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TMI Blog2020 (2) TMI 1034X X X X Extracts X X X X X X X X Extracts X X X X ..... ls relate to the same issue involving identical facts and circumstances but to different assessees, hence the same are heard analogously and are being disposed of by way of this common order. 3. First we take up the assessee's appeal in IT(ss)A No.3/Ahd/2016 (in the case of Sagar Corporation) for AY 2008-09 as a lead case, wherein assessee has raised the following grounds of appeal: All the grounds of appeal in this appeal are mutually exclusive and without prejudice to each other. 1. The Ld. CIT (A)-12, Ahmedabad has erred in law and in facts in confirming the action of the Ld. A.O. in denying the deduction of Rs. 3,74,191/- claimed u/s. 8018(10) on the following grounds: i) The appellant has first time made claim of deduction u/s 801B(10) in the return of income filed in response to notice us/ 153C and no claim of deduction u/s 801B(10) was made in the original return of income filed electronically on 30.09.2008 and the requisite report from the auditor in Form No. 10CCB was also not filed before the due date prescribed u/s 80AC r.w.s. 801B(13) r.w.s. 80LA (7) or even before the time limit allowed for revised return for the year under consideration in response to notice u/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... astta, Waghodia Road, Baroda. 2. The assessee firm has acquired development right in the land bearing R.S.NO.724/1, 724/2 & 725 of village Bapod Dist.Baroda admeasuring 61108 Sq. feet for a consideration of Rs. 69/- per Sq.feet as per Sale of agreement dated 30/03/2007executed with Shri Jayntilal Dalsumhbhai Panchal, a landowenr and Shri Rakesh Kantilal Pate/ and others and Javnika Chhotalal Pate/ and others, a confirming parties and accordingly, the assesses firm has made total payment of the said land in the financial year 2007-08 to Shri Jayantilal D. Panchal for purchase of land. Copy of sate of agreement dated 30/03/2007 is enclosed at Annexure - 1. 3. The approval of development and construction of housing project is obtained on 06/11/2007 from Vadodara Municipal Corporation and subsequently, the said plan has been revised on 26/03/2009 and same is enclosed at Annexure - 2. 4. It is further submits that the claim of deduction was rightly made and the terms of agreement fully indicated that the dominion of ownership and subsequent control over the land vested with the assessee firm on execution of the development agreement. The landowner only was entitled to fixed consid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he deduction u/s. 80IB(10). The decision of the Hon'ble Supreme Court in the case of Faqir Chand Gulati (supra) will not assist the Revenue, as the agreement is not sharing of the constructed area. In other cases the copy of agreement since has not been submitted before us. If submitted, the terms and conditions of the agreement were not specifically argued before and placed before us, we therefore, in the interest of justice and fair play to both the parties set aside the order of the CIT(A) and restore all other appeals to the file of the AO with the direction that the AO shall look into the agreement entered into by each of the assessees with the landowner and decide whether the assessee has in fact purchased the land for a fixed consideration from the landowner and has developed the housing project at its own cost and risks involved in the project. In case the AO finds that practically the land has been bought by the Developer and Developer has all dominant control over the project and has developed the land at his own cost and risks, the AO should allow the deduction to the assessee u/s. 80IB(10). In case the AO finds that the Developer has acted on behalf of the landowner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... expenditure for development and construction of the housing project including the following: i) Architect fees. ii) Development charges to be paid to the regulatory authorities for making availability of electricity connection charges paid to GEB, drainage & water connection facilities charges paid to local authority and also obtaining the permission for commencing the development and construction. iii) All expenses for development of infrastructure such as: a) Common entrance gate with compound wall to the housing scheme b) Internal roads c) Streetlights d) Water lines and connections for supply of water from the common source of the water for the entire housing project e) Providing drainage lines for each individual house in the housing project and its discharge through the common Corporation discharge lines / connections. f) Common plot for accommodating the play area for children, sit out for elders, lawn, etc. iv) The expenses for construction of the houses in the housing scheme under the various heads are also incurred by the appellant. v) The advertisement expenses for promoting and sale of the houses in the scheme. The assessee firm has incurred vari ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g housing projects as per the other conditions specified. 9. In light of the above requirement, the meaning of the term 'developers / contractors' as observed in the decision of the Hon'ble Ahmedabad Tribunal in the case of Radhe Developers Vs. /TO 113 ITJ 300 (AHD) in Para 30 & 31 is worth referring. The Honble ITAT has referred to the decision of the Hon'ble Supreme Court in the case of Gu/arat Industrial Development Corporation Vs. CIT 227 ITR 414 and for the sake of ready reference is reproduced as under: "30. What is the meaning of the term develop, developer, developing, development, we can find the answer in certain dictionaries, including the Law Dictionary. (a) The Webster's Encyclopedia Unabridged Dictionary of the English Language gives following meanings of the term 'developer' as: "1. One who or that which develops; 2. A person who invests in and develops the urban or suburban potentialities of real estate". (b) Oxford Advanced Learners Dictionary of Current English Fourth Indian edition gives meaning of the term "developer" as person or company that develops land. (c) Random House Dictionary of the English Language, the following ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion has been obtained in the name of the registered landowners, but the same have been obtained by the assessee-firm through its partners who are holding power of attorney of the respective landowners. It is a fact that the assessee is a 'developer' and not a 'contractor' as held by the lower authorities. The developer is not working on remuneration for the landowners, but developer is working for himself in order to exploit the potential of its business in his own interest and, therefore, opted for all business risks associated with the business of development of real estate including developing and building of housing projects. As per the provisions of section 2(1)(g) of Regulation of Employment and Conditions of Service Act (27 of 1996), the term 'Contractor' means a person who undertakes to produce a given result for any establishment, other than a mere supply of goods or articles of manufacture, by the employment of building workers or who supplies building workers for any work of the establishment; and includes a sub-contractor." It is thus evident that the activity of the assessee can undoubtedly be held as that of development and construction of the ho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rson makes the investment and himself executes the development work i.e. carries out the civil construction work, he will be eligible for tax benefit under section 80-1 A. In contrast to this, a person, who enters into a contract with another person (including Government or an undertaking or enterprise referred to in section 80-IA) for executing works contract, will not be eligible for the tax benefit under section 80-IA. From the reading of the above clarification, it is evident that the intention of insertion of the explanation was to restrict the developer as well as the contractor from claiming deduction in respect of the same project and where the developer and contractor is the same person and where the investment is made by the same assesses including the execution of development work, civil construction etc. would be entitled to the deduction. The restriction is to the person who is not developing the same out of his own funds and merely as a contractor. The assessee submits that similar explanation is found to be existing u/s. 80IB reading as under: [Explanation - For the removal of doubts, it is hereby declared that nothing contained in this section shall apply to a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rdinate Bench set aside the matter back to the file of Ld.CIT(A) with the following observation: "1. This appeal, filed by the assessee, is directed against Learned CIT(A)'s order dated 31st August 2015, in the matter of assessment under section 143(3) r.w.s 153C of the Income Tax Act 1961, for the assessment year 2010-11. 2. Grievances raised by the appellant are as follows: 1. The Ld. CIT (A)-12, Ahmedabad has erred in law and in facts in confirming the action of the Ld. A.O. in denying the deduction of Rs. 5,38,387/- claimed u/s.80IB(10) on the following grounds: i) The appellant has first time made claim of deduction u/s 80IB(10) in the return of income filed in response to notice u/s 153C and no claim of deduction u/s 80IB(10) was made in the original return of income filed electronically on 30.09.2008 and the requisite report from the auditor in Form No.10CCB was also not filed before the due date prescribed u/s. 80AC r.w.s. 80IB(13) r.w.s. 80LA(7) or even before the time limit allowed for revised return for the year under consideration in response to notice u/s.153C of the IT. Act. ii) The appellant has not fulfilled the condition prescribed u/s.80IB(10) r.w.s. 80A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... poration is allowed for statistical purposes. 12. Now coming to IT(ss) A No.04/Ahd/2016 for AY 2009-10 (in the case of Sagar Corporation) and ITA No.08/Ahd/2016 for AY 2009-10 (in the case of Sagar Projects). (a) In IT(ss) A No.04/Ahd/2016 for AY 2009-10, the assessee has raised the following grounds of appeal: All the grounds of appeal in this appeal are mutually exclusive and without prejudice to each other. 1. The Ld. CIT (A)-12, Ahmedabad has erred in law and in facts in confirming the action of the Ld. A.O. in denying the deduction of Rs. 22,99,781/- claimed u/s. 80IB(10) on the following grounds: i. The appellant has first time made claim of deduction u/s 80IB(10) in the return of income filed in response to notice us/ 153C and no claim of deduction u/s 80IB(10) was made in the original return of income filed electronically on 30.09.2008 and the requisite report from the auditor in Form No. 10CCB was also not filed before the due date prescribed u/s 80AC r.w.s. 80IB(13) r.w.s. 80LA (7) or even before the time limit allowed for revised return for the year under consideration in response to notice u/s 153C of thel.T. Act. ii. The appellant has not fulfilled the condit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs. 38,62,286/- as claimed. 2. The Ld. Commissioner of Income Tax (Appeals)-12, Baroda has erred in law and in facts in confirming the disallowance of Rs. 6,00,000/- made by the Ld. A.O., out of "cost of right release expense", on cancellation of booking of customers. The recipients are duly assessed to tax, and the amount received from appellant has been duly offered for taxation in their returns of income. The disallowance of Rs. 6,00,000/- being erroneous in facts and in law is prayed to be allowed. 3. The Ld.Commissioner of income Tax (Appeals)-12, Baroda has erred in law and in facts in confirming the addition made u/s.68 of the Act of an amount of Rs. 1,54,000/- being the deposit received at the time of booking of flats alleging the impugned transaction as bogus. The addition of Rs. 1,54,000/- being erroneous in facts and bad in law is prayed to be deleted. 4. Your appellant craves the liberty to add, alter, amend or delete any or all of the above ground(s) of appeal. 13. Since identical facts and circumstances are involved in these two appeals, therefore, taking a consistent view and in parity with the order of the Coordinate Bench, and with similar directions, these ..... X X X X Extracts X X X X X X X X Extracts X X X X
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