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TMI Blog2019 (3) TMI 145X X X X Extracts X X X X X X X X Extracts X X X X ..... the capital gain accrued on conversion of capital asset into stock-in-trade while filing the return along with the claim of exemption of business profit earned on sale of flat of his share under section 80IB(10) of the Act. If the assessee succeeds in proving that capital asset was converted into stock-in-trade, before entering into JDA, claim of exemption of deduction under section 80IB(10) be allowed. - Decided in favour of assessee for statistical purposes. - ITA No.147/Bang/2016 - - - Dated:- 12-9-2018 - SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI. G. MANJUNATHA, ACCOUNTANT MEMBER For The Assessee : Smt. Sheethal Borkar, Advocate For The Revenue : Smt. Nandini Das, Addl. CIT ORDER Per Sunil Kumar Yadav, Judicial Member This appeal is preferred by the assessee against the order of CIT(A), inter alia , on the following grounds: 1. The learned CIT (Appeals) has grossly erred in law and on facts in holding that the Appellant is not entitled to deduction under Section 80-IB(10) of the Act. 2. The learned CIT (Appeals) is not justified in holding that Section 80-IB(10) is applicable only to an undertaking involved in developing an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... SJR Builders dated 16.06.2004 under which the appellant has offered their land to the builder namely SJR Builders for construction of residential apartments. As per the agreement, the builder undertakes to put up a superstructure on that part or portion of land retained by the appellant in consideration of transfer of remaining part. It was further explained before the AO that JDA is not a sale simpliciter, because there is an element of builder s contract with the only difference that the consideration is not cash, but in kind i.e., constructed portion on the retained land. In development agreement, the appellant has permitted the builder for construction of multistoried residential complex and not in the capacity of buyer but only as a builder. The AO rejected the claim of the assessee and has computed the capital gain in the hands of the assessee. 3. Assessee preferred an appeal before the CIT(A) with the submissions that assessee has fulfilled all the conditions required for claiming of exemption under section 80IB(10) of the Act. As per the agreement, the SJR Builders have propounded a scheme for constructing residential apartment to be built on the scheduled property, wher ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urther contended that the builder i.e., SJR Builders has only claimed exemption under section 80IB(10) with respect to profits earned by it on the sale of flats which fell in his share. He has also invited our attention to the orders of the Tribunal in the case of Abdul Khader Vs. ACIT 57/Bang/2011, judgment of the Karnataka High Court in the case of CIT Vs. Shravanee Constructions (2012) 209 Taxman 0006, judgment of the Bombay High Court in the case of CIT Vs. Suresh L Wadhwa (HUF) (2015) 374 ITR 0541 (Bom), order of the Tribunal, Jaipur Bench in the case of DCIT Vs. Shri. Prem Kumar Sanghi in ITA No. 791/2017, in support of his contentions that the 80IB(10) deduction is to be given to the undertakings or the persons who construct the residential apartment. In these cases, more than one person was engaged in the construction activities and the exemption was given to all the persons involved in construction activities with respect to the profit earned on sale of residential flats fell in their respective share. Therefore, claim of exemption under section 80IB(10) be allowed to the assessee in the light of aforesaid judgments. 5. The learned DR on the other hand has placed relian ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th prior intimation to developers. The complete set of sanctioned plans and copy of documents and drawings were also made available to the appellant prior to commencement of the construction work. The appellant and the developers, as per clause 19, shall bear the amount payable to KPTCL/BWSSB or other authorities required for permanent connections to the building, proportionately to their holding of super built area. 8. From the careful perusal of this agreement, it appears to us that the appellant was also engaged in the construction activities though at minimal. Appellant has contributed its land to the JDA for its development and the developer has made the investment in construction of flat. The details of flats were also filed before us where from we find that almost 58 flats fell in the share of first party i.e., the appellant and 193 flats fell in the share of the second party. Meaning thereby, share of the appellant may be less but it does not mean that the appellant was not engaged in the construction activity. 9. During the course of hearing, assessee has tried to demonstrate from the assets and liabilities statement as on 31.03.2007 and 31.03.2008 and the balance sh ..... X X X X Extracts X X X X X X X X Extracts X X X X
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