The ITO, Ward-3(2),, Baroda v. M/s. Sitaram Developers, Baroda

ITA 2500/AHD/2010 | 2006-2007
Pronouncement Date: 04-03-2011 | Result: Dismissed

Appeal Details

RSA Number 250020514 RSA 2010
Assessee PAN AAZFS7125F
Bench Ahmedabad
Appeal Number ITA 2500/AHD/2010
Duration Of Justice 6 month(s) 24 day(s)
Appellant The ITO, Ward-3(2),, Baroda
Respondent M/s. Sitaram Developers, Baroda
Appeal Type Income Tax Appeal
Pronouncement Date 04-03-2011
Appeal Filed By Department
Order Result Dismissed
Bench Allotted B
Tribunal Order Date 04-03-2011
Assessment Year 2006-2007
Appeal Filed On 11-08-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH 'B' BEFORE SHRI D K TYAGI JM & SHRI A N PAHUJA AM ITA NO.2500/AHD/2010 (ASSESSMENT YEAR:-2006-07) INCOME-TAX OFFICER WARD- 3(2) ROOM NO. 304 BARODA V/S M/S SITARAM DEVELOPERS 2 RAVIRAJ SOCIETY ABHILASHA CROSSING NEW SAMA ROAD BARODA PAN: AAZFS 7125 F [APPELLANT] [RESPONDENT] REVENUE BY :- SHRI P R GHOSH DR ASSESSEE BY:- NONE O R D E R A N PAHUJA: THIS APPEAL BY THE REVENUE AGAINST AN ORDER DATED 16- 06-2010 OF THE LD. CIT(APPEALS)-V BARODA FOR THE ASSESSMENT YEAR (AY) 2006-07 RAISE THE FOLLOWING GROUNDS:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW THE ID CIT (APPEALS) ERRED IN DIRECTING THE ASSESSING OFFI CER TO ALLOW THE DEDUCTION TO THE ASSESSEE ON THE GROUND THAT THE AS SESSEE HAS PURCHASED THE LAND FOR A FIXED CONSIDERATION FROM THE LANDOWN ER AND HAS DEVELOPED THE HOUSE PROJECT AT ITS OWN COST AND RISKS INVOLVE D IN RESPECT OF ISSUE REGARDING DEDUCTION U/S.80IB(10) R.W.S.80IB(1) CLAI MED BY THE ASSESSEE WITHOUT APPRECIATING THE FACT THAT THE APPROVAL BY THE LOCAL AUTHORITY AS WELL AS COMPLETION CERTIFICATE WAS NOT GRANTED TO THE AS SESSEE BUT TO THE LAND OWNER AND THE RIGHTS AND OBLIGATION UNDER THE SAID APPROVAL WERE NOT TRANSFERABLE AND THAT TRANSFER OF DWELLING UNITS I N FAVOR OF THE END-USERS WAS MADE BY THE LANDOWNER AND NOT BY THE ASSESSEE. 2. THE APPELLANT CRAVES LEAVE TO ADD TO AMEND OR A LTER THE ABOVE GROUNDS AS MAY BE DEEMED NECESSARY. RELIEF CLAIMED IN APPEAL. THE ORDER OF THE ID. CIT (APPEALS) MAY BE SET ASIDE AND THAT OF THE ASSESSING OFFICER MAY BE RESTORED. 2 NONE APPEARED ON BEHALF OF THE ASSESSEE DESPITE S ERVICE OF NOTICE. CONSIDERING THE FACT THAT ISSUE IS COVERED BY THE DECISION OF ITA NO.2500/AHD/2010 2 THE ITAT WE THEREFORE DECIDED TO DISPOSE OF THE APPEAL AFTER HEARING THE LEARNED DEPARTMENTAL REPRESENTATIVE. 3. FACTS IN BRIEF AS PER RELEVANT ORDERS ARE THAT RETURN DECLARING NIL INCOME FILED ON 17-07-2006 BY THE ASSESSEE CAR RYING ON THE BUILDING CONSTRUCTION ACTIVITIES PROCESSED ON 21.6 .2006 U/S 143(1) OF THE INCOME-TAX ACT 1961 [HEREINAFTER REFERRED T O AS THE ACT WAS SELECTED FOR SCRUTINY WITH THE SERVICE OF A NOTICE U/S 143(2) OF THE ACT ON 01-10-2008. INTER ALIA THE ASSESSEE. CLAIM ED DEDUCTION OF RS.16 81 000/- U/S 80IB(10) OF THE ACT. SINCE THE A SSESSEE WAS NOT THE ACTUAL OWNER OF THE LAND ON WHICH THE PROJECT SURABHI PARK WAS BUILT NOR THE APPROVAL OF THE PROJECT WAS GRANT ED TO THE ASSESSEE FIRM BUT WAS IN THE NAME OF LAND OWNERS I. E. SHRI RAVJIBHAI PRAGBHAI PATEL THE AO DISALLOWED THE CLAIM FOR DE DUCTION U/S 80IB(10) OF THE ACT. 4. ON APPEAL THE LEARNED CIT(A) ALLOWED THE CLAIM FOR DEDUCTION U/S 80IB(10) OF THE ACT IN THE FOLLOWING TERMS:- 5.2. IN APPEAL IT IS CONTENDED THAT THE ASSESSEE IS ENGAGED IN DEVELOPING HOUSING PROJECT ON THE LAND IN POSSESSION OF THE FI RM. IT IS ALSO MENTIONED THAT ALL THE OTHER CONDITIONS REGARDING AREA ETC. AS LAID DOWN U/S. 80IB(1Q) ARE SATISFIED. RELIANCE IS PLACED ON THE DECISION O F THE HON'BLE ITAT IN THE CASE OF M/S. RADHE DEVELOPERS. IT IS ALSO POINTED O UT THAT THE APPELLANT HAD INCURRED AIL EXPENSES IN RESPECT OF DEVELOPMENT AND CONSTRUCTION OF HOUSING PROJECT AND AIL THE PAYMENTS FOR OBTAINING NECESSARY CLEARANCES WERE BORNE BY THE APPELLANT AND THAT THE LAND OWNER S RECEIVED ONLY THE CONSIDERATION FOR PURCHASE OF LAND AND ALL RISKS AN D REWARDS ARE VESTED IN THE DEVELOPER. REFERRING TO THE DECISION IN THE CAS E OF M/S. SHAKTI CORPORATION IT IS SUBMITTED BY THE APPELLANT THAT THE APPELLANT HAD PAID FOR PURCHASE OF LAND TO THE LAND OWNER AND THAT ALL THE EXPENSES IN RELATION TO HOUSING PROJECTS ARE INCURRED BY THE APPELLANT AND THE DEVELOPER IS FULLY AUTHORIZED TO TRANSFER THE LAND ALONG WITH CONSTRUC TION IN FAVOUR OF ANY PERSON AND THAT THE SAND OWNER HAS NO CONTROL OR RI GHT OVER THE DEVELOPER. 5.3. I HAVE CAREFULLY EXAMINED THE FACTS OF THE CAS E SUBMISSIONS OF THE APPELLANT AND PERUSED THE ARGUMENTS OF THE ASSESSIN G OFFICER. ON THE MAIN ISSUE OF DEDUCTION U/S. 80IB (10) IT .IS SEEN THAT ALTHOUGH THE ISSUE WAS DECIDED IN FAVOR OF THE APPELLANT AND AGAINST R EVENUE BY THE ORDER OF THE JURISDICTIONAL ITAT IN THE CASE OF RADHE DEVEL OPERS VS ITO WARD 3(2) ITA NO.2500/AHD/2010 3 BARODA NO 2482/AHD/2006 A BENCH AHMEDABAD HOWEVER THE DECISION WAS PARTLY MODIFIED BY THE SUBSEQUENT DECISION IN T HE CASE OF ITO VS M/S SHAKTI CORPORATION ITA NO. 1503/AHD/2008 DATED 07/1 1/2008 WHEREIN THE HON'BLE ITAT HAS INDICATED THAT THE BENEFIT UNDER 8 0IB(10) WOULD BE AVAILABLE IF THE DEVELOPER HAS DOMINANT CONTROL OVE R THE PROJECT AND HAS DEVELOPED THE LAND AT ITS OWN COST AND RISK AND THE BENEFIT WOULD BE DENIED IF THE ASSESSEE HAD ENTERED INTO AN AGREEMEN T FOR A FIXED REMUNERATION AS A CONTRACTOR TO CONSTRUCT OR DEVELO P THE PROJECT ON BEHALF OF THE LAND OWNER. FURTHER HON'BLE APEX COURT IN T HE CASE OF FAQIR CHAND GUIATI VS UPPAL AGENCIES PVT LTD. & ANR (CIVIL AP PEAL NO. 3302 OF 2005) DATED 10/07/2008 HAS HELD AS UNDER; I) A DEVELOPMENT AGREEMENT IS ONE WHERE THE LAND HOLDE R PROVIDES THE LAND. THE BUILDER PUTS UP A BUILDING. THEREAFTE R THE LAND OWNER AND BUILDER SHARE THE CONSTRUCTED AREA. THE BUILDER DELIVERS THE OWNER'S SHARE TO THE LAND HOLDER AND RETAINS THE BU ILDER'S SHARE. THE LAND HOLDER SELLS/TRANSFERS UNDIVIDED SHARE'/S IN T HE LAND CORRESPONDING TO THE BUILDER'S SHARE OF THE BUILDIN G TO THE BUILDER OR HIS NOMINEES. THE LAND HOLDER WILL HAVE NO SAY OR C ONTROL IN THE CONSTRUCTION OF HAVE ANY SAY AS TO WHOM AND AT WHAT COST THE BUILDER'S SHARE OF APARTMENTS ARE TO BE DEALT WITH OR DISPOSED OF SUCH AN AGREEMENT IS NOT A 'JOINT VENTURE' IN THE L EGAL SENSE. IT IS A CONTRACT FOR SERVICES:' II) ON THE OTHER HAND AN AGREEMENT BETWEEN THE OWN ER OF A LAND AND A BUILDER FOR CONSTRUCTION OF APARTMENTS AND SALE OF THOSE APARTMENTS SO AS TO SHARE THE PROFITS IN A PARTICUL AR RATIO MAY BE A JOINT VENTURE IF THE AGREEMENT DISCLOSES AN INTENT THAT BOTH PARTIES SHALL EXERCISE JOINT CONTROL OVER THE CONSTRUCTION/ DEVELOPMENT AND BE ACCOUNTABLE TO EACH OTHER FOR THEIR RESPECTIVE A CTS WITH REFERENCE TO THE PROJECT. III) THE TITLE OF THE DOCUMENTS IS NOT DETERMINATIV E OF THE NATURE AND CHARACTER OF THE DOCUMENT THOUGH THE NAME MAY USUA LLY GIVE SOME INDICATION OF THE NATURE OF THE DOCUMENT. THE USE O F THE WORDS 'JOINT VENTURE' OR 'COLLABORATION' IN THE AGREEMENT WILL N OT MAKE THE TRANSACTION A JOINT VENTURE IF THERE ARE NO'PROVIS IONS FOR SHARED CONTROL AND LOSSES. 5.3.1. IN THE INSTANT CASE THE APPELLANT HAS PURC HASED THE LAND FOR FIXED CONSIDERATION AND HAS DEVELOPED THE HOUSING PROJECT ON ITS OWN COST AND RISK AND THAT LAND OWNERS DO NOT HAVE ANY RIGHT TO RECEIVE PROFIT OF THE PROJECT AND THAT ONLY THE AGREED LAND PRICE AND THE DEVELOPER HAS NOT ACTED AS A CONTRACTOR FOR FIXED REMUNERATION AND TH ERE IS NO JOINT VENTURE WITH THE LAND OWNERS AND THUS IN TERMS OF DECISION IN THE CASE OF M/S SHAKTI CORPORATION AND FAQIR CHAND GULATI VS. UPPAL AGENCIES PVT. LTD. & ANR. THE APPELLANT IS ENTITLED TO DEDUCTION U/S 80 IB(10). THE GROUND IS ALLOWED. ITA NO.2500/AHD/2010 4 5. THE REVENUE IS NOW IN APPEAL BEFORE US AGAINST T HE AFORESAID FINDINGS OF THE LEARNED CIT(A). THE LEARNED DR MERE LY SUPPORTED THE ORDER OF THE AO. 6. WE HAVE HEARD BOTH THE PARTIES AND GONE THROU GH THE FACTS OF THE CASE. WE FIND THAT THE ITAT WHILE ADJUDICATI NG A SIMILAR CLAIM IN THEIR DECISION DATED 7.11.2008 IN THE CASE OF M /S SHAKTI CORPORATION (SUPRA) AFTER CONSIDERING THE DECISION OF THE ITAT IN THE CASE OF M/S RADHE DEVEOPERS IN ITA NO.2482/AHD./200 6 AS ALSO DECISION OF THE HON'BLE SUPREME COURT IN THE CASE O F FAQIR CHAND GULATI V UPPAL AGENCIES PVT. LTD. & ANR. [CIVIL APPEAL NO.33 02 OF 2005] CONCLUDED AS UNDER:- 7 WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSI ONS AND PERUSED THE MATERIAL ON RECORD ALONG WITH THE ORDER OF THE TAX AUTHORITIES BELOW. WE HAVE GONE THROUGH THE DECISION OF THE HON 'BLE SUPREME COURT IN THE CASE OF FAQIR CHAND GULATI V UPPAL AGENCIES PVT . LTD. & ANR. [CIVIL APPEAL NO.3302 OF 2005]. WE FIND THAT IN THAT CASE THE QUE STIONS FRAMED BEFORE THE HON'BLE SUPREME COURT WERE AS UNDER: (I) WHETHER ON THE FACTS AND CIRCUMSTANCES A C OMPLAINT UNDER THE CONSUMER PROTECTION ACT 1986 IS MAINTAINABLE IN R EGARD TO THE AGREEMENT DATED 17-5-1991 BETWEEN THE PARTIES (II) WHETHER A COMPLAINT IS MAINTAINABLE UNDER THE ACT FOR A PRAYER SEEKING DELIVERY OF COMPLETION CERTIFICATE AND C&D FORMS IN REGARD TO A BUILDING AND WHETHER THE PRAYER FOR COM PLETION CERTIFICATE / C&D FORMS INVOLVES A PRAYER FOR RECTI FICATION OF THE DEFICIENCIES IN THE BUILDING SO AS TO SECURE THE CO MPLETION CERTIFICATE AND C&D FORMS. THE FACTS INVOLVED IN THE CASE OF FAQIR CHAND GULAT I (SUPRA) ARE THAT THE ASSESSEE IS THE OWNER OF THE PREMISES AT L-3 KAILA SH COLONY NEW DELHI. HE ENTERED INTO A COLLABORATION AGREEMENT DATED 17-5-1 991 WITH UPPAL AGENCIES PVT. LTD. [THE BUILDER HEREINAFTER]. THE TERMS OF THE AGREEMENT IN BRIEF WERE AS UNDER: [I] THE OWNER SHALL PLACE AT THE DISPOSAL OF THE BU ILDER VACANT POSSESSION OF THE REMISES AND AUTHORIZE THE BUILDER TO SECURE NEC ESSARY SANCTIONS PERMISSIONS AND APPROVALS FOR DEMOLITION OF THE EXI STING BUILDING AND CONSTRUCTION AND COMPLETION OF A NEW BUILDING. ITA NO.2500/AHD/2010 5 [III] THE BUILDER SHALL DEMOLISH THE EXISTING STRUC TURE AND CONSTRUCT A RESIDENTIAL BUILDING CONSISTING OF GROUND FIRST AND SECOND FLO ORS AT ITS COST AND EXPENSE. [IV] THE BUILDER WILL HAVE THE RIGHT TO APPOINT ARC HITECTS CONTRACTORS SUB- CONTRACTORS ETC. [V] THE NEW BUILDING TO BE CONSTRUCTED BY THE BUILD ER SHALL BE OF GOOD QUALITY AS PER THE DETAILED SPECIFICATIONS CONTAINED IN ANN EXURE-A TO THE AGREEMENT. [VI] ON COMPLETION OF CONSTRUCTION THE LAND-OWNER WILL BE ENTITLED TO THE ENTIRE GROUND FLOOR (CONSISTING OF THREE BEDROOMS WITH ATT ACHED BATHROOMS ONE DRAWING-CUM-DINING ONE STORE ROOM ONE KITCHEN) WI TH ONE SERVANT ROOM UNDER THE OVERHEAD WATER TANK ON REAR TERRACE AND O NE PARKING SPACE AS HIS SHARE IN CONSIDERATION OF HIS HAVING MADE AVAIL ABLE THE LAND. THE BUILDER SHALL ALSO PAY A SUM OF RS.8 LAKHS AS NON-R EFUNDABLE CONSIDERATION TO THE OWNER. [VII] THE REMAINING PART OF THE BUILDING (THE ENTIR E FIRST AND SECOND FLOORS AND TWO SERVANT ROOMS AND TWO CAR PARKING SPACES) SHALL BELONG TO THE BUILDER AS ITS SHARE OF THE BUILDING IN CONSIDERATION OF HA VING SPENT THE COST OF CONSTRUCTION OF THE ENTIRE BUILDING AND ALL OTHER S ERVICES RENDERED BY HIM UNDER THE AGREEMENT. [VIII] THE OWNER AND THE BUILDER SHALL BE ENTITLED TO UNDIVIDED AND INDIVISIBLE SHARE IN THE LAND PROPORTIONATE TO THEIR RIGHT IN THE BUILDING THAT IS AN UNDIVIDED ONE-THIRD SHARE IN THE LAND SHALL BELONG TO THE OWNER AND TWO- THIRD SHARE SHALL BELONG TO THE DEVELOPER. [IX] THE BUILDER SHALL BE ENTITLED TO EITHER RETAIN OR SELL ITS SHARE OF THE BUILDING. THE OWNER SHALL EXECUTE NECESSARY DOCUMENTS FOR TRA NSFERRING THE SHARE CORRESPONDING TO THE BUILDERS PORTION OF THE BUILD ING. THE OWNER SHALL GIVE AN IRREVOCABLE POWER OF ATTORNEY ENABLING THE BUILD ER TO EXECUTE THE DEED OF CONVEYANCE IN REGARD TO THE BUILDERS SHARE IN T HE LAND. THE BUILDER WILL HOWEVER HAVE THE OPTION TO REQUIRE THE OWNER TO PE RSONALLY EXECUTE THE SALE DEED IN REGARD TO THE BUILDERS SHARE IN THE L AND INSTEAD OF USING SUCH POWER OF ATTORNEY. [X] ON COMPLETION OF THE BUILDING THE BUILDER SHAL L APPLY FOR COMPLETION CERTIFICATE TO THE CONCERNED AUTHORITY AND SHALL BE LIABLE TO PAY ANY PENALTY THAT MAY BE IMPOSED OR LEVIED IN REGARD TO THE DEVI ATIONS IF ANY MADE IN THE CONSTRUCTION OF THE BUILDING. [XI] THE OWNER SHALL NOT INTERFERE OR OBSTRUCT THE CONSTRUCTION AND COMPLETION OF THE WORK IN ANY MANNER BUT WILL HAVE ACCESS TO THE CONSTRUCTION TO POINT OUT ANY DEFECT IN CONSTRUCTION OR WORKMANSHIP OR US E OF INFERIOR MATERIAL SO AS TO REQUIRE THE BUILDER TO RECTIFY SUCH DEFECT S. ITA NO.2500/AHD/2010 6 [XII] TITLE DEEDS HANDED OVER BY THE OWNER TO THE B UILDER FOR COMPLETING THE FORMALITIES RELATING TO THE AGREEMENT SHALL THEREAF TER BE RETURNED TO THE OWNER WHO SHALL HOWEVER MAKE AVAILABLE THE SAME F OR REFERENCE BY THE OWNERS OF THE OTHER FLOORS. (XIII) THE AGREEMENT AN D THE POWER OF ATTORNEY EXECUTED BY THE OWNER IN FAVOUR OF THE BUILDER ARE IRREVOCABLE. IN THE EVENT OF NEGLECT FAILURE DEFAULT ON THE PART OF THE OWN ER OR THE BUILDER THE AFFECTED PARTY SHALL HAVE THE RIGHT TO SPECIFIC PER FORMANCE OF THE SAID AGREEMENT AT THE COST AND RISK OF THE DEFAULTING PA RTY WHO SHALL ALSO BE LIABLE TO PAY DAMAGES. [XIV] THE AGREEMENT IS NOT A PARTNERSHIP AND SHALL NOT BE DEEMED TO BE A PARTNERSHIP BETWEEN THE OWNER AND THE BUILDER. 