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TMI Blog2016 (3) TMI 415X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee electronically filed its return of income for A.Y. 2009-10 on 30.09.2009 declaring total income at Rs. ITA No.1997/Ahd/12 A.Y. 2009-10 (ITO vs. Hindustan Homefina Ltd.) 2 14,39,930/- after claiming the deduction of Rs. 4,17,56,392/- u/s.80IB(10) of the Act. The case was selected for scrutiny and thereafter, assessment was framed u/s.143(3) of the Act vide order dated 20.12.2011 and the total income was determined at Rs. 4,31,52,822/- by disallowing the claim of deduction u/s.80IB(10) of the Act. Aggrieved by the order of Assessing Officer, assessee carried the matter before the ld. CIT(A) who vide order dated 26.06.2012 (in Appeal No. CIT(A) -VIII/ITO.W4(3)/351/11-12) granted partial relief to the assessee. Aggrieved by the order of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roval was not issued to assessee by the local authorities. A.O. also noticed that assessee has entered into a project by entering into a development agreement with the land owners and the construction was done by the assessee as per the agreement and therefore assessee was merely a contractor. He was, therefore, of the view that assessee was merely a contractor and was therefore not eligible for claiming deduction u/s.80IB(10) of the Act and accordingly denied the claim of deduction. 4. Aggrieved by the order of A.O., assessee carried the matter before the ld. CIT(A) who deleted the addition by holding as under: "3.7 In the present case, appellant has fulfilled all the basic conditions laid down under Section 80IB(10) which is summarized ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9;ble Gujarat High Court in case of Radhe Developers referred herein above wherein it has been held that when developer has obtained the possession of the land, it would be the owner of the land for the purpose of claiming deduction under Section 80IB(10) of the Act even though title of land has not passed to appellant. Further, the Hon'ble Court in various paras of the Order has given categorical finding that provisions of Section 80IB(10) does not envisage the ownership of the land for the purpose of claiming deduction under Section 80IB(10) of the Act. In view of the same, observation made by Assessing Officer regarding ownership of land cannot be accepted. 3.8. On careful consideration of various clauses of the development agreeme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng units at its own cost. (vi) Appellant-developer was entitled to mortgage the land and construction on impugned land on which housing project has been developed for obtaining finance, if any required for the project. 3.9. In the present case, appellant has acquired the impugned land from the society at fixed cost and Society was not entitled to any further benefits arising from development of the project. Further, all the development and construction of the project was carried out by appellant at its own risk and has borne all the expenditure like material cost, labour cost, architect's fees, AUDA charges, site expenses, administrative and other expenses. The appellant has shown closing work-in progress and closing unsold units in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the land. In view of the same, the entire risk of investment and expenditure were that of Assessee and Society for the purpose of development of housing project has not taken any risk but accepted only full price of land and nothing further. The profit and loss has accrued to Assessee hence explanation to Section 80IB with retrospective effect from 1st April, 2001 has no bearing on appellant. The facts of appellant's case are identical with the facts of case before the Hon'ble Gujarat High Court in case of Radhe Developers and respectfully following the decision of jurisdictional High Court and on facts and circumstances of appellant's case, disallowance of deduction under Section 80IB(10) made by Assessing Officer is deleted. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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