9911796707
TMI Blog2017 (2) TMI 1187X X X X Extracts X X X X X X X X Extracts X X X X ..... re by it has challenge action of CIT(A) for granting deduction to the assessee under section 80IB(10) of the Income Tax, Act. 3. In the case of M/s. Mahalaxmi Corporation the Ld. first appellant has passed the order on 28/03/2012 in A.Y. 07-08. Thereafter, this order has been followed in A.Y. 2008-09. Thus, facts on all vital points are common in case of M/s. Mahalaxmi Corporation. 4. Similarly, in the case of M/s. Dhanlaxmi Corporation the Ld. CIT(A) has made identical discussions as was made in the case of M/s.Mahalaxmi Corporation, in this appeal order was passed by CIT(A) on 28/03/2012. The facts accept variation in the quantum and details of land on which assesse has raised theconstructions are common. Therefore all,these appeal are heard together and I deemed it appropriate to disposed of them by this common order. 5. Brief facts in the case of M/s.Mahalaxmi Corporation are that land comprising in plot no.91 of the TPS No.40 Naroda-II having area of 7,059 Sq. meters at Naroda, Ahmedabad was purchased by the co-owners of the land i.e 1) ShriIshwarbhaiValjibhai Desai, 2) ShriAmratbhaiValjibhai Desai, 3) Smt. LilubenValjibhai Desai, 4) Smt. MadhvibenIshwarbhai Desai, 5) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on ble Gujarat High Court s in the case of M/s. Radhe Developers and M/s. Shakti Corporation. 11. Before me both the parties have conceded to the facts that the issues are squarely covered by the decision of Hon ble Gujarat High Court s in the case of M/s.Radhe Developers, when the AO has passed assessment order, this judgment has not come and he has not the benefit of the judgment. 12. I have duly considered rival contention and gone through the record carefully I find that the Ld.first Appellant authority has made lucide enunciation of Law and facts on this point. I cannot do better than to extract the details finding record by the first Ld. Authority on this issue. The findings read as under:- 14. Considering all these facts, I am inclines to accept the contension of the appellant. 15. (A) Hon'ble Gujarat High Court in its landmark judgement dated 13.12.2011 in the case of Radhe Developers, Shakti Corporation and Others vs. CIT at Para 4 and Para 5 illustrate the basic facts of the case of M/s. Radhe Developers. At para 7, Hon'ble ITAT's order dated 29.6.2007 was summarized wherein it was held that firstly for deduction u/s.80IB(10) of the Act it is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e on 18-05-2000 accordingly on that basis the rights of agreement of Sale dated 7-9-91 at the rate of ₹ 100/- per Sq.ft. Subject to other conditions written therein are decided to be purchased by the Party of the Third Part. Clause-6. In fact in The Party of the First and Second Part confirming party have no necessary technical knowledge and skill pass through the said scheme to arrange for constructing residential houses having area less than 1500 sq.ft. for the middle class society and also have no finance to invest as per the size of scheme and to register the members for that required alertness and skill being absent they themselves are not in a position to place a project or scheme on the land mentioned in schedule in such circumstances to The Party of the Third part over and above the right to purchase the rights of Agreement of Sale on dt.18-05- 2000 they have also decided to give all rights along with constructing anddeveloping on the said land mentioned in schedule by this Agreement dt.18-05--2000. Clause 11(3):The said Developer cum Building Contractor is authorized to admit the persons who are willing to join in the scheme to get the houses of fixed are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... btaining all necessary permissions over the said land such as NA, NOC Development Permission, Rajachiththi, permission for passing plans, Title Clearance, etc. for making the construction and erect an apartment in the same, can organize shops, offices, flats and tenement society and can engage architect if required, can prepare plans and obtain the occupation Certificate, Completion Certificate, can get the revised maps prepared and for which the complete powers are given to the party of the Second Part. Clause-4: The party of the Second Part Developers can register the members for the new construction that may be made over the said land/property, can issue receipt to the members, can issue allotment letter to the members, can execute the Agreement to sale, can hand over the possession, can execute Tripartite Agreement, but the entire responsibility for the same shall be that of the party of the Second Part. Cluase-7: That for the houses, shops flats, etc. that are to be constructed over the said land for which the party of the Second Part is to register them as members and can upon executing Agreement to Sale etc. accept the money and issue receipts to the members. Sam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. Profit or loss which may result from execution of the project belonged entirely to the assessee. It can thus be seen that the assessee had developed the housing project. The fact that the assessee may not have owned the land would be of no consequence. (H) At para 36, the Hon'ble High Court examined the effect of Explanation of Section 80IB(10) introduced with retrospective effect from 1.4.2001 and held that 36. We have noted at some length, the relevant terms and conditions of the development agreements between the assessees and the land owners in case pfRadhe Developers. We also noted the terms of the agreement of sale entered into between the parties. Such conditions would immediately reveal that the owner of the land had received part of sale consideration. In lieu thereof he had granted development permission to the assessee. He had also parted with the possession of the land. The development of the land was to be done entirely by the assessee by constructing residential units thereon as per the plans approved by the local authority. It was specified that the assessee would bring in technical knowledge and skill required for execution of such project. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or the land in question. The assessee agreed to pay off the (and owner first before appropriating any part of the sale consideration of the ^housing units for his benefit. In short, assessee took the full risk of executing thehousing project and thereby making profit or loss as the case may be Theassessee invested its own funds in the cost of construction and engagement of several agencies. Land owner would receive a fix predetermined amount towards the price of land and was thus insulated against any risk. (I) After considering the Hon'ble Bombay High Court judgement in the case of C1T vs. Glenmark Pharmaceutical Ltd. (2010) 324 ITR 199 under the head Contract of work or a contract of sale and Hon'ble Supreme Court judgement in the case of State of Andhra Pradesh vs. M/s. Kone Elevators AIR 2005 SC 1581, the Hon'ble Gujarat High Court at para 38 held that - 38. In the present case, as already held the assessee had undertaken the development of housing project at its own risk and cost. The land owner had accepted only the full price of the land and nothing further. The entire risk of investment and expenditure was that of the assessee. Resultantly, profi ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