8 THE LAND OWNER ALLEGES THAT THE BUILDER MADE SEV ERAL UNAUTHORIZED DEVIATIONS DURING THE CONSTRUCTION FRO M THE SANCTIONED PLAN OF MUNICIPAL CORPORATION OF DELHI DUE TO WHICH THE LAN D OWNER RECEIVED A NUMBER OF NOTICES FROM MUNICIPAL CORPORATION OF DELHI AND VIDE ORDER DATED 16-1- 1991 MUNICIPAL CORPORATION OF DELHI DIRECTED TO SE AL THE PREMISES AND THE PREMISES WERE DE-SEALED SUBSEQUENTLY TO ENABLE THE BUILDER TO RECTIFY THE DEVIATIONS. THE BUILDER DELIVERED THE GROUND FLOOR TO THE LANDOWNERS SON DURING THE LANDOWNERS ABSENCE FROM INDIA. THE LAND OWNER ON RETURN NOTED A NUMBER OF SHORTCOMINGS IN THE CONSTRUCTION AND THE VIOLATION OF SANCTIONED PLAN AND ACCORDINGLY VIDE LETTER DATED 29-10-1992 A SKED THE BUILDER TO RECTIFY THE DEVIATIONS AND DEFECTS. THE BUILDER DID NOT COM PLY WITH THE SAME. THE LANDOWNER THEREFORE FILED A COMPLAINT BEFORE THE DI STRICT CONSUMER DISPUTES REDRESSAL FORUM. THE DISTRICT CONSUMER DISPUTES RED RESSAL FORUM DISMISSED THE COMPLAINT AS NOT MAINTAINABLE UNDER T HE CONSUMER PROTECTION ACT 1986 HOLDING THAT THE LANDOWNER WAS NOT A CONS UMER. THE APPEAL FILED BEFORE THE STATE COMMISSION DELHI WAS DISMISSED AS NOT MAINTAINABLE. REVISION PETITION WAS FILED BEFORE THE NATIONAL COM MISSION. THE LANDOWNER CONTENDED THAT NON-COMPLETION OF THE BUILDING AS PE R SANCTIONED PLAN AND MAKING DEVIATIONS ON A LARGE SCALE RESULTING IN NON -ISSUE OF COMPLETION CERTIFICATE AND C&D FORMS AMOUNTED TO DEFICIENCY IN SERVICES AND ACCORDINGLY THE COMPLAINT WOULD HAVE BEEN ALLOWED. THE NATIONAL COMMISSION DISMISSED THE REVISION PETITION BY OBSERVING THAT THE AGREEME NT WAS IN THE NATURE OF JOINT-VENTURE AND THE TRANSACTION DID NOT HAVE ANY ELEMENT OF HIRING THE SERVICES OF THE BUILDER WITHIN THE MEANING OF SECTI ON 2(1)(D)(II) OF THE ACT. THE SAID ORDER WAS CHALLENGED BEFORE THE HON'BLE SUPREM E COURT BY SPECIAL LEAVE. THE HON'BLE SUPREME COURT TOOK THE VIEW THAT THE LANDOWNERS COMPLAINT IS MAINTAINABLE AND DIRECTED THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM TO CONSIDER THE MATTER ON MERIT BY OBSERVING AS UNDER [AS RELIED ON BY THE LEARNED AR UNDER PARAS 16 AND 19 T O 24 OF THE JUDGMENT]: 16 THERE IS NO DISPUTE OR DOUBT THAT A COMPLAINT U NDER THE ACT WILL BE MAINTAINABLE IN THE FOLLOWING CIRCUMSTANCES : (A) WHERE THE OWNER/HOLDER OF A LAND WHO HAS ENTRUSTED THE CONSTRUCTION OF A HOUSE TO A CONTRACTOR HAS A COMP LAINT OF DEFICIENCY OF SERVICE WITH REFERENCE TO THE CONSTRU CTION. ITA NO.2500/AHD/2010 7 (B) WHERE THE PURCHASER OR INTENDING PURCHASER OF AN APARTMENT/FLAT/HOUSE HAS A COMPLAINT AGAINST THE BUILDER/DEVELOPER WITH REFERENCE TO CONSTRUCTION OR DELIVERY OR AMENITIES. BUT WE ARE CONCERNED WITH A THIRD HYBRID CATEGORY W HICH IS POPULARLY CALLED AS JOINT-VENTURE AGREEMENTS OR DEVELOPMENT AGREEMENTS OR COLLABORATION AGREEMEN TS BETWEEN A LAND-HOLDER AND A BUILDER. IN SUCH TRANSA CTIONS THE LAND-HOLDER PROVIDES THE LAND. THE BUILDER PUTS UP A BUILDING. THEREAFTER THE LAND OWNER AND BUILDER SH ARE THE CONSTRUCTED AREA. THE BUILDER DELIVERS THE OWNERS SHARE TO THE LAND-HOLDER AND RETAINS THE BUILDERS SHARE. THE LAND- HOLDER SELLS/TRANSFERS UNDIVIDED SHARE/S IN THE LAN D CORRESPONDING TO THE BUILDERS SHARE OF THE BUILDIN G TO THE BUILDER OR HIS NOMINEES. AS A RESULT EACH APARTMENT OWNER BECOMES THE OWNER OF THE APARTMENT WITH CORRESPONDI NG UNDIVIDED SHARE IN THE LAND AND AN UNDIVIDED SHARE IN THE COMMON AREAS OF THE BUILDING. IN SUCH A CONTRACT T HE OWNERS SHARE MAY BE A SINGLE APARTMENT OR SEVERAL APARTMENTS. THE LAND-HOLDER WHO GETS SOME APARTMENT S MAY RETAIN THE SAME OR MAY DISPOSE OF HIS SHARE OF APAR TMENTS WITH CORRESPONDING UNDIVIDED SHARES TO OTHERS. THE USUAL FEATURE OF THESE AGREEMENTS IS THAT THE LAND-HOLDER WILL HAVE NO SAY OR CONTROL IN THE CONSTRUCTION. NOR WILL HE HAVE ANY SAY AS TO WHOM AND AT WHAT COST THE BUILDERS SHARE OF APARTMENTS ARE TO BE DEALT WITH OR DISPOSED OF. HIS ONLY RIGHT IS TO DEMAND DELIVERY OF HIS SHARE OF CONSTRUCTED AREA IN ACCORDANCE WITH THE SPECIFICATIONS. THE BUILDERS CO NTEND THAT SUCH AGREEMENTS ARE NEITHER CONTRACTS FOR CONS TRUCTION NOR CONTRACTS FOR SALE OF APARTMENTS BUT ARE CONTR ACTS ENTERED FOR MUTUAL BENEFIT AND PROFIT AND IN SUCH A CONTRACT THEY ARE NOT SERVICE-PROVIDERS TO THE LAND-OWNERS BUT A CO- ADVENTURER WITH THE LAND-HOLDER IN A JOINT VENTURE IN DEVELOPING THE LAND BY PUTTING UP MULTIPLE-HOUSING (APARTMENTS) AND SHARING THE BENEFITS OF THE PROJEC TS. THE QUESTION IS WHETHER SUCH AGREEMENTS ARE TRULY JOINT -VENTURES IN THE LEGAL SENSE. 19. WHAT THEN IS THE NATURE OF THE AGREEMENT BETWEEN THE APPELLANT AND THE FIRST RESPONDENT? APP ELLANT IS ITA NO.2500/AHD/2010 8 THE OWNER OF THE LAND. HE WANTS A NEW HOUSE BUT IS NOT ABLE TO CONSTRUCT A NEW HOUSE FOR HIMSELF EITHER ON ACCO UNT OF PAUCITY OF FUNDS OR LACK OF EXPERTISE OR RESOURCES. HE THEREFORE ENTERS INTO AN AGREEMENT WITH THE BUILDE R. HE ASKS THE BUILDER TO CONSTRUCT A HOUSE AND GIVE IT TO HIM . HE SAYS THAT AS HE DOES NOT HAVE THE MONEY TO PAY FOR THE CONSTRUCTION AND WILL THEREFORE PERMIT THE BUILDER TO CONSTRUCT AND OWN ADDITIONAL FLOOR/S AS CONSIDERATION. HE ALS O AGREES TO TRANSFER AN UNDIVIDED SHARE IN THE LAND CORRESPONDI NG TO THE ADDITIONAL FLOOR/S WHICH FALLS TO THE SHARE OF THE BUILDER. AS A RESULT INSTEAD OF BEING THE FULL OWNER OF THE LAND WITH AN OLD BUILDING HE BECOMES A CO-OWNER OF THE LAND WITH A ONE-THIRD SHARE IN THE LAND AND ABSOLUTE OWNER OF THE GROUND FLOOR OF THE NEWLY CONSTRUCTED BUILDING AND AGREES THAT THE BUILDER WILL BECOME THE OWNER OF THE UPPER FLOORS WITH CORR ESPONDING TWO-THIRD SHARE IN THE LAND. AS THE COST OF THE UND IVIDED TWO- THIRD SHARE IN THE LAND WHICH THE LAND OWNER AGREE S TO TRANSFER TO THE BUILDER IS MORE THAN THE COST OF C ONSTRUCTION OF THE GROUND FLOOR BY THE BUILDER FOR THE LANDOWNER IT IS ALSO MUTUALLY AGREE THAT THE BUILDER WILL PAY THE LANDOW NER AN ADDITIONAL CASH CONSIDERATION OF RS.8 LAKHS. THE BA SIC UNDERLYING PURPOSE OF THE AGREEMENT IS THE CONSTRUC TION OF A HOUSE OR AN APARTMENT (GROUND FLOOR) IN ACCORDANCE WITH THE SPECIFICATIONS BY THE BUILDER FOR THE OWNER THE C ONSIDERATION FOR SUCH CONSTRUCTION BEING THE TRANSFER OF UNDIVID ED SHARE IN LAND TO THE BUILDER AND GRANT OF PERMISSION TO THE BUILDER TO CONSTRUCT TWO FLOORS. SUCH AGREEMENT WHETHER CALLED AS A COLLABORATION AGREEMENT OR A JOINT-VENTURE AGREE MENT IS NOT HOWEVER A JOINT-VENTURE. THERE IS A CONTRACT FOR CONSTRUCTION OF AN APARTMENT OR HOUSE FOR THE APPEL LANT IN ACCORDANCE WITH THE SPECIFICATIONS AND IN TERMS OF THE CONTRACT. THERE IS A CONSIDERATION FOR SUCH CONSTRU CTION FLOWING FROM THE LANDOWNER TO THE BUILDER (IN THE F ORM OF SALE OF AN UNDIVIDED SHARE IN THE LAND AND PERMISSION TO CONSTRUCT AND OWN THE UPPER FLOORS). TO ADJUST THE VALUE OF T HE EXTENT OF LAND TO BE TRANSFERRED THERE IS ALSO PAYMENT OF CA SH CONSIDERATION BY THE BUILDER. BUT THE IMPORTANT ASP ECT IS THE AVAILMENT OF SERVICES OF THE BUILDER BY THE LAND-OW NER OF A HOUSE CONSTRUCTION (CONSTRUCTION OF OWNERS SHARE O F THE BUILDING) FOR A CONSIDERATION. TO THAT EXTENT THE LAND-OWNER IS A CONSUMER THE BUILDER IS A SERVICE-PROVIDER AND I F THERE IS DEFICIENCY IN SERVICE IN REGARD TO CONSTRUCTION TH E DISPUTE RAISED BY THE LAND OWNER WILL BE A CONSUMER DISPUTE . WE MAY MENTION THAT IT MAKES NO DIFFERENCE FOR THIS PURPOS E WHETHER THE COLLABORATION AGREEMENT IS FOR CONSTRUCTION AND DELIVERY OF ONE APARTMENT OR ONE FLOOR TO THE OWNER OR WHETH ER IT IS FOR ITA NO.2500/AHD/2010 9 CONSTRUCTION AND DELIVERY OF MULTIPLE APARTMENTS OR MORE THAN ONE FLOOR TO THE OWNER. THE PRINCIPLE WOULD BE THE SAME AND THE CONTRACT WILL BE CONSIDERED AS ONE FOR HOUSE CO NSTRUCTION FOR CONSIDERATION . THE DECIDING FACTOR IS NOT THE NUMBER OF APARTMENTS DELIVERABLE TO THE LAND OWNER BUT WHETH ER THE AGREEMENT IS IN THE NATURE OF A JOINT- VENTURE OR W HETHER THE AGREEMENT IS BASICALLY FOR CONSTRUCTION OF CERTAIN AREA FOR THE LANDOWNER. 20. IT IS HOWEVER TRUE THAT WHERE THE CONTRACT IS A TRUE JOINT VENTURE THE SCOPE OF WHICH HAS BEEN POINTED OUT IN PARA 17 ABOVE THE POSITION WILL BE DIFFERENT. IN A TRUE JO INT VENTURE AGREEMENT BETWEEN THE LAND-OWNER AND ANOTHER (WHETH ER A RECOGNIZED BUILDER OR FUND PROVIDER) THE LAND-OWNE R IS A TRUE PARTNER OR CO-ADVENTURER IN THE VENTURE WHERE THE L AND OWNER HAS A SAY OR CONTROL IN THE CONSTRUCTION AND PARTIC IPATES IN THE BUSINESS AND MANAGEMENT OF THE JOINT VENTURE AND HAS A SHARE IN THE PROFIT/LOSS OF THE VENTURE. IN SUCH A CASE THE LAND OWNER IS NOT A CONSUMER NOR IS THE OTHER CO- ADVENT URER IN THE JOINT VENTURE A SERVICE PROVIDER. THE LAND OWNER H IMSELF IS RESPONSIBLE FOR THE CONSTRUCTION AS A CO-ADVENTURER IN THE VENTURE. BUT SUCH TRUE JOINT VENTURES ARE COMPARATI VELY RARE. WHAT IS MORE PREVALENT ARE AGREEMENTS OF THE NATURE FOUND IN THIS CASE WHICH ARE A HYBRID AGREEMENT FOR CONSTRU CTION FOR CONSIDERATION AND SALE AND ARE PSEUDO JOINT-VENTURE S. NORMALLY A PROFESSIONAL BUILDER WHO DEVELOPS PROPER TIES OF OTHERS IS NOT INTERESTED IN SHARING THE CONTROL AND MANAGEMENT OF THE BUSINESS OR THE CONTROL OVER THE CONSTRUCTION WITH THE LAND OWNERS. EXCEPT ASSURING THE LAND OWNER A CERTAIN CONSTRUCTED AREA AND/OR CERTAIN CAS H CONSIDERATION THE BUILDER ENSURES ABSOLUTE CONTROL IN HIMSELF ONLY ASSURING THE QUALITY OF CONSTRUCTION AND COMPL IANCE WITH THE REQUIREMENTS OF LOCAL AND MUNICIPAL LAWS AND UNDERTAKING TO DELIVER THE OWNERS CONSTRUCTED AREA OF THE BUILDING WITH ALL CERTIFICATES CLEARANCES AND APPR OVALS TO THE LAND OWNER. 21. LEARNED COUNSEL FOR THE RESPONDENT CONTENDED TH AT THE AGREEMENT WAS TITLED AS COLLABORATION AGREEMENT W HICH SHOWS AN INTENTION TO COLLABORATE AND THEREFORE IT IS A JOINT VENTURE. IT IS NOW WELL SETTLED THAT THE TITLE OR C APTION OR THE NOMENCLATURE OF THE INSTRUMENT/DOCUMENT IS NOT DETERMINATIVE OF THE NATURE AND CHARACTER OF THE INSTRUMENT/DOCUMENT THOUGH THE NAME MAY USUALLY GI VE SOME INDICATION OF THE NATURE OF THE DOCUMENT. THE NATURE AND TRUE PURPOSE OF A DOCUMENT HAS TO BE DETERMINED WITH ITA NO.2500/AHD/2010 10 REFERENCE TO THE TERMS OF THE DOCUMENT WHICH EXPRE SS THE INTENTION OF THE PARTIES. THEREFORE THE USE OF THE WORDS JOINT VENTURE OR COLLABORATION IN THE TITLE OF AN AGRE EMENT OR EVEN IN THE BODY OF THE AGREEMENT WILL NOT MAKE THE TRANSACTION A JOINT VENTURE IF THERE ARE NO PROVIS IONS FOR SHARED CONTROL OF INTEREST OR ENTERPRISE AND SHARED LIABIL ITY FOR LOSSES. 