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TMI Blog2020 (9) TMI 672X X X X Extracts X X X X X X X X Extracts X X X X ..... has been filed raising the following Substantial Questions of Law: 1.Whether on the facts and in the circumstances of the case the Tribunal was right and justified in holding that the provisions of Section 80IA (10) does not apply to the provisions of Section 80IB(10)? 2. Is not the finding of the Tribunal bad, by holding that the Principal Chief Commissioner of Income Tax had not proved with material evidence that the profits of the firm were more than the ordinary profits and that the sale consideration of the land ought to be much higher without taking note of the fact brought out in the 263 order in the form of 3 independent joint agreement appended to the said order? 3. Whether the reasoning and finding of the Tribunal is proper ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsideration, AY 2012-13 and 2013-14. The firm filed return of income on 29.09.2012 admitting total income as 'Nil'. The return was processed under Section 143(1) of the Act and subsequently the case was selected for scrutiny and the Firm filed a revised return and after hearing the assessee, the Assessing Officer completed the assessment under Section 143(3) by order dated 27.03.2015 and the income assessed was at Rs. 23,235/-. 4. The Principal Commissioner of Income Tax-5, Chennai ('PCIT' for brevity) invoked his power under Section 263 of the Act, who opined that the Assessing Officer while computing the quantum eligible for deduction under Section 80IB(10), omitted to examine the vital aspects and parameters. The PCIT c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the guideline value and there is no understatement of consideration. They placed reliance on the decision of the Supreme Court of India in the cases of 131 ITR 597 (K.P.Varghese Vs. ITO); 282 ITR 259 (CIT Vs. P.V.Kalyanasundram); 66 ITR 622 (CIT Vs. George Henderson Co.Ltd); 87 ITR 407 (CIT Vs. Gillanders & Arbuthnot & Co.Ltd.,); [2011] 203 Taxman 241 (madras) (Dr.Fareed Jamshid Italia Vs. ACIT). The PCIT after considering the reply submitted by the assessee held that if the owners of land (Smt. and Shri.Chandrasekaran) had entered into a Joint Development Agreement with any builder during the relevant period of time, by which constructed space is received by the owners in lieu of transfer of undivided share of land to the builders, the sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nation of the rate of the area concerned to give guidance to the registering authority to test prima facie whether the instrument has properly described the value of the property and the circle rate under the Stamp Act / Rules is not final. The PCIT observed that the provision of Section 80IB are governed by Section 80IA(10) and net profits which stands at a phenomenal rate of 50% is definitely an arrangement of business so as to avail excessive deduction and accordingly set aside the assessment order. 6. The assessee carried the matter on appeal before the Tribunal. The Tribunal considered the submissions on either side, carried out a detailed analysis of the factual position and found that there is no material to suggest that the busine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rough the factual position found that there is no such methodology adopted by the assessee for invoking the provisions of Section 80IA(10). It is further submitted that the land owner is also entitled to claim deduction under Section 80IB and in support of such argument, reliance was placed on the decision in the case of Commissioner of Income Tax Vs. Astoria Leathers [2020 117 taxmann.com 907 (Madras)] dated 08.07.2020. 9. We have elaborately heard learned counsel appearing for parties and carefully perused the entire materials placed on record. We find that the issue involved in the matter is wholly factual. The Assessing Officer formed an opinion initially and completed the assessment under Section 143(3) of the Act. The PCIT thought fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the property. The predominant purpose for which the guideline value is fixed by the State is for computing the stamp duty on an instrument of sale. However in the instant case, the PCIT faulted the land owners for having sold the land at the guideline value. There was no material available before the PCIT that such guideline value was ridiculously low. In fact, the profit is being computed based on the sale which were effected during the assessment year under consideration, AY 2012-13, that is more than five years after entering into the Joint Development Agreement, four years after the Partnership Firm came into being. Therefore, in the absence of any material to show that the assessee had so arranged the business and made transaction t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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