Nirmala Devlopers, Baroda vs Assessee

सुनवाई क तार ख/ Date of Hea ring : 2 4/04/2015 घोषणा क तार ख /Date of P ronouncement: 9/06/2015

आदेश /O R D E R

PER SHRI S.S. GODARA, JUDICIAL MEMBER

This assessee's appeal for A.Y.2008-09, arises from order of the CIT(A)-V Baroda dated 15.11.2012 passed in case no.CAB/(A)V-143/10-11, upholding the Assessing Officer's finding disallowing its claim of section 80IB(10) deduction of Rs.1,02,00,421/-, in proceedings u/s.143(3) of the Income Tax Act in short 'the Act'.

2. The assessee-firm filed its return on 2.7.2008 showing Nil income after claiming the impugned section 80IB(10) of Rs.1,02,00,421/-. The Assessing Officer in course of a regular ITA No.27/Ahd/2013 M/s. Nirmala Developers.

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assessment framed on 19.11.2010 observed that the assessee was not owner of the land subject to matter of the residential project in question nor it had itself obtained building plan approval from the local authority, the land owner had already sold residential units in the project land to unit holder and the assessee had only acted as a confirming party, its role was merely that of a contractor executing construction agreement with the unit holders and it had never sold the residential houses in question to the ultimate buyers by way of registered documents; for disallowing the deduction in question.

3. The CIT(A) has expressed agreement with the Assessing Officer's findings for rejecting the assessee's appeal.

4. We have heard both sides and gone through the case file. The sole question involved in the present is that of assessee's claim of section 80IB(10) deduction amounting to Rs.1,02,00,421/- relating o 'Gayatri Krupa Tenements' project in Vadodara. The Revenue strongly supports the CIT(A)'s order. The relevant facts already stand narrated hereinabove along with the lower authorities' reasons for refusing the impugned deduction. They hold that the assessee is not the owner of the land and the project approval had been obtained in the name of third party. The case file reads that it has submitted to be the owner of the land as per the partnership deed and sale deed and only the approval had been in the name of the original owner from whom its partners had purchased the land in view of the fact that there was no requirement of a revised approval. Page 34 of the ITA No.27/Ahd/2013 M/s. Nirmala Developers.

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paper book containing the assessee's submission before the assessing authorities demonstrates these facts. There is also no finding forthcoming in the assessment order or lower appellate order that the assessee has not borne risk and responsibility in the housing project stated hereinabove. The hon'ble jurisdiction High Court in CIT Vs. Radhey Developers (2012) 341 ITR 403 holds that ownership of land is not a condition precedent for developing it under a housing project as per the Gujarat Town Planning and Control Regulations. This over rules the Revenue's first two substantive objections. The latter three reasons of execution of separate sale deeds etc (supra) are taken care of by a co-ordinate bench (same combination) in ITA 532/Ahd/2013 Puspak Developer Vs. DCIT decided on 28.4.2015 as under:

"6. We see no reason to take any other view than the view taken by the coordinate bench in the case of Narayan Realty Ltd. Vs. DCIT and other cases relied upon in the said decision. In the present case also, it is undisputed fact that the assessee was responsible for incurring all the expenses and taking all the risks involved in this venture. The mere fact that the assessee did not own the land and the mere fact that the sale deed executed in favour of the end buyer was a tripartite agreement showing sale by the land owner and construction having been done by the assessee does not negate the fact that the assessee was carrying on the business entrepreneur rather than a contractor simpliciter. In this view of the matter and respectfully following the decision of co-ordinate bench, we hold that the assessee was entitled to deduction under section 80IB(10) amounting to Rs.4,71,720/-. We accordingly direct the Assessing Officer to grant the same. The assessee gets the relief accordingly."

The Revenue fails to point out any distinction of facts or quote judicial precedent to the contrary. Thus, we accept the assessee's ITA No.27/Ahd/2013 M/s. Nirmala Developers.

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contention and hold it entitle for impugned section 80IB(10) deduction of Rs.1,02,00,421/-.

5. The assessee's appeal is allowed.

Order pronounced in the Court on this day, the 9th June, 2015 at Ahmedabad.

Sd/- Sd/- (PRAMOD KUMAR) (S.S. GODARA) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad; Dated /04/2015 Prabhat Kr. Kesarwani, Sr. P.S. आदेश क त ल प अ े षत/Copy of the Order forwarded to : 1. अपीलाथ / The Appellant 2. यथ / The Respondent. 3. संबं धत आयकर आयु त / Concerned CIT

4. आयकर आयु त(अपील) / The CIT(A)-III, Ahmedabad

5. वभागीय त न ध, आयकर अपील य अ धकरण, अहमदाबाद / DR, ITAT, Ahmedabad

6. गाड फाईल / Guard file.

आदेशानुस ार / BY ORDER,

उप/सहायक पंजीकार (Dy./Asstt.Registrar) आयकर अपील य अ धकरण, अहमदाबाद / ITAT, Ahmedabad