22. THE STATE COMMISSION AND NATIONAL COMMISSION HA VE PROCEEDED ON AN ASSUMPTION WHICH APPEARS TO BE CLE ARLY BASELESS THAT WHEREVER THERE IS AN AGREEMENT FOR DEVELOPMENT OF A PROPERTY BETWEEN THE PROPERTY OWNE R AND BUILDER UNDER WHICH THE CONSTRUCTED AREA IS TO BE D IVIDED IT WOULD AUTOMATICALLY AMOUNT TO A JOINT VENTURE AND T HERE IS NO QUESTION OF THE LANDHOLDER AVAILING THE SERVICE OF THE BUILDER FOR CONSIDERATION. RELIANCE WAS PLACED ON TWO DECIS IONS THE FIRST BEING THAT OF THE NATIONAL COMMISSION IN C NA RASIMHA RAO V. K R NEELAKANDAN - I (1994) CPJ 160 AND THE S ECOND BEING THAT OF THE DELHI STATE COMMISSION IN HAR SAR UP GUPTA V. MIS. KAILASH NATH & ASSOCIATES - II (1995) CPJ 2 75. IN C NARASIMHA RAO THERE WAS AN AGREEMENT BETWEEN THE LANDOWNERS AND A BUILDER FOR CONSTRUCTION OF A BUIL DING AND SHARING OF THE CONSTRUCTED AREA. THE OLD BUILDING W AS DEMOLISHED BUT THE BUILDER FAILED TO COMPLETE THE CONSTRUCTION OF A NEW BUILDING AND HAND OVER THE OW NERS SHARE OF FLATS. THE LANDOWNERS PREFERRED A COMPLAIN T CLAIMING RS.94 000/- AS THE VALUE OF THE MALBA (RETRIEVABLE VALUABLES FROM THE DEBRIS OF THE OLD BUILDING) THAT HAD BEEN REMOVED BY THE BUILDER. THE NATIONAL COMMISSION HELD THAT A S THE CLAIM WAS FOR RECOVERY OF THE MONEY BEING VALUE OF THE MALBA REMOVED BY THE BUILDER IT DOES NOT AMOUNT TO A CLAIM BASED ON DEFICIENCY OF SERVICE AND THEREFORE SUCH A CLAIM WOULD FALL OUTSIDE THE SCOPE OF THE CONSUMER PROTEC TION ACT. THE SAID DECISION IS WHOLLY INAPPLICABLE AS IT DEA LT WITH A DIFFERENT QUESTION. IN HAR SWAMP GUPTA THE STATE COMMISSION WAS CONCERNED WITH A CLAIM OF THE LANDOW NERS FOR COMPENSATION ALLEGING THAT THE BUILDER HAD NOT BUILT THE FLATS IN TERMS OF THE CONTRACT UNDER WHICH THE LAND OWNERS WERE ENTITLED TO 36% AND THE BUILDER WAS ENTITLED T O 64% OF THE BUILT UP AREA. THE STATE COMMISSION HELD THAT T HE COMPLAINT WAS NOT MAINTAINABLE ON THE GROUND THAT O N SIMILAR FACTS THE NATIONAL COMMISSION IN NARASIMHA RAOS CA SE (SUPRA) HAD HELD THAT THE FORA UNDER THE CONSUMER P ROTECTION ACT DID NOT HAVE JURISDICTION. BUT NARASIMHA RAO (S UPRA) AS NOTICED ABOVE WAS NOT SIMILAR ON FACTS NOR DID IT LAY DOWN ANY SUCH PROPOSITION. HAR SWAMP GUPTA IS CLEARLY WR ONGLY DECIDED. ITA NO.2500/AHD/2010 11 23. WE MAY NOTICE HERE THAT IF THERE IS A BREACH BY THE LANDOWNER OF HIS OBLIGATIONS THE BUILDER WILL HAVE TO APPROACH A CIVIL COURT AS THE LANDOWNER IS NOT PROV IDING ANY SERVICE TO THE BUILDER BUT MERELY UNDERTAKES CERTAI N OBLIGATIONS TOWARDS THE BUILDER BREACH OF WHICH WO ULD FURNISH A CAUSE OF ACTION FOR SPECIFIC PERFORMANCE AND/OR D AMAGES. ON THE OTHER HAND WHERE THE BUILDER COMMITS BREACH OF HIS OBLIGATIONS THE OWNER HAS TWO OPTIONS. HE HAS THE RIGHT TO ENFORCE SPECIFIC PERFORMANCE AND/OR CLAIM DAMAGES B Y APPROACHING THE CIVIL COURT. OR HE CAN APPROACH THE FORUM UNDER CONSUMER PROTECTION ACT FOR RELIEF AS CONSUM ER AGAINST THE BUILDER AS A SERVICE- PROVIDER. SECTION 3 OF THE ACT MAKES IT CLEAR THAT THE REMEDY AVAILABLE UNDER THE ACT IS IN ADDITION TO THE NORMAL REMEDY OR OTHER REMEDY THAT MAY BE AVAILABLE TO THE COMPLAINANT. 24. THE DISTRICT FORUM THE STATE COMMISSION AND TH E NATIONAL COMMISSION COMMITTED A SERIOUS ERROR IN WRONGLY ASS UMING THAT AGREEMENTS OF THIS NATURE BEING IN THE NATURE OF JOINT VENTURE ARE OUTSIDE THE SCOPE OF CONSUMER DISPUTES. FROM THE AFORESAID DECISION IT IS APPARENT THAT THE FOLLOWING PROPOSITION OF LAW HAS BEEN LAID DOWN BY THE HON'BLE SUPREME COURT FOR DECIDING THE NATURE OF THE AGREEMENT (DOCUMENT): (1) TITLE OR NOMENCLATURE GIVEN TO THE AGREEMENT / DOCUMENT / INSTRUMENT DOES NOT DECIDE THE NATURE OF THE AGREEMENT. (2) THE NAME GIVEN TO THE AGREEMENT USUALLY GIVES SOME INDICATION OF THE NATURE OF THE AGREEMENT / DOCUMENT / INSTRUMENT. (3) THE NATURE OF THE AGREEMENT HAS TO BE DECIDED W ITH REFERENCE TO THE TERMS AND CONDITIONS AGREED TO BETWEEN THE PARTIES WHO HAVE ENTERED INTO THE AGREEMENT OR EXECUTED THE DOCUMENT OR INSTRUMENT AS THESE TERMS AND CONDITIONS EXPRESS THE INTENTION OF THE PARTIES. (4) EVEN THE NOMENCLATURE GIVEN IN THE BODY OF THE AGREEMENT / DOCUMENT / INSTRUMENT IS ALSO NOT DETERMINATIVE OF THE NATUR E AND CHARACTER OF THE AGREEMENT / DOCUMENT / INSTRUMENT. ON THE FACTS OF THIS CASE THE HON'BLE SUPREME COUR T OBSERVED THAT THE LAND OWNER HAS TO DO NOTHING EXCEPT TO THE EXTENT HE HAS TO RECEIVE THE CONSTRUCTED AREA BY WAY OF CONSIDERATION FROM THE BUILDER / DEV ELOPER. THE HON'BLE ITA NO.2500/AHD/2010 12 SUPREME COURT CAME TO THE CONCLUSION THAT THE BASIC PURPOSE OF THE AGREEMENT TO CONSTRUCT A HOUSE OR APARTMENT BY THE BUILDER FOR THE OWNER AND THEREFORE THE AGREEMENT IS NOT JOINT VENTURE EVEN THOUGH THE NOMENCLATURE OF THE AGREEMENT GIVEN MAY BE A COLLAB ORATION AGREEMENT. THE LAND OWNER WILL NOT HAVE ANY SAY OR CONTROL IN THE CONSTRUCTION. HIS MOTIVE IS NOT TO DEVELOP CONSTRUCT OR CARRY ON THE BUSINESS. HIS ONLY RIGHT IS TO DEMAND DELIVERY OF HIS SHARE OF CONSTRUCTED AREA IN ACCORD ANCE WITH THE SPECIFICATIONS. THEREFORE THE HON'BLE SUPREME COURT AFTER HAVING L ENGTHY AND PAIN TAKING DISCUSSION CAME TO THE CONCLUSION THAT THE CONTRACT ENTERED INTO EVEN THOUGH IS TITLED AS COLLABORATION AGREEMENT IS IN FACT A C ONTRACT FOR HOUSE CONSTRUCTION FOR THE CONSIDERATION AND ACCORDINGLY TOOK THE VIEW THAT THE LAND OWNER IS A CONSUMER AND THE BUILDER IS A SERVICE PROVIDER. THE REMEDY IS AVAILABLE TO THE LAND OWNER AGAINST THE BUILDER FOR THE DEFICIENCY I N THE SERVICE. THE HON'BLE SUPREME COURT ALSO MADE IT CLEAR THAT THE AGREEMENT OF THE NATURE UNDER DISPUTE IS NOT JOINT VENTURE WHICH CAN BE REGARDED TO BE OUTSIDE THE SCOPE OF CONSUMER DISPUTES. 9 WE AGREE WITH THE CONTENTIONS OF THE LEARNED AR THAT THE DECISION IS A PRECEDENT ON ITS OWN FACTS. A DECISIO N CANNOT BE APPLIED UNIVERSALLY WITHOUT LOOKING TO THE FACTS AND THE IS SUE INVOLVED IN THE DECISION. IF THE QUESTIONS INVOLVED IN BOTH THE DECISIONS ARE DI FFERENT ONE DECISION CANNOT BE FOLLOWED WHILE DECIDING THE OTHER CASE. IF THE F ACTS INVOLVED IN BOTH THE CASES ARE DIFFERENT THE DECISION INVOLVED IN ONE C ASE CANNOT BE APPLIED IN THE OTHER CASE. HOW A JUDGMENT HAS TO BE READ THE HON' BLE SUPREME COURT IN THE CASE OF CIT V SUN ENGINEERING WORKS P. LTD. (1992) 198 ITR 297 (SC) HAS HELD [AT PAGE 299] AS UNDER: IT IS NEITHER DESIRABLE NOR PERMISSIBLE TO PICK OU T A WORD OR A SENTENCE FROM THE JUDGMENT OF THE SUPREME COURT DIV ORCED FROM THE CONTEXT OF THE QUESTION UNDER CONSIDERATION AND TREAT IT TO BE THE COMPLETE LAW DECLARED BY THE COURT. THE JUDGMEN T MUST BE READ AS A WHOLE AND THE OBSERVATIONS FROM THE JUDGM ENT HAVE TO BE CONSIDERED IN THE LIGHT OF THE QUESTIONS WHICH W ERE BEFORE THE COURT. A DECISION OF THE SUPREME COURT TAKES ITS CO LOUR FROM THE QUESTIONS INVOLVED IN THE CASE IN WHICH IT IS RENDE RED AND WHILE APPLYING THE DECISION TO A LATER CASE COURTS MUST CAREFULLY TRY TO ASCERTAIN THE TRUE PRINCIPLE LAID DOWN BY THE DECIS ION. WE HAVE ALSO GONE THROUGH THE DECISION OF THE HON'B LE SUPREME COURT IN THE CASE OF GOVERNMENT OF KARNATAKA & OTHERS V SMT. GOW RAMMA AND OTHERS [APPEAL (CIVIL) NO.2874 OF 2001 DATED 14-12-2007] ON WHICH THE LEARNED SENIOR ADVOCATE HAS HEAVILY RELIED. WE FIND THAT IN THIS CASE THE HON'BLE SUPREME COURT ON THE APPLICABILITY OF THE JUDGMENT HAS HELD AS UNDER: A DECISION IS A PRECEDENT ON ITS OWN FACTS. EACH C ASE PRESENTS ITS OWN FEATURES. IT IS NOT EVERYTHING SAID BY A JUDGE WHILE GIVING A JUDGMENT THAT CONSTITUTES A PRECEDENT. THE ONLY THI NG IN A JUDGES DECISION BINDING A PARTY IS THE PRINCIPLE UPON WHIC H THE CASE IS ITA NO.2500/AHD/2010 13 DECIDED AND FOR THIS REASON IT IS IMPORTANT TO ANAL YZE A DECISION AND ISOLATE FROM IT THE RATIO DECIDENDI. ACCORDING TO T HE WELL-SETTLED THEORY OF PRECEDENTS EVERY DECISION CONTAINS THREE BASIC POSTULATES (I) FINDINGS OF MATERIAL FACTS DIRECT AND INFERE NTIAL. AN INFERENTIAL FINDING OF FACT IS THE INFERENCE WHICH THE JUDGE DR AWS FROM THE DIRECT OR PERCEPTIBLE FACTS; (II) STATEMENTS OF TH E PRINCIPLES OF LAW APPLICABLE TO THE LEGAL PROBLEMS DISCLOSED BY THE F ACTS; AND (III) JUDGMENT BASED ON THE COMBINED EFFECT OF THE ABOVE. A DECISION IS AN AUTHORITY FOR WHAT IT ACTUALLY DECIDES. WHAT IS OF THE ESSENCE IN A DECISION IS ITS RATIO AND NOT EVERY OBSERVATION FOU ND THEREIN NOR WHAT LOGICALLY FLOWS FROM THE VARIOUS OBSERVATIONS MADE IN THE JUDGMENT. THE ENUNCIATION OF THE REASON OR PRINCIPLE ON WHICH A QUESTION BEFORE A COURT HAS BEEN DECIDED IS ALONE BINDING AS A PRECEDENT. (STATE OF ORISSA V SUDHANSU SEKHAR MISRA AND ORS. ( AIR 1968 SC 647) AND UNION OF INDIA AND ORS. V DHANWANTI DEVI AND OR S. (1996 (6) SCC 44)). A CASE IS A PRECEDENT AND BINDING FOR WH AT IT EXPLICITLY DECIDES AND NO MORE. THE WORDS USED BY THE JUDGES I N THEIR JUDGMENTS ARE NOT TO BE READ AS IF THEY ARE WORDS I N ACT OF PARLIAMENT. IN QUINN V LEATHEM (1901) AC 495 (H.L.) EARL OF HALSBURY LC OBSERVED THAT EVERY JUDGMENT MUST BE READ AS APP LICABLE TO THE PARTICULAR FACTS PROVED OR ASSUMED TO BE PROVED SINCE THE GENERALITY OF THE EXPRESSIONS WHICH ARE FOUND THERE ARE NOT INTENDED TO BE EXPOSITION OF THE WHOLE LAW BUT GOVE RNED AND QUALIFIED BY THE PARTICULAR FACTS OF THE CASE IN WH ICH SUCH EXPRESSIONS ARE FOUND AND A CASE IS ONLY AN AUTHORI TY FOR WHAT IT ACTUALLY DECIDES. COURTS SHOULD NOT PLACE RELIANCE ON DECISIONS WITHO UT DISCUSSING AS TO HOW THE FACTUAL SITUATION FITS IN WITH THE FACT SITUATION OF THE DECISION ON WHICH RELIANCE IS PLACED. OBSERVATIONS OF COURTS ARE NEITHER TO BE READ AS EUCLID S THEOREMS NOR AS PROVISIONS OF THE STATUTE AND THAT TOO TAKEN OUT OF THEIR CONTEXT. TH ESE OBSERVATIONS MUST BE READ IN THE CONTEXT IN WHICH THEY APPEAR TO HAVE BEEN STATED. JUDGMENTS OF COURTS ARE NOT TO BE CONSTRUED AS STATUTES. TO INTERPRET WORDS PHRASES AND PROVISIONS OF A STATUT E IT MAY BECOME NECESSARY FOR JUDGES TO EMBARK INTO LENGTHY DISCUSS IONS BUT THE DISCUSSION IS MEANT TO EXPLAIN AND NOT TO DEFINE. J UDGES INTERPRET STATUTES THEY DO NOT INTERPRET JUDGMENTS. THEY INT ERPRET WORDS OF STATUTES; THEIR WORDS ARE NOT TO BE INTERPRETED AS STATUES. IN LONDON GRAVING DOCK CO. LTD. V HORTON (1951 AC 737) LORD MAC DERMOT OBSERVED: THE MATTER CANNOT OF COURSE BE SETTLED MERELY BY TREATING THE IPSISSIMA VERTA OF WILLES J. AS THOUGH THEY WE RE PART OF AN ACT OF PARLIAMENT AND APPLYING THE RULES OF INTERPR ETATION APPROPRIATE THERETO. THIS IS NOT TO DETRACT FROM TH E GREAT ITA NO.2500/AHD/2010 14 WEIGHT TO BE GIVEN TO THE LANGUAGE ACTUALLY USED BY THAT MOST DISTINGUISHED JUDGE. IN HOME OFFICE V DORSET YACHT CO. (1970 (2) ALL. E. R. 294) LORD REID SAID LORD ATKINSS SPEECH - - - IS NOT TO BE TREA TED AS IF IT WAS A STATUTE DEFINITION. IT WILL REQUIRE QUALIFICATION I N NEW CIRCUMSTANCES. MEGARRY J. IN (1971) 1 WLR 1062 OBSERVED: ONE MUST NOT OF COURSE CONSTRUE EVEN A RESERVED JUDGMENT OF RUSSELL L.J. AS IF IT WERE AN ACT OF PARLIAMENT. AND IN HERRINGTON V BRITISH RAILWAYS BOARD (1972 (2) WLR 5 37) LORD MORRIS SAID: THERE IS ALWAYS PERIL IN TREATING THE WORDS OF A S PEECH OR JUDGMENT AS THOUGH THEY ARE WORDS IN A LEGISLATIVE ENACTMENT AND IT IS TO BE REMEMBERED THAT JUDICIAL UTTERANCES MADE IN THE SETTING OF THE FACTS OF A PA RTICULAR CASE. CIRCUMSTANTIAL FLEXIBILITY ONE ADDITIONAL OR DIFFE RENT FACT MAY MAKE A WORLD OF DIFFERENCE BETWEEN CONCLUSIONS IN TWO CA SES. DISPOSAL OF CASES BY BLINDLY PLACING RELIANCE ON A DECISION IS NOT PROPER. THE FOLLOWING WORDS OF LORD DENNING IN THE MATTER O F APPLYING PRECEDENTS HAVE BECOME LOCUS CLASSICUS: EACH CASE DEPENDS ON ITS OWN FACTS AND A CLOSE SIM ILARITY BETWEEN ONE CASE AND ANOTHER IS NOT ENOUGH BECAUSE EVEN A SINGLE SIGNIFICANT DETAIL MAY ALTER THE ENTIRE AS PECT IN DECIDING SUCH CASES ONE SHOULD AVOID THE TEMPTATIO N TO DECIDE CASES (AS SAID BY CORDOZO) BY MATCHING THE C OLOUR OF ONE CASE AGAINST THE COLOUR OF ANOTHER. TO DECIDE T HEREFORE ON WHICH SIDE OF THE LINE A CASE FALLS THE BROAD R ESEMBLANCE TO ANOTHER CASE IS NOT AT ALL DECISIVE. *** *** *** PRECEDENT SHOULD BE FOLLOWED ONLY SO FAR AS IT MAR KS THE PATH OF JUSTICE BUT YOU MUST CUT THE DEAD WOOD AND TRIM OF F THE SIDE BRANCHES ELSE YOU WILL FIND YOURSELF LOST IN THICKETS AND BR ANCHES. MY PLEA IS TO KEEP THE PATH TO JUSTICE CLEAR OF OBSTRUCTIONS WHIC H COULD IMPEDE IT. 10 NOW THE QUESTION BEFORE US IS WHETHER THE DECIS ION OF THE HON'BLE SUPREME COURT IN THE CASE OF FAQIR CHAND GU LATI (SUPRA) WILL BE APPLICABLE IN THE CASE OF THE ASSESSEE OR NOT OR CA N IT BE REGARDED TO BE THE PRECEDENT FOR DECIDING THE ISSUE INVOLVED IN THE CA SES BEFORE US FOR WHICH THE ITA NO.2500/AHD/2010 15 LD. SENIOR ADVOCATE TOOK ALL THE PAINS FOR TRAVELIN G FROM AHEMADABAD TO BARODA AND MADE US READ AND UNDERSTAND THE WHOLE JU DGEMENT DELIVERED BY THE HONBLE APEX COURT IN THE CASE OF FAKIR CHAND G ULATI AND THAT OF THIS TRIBUNAL IN THE CASE OF RADHE DEVELOPERS VIS A VIS THE FACTS OF BOTH THE CASES. THE CASE OF FAQIR CHAND GULATI(SUPRA) HAS BEEN DECI DED BY THE HON'BLE SUPREME COURT WHEN A SPECIAL LEAVE PETITION HAS BEE N FILED AGAINST THE ORDER OF NATIONAL COMMISSION DISMISSING THE COMPLAI NT OF THE ASSESSEE BEING NOT MAINTAINABLE UNDER THE CONSUMER PROTECTION ACT 1986. THE ISSUE INVOLVED RELATES TO WHETHER THE COMPLAINT UNDER THE CONSUMER PROTECTION ACT 1986 IS MAINTAINABLE OR NOT. WHILE DECIDING THIS IS SUE THE HON'BLE SUPREME COURT HAS GONE THROUGH THE AGREEMENT ENTERED INTO B Y THE LANDOWNER WITH THE BUILDER FOR THE DEVELOPMENT OF THE PROPERTY. THE AG REEMENT WAS ENTERED INTO FOR THE DEVELOPMENT OF THE PROPERTY BY CONSTRUCTING A BUILDING AND SHARING OF THE CONSTRUCTED AREA BETWEEN THE OWNER AND THE BUIL DER. THE HON'BLE SUPREME COURT WHILE INTERPRETING THE AGREEMENT HAS LAID DOWN THAT HOW AN AGREEMENT HAS TO BE INTERPRETED. IT TOOK THE VIEW T HAT IT IS WRONG TO ASSUME THAT WHEREVER THERE IS AN AGREEMENT FOR DEVELOPMENT OF A PROPERTY BETWEEN THE LANDOWNER AND THE BUILDER UNDER WHICH THE CONST RUCTED AREA IS TO BE DIVIDED IT WOULD AMOUNT TO A JOINT-VENTURE AND THE RE IS NO QUESTION OF THE LANDOWNER AVAILING THE SERVICES OF THE BUILDER FOR CONSIDERATION. 