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TMI Blog2021 (4) TMI 1253X X X X Extracts X X X X X X X X Extracts X X X X ..... bservation. - Appeal of assessee allowed. - I.T.A No.148/SRT/2017 - - - Dated:- 16-4-2021 - Shri Pawan Singh, Hon'ble Judicial Member And Dr.Shri Arjun Lal Saini, Hon'ble Accountant Member For the Assessee : Shri Sapnesh Sheth CA For the Revenue : Smt. Usha Shrote Sr.DR ORDER PER PAWAN SINGH, JUDICIAL MEMEBER: 1. This appeal by Assessee is directed against the order of learned Commissioner of Income Tax (Appeals)-2, Surat, hereinafter referred as Ld.CIT(A) , dated 23.08.2017 for assessment year (AY) 2013-14. The assesse has raised following grounds of appeal: 1. On the facts and in circumstances of the case as well as law on the subject, the learned Commissioner of Income Tax (Appeals) has erred in confirming the action of assessing officer in holding that income from housing project in the name of Hampton Park belongs to AOP and not in the individual capacity as co-owner. 2. On the facts and in circumstances of the case as well as law on the subject, the learned Commissioner of Income-tax (Appeals) has erred in confirming the action of assessing officer in disallowing deduction of ₹ 59,80,995/- claimed by assessee u/s 80 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessment year passed the following order: 11. We have heard both submissions and perused the material available record. We find that on death of assessee's husband, the impugned land was inherited to Smt. Jayaben Govindbhai Patel (Assessee), Shri Ashok Govindbhai Patel (Son of the assessee) other son and two daughters who later assigned their rights in favour of the assessee and her one son. Thus, the assessee and her son Ashok Govindbhai Patel are the co-owners of the inherited impugned land on which housing project in the name of Hampton Park has been developed. The documentary evidences such as copies of approved plan submitted and signed by Co-owners, development permission letter bearing the names of both the Co-owners, copy of sale deed executed , by Co-owners, copy of current account held jointly in both their names, receipt of booking amount from the-flat holders; audit report u/s.44A8 and 80IB(10) in respect of Hampton Park , joint books of account-in the name of Hampton Park etc., were submitted by the assessee to the Assessing Officer to show that the project was being carried out under the status of Co-ownership . It was justified also stating that for th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sale of plots would not have been deposited in a separate bank account. The assessee also filed development permission letter bearing the name of co-owners in their individual capacity. It was further pointed out that the assessee as well as Ashok Govindbhai Patel has obtained separate registration under the Service Tax act in the individual capacity and the Service Tax Return filed along with deposit of service tax in the individual capacity were also furnished. It was contended that this is not the case where two or more independent persons have joined together for acquiring land and construction housing project by pooling their joint resources. The, assessee with her son cannot be at all be said to be voluntarily, because the land has been received by them jointly by way of inheritance. In such cases, the association of two or more persons is a forced association of the joint legatees and therefore, the status can only be regarded as co-ownership. In support of this contention the assessee; has placed reliance on the decision of Hon'ble Allahabad High Court in the; case of CIT Vs. Laxmi P Da Sons 316 ITR 330 (All) wherein it was held that' an AOP is a voluntary ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elating to sale of plots have been deposited in a separate bank amount of the assessee and her son .and. the same has been shared equally. This, fact further manifest that there was nonexistence of AOP, otherwise proceeds on sale of plots would not have been deposited in a separate bank account. The assessee also filed development permission letter bearing the name of coowners in their individual capacity. It was further pointed out that the assessee as well as Ashok Govindbhai Patel has obtained separate registration under the Service Tax act in the individual capacity and the Service Tax Return filed along with deposit of service tax in the individual capacity were also furnished. It was contended that this is not the case where two or more independent persons have joined together for acquiring land and construction housing project by pooling their joint resources. The, assessee with her son cannot be at all be said to be -voluntarily, because the land has been received by them jointly by way of; inheritance. In such cases, the association of two or more persons is a forced association of the joint legatees and therefore, the status can only be regarded as co-ownership. In s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r resources and thereafter acquired their property in the name of AOP. The ratio of this decision is again directly applicable to the facts of instant case, hence the contention of the Assessing Officer in para 4.6 of the order that eligible business activity has been carried out by the AOP / BOI is invalid. The contention of the AO that benefit of section 80IB(10) can only be granted to an AOP and not to the assessee. If that is the case of the Revenue, then it cannot tax the income which does not belongs to her in her individual capacity and therefore, the same can be taxed in the hands of the AOP. But this is not the case of the AO. The A.O. merely denied the claim that return of income was not filed in the status of AOP, in such situation provision of 292B comes to the rescue of the assessee and defects in return of income can be removed. We do hot find his son had agreed to share receipts in the ratio of 50%. It is further relevant to note that all the expenditure for the execution of project was incurred by the, assessee and his son. furrier, the following case laws CIT Vs. Laxmi PD. Sons 316 ITR 330, Sudhir Nagpal and Others vs. ITO 349 ITR 636 (P H), Baryyopd Estat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the object with which his provision is introduced when all persons who have made investments in this housing project -which is for the benefit of middle and lower c/ass people and, when they have complied with all the conditions prescribed under fire aforesaid provision, both of them are entitled to Hundred percent benefit of tax deduction as provided under the said provision. In that view of the matter, we do not see any merit in these appeals. The substantial question of law is answered in favour of the assessee and against the revenue. Accordingly, the appeals are dismissed. 13. Therefore, respectfully following the above ratio we allow the appeal of the assessee. We also note that following the ratio laid down in the case of CIT v. Shravanee Constructions (supra), the Co-ordinate Bench of Pune Tribunal in the case of ITO V. Skyline Developers ITA. No. 1503/PUH/2014 A.Y. 2009-10 dated 10.01.2018] has allowed the benefit to individual; assessee. The Co-ordinate Bench of Pune Tribunal has also relied on following case laws i.e. Income Tax Vs. Mahalakshmi Housing, 41 taxmann.com 146 (Madras); Income Tax Officer Vs. M/s. Shalom Sankalp Ventures in ITA No. 1696/Ban /2013 for a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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