CIT v Moon Star Developers [2014] 367 ITR 621 (Gui) where also the land on which the housing project was constructed was not owned by the assessee and the development permission by the local authority was given in the name of the landowners and not the assessees. The Hon'ble Gujarat High Court following its own decision in Radhe Developers referred to supra held that the assessee is eligible to claim deduction u/s.80-lB(10) even though the land was not owned by the assessee and the development permission was also in the name of the landowners. 12. In the light of the above decisions it is therefore most humbly submitted that the appellant is eligible for claiming deduction u/s.80- IB(10) even though the appellant is not the owner of the land and the approval for construction of building and the completion certificate is in the name of the land owner. 13. In order to carry ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... land, the building plan approval and the completion certificate were not in the name of the appellant company. 20. The Commissioner of Income Tax (Appeals) has also concluded that since M/s.lswaryalaxmi Properties Pvt Ltd has shown losses in the financial year relevant to assessment year 2010-11 and has also got brought forward losses the deduction uls.80-IB(10) could not be claimed fully and hence by virtue of joint venture agreement the appellant has claimed deduction u/s.80-IB(10). 21. It may be noted that the landowners may choose to give their property for development to any person. Since one of the landowners in the instant case happens to be the Managing Director of M/s.lswaryalaxmi Properties Pvt Ltd, it does not mean that they have chosen the appellant firm for developing the property, since M/s.lswaryalaxmi Properties Pvt Ltd is a loss making entity. Even if M/s.lswaryalaxmi Properties Pvt Ltd makes profit the landowners are at will to choose any person to enter into a joint venture agreement. 22. lt is submitted that by showing the income in the hands of M/s.lswaryalaxmi Properties Pvt Ltd or in the hands of the appellant firm there is no loss to the reve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aximum benefit under the provisions of the Act. On analyzing the Joint Venture Development agreement dated 21st December, 2005 entered between the four owners of the land and the assessee firm the following facts emerges:- Clause 1: The party of the second part (assessee firm) shall put up residential flats in the property mentioned in the schedule hereunder to the extent approved by the CMDA and the Corporation/Municipality of Chennai. The party of second part (assessee firm) shall conveniently divide/sub-divide the schedule mentioned properties as the case may be, but strictly in accordance with the rules. Clause 2: 50% of the constructed area is assigned to the owners of the land who are in joint venture with the assessee firm sharing the risk in the project in order to realize the sale proceeds directly on their own as their reward for contribution of land. Clause 3: The assessee has provided security deposit to the owners of the land only to the extent of ₹ 50,00,000/- though the overall project value is much more. Clause 4: Power is granted by the owners of the land to the assessee firm for development of the project as a joint venture, ie., the project is t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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