11 NOW COMING TO THE FACTS OF THE CASE OF THE ASSE SSEE THE ASSESSEE HAS ENTERED INTO THE AGREEMENT WITH THE LA NDOWNER THE COPY OF WHICH IS AVAILABLE BEFORE US AND ENGLISH TRANSLATIO N OF WHICH IS AVAILABLE AT PAGES 42 TO 49 OF THE PAPER BOOK. THIS AGREEMENT HA S BEEN ENTERED INTO ON 26-2-2004 WITH THE NOMENCLATURE AGREEMENT FOR DEVE LOPMENT. THE PREAMBLE OF THE AGREEMENT STATES THAT OUT OF THE SA ID LAND F. PLOT NO. 375 PAIKI THE POWERS TO DEVELOP THE LAND 6985 SQ. METE RS = 75158 SQ. FT. ARE GIVEN BY THE LANDOWNER PARTY OF THE FIRST PART TO T HE PARTY OF THE SECOND PART DEVELOPER (THE ASSESSEE) AND FOR THAT PURPOSE COST OF THE LAND IS FIXED UPON CALCULATING AT THE RATE OF RS.121/- PER SQ. FT. BEI NG RS.90 94 190/-. OUT OF THE SAID AMOUNT RS.1 00 000/- HAS BEEN PAID BY THE DEV ELOPER TO THE LANDOWNER. THE REMAINING AMOUNT OF RS.89 94 190/- IS TO BE PA ID BY THE PARTY OF THE SECOND PART TO THE PARTY OF THE FIRST PART WITHIN T HE PERIOD OF 33 MONTHS IN EQUAL INSTALMENTS OF THREE MONTHS. IT IS ALSO MENTI ONED IN THE SAID AGREEMENT THAT FOR CONSTRUCTING BUILDINGS FOR RESIDENTIAL AS WELL AS COMMERCIAL PURPOSE OVER THE LAND MENTIONED IN THIS AGREEMENT THE VADO DARA MUNICIPAL CORPORATION HAS GRANTED RAJACHITHTHI NO. L/96/2003 DATD 28-07-2003. THE ASSESSEE HAS TO PERFORM THE FOLLOWING ACTS OVER THE SAID LAND INCLUDING CONSTRUCTION: (1) THAT THE PARTY OF THE SECOND PART (ASSESSEE) S HALL UPON OBTAINING ALL NECESSARY PERMISSIONS OVER THE SAID LAND SUCH AS N A N O C DEVELOPMENT PERMISSION RAJACHITHTHI PERMISSION FO R PASSING PLANS TITLE CLEARANCE ETC. FOR MAKING THE CONSTRUCTION A ND ERECT AN APARTMENT IN THE SAME CAN ORGANIZE SHOPS OFFICES FLATS AND TENEMENT SOCIETY AND CAN ENGAGE ARCHITECT IF REQUIRED CAN P REPARE PLANS AND OBTAIN THE OCCUPATION CERTIFICATE COMPLETION CERTI FICATE CAN GET THE ITA NO.2500/AHD/2010 16 REVISED MAPS PREPARED AND FOR WHICH THE COMPLETE P OWERS ARE GIVEN TO THE PARTY OF THE SECOND PART. (2) THE ENTIRE RESPONSIBILITY FOR CARRYING ALL LEGA L PROCEEDINGS IN RESPECT OF AFORESAID LAND SHALL BE THAT OF THE PARTY :F THE SE COND PART AND FOR THAT PURPOSE THE PARTY OF THE FIRST PART ARE BOUND TO S UBSCRIBE SIGNATURES CONSENTS AFFIDAVITS IF AND WHEN FOUND NECESSARY. HOWEVER THE ENTIRE EXPENSES THAT MAY BE REQUIRED TO BE INCURRED BY TH E SECOND PARTY ON THE SAME CANNOT BE RECOVERED FROM THE PARTY OF THE FIRST PART. WITH THIS CLEAR-CUT CONDITION THIS LAND IS ENTRUSTED TO YOU FOR MAKING THE DEVELOPMENT. (3) ON THE BASIS OF THIS AGREEMENT THE PARTY OF T HE SECOND PART HEREIN IS ENTITLED TO MAKE ADVERTISEMENT BY DISPLAYING THE BO ARD R IN ANY OTHER MANNER FOR THE SCHEME OVER THE LAND MENTIONED IN TH E SCHEDULE. (4) THE PARTY OF THE SECOND PART DEVELOPERS CAN RE GISTER THE MEMBERS FOR THE NEW CONSTRUCTION THAT MAY BE MADE OVER THE SAID LAND/PROPERTY CAN ISSUE RECEIPT TO THE MEMBERS CAN ISSUE ALLOTME NT LETTER TO THE MEMBERS CAN EXECUTE THE AGREEMENT TO SALE CAN HAN D OVER THE POSSESSION CAN EXECUTE TRIPARTIE AGREEMENT BUT TH E ENTIRE RESPONSIBILITY FOR THE SAME SHALL BE THAT OF THE PA RTY OF THE SECOND PART. (5) THAT THE PARTY OF THE SECOND PART DEVELOPER HA S TO MAKE THE CONSTRUCTION AS PER THE RAJACHITHHL ISSUED BY THE M UNICIPAL CORPORATION VADODARA I.E. CONSTRUCTION PERMISSION OVER THE PROPERTY AS DESCRIBED ABOVE AND THE ENTIRE EXPENSES FOR THE SAME IS TO BE INCURRED BY THE PARTY OF THE SECOND PART OF ITS OWN AND THERE WILL NOT BE ANY RESPONSIBILITY OF THE PARTY OF THE FIRST PART I N RESPECT OF THE SAID AMOUNT OF EXPENSES. (6) THAT THE DEVELOPER CAN ENGAGE LABOUR CONTRACTO R BUILDING CONTRACTOR OR ANY OTHER AGENCY FOR MAKING CONSTRUCTION 01: THE SCHEME ORGANIZED OVER THE AFORESAID PROPERTY AND THE PARTY OF THE SE COND PART IS COMPLETELY AUTHORIZED TO MAKE SEPARATE AGREEMENTS W ITH THEM FOR ALL SUCH ACTIVITIES. THAT ON THE BASIS OF PRESENT AGREE MENT IF THE PARTY OF THE SECOND PART DEVELOPERS WILL ORGANIZE ANY SCHEME OR PROJECT OVER THE AFORESAID PROPERTY IN WHICH MAY ACCEPT THE COM PLETE AMOUNTS AS STATED IN THIS AGREEMENT FOR SHOPS OFFICES FLATS ETC. WILL BE CONSTRUCTED FOR WHICH WE SHALL EXECUTE THE SALE DEED IN FAVOUR OF MEMBERS AS AND WHEN YOU MAY INTIMATE AND CAUSE REGISTRATION AND WI TNESSING ETC. ON THE SALE DEEDS IN THE OFFICE OF THE SUB REGISTRAR B Y PRESENTING THE SAME. HOWEVER THE STAMP REGISTRATION CHARGES AND OTHER EXPENSES FOR THE SAME SHALL BE BORNE BY YOU THE PARTY OF TH E SECOND PART OR THE PURCHASERS OF THE SAID OFFICES SHOPS FLATS HOUSE S ETC. (7) THAT FOR THE HOUSES SHOPS FLATS ETC. THAT AR E TO BE CONSTRUCTED OVER THE SAID LAND FOR WHICH THE PARTY OF THE SECOND PAR T IS TO REGISTER THEM ITA NO.2500/AHD/2010 17 AS MEMBERS AND CAN UPON EXECUTING AGREEMENTS TO SAL E ETC. ACCEPT THE MONEY AND ISSUE RECEIPTS TO THE MEMBERS. SAME W AY YOU CAN REMOVE ALL OBSTRUCTIONS THAT MAY COME DURING THE PE RIOD OF MAKING THE DEVELOP IT. (8) IF REQUIRED THE PARTY OF THE SECOND WILL RAI SE NECESSARY CAPITAL FOR MAKING DEVELOPMENT AND CONSTRUCTION OVER THE SAID L AND AND CAN OBTAIN THE LOAN FROM THE BANK OR ANY OTHER INSTITUT IONS TO COMPLETE THE SCHEME AND FOR THAT PURPOSE CAN FILE A CLAIM AGAINS T SUCH INSTITUTIONS FOR CARRYING OUT NECESSARY PROCEEDINGS AND ARTY OF THE SECOND PART OF ITS OWN WHATEVER FINANCIAL RESPONSIBILITY THAT MAY ARISE IN AU SUCH WORKS SHALL BE ON THE HEAD OF THE PARTY OF THE SEC OND PART DEVELOPERS. (9) THAT ALL ACTIVITIES RELATING TO THE CONSTRUCTIO N IS TO BE CARRIED OUT BY THE DEVELOPER AND IF REQUIRED THE PARTY OF THE FIRST P ART HAS TO EXTEND NECESSARY COOPERATION AND ASSISTANCE AS A LAND OWNE R. THE EXPENSES FOR THE SAID WORKS IS TO BE BORNE BY THE PARTY OF T HE SECOND PART DEVELOPER. (10) FROM THE DATE OF THIS AGREEMENT YOU THE PART Y OF THE SECOND PART IS BOUND TO PAY TAX LAND REVENUE SPECIAL CESS ETC. IN THE OFFICES OF THE VADODARA MUNICIPAL CORPORATION GOVERNMENT SEMI GO VERNMENT AND WHATEVER TAX LAND REVENUE EDUCATION CESS SPECIAL CESS ETC. ARE OUTSTANDING PRIOR TO THE DATE OF THIS AGREEMENT TH E SAME ARE AND SHALL BE PAID BY US THE PARTY OF THE FIRST PART AS A LAN D OWNER. (11) THAT FOR THE BUILDINGS THAT MAY BE CONSTRUCTED OVER THE SAID LAND THE PARTY OF THE SECOND PART DEVELOPER CAN GIVE A SUITA BLE NAME TO THE PROJECT AS DEEMED FIT AND FOR WHICH THE PARTY OF TH E FIRST PART SHALL NOT RAISE ANY OBJECTION OR DISPUTE. (12) THAT FOR PERFORMING DEVELOPMENT ACTIVITY OVER THE SAID LAND AS WELL AS FOR THE PUBLICITY OF THE SAID SCHEME/PROJECT THE P ARTY OF THE SECOND PART CAN PRINT BROCHURES ETC. AND CAN PUBLISH ADVE RTISEMENT ETC. OF THE SAME IN THE DAILY NEWSPAPER AND PRIOR TO MAKING CON STRUCTION OVER THE SAID LAND CAN CONSTRUCT A SITE OFFICE AND FOR STOR ING THE BUILDING MATERIAL CAN CONSTRUCT THE GODOWN ETC. AT ITS OWN COST. (13) THAT THE REQUIRED FACILITIES OF WATER DRAINAG E. ETC. CONNECTIONS FOR THE HOUSES CONSTRUCTED OVER THE SAID LAND AS WELL AS FO R ELECTRIC CONNECTION FROM GUJARAT ELECTRICITY BOARD SHALL BE OBTAINED AN D PROVIDED BY THE PARTY OF THE SECOND PART AT ITS COST AND FOR THAT P URPOSE THE PARTY OF THE FIRST PART HEREIN IS TO EXTEND NECESSARY COOPERATIO N AND ASSISTANCE TO THE PARTY OF THE SECOND PART. (14) THAT EXCEPT THE WRITER HEREIN NO ONE ELSE HAS ANY RIGHT TITLE INTEREST CONCERN SHARE OR ENCUMBRANCE OVER THE SAID LAND AN D EXCEPT MYSELF NO ONE HAS ANY OWNERSHIP RIGHT NOR ANY RIGHT OF MAI NTENANCE OR SHARE OR ITA NO.2500/AHD/2010 18 AUTHORITY IS BEING MAINTAINED OVER THE SAID LAND. S IMILARLY THERE IS NO EASEMENT RIGHT OF ANY ONE OVER THE SAID PROPERTY NO R IT IS UNDER ACQUISITION AND WE HAVE NOT PREVIOUSLY EXECUTED ANY AGREEMENT TO SALE OR ANY OTHER WRITING TO SELL THE SAID PROPERTY IN F AVOUR OF ANY ONE ELSE AND NOT TRANSFERRED ASSIGNED THE SAME IN ANY MANNE R. IN SPITE OF THE SAME IF ANY THIRD PERSON COMES FORWARD RAISING RIG HT CLAIM OR CHARGE THAN WE THE PARTY OF THE FIRST PART SHALL BE BOUND TO REMOVE THE SAME AT MY COST. THUS BY GIVING ASSURANCE BINDING AND TRU ST THAT THE PROPERTY AS DESCRIBED HEREINABOVE IS HAVING COMPLETE CLEAR A ND MARKETABLE TITLE THE DEVELOPMENT AGREEMENT FOR THE AFORESAID PROPERT Y IS EXECUTED IN FAVOUR OF THE DEVELOPER HEREIN. (15) THAT THE PHYSICAL POSSESSION OF THE SAID LAND FOR PERFORMING DEVELOPMENT ACTIVITY OVER THE LAND IS HANDED OVER B Y THE PARTY OF THE FIRST PART HEREIN TO THE PARTY OF THE SECOND PART H EREIN. 12 IF THE FACTS AND THE TERMS AND CONDITIONS OF TH IS AGREEMENT ARE COMPARED WITH THE DECISION OF THE HON 'BLE SUPREME COURT IN THE CASE OF FAQIR CHAND GULATI (SU PRA) WE NOTED THAT IN THIS CASE THERE IS NO AGREEMENT TO SH ARE THE CONSTRUCTED AREA. THIS AGREEMENT RELATES ONLY TO PU RCHASE PART OF THE LAND FROM THE LANDOWNER BY THE ASSESSEE FOR A PRE- DETERMINED CONSIDERATION. ALL THE RESPONSIBILITIES FOR CARRYING OUT THE CONSTRUCTION PERMISSION N A N O C LEGAL PROCEEDINGS AND THE RESULTS OF THE DEVELOPMENT LIES WITH THE ASSESSEE. THE FIRST PARTY IS ONLY TO CO-OPERATE THE ASSESSEE IN CARRYING OUT THE DEVELOPMENT AND ALSO TO EXECUTE TH E DOCUMENTS WHENEVER IT IS REQUIRED BY THE DEVELOPER. THE ASSESSEE HAS ALSO HANDED OVER THE PHYSICAL POSSESSI ON TO THE BUILDER FOR CARRYING OUT THE DEVELOPMENT OF THE PRO JECT. THE LANDOWNER DOES NOT HAVE ANY RIGHT INTEREST TITLE IN THE DEVELOPMENT SO CARRIED OUT EXCEPT TO THE EXTENT HE HAS TO RECEIVE THE CONSIDERATION FROM THE ASSESSEE. THE AS SESSEE IS ENTITLED TO PUBLICIZE THE PROJECT PRINT BROCHURES ETC. AND CAN SELL THE PROJECT AT ITS OWN RIGHT. ALL THE EXPENSES HAVE TO BE INCURRED BY THE ASSESSEE FOR CARRYING OUT THE CONST RUCTION ETC. THE LAND OWNER HAS TO DO NOTHING EXCEPT TO THE EXTE NT HE HAS TO RECEIVE CONSIDERATION FROM THE ASSESSEE. HIS MOT IVE IS NOT TO DEVELOP CONSTRUCT OR CARRY ON THE BUSINESS AS A BUILDER OR DEVELOPER. PRACTICALLY NO RIGHT IN THE LAND REMAINS WITH THE OWNER. FOR WHOLE PRACTICAL PURPOSE THE ASSESSEE ACQ UIRED DOMINANT RIGHT OVER THE LAND AND HE CAN DEAL WITH T HE LAND IN THE MANNER IN WHICH HE MAY LIKE. THUS THE TERMS AN D CONDITIONS ENTERED INTO IN OUR OPINION GIVE ALL D OMINANT CONTROL AND RIGHTS OVER THE LAND TO THE ASSESSEE. T HE ASSESSEE IN OUR OPINION WILL BE CONSTRUCTING THE BUILDING AT ITS OWN COST AND WILL REMAIN THE OWNER OF THE BUILDING AT ITS OWN WITHOUT ANY INTERFERENCE FROM THE LANDOWNER. THE LA NDOWNER DOES NOT HAVE ANY RIGHT TO SHARE THE BUILDINGS. THE AGREEMENT ITA NO.2500/AHD/2010 19 DOES NOT ENVISAGE THAT THE ASSESSEE WILL BE WORKING AS A CONTRACTOR OR AGENT ON BEHALF OF THE LANDOWNER. THE AGREEMENT CANNOT BE REGARDED TO BE THE JOINT-VENTURE OR COLLA BORATION AGREEMENT. IT IS IN OUR OPINION THE AGREEMENT FOR THE SALE OF THE LAND FOR A DETERMINED CONSIDERATION UNDER WHICH THE ASSESSEE IS ENTITLED TO DEVELOP THE PROJECT ON THE SAID LAND AT ITS OWN COST IN THE MANNER IN WHICH HE MAY DECIDE. 13 WE HAVE ALSO GONE THROUGH THE DECISION IN THE C ASE OF RADHE DEVELOPERS (SUPRA) ON WHICH THE LEARNED SE NIOR COUNSEL HAS HEAVILY RELIED. WE FIND THAT THE TRIBU NAL IN THAT DECISION ALTHOUGH DEALT WITH 45 APPEALS OF DIFFEREN T ASSESSEES BUT HAS DEALT WITH THE FACTS RELATING TO RADHE DEVE LOPERS IN ITA NO.2482/AHD/2006. THE FACTS IN THAT CASE AS ARE APPEARING ARE AS UNDER: 3 THE BRIEFLY STATED FACTS ARE THAT THE ASSESSEE H AD DEVELOPED AND BUILT A HOUSING PROJECT ON A LAND AT REVENUE SURVEY NO.648 BELONGING TO ONE SHRI GHANSHYAMBHAI A PATEL & OTHERS THROUGH PO WER OF ATTORNEY HOLDER MAHENDRABHAI A PATEL WHO ARE THE OWNERS OF THE LAND. THE ASSESSEE-FIRM HAD ENTERED INTO A DEVELOPMENT AND CO NSTRUCTION AGREEMENT WITH (1) SHRI VINODBHAI NATHABHAI PATEL ( HUF) (2) SHRI BHAILALBHAI NATHABHAI PATEL HUF (3) HARISHBHAI NAT HABHAI PATEL HUF AND (4) SHRI HASMUKHBHAI NATHABHAI PATEL THROUGH THEIR PARTNER SHRI CHETANKUMAR RAMESHBHAI JOGI. THE DEVELOPMENT AND CO NSTRUCTION AGREEMENT AND BANAKHAT AGREEMENT ARE BOTH DATED 18- 05-2000. THERE WAS A TRI-PARTY DEVELOPMENT AGREEMENT REVEALING THA T THE LAND OWNERS AGREED TO GET THE LAND DEVELOPED THROUGH THE ASSESS EE-FIRM AND ALSO AGREED THAT THE ASSESSEE-FIRM WOULD MAKE THE MEMBER S I.E. PROSPECTIVE BUYERS AND COLLECT THE LAND CONSIDERATION AT THE RA TE MENTIONED IN THE AGREEMENT. THE PROJECT WAS APPROVED BY THE LOCAL AU THORITY BARODA MUNICIPAL CORPORATION (HEREINAFTER REFERRED TO AS BMC ON 17-07-2000. THE APPROVAL WAS IN THE NAME OF THE SAID OWNERS OF THE LAND. AS THE ASSESSEE-FIRM IS NOT THE OWNER OF THE LAND AND EVEN THE APPROVAL FOR PERMISSION TO DEVELOP AND CONSTRUCT THE PROJECT WAS ALSO NOT IN THE NAME OF THE ASSESSEE BUT IN THE NAME OF THE ORIGINAL LAN D OWNERS THE AO HELD THAT THE ASSESSEE HAS MERELY ACTED AS AN AGENT/CONT RACTOR FOR CONSTRUCTION OF RESIDENTIAL HOUSES AND THEREFORE DID NOT SATIS FY THE CONDITIONS FOR GRANTING THE CLAIM OF DEDUCTION U/S 80IB(10) OF THE ACT AND ACCORDINGLY NOT ENTITLED TO THE DEDUCTION. 4 THE CIT(A) DISMISSED THE ASSESSEES APPEAL VIDE D ISCUSSION IN PARAGRAPH NOS.15 & 16 OF HIS ORDER IN THE FOLLOWING MANNER: 15 THEREFORE THE DEDUCTION U/S 80IB(10) READ WITH SECTION 80IB(1) AND RULE 18-BBB IS ADMISSIBLE ONLY TO SUCH ASSESSEES AS ARE DERIVING PROFITS FROM AN UNDERTAKING OF BUILDING AN D HOUSING PROJECTS APPROVED BY THE LOCAL AUTHORITY AND FOR S UCH APPROVAL THE ASSESSEE MUST LEGALLY OWN THE LAND WHICH IS AN INAL IENABLE ITA NO.2500/AHD/2010 20 CONSTITUENT OF ANY HOUSING PROJECT. THE PERSON DOIN G ONLY THE WORK OF DEVELOPING AND CONSTRUCTING THE BUILDING STRUCTU RE ON THE AUTHORITY OF THE APPROVAL GRANTED TO THE LANDOWNER CANNOT BE SAID TO BE IN THE BUSINESS OF AN UNDERTAKING DEVELOPING AND BUILDING HOUSING PROJECT NOT ONLY ON ACCOUNT OF NOT BEING T HE OWNER OF THE LAND A NECESSARY CONSTITUENT OF THE HOUSING PROJEC T BUT ALSO ON ACCOUNT OF NOT HAVING BEEN GRANTED THE APPROVAL TO EXECUTE THE PROJECT IN HIS OWN RIGHT BECAUSE THAT INVOLVES OBL IGATION THAT CAN BE DISCHARGED ONLY BY THE PERSON TO WHOM THE APPROV AL IS GRANTED. THE CASE LAWS RELIED UPON ARE ALL DISTINGUISHABLE O N FACTS AND HENCE ARE NOT APPLICABLE TO THE PRESENT CASE. 16 IN VIEW OF THE DISCUSSIONS GIVEN ABOVE I DO NOT INTEND TO INTERFERE WITH THE ACTION OF THE AO IN DISALLOWING THE CLAIM OF DEDUCTION U/S 80IB(10) HENCE THE SAME IS CONFIRMED. 14 THE FINDINGS OF THE TRIBUNAL ARE GIVEN AT PAGE 13 ONWARDS ARE AS UNDER: 8. WE HAVE HEARD THE RIVAL CONTENTIONS AND GONE THR OUGH THE FACTS AND CIRCUMSTANCES OF THE CASE. WE HAVE ALSO GONE T HROUGH THE ORDERS OF LOWER AUTHORITIES AS WELL AS THE PAPER-BOOK FILED B Y THE LD.COUNSEL FOR THE ASSESSEE. 9 IN THE MOST COMMON MODE OF DEVELOPMENT OF REAL ES TATE BY THE DEVELOPERS THE OWNERS OF LAND DO NOT DESIRE TO DEV ELOP THE LAND AND THEY SELL THE LAND TO A DEVELOPER. IT IS THE OBLIGATION OF THE DEVELOPER TO DEVELOP THE LAND AND IF NECESSARY TO GET AGRICULTU RAL LAND CONVERTED INTO NON-AGRICULTURAL LAND BY THE CHANGE OF USER APPOIN T THE ARCHITECTS TO PREPARE THE BUILDING PLANS GET THEM APPROVED WITH THE LOCAL AUTHORITY AND TO CONSTRUCT THE HOUSES IN THE FORM OF TENEMENT S AND FLATS. THE DEVELOPER WOULD CARRY OUT THE CONSTRUCTION ON HIS O WN NAMELY CARRY OUT ALL NECESSARY STATUTORY FORMALITIES FOR CONSTRUCTIO N BUY MATERIAL FOR CONSTRUCTION EMPLOY LABOUR OR AN AGENCY WHICH WOUL D SUPPLY LABOURERS AND THEREUPON COMPLETE THE CONSTRUCTION. THE DEVELO PER WOULD THEN SELL THE HOUSES TO THE PROSPECTIVE BUYERS. THE DEVELOP ER WOULD BUY LAND AND GET IT TRANSFERRED IN HIS NAME EVEN BEFORE THE PLAN S ARE PLACED. 10 HOWEVER THE OTHER MODE IN MANY CASES IS THAT LA ND IS NOT PURCHASED AT THAT STAGE BY EXECUTING DEED OF CONVEY ANCE I.E. SALE-DEED. THIS IS BECAUSE OF VARIETY OF REASONS NAMELY BECA USE SUCH CONVEYANCE WOULD ENTAIL PAYMENT OF STAMP DUTY BECAUSE OF LITI GATION PROHIBITION AGAINST EXECUTION OF CONVEYANCE-DEED IMMEDIATELY E TC. IN SOME CASES THE LAND MAY BE CONVEYED DIRECTLY IN FAVOUR OF CO-O PERATIVE HOUSING SOCIETIES OR NON TRADING CORPORATIONS OR DEVELOPERS . THEREFORE IF THE LAND IS CONVEYED TO A DEVELOPER WHAT THE DEVELOPER DOES IS THAT HE ENTERS ITA NO.2500/AHD/2010 21 INTO AN AGREEMENT TITLED AS DEVELOPMENT AGREEMENT W ITH THE LAND-OWNER. THE DEVELOPMENT AGREEMENT EFFECTIVELY IS AN AGREEME NT OF SALE UNDER WHICH THE LAND-OWNER HANDS OVER THE POSSESSION TO T HE DEVELOPER WHICH ENTITLE DEVELOPER TO DEVELOP THE PROPERTY ENTIRELY AT HIS CHOICE CONVENIENCE AND DISCRETION. BY SUCH DEVELOPMENT AG REEMENT THE PRICE ON WHICH THE LAND WOULD BE SOLD IS FIXED. THE AG REEMENT WOULD ALSO SPECIFY THAT THE LAND-OWNER WOULD BE ENTITLED TO RE CEIVE HIS CONSIDERATION EITHER IMMEDIATELY OR OVER A FIXED PERIOD IRRESPEC TIVE OF WHETHER OR NOT THE LAND IS ACTUALLY DEVELOPED BY THE DEVELOPER. THE LAND-OWNER GIVES ALL HIS RIGHTS OVER THE LAND AND GIVES FULL AUTHORITY T O THE DEVELOPER TO ENJOY THE LAND IN THE MANNER OF HIS CHOICE. THE AGREEME NT WOULD ALSO SPECIFICALLY AUTHORIZE THE DEVELOPER TO DEVELOP THE LAND CONSTRUCT TENEMENTS THEREON BOOK MEMBERS AND HAND OVER POSSE SSION TO ONE OR MORE ALLOTTEES. FOR ALL PURPOSES THEREFORE THE LA ND-OWNER EXTINGUISHES HIS INTEREST IN THIS LAND IN FAVOUR OF DEVELOPER ON EXECUTION OF THIS DEVELOPMENT AGREEMENT. 11 IN THE CASES OF THE PRESENT ASSESSEE LAND SITUAT ED AT VADODARA I.E. AREA COMPRISING OF THE CITY OF BARODA AND AROUND IT IS DECLARED AS URBAN DEVELOPMENT AREA WITHIN THE MEANING OF SECTION 2(XX IX) OF THE GTP & UDA AND THE CONSTRUCTIONS CARRIED OUT IN AND AROUND VADODARA ARE GOVERNED BY THE PROVISIONS OF THE GTP & UDA. THE PROVISIONS OF SECTION 26 OF THE GTP & UDA RESTRICTS EVERYONE FROM CARRYIN G ON DEVELOPMENT/CONSTRUCTION OVER ANY LAND WITHOUT THE PERMISSION OF THE APPROPRIATE AUTHORITY I.E. VADODARA URBAN DEVELOP MENT AUTHORITY (VUDA) SECTION 27 PRESCRIBES THAT AN APPLICATION F OR DEVELOPMENT IS TO BE MADE IMPORTANTLY SUCH APPLICATION CAN BE MADE BY ANY PERSON INTENDING TO CARRY OUT ANY DEVELOPMENT . IN OR OVE R ANY LAND . IT DOES NOT REFER ONLY TO AN OWNER OF THE LAND. THAT APART THE DEFINITION OF THE TERM OWNER AS GIVEN IN SECTION 2 (XVIII) OF T HE GTP & UDA CLEARLY SAYS THAT ANYONE WHO DEVELOPS THE LAND ON HIS OWN ACCOUNT OR FOR THE BENEFIT OF ANY OTHER PERSON OR AS A JOINT TRUSTEE GUARDIAN MANAGER ETC. IS TO BE TREATED AS AN OWNER. SECTION 29 OF GTP & UDA AUTHORIZES VUDA TO GRANT OR REFUSE PERMISSION FOR DEVELOPMENT. IN TERMS OF THE POWERS PRESCRIBED UNDER SECTION 118 OF GTP & UDA T HE STATE GOVERNMENT HAS NOTIFIED RULES VIZ. GUJARAT TOWN P LANNING AND URBAN DEVELOPMENT RULES 1979 (HEREIN AFTER REFERRED TO A S GTP & UDR). RULE 9 THEREOF PRESCRIBES APPLICATION FOR DEVELOPME NT PERMISSION UNDER SECTION 27 TO BE IN FORM-C AND THAT PERMISSION TO B E GRANTED UNDER SECTION 29 TO BE IN FORM-D. ON LOOKING AT FORM-C IT IS CLEAR THAT SUCH AN APPLICATION CAN BE MADE BY ANYONE NOT NECESSARILY OWNER. SIMILARLY PERMISSION FOR DEVELOPMENT COULD BE GRANTED TO WHOE VER HAS APPLIED FOR THE PERMISSION; NOT NECESSARILY ONLY THE OWNER. ITA NO.2500/AHD/2010 22 12 WE MAY ALSO REFER TO AT THIS STAGE THE GENERAL DEVELOPMENT CONTROL REGULATIONS (GDCR) AS NOTIFIED BY VUDA IN P URSUANCE OF PROVISIONS OF SECTION 12(2) (M) AND SECTION 13(2) ( C) OF THE TP ACT WHICH GOVERN THE ACTIVITY OF CONSTRUCTION IN AND AROUND T HE CITY OF VADODARA. CLAUSE 2 OF GDCR GIVES DEFINITIONS. THE TERM OWNE R IN CLAUSE 2.32 INCLUDES DEVELOPERS. THEREFORE IN GDCR WHENEVE R THERE IS A REFERENCE TO THE TERM OWNER IT WOULD ALWAYS INCLUDE DEVELO PERS DEVELOPING ANY PROPERTY. CLAUSE-3 OF GDCR PRESCRIBES PROCEDURE FOR ACQUIRING DEVELOPMENT PERMISSION. APPLICATION HAS TO BE MAD E IN FORM NO.1 WHICH CAN BE FILED BY ANYONE INCLUDING DEVELOPER. THU S A DEVELOPER HAS A RIGHT TO APPLY FOR DEVELOPMENT PERMISSION AND TO CA RRY ON ALL CONSTRUCTION ACTIVITIES. CLAUSE-11 PRESCRIBES CONDITIONS FOR D EVELOPMENT OF LAND AND CLEARLY CONTEMPLATES GRANT OF DEVELOPMENT PERMISSIO N NOT ONLY TO OWNER BUT ALSO TO A PERSON WHO HAS A RIGHT TO DEVELOP THE LAND. REGULATION-23 SHOWS THAT IT APPLIES TO THE NEW CONSTRUCTION AS D ISTINGUISHED FROM THE APPLICABILITY TO THE PERSON APPLYING FOR CONSTRUCTI ON. IN OTHER WORDS THE DEVELOPER CARIES OUT DEVELOPMENT ACTIVITY AS TO COM PLY WITH THE REGULATIONS WHETHER OR NOT HE IS THE OWNER. THI S BECOMES FURTHER CLEAR WHEN ONE EXAMINES CLAUSE-25 WHICH PERTAINS TO PENA LTIES. FINALLY WHEN THE CONSTRUCTION IS COMPLETED THE APPLICATION FOR O CCUPANCY PERMISSION HAS TO BE MADE IN FORM NO.7 PURSUANT TO REGULATION NO.6 .2 (B) AND THAT BUILDING COMPLETION CERTIFICATE IS GIVEN BY THE AUT HORITY IN FORM NO.10 PURSUANT TO REGULATION NO.7 IN RELATION TO DEVELOPM ENT. THEREFORE WHAT IS MATERIAL IS THE DEVELOPMENT OF THE REAL ESTATE A ND NOT WHO HAS CARRIED OUT THE SAME. 13 IT IS A FACT THAT THE LAND WAS NOT REGISTERED IN ITS NAME. IT IS ALSO TRUE THAT THE ASSESSEE HAD THE APPROVAL GRANTED BY LOCAL AUTHORITY I.E. BMC WHICH STANDS IN THE NAME OF THE OWNER OF THE LA ND. BUT ON PERUSAL OF THE DEVELOPMENT AND CONSTRUCTION AGREEMENT IT IS VE RY CLEARL THAT THE LAND OWNERS HAVE AGREED TO GET THEIR LAND DEVELOPED THRO UGH THE ASSESSEE-FIRM FOR CONSTRUCTION OF HOUSING PROJECT. FROM THE TRANS LATED COPY OF APPROVAL OF LOCAL AUTHORITY I.E. BMC DATED 17/07/2000 WE FI ND THAT IT IS IN THE NAME OF SHRI GHANSHYAMBHAP A.PATEL & OTHERS THROUGH POWE R OF ATTORNEY HOLDER MAHENDRABHAI A.PATEL AND IN THIS APPROVAL LE TTER LAND OWNERS IS SHOWN AS THE APPLICANT. THE RELEVANT CLAUSE NO.1 & 2 OF THE AGREEMENT TO SELL MAY NOW BE LOOKED INTO TO FIND OUT WHAT IS T HE EXACT NATURE OF THE TRANSACTION. THE RELEVANT CLAUSE READS AS UNDER:- 1) THE ABOVE REFERRED LAND IN SCHEDULE IS AGREED T O BE SOLD BY US PARTY OF THE THIRD PART TO PARTY OF THE FIRST PART AT THE RATE OF PER SQ.FT. AT RS.100/- & TODAY & YOU PARTY OF THE FIRST PART HAS JOINTLY PAID TO PARTY OF THE THIRD PART RS.11 000/- (RUPEES ELEVEN THOUSANDS ONLY) BY CASH SUBHANPURA BARODA. ITA NO.2500/AHD/2010 23 2)THE ABOVE SAID AMOUNT PAID AS REFERRED IN PARA. I YOU PARTY OF THE FIRST PART HAS TO PAY TO PARTY OF THE THIRD PAR T IN FOUR MONTHLY INSTALMENT WITHIN EIGHTEEN MONTHS. DURING THIS PE RIOD AT THE TIME OF PAYING MONEY THE NAME OF MEMBERS THAT YOU SUGGES T TO BE INCORPORATED IN AGREEMENT TO SALE/SALE DEED BY PART WITH INTERNAL UNDERSTANDING FOR WHICH THE SELLER WILL GIVE CONSEN T. AS THE LAND IS COVERED BY THE LAWS OF URBAN LAND CE ILING ACT RULES AND REGULATION THERE UNDER THE PARTY OF THE SECOND PART. BEFORE COMPETENT AUTHORITY AND ADDITIONAL COLLECTOR BARODA HAS PUT THE SAID LAND & HAS DECLARED ON DT. /06/93. THE SA ID LAND TO BE KEPT AS FREE HOLD. THE SAID LAND LAY OUT PLAN DEVELOPMENT PERMISSION TO CONSTRUCT BY THE ORDER DT: 14/1/96 NO. L/152/95-96 THE BARODA DE PUTY CITY DEVELOPMENT AUTHORITY AND PERMISSION TO CONSTRUCT I S GRANTED BY BARODA MUNICIPAL CORPORATION. THE OWNERS OF THE LAND EXECUTORS OF AGREEMENT TO S ALE BY DT: 7/9/81 HAS PASSED THE DEED OF AGREEMENT TO SALE FAV OURING CONSENTING PARTY. THEREFORE THEY ARE TAKEN AS CON SENTING PARTY IN PRESENT AGREEMENT TO SALE. AT THE TIME OF MAKING AGREEMENT TO SALE WE LAND OWNERS THE EXECUTORS HAVE RECEIVED FU LL AMOUNT TOWARDS THE SALE PRICE OF THE LAND AND THEREFORE TH E PARTY OF THIRD PART IS MADE CONSENTING PARTY AND THEREFORE THE AMO UNT OF SALE PRICE IS TO BE GIVEN TO THE CONSENTING PARTY BY THE PURCHASER AS PER THIS AGREEMENT TO SALE. 14 THE RELEVANT TERMS AND CONDITIONS CLEARLY STATES THAT THE SECOND PARTY ARE THE OWNERS OF THE LAND. THE AGREEMENT FOR DEVELOPMENT OF THE HOUSING PROJECT AND CONSTRUCTION DATED 18-05-2000 D ESCRIBED IN THE SCHEDULE AND THE LAND IS IN THEIR NAMES IN THE GOVT . RECORDS. THE RELEVANT CLAUSES 1 2 3 & 4 READ AS UNDER:- WHO SHALL BE HEREINAFTER IN THIS PRESENT AGREEMENT OF DEVELOPMENT OF HOUSING PROJECT AND CONSTRUCTION TER MED AS THE PARTY OF THE THIRD PART OR YOU THE SAID FIRM OR DEV ELOPER-BUILDER IN THE MEANING AND CONTEXT OF THE SAID TERM INCLUDES A LL THE PRESENT AND FUTURE PARTNERS/PARTNERS FROM TIME TO TIME OF T HE SAID FIRM OF THE PARTY OF THE THIRD PART WHO ARE ALIVE AND HEI RS SUCCESSORS GUARDIANS ETC. OF EVERYBODY. 1. WHEREAS THE PARTY OF THE SECOND PART THE CONFIRMING PARTY ARE THE ORIGINAL OWNERS OF THE LAND DESCRIBED IN SCHEDU LE BELOW AND IS ON THEIR NAMES IN GOVERNMENT RECORD. 2. THE PARTY OF THE SECOND PART THE CONFIRMING PARTY A S LANDLORDS HAD EXECUTED AN AGREEMENT OF SALE FOR THE LAND DESC RIBED IN ITA NO.2500/AHD/2010 24 SCHEDULE BELOW IN FAVOUR OF THE PARTY OF THE FIRST PART ON 7-9- 81 AT THE RATE OF RS.18/- PER SQ.FT. AND SUBJECT TO THE OTHER CONDITIONS MENTIONED THEREIN. ACCORDINGLY THE PAR TY OF THE FIRST PART AS DECIDED FULL CONSIDERATION PRICE IS PAID TO THE SECOND PART THE CONFIRMING PARTY I.E. TO LANDLORDS AND THE REFORE LANDLORDS REGISTERED SALE DEED/THE FIRST PART OR NO MINEE / S OF THE PARTY OF THE FIRST PART ARE IN ACTUAL POSSESSIO N OF THE LAND DESCRIBED. 3. THE PARTY OF THE THIRD PART ARE CONNECTED WITH THE CONSTRUCTION OF BUSINESS SINCE MANY YEARS AND HAVE EXPERIENCE OF CONSTRUCTING RESIDENTIAL HOUSES. 4. WITH THE CONSENT OF THE PARTY OF THE FIRST AND SECO ND PART THE PARTY OF THE THIRD PART AS A DEVELOPER AND BUILDER WANTS TO DO A PROJECT/SCHEME OF CONSTRUCTING RESIDENTIAL HOUSES H AVING AREA LESS THAN 1500 SQ. FT. FOR THE MIDDLE CLASS SOCIETY . 15 ON PERUSAL OF CLAUSE 11 OF THESE AGREEMENTS WE F IND THAT WITH THE CONSENT OF THE PARTY OF THE FIRST AND SECOND PART THE RIGHTS AND AUTHORITIES ARE GIVEN TO THE THIRD PARTY AS A DEVE LOPER-CUM-BUILDER. THE SUB-CLAUSES (8) & (9) TO CLAUSE 11 ELABORATE TH AT THE DEVELOPER-CUM-BUILDER HAS TO TAKE ALL THE PROCEEDIN GS AT GOVERNMENT SEMI-GOVERNMENT MUNICIPAL CORPORATION OFFICE AND IN LEGAL COURT AND AT OTHER PLACES ON BEHALF OF THE PA RTY OF THE FIRST AND SECOND PART. ALL NECESSARY APPLICATIONS AND WRI TTEN STATEMENTS REPLIES AND IN THE FORMS ALL THAT IS TO BE DONE BY DEVELOPER-CUM- BUILDING CONTRACTOR. THE RELEVANT SUB-CLAUSES (8) & (9) READ AS UNDER: 8. THAT THE SAID DEVELOPER CUM BUILDING CONTRAC TOR IN ORDER TO COMPLETE THE SCHEME IN ORDER STEP BY STEP BUT IN PR ESCRIBED TIME PERIOD THE PARTY OF THE FIRST AND SECOND PART AND ALL THE MEMBERS DESIROUS IN JOINING IN THE SCHEME DEVELOPER CUM BUI LDING CONTRACTOR WHENEVER AND WHEREVER THEY NEED THE SIGN ATURES AND ADMISSIONS THEY SHALL HAVE TO GIVE THAT TO THE DEV ELOPER CUM BUILDING CONTRACTOR AND IN SPECIAL CIRCUMSTANCES DE VELOPER CUM BUILDING CONTRACTOR IN ORDER TO COMPLETE THE SCHEME IN ORDER STEP BY STEP BUT IN PRESCRIBED TIME PERIOD SHALL BE ENT ITLED TO RECEIVE GENERAL POWER OF ATTORNEY FORM THE PARTY OF THE FIR ST AND SECOND PART. 9. IN ORDER TO COMPLETE THE SCHEME AS PER ARRANG EMENT PLAN AND IN PRESCRIBED TIME PERIOD DEVELOPER CUM BUILDING C ONTRACTOR HAS TO ALL THE PROCEEDINGS AT GOVERNMENT AND SEMI-GOVERNME NT AND MUNICIPAL CORPORATION OFFICE AND IN LEGAL COURTS AN D AT OTHER PLACES ITA NO.2500/AHD/2010 25 ON BEHALF OF THE PARTY OF THE FIRST AND SECOND PART ON NECESSARY APPLICATIONS AND WRITTEN STATEMENTS REPLIES AND IN THE FORMS ALL THAT IS TO BE DONE BY DEVELOPER CUM BUILDING CONTRA CTOR AND FOR THAT HEREBY THE AUTHORITY AND POWERS ARE GIVEN TO H IM IN SPITE OF THAT IN FUTURE IF ANY SPECIFIC POWER OF ATTORNEY IS TO BE OBTAINED AT THAT TIME THE PARTY OF THE FIRST AND SECOND PART SH ALL HAVE TO EXECUTE THAT IN FAVOUR OF DEVELOPER CUM BUILDING CO NTRACTOR. 16 BY CLAUSE 14 OF THIS AGREEMENT THE POSSESSION IS TO BE WITH THE DEVELOPER-CUM-BUILDING CONTRACTOR I.E. ASSESSEE-FI RM AND IT READS AS UNDER:- 14. THE LAND DESCRIBED IN SCHEDULE BELOW AND THE CONSTRUCTION DONE ON IT ITS ACTUAL POSSESSION SHALL BE WITH DEV ELOPER CUM BUILDING CONTRACTOR TILL THE COMPLETION OF THIS SC HEME AND MOREOVER TILL THE TOTAL IMPLEMENTATION OF THIS AGREEMENT ON THE SAID LAND AND THE CONSTRUCTION OVER IT THERE SHALL BE A CONTRACTU AL LIEN OF THE DEVELOPER CUM BUILDING CONTRACTOR. 17 VIDE CLAUSE NO.16 OF THIS AGREEMENT THE PARTIES OF THE FIRST AND SECOND PART OF THIS AGREEMENT HAVE HANDED OVER ALL THE RESPONSIBILITIES OF THE SCHEME TO THE DEVELOPER-CUM-BUILDING CONTRACTOR . IT READS AS UNDER: 16 THE PARTY OF THE FIRST AND SECOND PART HAVE HAN DED OVER ALL THE RESPONSIBILITIES OF THE SCHEME TO THE DEVELOPER CUM BUILDING CONTRACTOR SO AT PRESENT TO THE PARTY OF THE FIRST PART AS PER RULES AND REGULATIONS HE IS GETTING F S I BUT IN FUTURE I T CHANGES TAKEN PLACE IN RULES AND REGULATIONS OF F S I IN SUCH CIR CUMSTANCES OTHER THAN THE PRESENT SCHEME ON THE LAND IF SPECIAL CONS TRUCTION IS ALLOWED THEN FOR SUCH ADDITIONAL WORK OTHER THAN TO TAL CONSTRUCTION MADE AS PER RULES AND REGULATIONS BY GETTING PASSE D THE PLANS FORM V M C VADODARA TO DO THE CONSTRUCTION ALL THE RIGHTS AND AUTHORITIES SHALL BY WITH DEVELOPER CUM BUILDING CO NTRACTOR AND THEREAFTER ALSO WHATEVER F S I RIGHTS SHALL REMAIN THAT ALSO AS PER HIS AGREEMENT SHALL BE WITH THE PARTY OF THE THIRD PART. 15 AFTER DISCUSSING VARIOUS CLAUSES OF THE AGREEME NT THE TRIBUNAL HELD AS UNDER: 18 FROM THE CLAUSES OF THE DEVELOPMENT AND CONSTRU CTION AGREEMENTS AS WELL AS AGREEMENT FOR SALE BOTH DATED 18/05/200 0 EXTRACTED ABOVE WE OBSERVE THAT THESE TWO AGREEMENTS EFFECTIVELY T RANSFER TO THE ASSESSEE-FIRM ALL THE RIGHTS OF DEVELOPMENT AND CON STRUCTION AND TO DEAL WITH THE LAND FOR A CONSIDERATION PAYABLE WITHIN A STIPULATED TIME; THAT THE ASSESSEE HAD BEEN PUT IN POSSESSION OF THE LAND ON THE TERMS AND CONDITIONS AS MENTIONED IN THESE TWO AGREEMENTS; TH AT THE ASSESSEE-FIRM ITA NO.2500/AHD/2010 26 HAS ALSO PAID CONSIDERATION OF RS.56 LACS DURING TH E TWO FINANCIAL YEARS; I.E. 2000-01 & 2001-02; THAT THE ASSESSEE-FIRM HAS TO OBTAIN NECESSARY APPROVALS FROM THE LOCAL AUTHORITIES; I.E. BMC ON B EHALF OF THE LAND-OWNERS AND ALL THE EXPENSES FOR SUCH PURPOSES ARE TO BE IN CURRED BY THE ASSESSEE; THAT THE ASSESSEE-FIRM HAS ENGAGED THE FIRM OF ARCH ITECT AND ALSO INCURRED EXPENSES TOWARDS THE CHARGES PAYABLE TO CORPORATION ETC. FOR OBTAINING THE APPROVALS; THAT EVEN FROM THE BOOKS OF ACCOUNT IT IS NOTICED THAT FOR OBTAINING THE APPROVAL THE ASSESSEE-FIRM HAS PAID THE DEVELOPMENTAL CHARGES TO VARIOUS REGULATING AGENCIES I.E. VUDA BMC AND GEB (GUJARAT ELECTRICITY BOARD) ETC.; AND THAT THESE EXPENSES A RE INCURRED BY THE ASSESSEE-FIRM AND THE ASSESSING OFFICER HAS BROUGHT OUT THE COMPLETE DETAILS YEAR-WISE IN HIS ASSESSMENT ORDERS AT PAGE NO.5 READING AS UNDER:- SR.NO. PARTICULARS FINANCIAL YEAR AMOUNT (RS.) 1. VMC CHARGES PAID TO VADODARA MUNICIPAL CORPORATION 2000-01 65 532/- 2. VMC CHARGES PAID TO VADODARA MUNICIPAL CORPORATION 2001-02 31 116/- 3. VUDA CHARGES PAID TO VADODARA DEVELOPMENT AUTHORITY 2000-01 46 508/- 4. ELECTRICITY CHARGES PAID TO GEB FOR GETTING ELECTRICITY CONNECTION TO ITS PROJECT 2000-01 1 99 944/- 19 THE ASSESSEE COMMENCED THE WORK TO DEVELOP WHICH INCLUDED THE DEVELOPMENT OF SITES LAYING ROADS WITHIN THE HOUSI NG COMPLEX PROVIDING FOR COMPOUND-WALLS OF THE HOUSING COMPLEX STREETLI GHTS DRAINAGE ETC.; THAT SIMULTANEOUSLY THE CONSTRUCTION COMMENCED THE WORK OF THE HOUSING WORK; THAT THE COST OF THE ENTIRE DEVELOPMENT AND T HE CONSTRUCTION IS SUBSTANTIALLY MADE OUT BY THE ASSESSEE-FIRM INITIAL LY AND PARTIALLY RECOVERED FROM THE CUSTOMERS WHO ARE DESIROUS TO PU RCHASE ANY RESIDENTIAL HOUSES I.E. THE PROSPECTIVE BUYERS; AN D THAT THE SIZE OF PLOT ON WHICH THE PROJECT IS DEVELOPED IS DEFINITELY IN E XCESS OF ONE ACRE AND THE SIZE OF EACH RESIDENTIAL HOUSE IS LESS THAN 1500 SQ . FT. 20 ON THESE UNDISPUTED FACTS WE HAVE TO EXAMINE THE PROVISIONS OF THE SECTION 80-IB(10) OF THE ACT. BEFORE DISCUSSING TH E PROVISIONS APPEARING IN THE IMPUGNED YEARS IT WOULD BE RELEVANT TO HAVE A LOOK THE LEGISLATIVE HISTORY OF THE PROVISION. THE DEDUCTION FOR HOUSING PROJECT WAS INTRODUCED FOR THE FIRST TIME IN ASST. YEAR 1999-2000 BY INSER TING SUB-SECTION (4F) IN SECTION 80IA OF THE ACT AND THE DEDUCTION WAS AS PE R PROVISIONS OF SEC.80IA(1) IN RESPECT OF ANY PROFITS AND GAINS OF SUCH UNDERTAKING. THE SAID SECTION 80IA(4F) READS AS UNDER:- ITA NO.2500/AHD/2010 27 (4F) THIS SECTION APPLIES TO AN UNDERTAKING ENGAGE D IN DEVELOPING AND BUILDING HOUSING PROJECTS APPROVED B Y A LOCAL AUTHORITY SUBJECT TO THE CONDITION THAT THE S IZE OF THE PLOT OF LAND HAS A MINIMUM AREA OF ONE ACRE AN D THE RESIDENTIAL UNIT HAS A BUILT UP AREA NOT EXCEED ING ONE THOUSAND SQUARE FEET : PROVIDED THAT THE UNDERTAKING COMMENCES DEVELOPMENT AND CONSTRUCTION OF THE HOUSING PROJECT ON OR AFTER THE 1 ST DAY OF OCTOBER 1998 AND COMPLETES THE SAME BEFORE THE 31 ST DAY OF MARCH 2001. 21 ON A CLOSE READING OF THIS PROVISION IT WOULD BE APPARENT THAT IT APPLIED TO AN UNDERTAKING WHICH WAS ENGAGED IN DEV ELOPING AND BUILDING HOUSING PROJECTS APPROVED BY A LOCAL AUTHORITY AND THE DEDUCTION WAS SUBJECT TO THE CONDITIONS THAT (I) THE SIZE OF THE PLOT OF LAND WAS A MINIMUM AREA OF ONE ACRE AND THE RESIDENTIAL UNIT HAS A BUILT UP AREA NOT EXCEEDING 1000 SQ. FT; AND (II) THE UNDERTAKING COM MENCED DEVELOPMENT AND CONSTRUCTION OF THE HOUSING PROJECT ON OR AFTER 1 ST OCTOBER 1998 AND COMPLETED THE SAME BEFORE 31 ST MARCH 2001. 22 SECTION 80IA WAS LATER SPLIT INTO AND SPREAD IN TWO SECTIONS- 80IA AND 80IB BY THE FINANCE ACT 1999 WITH EFFECT FROM 1 ST APRIL 2000. THE HOUSING PROJECT FELL IN S. 80IB AND FORMS PART OF S UB-SECTION (10) OF SEC. 80IB. IT GRANTS DEDUCTION IN RESPECT OF PROFIT AND GAINS FROM CERTAIN INDUSTRIAL UNDERTAKING OTHER THAN INFRASTRUCTURE DE VELOPMENT UNDERTAKINGS. THE RELEVANT PROVISION BROUGHT OUT READS AS UNDER: 80-IB. DEDUCTION IN RESPECT OF PROFITS AND GAINS FROM CERTAIN INDUSTRIAL UNDERTAKINGS OTHER THAN INFRASTRUCTURE D EVELOPMENT UNDERTAKINGS. (10) THE AMOUNT OF PROFITS IN CASE OF AN UNDERTAKING DE VELOPING AND BUILDING HOUSING PROJECTS APPROVED BY A LOCAL A UTHORITY SHALL BE HUNDRED PER CENT OF THE PROFITS DERIVED IN ANY P REVIOUS YEAR RELEVANT TO ANY ASSESSMENT YEAR FROM SUCH HOUSING P ROJECT IF (A) SUCH UNDERTAKING HAS COMMENCED OR COMMENCES DEV ELOPMENT AND CONSTRUCTION OF THE HOUSING PROJECT ON OR AFTER THE 1ST DAY OF OCTOBER 1998 AND COMPLETES THE SAME BEFORE THE 31 ST DAY OF MARCH 2001; ITA NO.2500/AHD/2010 28 (B) THE PROJECT IS ON THE SIZE OF A PLOT OF LAND WH ICH HAS MINIMUM AREA OF ONE ACRE; AND (C) THE RESIDENTIAL UNIT HAS A MAXIMUM BUILT-UP ARE A OF ONE THOUSAND SQUARE FEET WHERE SUCH RESIDENTIAL UNIT IS SITUATED WITHIN THE CITIES OF DELHI OR MUMBAI OR WITHIN TWENTY-FIVE KILOMETERS FROM THE MUNICIPAL LIMITS OF THESE CITIES AND ONE THOUSA ND AND FIVE HUNDRED SQUARE FEET AT ANY OTHER PLACE.' 23 FOR ENACTING THIS PROVISION THE NOTES ON CLAUSE S TO THE FINANCE BILL 1999 HAS EXPLAINED THAT THE PROVISION ALSO SEEKS TO PROVIDE THAT FOR APPROVED HOUSING PROJECTS THE PROFITS WHICH ARE FUL LY DEDUCTIBLE THE BUILT- UP AREA IN REGIONS OTHER THAN OUTSIDE TWENTY-FIVE K M. OF MUNICIPAL LIMITS OF DELHI AND MUMBAI DOES NOT EXCEED ONE THOUSAND FIVE HUNDRED SQUARE FEET. 24 FURTHER THE MEMO CONTAINED IN FINANCE BILL 199 9 HAS EXPLAINED THE PROVISIONS BROUGHT BY THE LEGISLATURE W.E.F. 1ST AP RIL 2000 AND THE SAME READS AS UNDER: 'TAX INCENTIVE FOR PROMOTION OF HOUSING LIBERALIZATION OF TAX HOLIDAY TO APPROVED HOUSING P ROJECTSUNDER S. 80-IA OF THE IT ACT PROFITS OF APPROVED HOUSING PR OJECTS WHERE THE DEVELOPMENT AND CONSTRUCTION COMMENCES ON OR AFTER 1ST OCT. 1998 AND IS COMPLETED BY 31ST MARCH 2001 ARE FULLY DEDUCTIBLE. THE CONDITIONS NECESSARY FOR CLAIMING THE BENEFIT A RE THAT THE APPROVED HOUSING PROJECT SHOULD BE ON MINIMUM AREA OF ONE ACRE AND SHOULD HAVE DWELLING UNITS WITH A MAXIMUM BUILT -UP AREA OF 1 000 SQ.FT. IT IS PROPOSED TO MODIFY THE EXISTING BENEFITS TO P ROVIDE THAT IN AREAS OTHER THAN FALLING IN AND WITHIN 25 KMS. FROM THE MUNICIPAL LIMITS OF DELHI AND MUMBAI THE BUILT-UP AREA OF D WELLING UNITS MAY BE UP TO A MAXIMUM LIMIT OF 1 500 SQ. FT. INSTEAD O F 1 000 SQ. FT. AT PRESENT TO MAKE THEM ENTITLED FOR BENEFIT. THE BUIL T-UP AREA FOR AREAS FALLING IN DELHI AND MUMBAI AND WITHIN 25 KMS . OF THE MUNICIPAL LIMITS OF BOTH HOWEVER SHALL REMAIN THE SAME. ITA NO.2500/AHD/2010 29 THE PROPOSED AMENDMENT WILL TAKE EFFECT FROM 1ST AP RIL 2000 AND WILL ACCORDINGLY APPLY IN RELATION TO THE ASST. Y R. 2000-01 AND SUBSEQUENT YEARS.' 25 THE PROVISIONS OF SEC.80IB(10) THUS ARE SOUGHT T O PROVIDE THAT FOR APPROVED HOUSING PROJECT THE PROFITS ARE FULLY DED UCTIBLE IF THE PROJECT HAS THE BUILT UP AREA FOR THE CITIES OF DELHI AND MUMBA I AND THE AREA WITHIN 25 KM. FROM THE MUNICIPAL LIMIT THEREOF DOES NOT EX CEED 1000 SQ. FT. AND FOR OTHER PLACES THE BUILT UP AREA OF RESIDENTIAL U NIT DOES NOT EXCEED 1500 SQ. FT. A PROVISION IS ALSO MADE WHEREBY ANY UNDERT AKING OF AN INDIAN COMPANY WHICH IS ENTITLED TO DEDUCTION UNDER THIS SECTION IS TRANSFERRED BEFORE THE EXPIRY OF THE PERIOD SPECIFIED IN THIS S ECTION TO ANOTHER INDIAN COMPANY IN A SCHEME OF AMALGAMATION OR DEMERGER (A) NO DEDUCTION TO BE ADMISSIBLE UNDER THIS SECTION TO THE AMALGAMATIN G OR THE DEMERGED COMPANY FOR THE PREVIOUS YEAR IN WHICH THE AMALGAMA TION OR THE DEMERGER TAKES PLACE; AND (B) THE PROVISIONS OF THI S SECTION TO APPLY TO THE AMALGAMATED OR RESULTING COMPANY AS THEY WOULD HAVE APPLIED TO THE AMALGAMATING OR DEMERGED COMPANY AS IF THE AMALGAMA TION OR DEMERGER HAD NOT TAKEN PLACE. 26 THE SUB-SECTION (10) RELATING TO HOUSING PROJECT WAS AMENDED FROM TIME TO TIME. FIRSTLY BY FINANCE ACT 2000 W.E.F. 1 ST APRIL 2000 EXTENDING THE OUTER LIMIT FOR COMPLETION OF THE HOUSING PROJE CT ON OR BEFORE 31 ST MARCH 2002 AS AGAINST 31 ST MARCH 2001 ORIGINALLY ENACTED. THIS SUB- SECTION WAS AGAIN AMENDED BY FINANCE ACT 2003 REMO VING THE TIME LIMIT FOR COMPLETION OF THE PROJECT MEANING THEREBY THAT FOR THE ASST. YEARS 2002-2003 2003-2004 AND 2004-05 THE ASSESSMENT YE ARS WITH WHICH WE ARE CONCERNED THERE WAS NO OUTER TIME LIMIT FOR CO MPLETION OF THE PROJECT. THERE HAVE BEEN CERTAIN FURTHER AMENDMENTS IN THIS SECTION BY FINANCE (NO.2) ACT 2004 W.E.F. 1 ST APRIL 2005 BUT WE ARE NOT CONCERNED WITH THESE AMENDMENTS INSOFAR AS ALL THESE APPEALS ARE C ONCERNED. THEREFORE WE ARE NOT DEALING WITH THE SAME. 27 A BARE READING OF THIS PROVISIONS OF S. 80IB (10 ) AS THEY STOOD IN THE YEARS UNDER CONSIDERATION THE REQUIREMENTS FOR CLAIMING DEDUCTION FOR HOUSING PROJECTS ARE THAT (I) THERE MUST BE AN UNDE RTAKING DEVELOPING AND BUILDING HOUSING PROJECT; (II) SUCH HOUSING PROJECT IS APPROVED BY THE LOCAL AUTHORITY; (III) THE DEVELOPMENT AND CONSTRUCTION O F HOUSING PROJECT HAS COMMENCED ON OR AFTER 1 ST DAY OF OCTOBER 1998; (IV) THE HOUSING PROJECT IS ON A SIZE OF A PLOT OF LAND WHICH HAS MINIMUM AR EA OF ONE ACRE; AND (V) THE RESIDENTIAL UNIT DEVELOPED AND BUILT HAS A BUIL T UP AREA OF 1000 SQ. FT. IF IT IS SITUATED IN DELHI AND MUMBAI OR WITHIN 25 KM. OF MUNICIPAL LIMIT OF THESE CITIES AND 1500 SQ. FT. AT ANY OTHER PLACES. THERE IS NO OTHER ITA NO.2500/AHD/2010 30 CONDITION WHICH IS TO BE COMPLIED WITH BY AN ASSES SEE FOR CLAIMING THE DEDUCTION ON PROFITS OF THE HOUSING PROJECT. 28 THE CONTENTION OF THE REVENUE AUTHORITIES THAT T O CLAIM DEDUCTION U/S.80IB(10) THERE IS A CONDITION PRECEDENT THAT T HE ASSESSEE MUST BE OWNER OF THE LAND ON WHICH HOUSING PROJECT IS CONST RUCTED HAS NO FORCE. WE DO NOT FIND ANY SUCH CONDITION AS APPEARING IN T HE PROVISIONS OF THE SECTION EXTRACTED ABOVE. A PLAIN READING OF SUB-SEC TION (10) OF SEC.80IB REVEALS AND MAKES IT EVIDENT THAT THERE MUST BE AN UNDERTAKING DEVELOPING AND BUILDING A HOUSING PROJECT AS APPROV ED BY A LOCAL AUTHORITY. IT DOES NOT HAVE ANY FURTHER CONDITION T HAT SUCH DEVELOPMENT AND BUILDING OF THE HOUSING PROJECT SHOULD ALSO BE ON A LAND OWNED BY AN ASSESSEE UNDERTAKING. IT MIGHT BE TRUE THAT THE LAN D BELONGS TO THE PERSONS WHO HAS ENTERED INTO AN AGREEMENT WITH THE ASSESSEE TO DEVELOP AND BUILD HOUSING PROJECT BUT ON A PERUSAL OF THE A GREEMENT AS NARRATED ABOVE IT IS EVIDENT THAT THE DEVELOPMENT AND BUILD ING WORK HAS BEEN CARRIED OUT BY THE ASSESSEE IN PURSUANCE OF A TRIPA RTITE AGREEMENT AND IT IS NOT BY THE LAND OWNERS. THEREFORE THE MERE FACT TH AT THE LAND-OWNER AND THE UNDERTAKING DEVELOPING AND BUILDING HOUSING PRO JECT ARE TWO DIFFERENT ENTITIES WOULD NOT MAKE ANY DIFFERENCE. THE DEDUCTI ON WOULD BE ELIGIBLE TO THE PERSON WHO IS DEVELOPING AND BUILDING HOUSING P ROJECT AND NOT TO THE MERE OWNER THEREOF. 29 IT IS ALSO THE CASE OF THE REVENUE THAT THE ASSE SSEE WAS A MERE CONTRACTOR DEVELOPING AND BUILDING HOUSING PROJECT AND THEREFORE IT COULD NOT BE A DEVELOPER. WE FAIL TO UNDERSTAND AS TO HOW SUCH A SITUATION COULD EMERGE. A PERSON WHO ENTERS INTO A CONTRACT WITH AN OTHER PERSON IS NO DOUBT A CONTRACTOR. HAVING ENTERED INTO AGREEMENTS WITH LANDOWNERS FOR DEVELOPMENT AND BUILDING THE HOUSING PROJECT WAS O BVIOUSLY A CONTRACTOR BUT IT DOES NOT DEROGATE THE ASSESSEE FOR BEING A D EVELOPER AS WELL. THE TERM CONTRACTOR IS NOT ESSENTIALLY CONTRADICTORY TO THE TERM DEVELOPER. AS STATED ABOVE IT IS THE UNDERTAKING THAT DEVELOPS OR BUILDS THE HOUSING PROJECT THAT IS ENTITLED TO DEDUCTION IRRESPECTIVE OF THE FACT WHETHER THAT IT IS THE OWNER OR NOT OR WHETHER IT IS THE CONTRACTOR THEREOF. THE REQUIREMENT FOR CLAIMING DEDUCTION IS THAT SUCH AN UNDERTAKING MUST DEVELOP AND BUILD HOUSING PROJECT BE IT ON THEIR O WN LAND OR ON THE LAND OF OTHERS AND FOR WHICH A TRIPARTITE AGREEMENT HAS BEEN ENTERED INTO FOR DEVELOPMENT AND BUILDING HOUSING PROJECT; OR BE THE ASSESSEE A CONTRACTOR FOR DEVELOPING AND BUILDING HOUSING PROJECT OR AN O WNER OF THE LAND. 30 WHAT IS THE MEANING OF THE TERM DEVELOP DEVELOP ER DEVELOPING DEVELOPMENT WE CAN FIND THE ANSWER IN CERTAIN DICT IONARIES INCLUDING THE LAW DICTIONARY. ITA NO.2500/AHD/2010 31 A. THE WEBSTERS 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 I NVESTS IN AND DEVELOPS THE URBAN OR SUBURBAN POTENTIALITIES OF RE AL ESTATE B. OXFORD ADVANCED LEARNERS DICTIONARY OF CURRENT ENGL ISH 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 DEFINITIONS CAN BE FOUND: DEVELOP : A. TO BRING OUT THE CAPABILITIES OR POSSIBILITIES OF; BRING TO A MORE ADVANCED OR EFFECTIVE STATE. B. TO CAUSE TO GROW OR EXPAND. DEVELOPER : A. THE ACT OR PROCESS OF DEVELOPING; PROGRESS B. SYNONYM: EXPANSION ELABORATION GROWTH EVOLUTION UNFOLDING MATURING MATURATION. D. WEBSTER DICTIONARY THE FOLLOWING DEFINITIONS EMERGE: A. TO REALIZE THE POTENTIAL OF; B. TO AID IN THE GROWTH OF: STRENGTHEN DEVELOP THE BICEPS C. TO BRING INTO BEING: MAKE ACTIVE (DEVELOP A BUSINES S) D. TO CONVERT ( A TRACT OF LAND ) FOR SPECIFIC PURPOS E AS BY BUILDING EXTENSIVELY E. LAW LEXICON DICTIONARY THE FOLLOWING DEFINITIONS COULD BE SEEN: DEVELOPMENT A. TO ACT PROCESS OR RESULT OF DEVELOPMENT OR GROWING OR CAUSING TO GROW; THE STATE OF BEING DEVELOPED. B. HAPPENING ITA NO.2500/AHD/2010 32 31 THE SUPREME COURT IN THE CASE OF GUJARAT INDUSTR IAL DEVELOPMENT CORPORATION AND OTHERS 227 ITR 414 (SC) CONSIDERIN G THE MEANING OF DEVELOPER HELD THAT THE WORD DEVELOPMENT APPEA RING IN THE PROVISIONS SHOULD BE UNDERSTOOD IN ITS WIDER SENSE AND THEREFORE GRANTED EXEMPTION EVEN THOUGH THE GUJARAT INDUSTRIA L DEVELOPMENT CORPORATION WAS ENGAGED IN THE INDUSTRIAL DEVELOPME NT. THE DEVELOPMENT MEANS THE REALIZATION OF POTENTIALITIES OF LAND OR TERRITORY BY BUILDING OR MINING. ACCORDINGLY IT CAN BE SAFELY SAID THAT A PERSON WHO UNDERTAKES TO DEVELOP REAL ESTATE BY DEVELOPING AND CONSTRUCTION A HOUSING PROJECT AN ELIGIBLE UNDERTAKING DEVELOPING AND BUILDING OF HOUSING PROJECTS WITHIN THE MEANING OF SECTION 80-I B(10) OF THE ACT. IN THE PRESENT CASE IN HAND THE LAND OWNER HAS NOT MA DE ANY CONSCIOUS ATTEMPT TO DEVELOP THE PROPERTY EXCEPT ENSURING THE IR RIGHTS AS LAND-OWNER SO THAT THE SALE VALUE OF THE LAND COULD BE REALIZE D TO THEM AS PER THE TERMS OF AGREEMENT TO SALE AND THE DEVELOPMENT A GREEMENT. THE LAND-OWNERS NO DOUBT HAVE NOT THROWN THEMSELVES IN TO DEVELOPMENT OF PROPERTY. IT IS ONLY THE ASSESSEE WHO IS DEVELOPIN G THE PROPERTY. THROWING ITSELF INTO THE BUSINESS OF DEVELOPMENT AN D BUILDING OF HOUSING PROJECTS BY TAKING ALL RISKS ASSOCIATED WITH THE BU SINESS BY ENGAGING ARCHITECTS STRUCTURAL CONSULTANTS DESIGNING AND P LANNING OF THE HOUSING SCHEMES PAYMENT OF DEVELOPMENT CHARGES OBTAINING NECESSARY PERMISSIONS APPROVING PLANS HIRING MACHINERY AND EQUIPMENTS HIRING ENGINEERS APPOINTING CONTRACTORS ETC. NO DOUBT THE PERMISSION HAS BEEN OBTAINED IN THE NAME OF THE REGISTERED LAND-OWNERS BUT THE SAME HAVE BEEN OBTAINED BY THE ASSESSEE-FIRM THROUGH ITS PART NERS WHO ARE HOLDING POWER OF ATTORNEY OF THE RESPECTIVE LAND-OWNERS. 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 REM UNERATION FOR THE LAND- OWNERS BUT DEVELOPER IS WORKING FOR HIMSELF IN ORD ER TO EXPLOIT THE POTENTIAL OF ITS BUSINESS IN HIS OWN INTEREST AND THEREFORE OPTION FOR ALL BUSINESS RISKS ASSOCIATED WITH THE BUSINESS OF DEVE LOPMENT OF REAL ESTATE INCLUDING DEVELOPING AND BUILDING OF HOUSING PROJEC TS. AS PER THE PROVISIONS OF SECTION 2(1)(G) OF REGULATION OF EMPL OYMENT AND CONDITIONS OF SERVICE ACT (27 OF 1996) THE TEM CONTRACTOR M EANS A PERSON WHO UNDERTAKES TO PRODUCE A GIVEN RESULT FOR ANY ESTABL ISHMENT OTHER THAN A MERE SUPPLY OF GOODS OR ARTICLES OF MANUFACTURE BY THE EMPLOYMENT OF BUILDING WORKERS OR WHO SUPPLIES BUILDING WORKERS F OR ANY WORK OF THE ESTABLISHMENT; AND INCLUDES A SUB-CONTRACTOR. 32 IN THESE CIRCUMSTANCES IN OUR OPINION THE ASSE SSEE IS ENTITLED TO DEDUCTION U/S. 80IB(10) AS IT HAD DEVELOPED AND BUI LT THE HOUSING PROJECT; IT HAD STARTED CONSTRUCTION AFTER 1 ST DAY OF APRIL 1998; THE PROJECT IS ON THE SIZE OF A PLOT OF LAND WHICH HAS A MINIMUM AREA OF ONE ACRE AND THE MAXIMUM BUILT UP AREA OF THE RESIDENTIAL UNITS ARE NOT MORE THAN 1500 SQ. ITA NO.2500/AHD/2010 33 FT. THE PROPERTY BEING SITUATED IN BARODA A CITY OTHER THAN DELHI AND MUMBAI. 33 IT MAY ALSO BE BORN IN MIND THE DEDUCTION IS NOT EXCLUSIVELY TO AN ASSESSEE BUT TO AN UNDERTAKING DEVELOPING AND BUILD ING HOUSING PROJECT BE IT DEVELOPED AS A CONTRACTOR OR AS AN OWNER. THI S FACT IS EVIDENT ON THE BARE READING OF SUB-SEC.(1) OF SEC.80IB SUB-SEC.(2 ) OF SEC.80IB WHICH PROVIDES THAT THIS SECTION APPLIES TO AN INDUSTRIA L UNDERTAKING WHICH FULFILLS ALL THE FOLLOWING CONDITIONS VIZ. AND SUB-S ECTION (12) WHICH ALLOWS THE DEDUCTION TO THE AMENDED OR RESULTING CO MPANY IN CASE OF AMALGAMATION OR DEMERGER OF THE ORIGINAL UNDERTAKIN G WHICH HAD STARTED DEVELOPING AND BUILDING THE HOUSING PROJECT. FOR TH E SAKE OF CONVENIENCE SUB-SECTION (12) OF SEC.80IB REPRODUCED HEREUNDER:- 80IB(12) WHERE ANY UNDERTAKING OF AN INDIAN COMPANY WHICH IS ENTITLED TO THE DEDUCTION UNDER THIS SECTI ON IS TRANSFERRED BEFORE THE EXPIRY OF THE PERIOD SPECIF IED IN THIS SECTION TO ANOTHER INDIAN COMPANY IN A SCHEME OF AMALGAMATION OR DEMERGER (A) NO DEDUCTION SHALL BE ADMISSIBLE UNDER THIS SE CTION TO THE AMALGAMATING OR THE DEMERGED COMPANY FOR THE PREVIOUS YEAR IN WHICH THE AMALGAMATION OR THE DEME RGER TAKES PLACE; AND (B) THE PROVISIONS OF THIS SECTION SHALL AS FAR A S MAY BE APPLY TO THE AMALGAMATED OR THE RESULTING COMPANY A S THEY WOULD HAVE APPLIED TO THE AMALGAMATING OR THE DEMER GED COMPANY IF THE AMALGAMATION OR DEMERGER HAD NOT TAK EN PLACE. 34 EVEN IF THAT IS SO REQUIRED THE ASSESSEE IN THE PRESENT CASE CAN ALSO BE SAID TO BE THE OWNER OF THE LAND AS IT HAD MADE PART PAYMENT TO THE LAND-OWNERS DURING THE FINANCIAL YEARS 2000-01 & 2001-02 FOR AN AMOUNT OF RS.56 LACS AND TAKEN THE POSSESSION OF T HE LAND FOR DEVELOPMENT AND BUILDING THE HOUSING PROJECT AND S ATISFY THAT CONDITION AS WELL OF BEING THE OWNER OF THE LAND IN VIEW OF P ROVISIONS OF SECTION 2(47) (V) OF THE ACT. WHEN THE ASSESSEE HAS TAKEN ON THE POSSESSION OF IMMOVABLE PROPERTY OR RETAINED IT IN PART PERFORMAN CE OF A CONTRACT OF A NATURE REFERRED TO IN SECTION 53A OF THE ACT OF THE TRANSFER OF PROPERTY ACT 1882 IT AMOUNTS TO TRANSFER UNDER SECTION 2(47 )(V) WHICH READS AS UNDER:- (47) ' TRANSFER ' IN RELATION TO A CAPITAL ASSET INCLUDES - ITA NO.2500/AHD/2010 34 (I) (II) (III) (IV) (IVA) (V) ANY TRANSACTION INVOLVING THE ALLOWING OF THE P OSSESSION OF ANY IMMOVABLE PROPERTY TO BE TAKEN OR RETAINED I N PART PERFORMANCE OF A CONTRACT OF THE NATURE REFERRED TO IN SECTION 53A OF THE TRANSFER OF PROPERTY ACT 1882 (4 OF 188 2) ; OR 35 SECTION 53A OF THE TRANSFER OF PROPERTY ACT 18 82 REFERRED TO IN THE AFORESAID SECTION OF THE I. T. ACT READS AS UNDER: - 53A. WHERE ANY PERSON CONTRACTS TO TRANSFER FOR CONSI DERATION ANY IMMOVABLE PROPERTY BY WRITING SIGNED BY HIM OR ON HIS BEHALF FROM WHICH THE TERMS NECESSARY TO CONSTITUTE THE TR ANSFER CAN BE ASCERTAINED WITH REASONABLE CERTAINTY AND THE TRANSFEREE HAS IN PART PERFORMANCE OF THE CONTRACT TAKEN POSSESSION OF THE PROPERTY OR ANY PART THEREOF OR THE TRANSFEREE BEING ALREADY IN POSSESSION CONTINUES IN POSSESSIO N IN PART PERFORMANCE OF THE CONTRACT AND HAS DONE SOME ACT I N FURTHERANCE OF THE CONTRACT AND THE TRANSFEREE HAS PERFORMED OR IS WILLING TO P ERFORM HIS PART OF THE CONTRACT THEN NOTWITHSTANDING THAT THE CONTRACT THOUGH REQ UIRED TO BE REGISTERED HAS NOT BEEN REGISTERED OR WHERE THER E IS AN INSTRUMENT OF TRANSFER THAT THE TRANSFER HAS NOT B EEN COMPLETED IN THE MANNER PRESCRIBED THEREFOR BY THE LAW FOR THE T IME BEING IN FORCE THE TRANSFEROR OR ANY PERSON CLAIMING UNDER HIM SHALL BE DEBARRED FROM ENFORCING AGAINST THE TRANSFEREE AND PERSONS CLAIMING UNDER HIM ANY RIGHT IN RESPECT OF THE PROP ERTY OF WHICH THE TRANSFEREE HAS TAKEN OR CONTINUED IN POSSESSION OT HER THAN A RIGHT EXPRESSLY PROVIDED BY THE TERMS OF THE CONTRACT: PROVIDED THAT NOTHING IN THIS SECTION SHALL AFFECT THE RIGHTS OR A TRANSFEREE FOR CONSIDERATION WHO HAS NO NOTICE OF T HE CONTRACT OR OF THE PART PERFORMANCE THEREOF. ITA NO.2500/AHD/2010 35 36 IN VIEW OF ABOVE PROVISIONS OF THE TRANSFER OF P ROPERTY ACT VIS-- VIS THE INCOME-TAX ACT TO GET THE CORRECT IMPORT O F SECTION 80-IB(10) OF THE ACT WE HAVE TO READ ALONG WITH SECTION 80-IB(1) OF THE ACT WHICH ALSO DOES NOT PROVIDE FOR ANY CONDITION THAT THE ASSESSE E SHOULD BE OWNER OF THE LAND. THE RELEVANT PROVISIONS OF SUB-SECTION (1 ) OF SECTION 80-IB READS AS UNDER:- 80IB. DEDUCTION IN RESPECT OF PROFITS AND GAINS FR OM CERTAIN INDUSTRIAL UNDERTAKINGS OTHER THAN INFRASTR UCTURE DEVELOPMENT UNDERTAKINGS. (1) WHERE THE GROSS TOTAL INCOME OF AN ASSESSEE INC LUDES ANY PROFITS AND GAINS DERIVED FROM ANY BUSINESS REFERRE D TO IN SUB- SECTIONS (3) TO (11) AND (11A) (SUCH BUSINESS BEING HEREINAFTER REFERRED TO AS THE ELIGIBLE BUSINESS) THERE SHALL IN ACCORDANCE WITH AND SUBJECT TO THE PROVISIONS OF THIS SECTION BE A LLOWED IN COMPUTING THE TOTAL INCOME OF THE ASSESSEE A DEDUC TION FROM SUCH PROFITS AND GAINS OF AN AMOUNT EQUAL TO SUCH PERCEN TAGE AND FOR SUCH NUMBER OF ASSESSMENT YEARS AS SPECIFIED IN THI S SECTION. 37 THE LD. DR RELIED ON THE DECISION OF THE SUPREME COURT IN THE CASE OF V.S.M.R. JAGADISHCHANDRAN (DECD.) 227 ITR 240 (S C) OBSERVING AT PAGE NO.243 THAT IT HAS BEEN HELD THAT WHERE A MO RTGAGE WAS CREATED BY THE PREVIOUS OWNER DURING HIS TIME AND THE SAME WAS SUBSISTING ON THE DATE OF HIS DEATH THE SUCCESSOR OBTAINS ONLY THE M ORTGAGOR'S INTEREST IN THE PROPERTY AND BY DISCHARGING THE MORTGAGE DEBT H E ACQUIRES THE MORTGAGEE'S INTEREST IN THE PROPERTY AND THEREFORE THE AMOUNT PAID TO CLEAR OFF THE MORTGAGE IS THE COST OF ACQUISITION O F THE MORTGAGEE'S INTEREST IN THE PROPERTY WHICH IS DEDUCTIBLE AS COST OF ACQU ISITION UNDER SECTION 48 OF THE ACT. IN THE PRESENT CASE WE FIND THAT THE M ORTGAGE WAS CREATED BY THE ASSESSEE HIMSELF. IT IS NOT A CASE WHERE THE PR OPERTY HAD BEEN MORTGAGED BY THE PREVIOUS OWNER AND THE ASSESSEE HA D ACQUIRED ONLY THE MORTGAGOR'S INTEREST IN THE PROPERTY MORTGAGED AND BY CLEARING THE SAME HE HAD ACQUIRED THE INTEREST OF THE MORTGAGEE IN TH E SAID PROPERTY. THE QUESTIONS RAISED BY THE ASSESSEE IN THE APPLICATION SUBMITTED UNDER SECTION 256(2) OF THE ACT DO NOT THEREFORE RAISE ANY ARGUABLE QUESTION OF LAW AND THE SAID APPLICATION WAS RIGHTLY REJECTED B Y THE HIGH COURT. IN THE CIRCUMSTANCES EVEN THOUGH WE ARE UNABLE TO AGREE W ITH THE REASONS GIVEN IN THE IMPUGNED ORDER WE ARE IN AGREEMENT WI TH THE ORDER OF THE HIGH COURT DISMISSING THE APPLICATION FILED BY THE ASSESSEE UNDER SECTION 256(2) OF THE ACT. 38 THE ARGUMENT IS TOTALLY MISCONCEIVED AS IN THE P RESENT CASE THE ASSESSEE HAS PERFORMED HIS PART OF THE CONTRACT IN REGARD TO AGREEMENT TO SALE AND DEVELOPMENT AGREEMENT AND PAID PART OF CONSIDERATION TO ITA NO.2500/AHD/2010 36 PERFORM HIS PART AND CARRIED OUT DEVELOPMENT ACTIVI TIES BY CONSTRUCTING A HOUSING PROJECT AS PER AGREEMENT. THIS BEING A TRI- PARTY AGREEMENT I.E. THE DEVELOPMENT AGREEMENT WHICH HAS PASSED ON A VAL ID AND RIGHTFUL TITLE TO THE PROSPECTIVE BUYERS IN NO WAY IT CAN BE SAID THAT FACTS OF CASE BEFORE THE SUPREME COURT WOULD APPLY TO THE PRESENT CASE. 39 WE MAY REFER TO THE PROVISIONS OF SECTION 10(20A ) OF THE INCOME- TAX ACT PROVIDING THAT : ' ANY INCOME OF AN AUTHORI TY CONSTITUTED IN INDIA BY OR UNDER ANY LAW ENACTED EITHER FOR THE PURPOSE OF DEALING WITH AND SATISFYING THE NEED FOR HOUSING ACCOMMODATION OR FO R THE PURPOSE OF PLANNING DEVELOPMENT OR IMPROVEMENT OF CITIES TOW NS AND VILLAGES OR FOR BOTH. ' THE SUPREME COURT WHILE INTERPRETING THE P ROVISIONS OF SECTION 10(20A) OF THE ACT THE PURPOSE OF WHICH IS ALMOST SIMILAR TO THE PRESENT SECTION 80IB HELD IN THE CASE OF GUJARAT INDUSTRIA L DEVELOPMENT CORPORATION & OTHERS (227 ITR 414) AT PAGE NO.417 AS UNDER:- ANY INCOME FALLING WITHIN THE AMBIT OF THE SAID CL AUSE WOULD AUTOMATICALLY SLIP OUT OF THE EXIGIBILITY UNDER THE INCOME-TAX ACT. THE CLAUSE PERTAINS TO ANY INCOME OF AN AUTHORITY C ONSTITUTED BY OR UNDER ANY ENACTED LAW. THIS FIRST LIMB OF THE CLAUS E IS SQUARELY AVAILABLE TO THE CORPORATION AS IT HAS BEEN CONSTIT UTED UNDER THE GUJARAT ACT. THE SECOND LIMB OF THE CLAUSE CONSISTS OF TWO ALTER NATIVES OF WHICH THE FIRST IS THAT THE AUTHORITY CONSTITUTED BY LAW SHOULD BE FOR DEALING WITH THE NEED TO PROVIDE HOUSING ACCOMMODAT ION. THAT ALTERNATIVE IS OBVIOUSLY NOT AVAILABLE TO THE APPEL LANT-CORPORATION AS NOBODY HAS A CASE THAT THE APPELLANT-CORPORATION HA S ANYTHING TO DO WITH THE OBLIGATION TO PROVIDE HOUSING ACCOMMODA TION. IT IS THE SECOND ALTERNATIVE IN THE CLAUSE UNDER WHICH THE AP PELLANT SEEKS SHELTER TO BE ABSOLVED FROM THE LIABILITY TO PAY IN COME-TAX. AS PER THAT ALTERNATIVE IF THE AUTHORITY IS CONSTITUTED F OR THE PURPOSE OF PLANNING OR DEVELOPMENT OR IMPROVEMENT OF ANY CITY OR TOWN OR VILLAGE OR A COMBINATION OF THEM THE INCOME OF SUC H AUTHORITY IS NOT EXIGIBLE TO INCOME-TAX. 40 IN THE CASE OF TAMIL NADU CIVIL SUPPLIES CORPORA TION LTD. 249 ITR 214 (SC) REFERRED TO BY THE LD. DR THE SUPREME CO URT HAS CONSIDERED THE ISSUE AS UNDER:- THE ASSESSEE BEFORE IT HAD PURCHASED CERTAIN HOUSE S FROM THE HOUSING BOARD AND HAD MADE PART PAYMENT THEREOF. IT HAD ACQUIRED POSSESSION OF THE HOUSES BUT THE DEED OF C ONVEYANCE WAS NOT EXECUTED UNTIL AFTER THE FINANCIAL YEAR IN QUES TION. EVEN SO THE ASSESSEE'S CLAIM FOR DEPRECIATION OF THE BUILDINGS WHICH IT HAD USED ITA NO.2500/AHD/2010 37 FOR THE PURPOSE OF ITS BUSINESS WAS UPHELD ON THE BASIS THAT IT HAD ACQUIRED DOMINION OVER THE BUILDINGS. WE WILL ASSUME THE CORRECTNESS OF THE JUDGMENT BUT' ON THE FACTS FOUND IT IS NOT POSSIBLE TO REACH THE CONCLUSION T HAT THE ASSESSEE HAD ACQUIRED DOMINION OVER THE MILLS IN QUESTION. T HERE IS NOTHING ON THE RECORD WHICH INDICATES THIS NOR IS THAT THE FINDING OF THE TRIBUNAL. 41 THE SUPREME COURT IN THIS CASE HAS CONSIDERED TH E ISSUE AND FINALLY FOUND THAT THERE IS NOTHING ON RECORD WHICH INDICAT ED THAT THE ASSESSEE HAD ACQUIRED DOMINION OVER THE MILLS IN QUESTION ON WHICH DEPRECIATION WAS CLAIMED IN ORDER TO THE FINDINGS OF THE TRIBUNA L AVAILABLE. IN VIEW OF THESE FACTS THE SUPREME COURT HAS DISMISSED THE AP PEAL OF THE ASSESSEE. 42 WE MAY REFER TO DECISIONS REFERRED TO BY THE LD. COUNSEL FOR THE ASSESSEE IN THE CASE OF SUPREME COURT IN THE CASE O F MYSORE MINERALS LTD. 239 ITR 775 (SC) WHEREIN BY RELYING ON THE DECISIO N OF CIT V/S. PODAR CEMENT PVT.LTD.[1997] (226 ITR 625)[SC] THE SUPRE ME COURT HAS ELABORATELY DISCUSSED AND DEFINED THE WORD OWNER AND FINALLY HELD AS UNDER:- SECTION 32 OF THE INCOME-TAX ACT CONFERS A BENEFIT ON THE ASSESSEE. THE PROVISION SHOULD BE SO INTERPRETED AN D THE WORDS USED THEREIN SHOULD BE ASSIGNED SUCH MEANING AS WOU LD ENABLE THE ASSESSEE SECURING THE BENEFIT INTENDED TO BE GIVEN BY THE LEGISLATURE TO THE ASSESSEE. IT IS ALSO WELL-SETTLE D THAT WHERE THERE ARE TWO POSSIBLE INTERPRETATIONS OF A TAXING PROVIS ION THE ONE WHICH IS FAVOURABLE TO THE ASSESSEE SHOULD BE PREFERRED. WHAT IS OWNERSHIP ? THE TERMS 'OWN' 'OWNERSHIP' ' OWNED' ARE GENERIC AND RELATIVE TERMS. THEY HAVE A WIDE AND AL SO A NARROW CONNOTATION THE MEANING WOULD DEPEND ON THE CONTEX T IN WHICH THE TERMS ARE USED BLACK'S LAW DICTIONARY (6TH EDIT ION) DEFINES 'OWNER' AS UNDER : 'OWNER THE PERSON IN WHOM IS VESTED THE OWNERSHIP DOMINION OR TITLE OF PROPERTY ; PROPRIETOR. HE WHO HAS DOMINION OF A THING REAL OR PERSONAL CORPOREAL OR INCORPOREAL WHICH HE HAS A RIGHT TO ENJOY AND DO WITH AS HE PLEASES EVEN TO SPOIL OR DESTROY IT AS FAR AS THE LAW PERMITS UNLESS HE BE PREVENTED BY SOME AGREEME NT OR COVENANT WHICH RESTRAINS HIS RIGHT. THE TERM IS HOWEVER A NOMEN GENERALISSIMUM AND I TS MEANING IS TO BE GATHERED FROM THE CONNECTION IN WHICH IT IS U SED AND FROM ITA NO.2500/AHD/2010 38 THE SUBJECT-MATTER TO WHICH IT IS APPLIED. THE PRIM ARY MEANING OF THE WORD AS APPLIED TO LAND IS ONE WHO OWNS THE FEE AND WHO HAS THE RIGHT TO DISPOSE OF THE PROPERTY BUT THE TERM ALSO INCLUDES ONE HAVING A POSSESSORY RIGHT TO LAND OR THE PERSON OCC UPYING OR CULTIVATING IT. THE TERM 'OWNER' IS USED TO INDICATE A PERSON IN WH OM ONE OR MORE INTERESTS ARE VESTED FOR HIS OWN BENEFIT . . . .' IN THE SAME DICTIONARY THE TERM 'OWNERSHIP' HAS BE EN DEFINED TO MEAN INTER ALIA A 'COLLECTION OF RIGHTS TO USE AN D ENJOY PROPERTY INCLUDING RIGHT TO TRANSMIT IT TO OTHERS .... THE R IGHT OF ONE OR MORE PERSONS TO POSSESS AND USE A THING TO THE EXCLUSION OF OTHERS. THE RIGHT BY WHICH A THING BELONGS TO SOME ONE IN PARTI CULAR TO THE EXCLUSION OF ALL OTHER PERSONS. THE EXCLUSIVE RIGHT OF POSSESSION ENJOYMENT AND DISPOSAL ; INVOLVING AS AN ESSENTIAL ATTRIBUTE THE RIGHT TO CONTROL HANDLE AND DISPOSE.' DIAS ON JURISPRUDENCE (4TH EDITION AT PAGE 400) ST ATES : 'THE POSITION THEREFORE SEEMS TO BE THAT THE IDEA OF OWNERSHIP OF LAND IS ESSENTIALLY ONE OF THE 'BETTER RIGHT' TO BE IN POSSESSION AND TO OBTAIN IT WHEREAS WITH CHATTELS THE CONCEPT IS A MORE ABSOLUTE ONE. ACTUAL POSSESSION IMPLIES A RIGHT TO RETAIN IT UNTIL THE CONTRARY IS PROVED AND TO THAT EXTENT A POSSESSOR IS PRESUM ED TO BE OWNER.' STROUD'S JUDICIAL DICTIONARY GIVES SEVERAL DEFINITI ONS AND ILLUSTRATIONS OF OWNERSHIP. ONE SUCH DEFINITION IS THAT THE 'OWNE R' OR 'PROPRIETOR' OF A PROPERTY IS THE PERSON IN WHOM (W ITH HIS OR HER ASSENT) IT IS FOR THE TIME BEING BENEFICIALLY VESTE D AND WHO HAS THE OCCUPATION OR CONTROL OR USEFRUCT OF IT ; E.G. A LESSEE IS DURING THE TERM THE OWNER OF THE PROPERTY DEMISED. YET AN OTHER DEFINITION THAT HAS BEEN GIVEN BY STROUD IS : ' 'OWNER' APPLIES 'TO EVERY PERSON IN POSSESSION OR RECEIPT EITHER OF THE WHOLE OR OF ANY PART OF THE RENTS OR PROFITS OF ANY LAND OR TENEMENT ; OR IN THE OCCUPATION OF SUCH LAND OR TEN EMENT OTHER THAN AS A TENANT FROM YEAR TO YEAR OR FOR ANY LESS TERM OR AS A TENANT AT WILL'.' IN STATE OF U. P. V. RENUSAGAR POWER COMPANY [1991] 70 COMP CAS 127 149 (SC) IS WAS HELD THAT 'THE WORD 'OWN' IS A GENERIC TERM EMBRACING WITHIN ITSELF SEVERAL GRADATIONS OF TITLE DEPENDENT ON THE CIRCUMSTANCES AND IT DOES NOT NECESSARILY MEAN OWN ERSHIP IN FEE SIMPLE ; IT MEANS 'TO POSSESS TO HAVE OR HOLD AS PROPERTY' '. ITA NO.2500/AHD/2010 39 IN CIT V. PODAR CEMENT PVT. LTD. [1997] 226 ITR 625 (SC) THE QUESTION WHICH CAME UP FOR CONSIDERATION BEFORE THI S COURT WAS WHETHER THE RENTAL INCOME FROM THE HOUSE PROPERTY W HICH HAD COME TO VEST IN THE ASSESSEE BUT AS TO WHICH THE A SSESSEE WAS NOT LEGAL OWNER FOR WANT OF DEED OF TITLE WAS LIABLE T O BE ASSESSED AS INCOME FROM HOUSE PROPERTY OR AS INCOME FROM OTHER SOURCES. TO BE ASSESSABLE AS INCOME FROM HOUSE PROPERTY WITHIN THE MEANING OF SECTION 22 OF THE ACT THE PROPERTY SHOULD BE SUC H ' OF WHICH THE ASSESSEE IS THE OWNER'. THIS COURT UPON A JURISTIC ANALYSIS OF THE UNDERLYING SCHEME OF THE ACT AND RESORTING TO CONTE XTUAL AND PURPOSIVE INTERPRETATION ALSO HAVING REVIEWED SEVE RAL CONFLICTING DECISIONS OF DIFFERENT HIGH COURTS HELD THAT THE L IABILITY TO BE ASSESSED WAS FIXED ON A PERSON WHO RECEIVES OR IS E NTITLED TO RECEIVE THE INCOME FROM THE PROPERTY IN HIS OWN RIG HT. VIDE PARA. 55 THIS COURT HAS HELD : 'WE ARE CONSCIOUS OF THE SETTLED POSITION THAT UNDE R THE COMMON LAW 'OWNER' MEANS A PERSON WHO HAS GOT VALID TITLE LEGALLY CONVEYED TO HIM AFTER COMPLYING WITH THE REQUIREMEN TS OF LAW SUCH AS THE TRANSFER OF PROPERTY ACT REGISTRATION ACT ETC. BUT IN THE CONTEXT OF SECTION 22 OF THE INCOME-TAX ACT HAVING REGARD TO THE GROUND REALITIES AND FURTHER HAVING REGARD TO THE O BJECT OF THE INCOME-TAX ACT NAMELY 'TO TAX THE INCOME' WE ARE OF THE VIEW 'OWNER' IS A PERSON WHO IS ENTITLED TO RECEIVE INCO ME FROM THE PROPERTY IN HIS OWN RIGHT.' IN R. B. JODHA MAL KUTHIALA V. CIT [1971] 82 ITR 57 0 (SC) IT WAS HELD FOR THE PURPOSE OF SECTION 9 OF THE INDIAN INC OME-TAX ACT 1922 THAT THE OWNER MUST BE THE PERSON WHO CAN EXE RCISE THE RIGHTS OF THE OWNER NOT ON BEHALF OF THE OWNER BUT IN HIS OWN RIGHT. WE MAY USEFULLY EXTRACT AND REPRODUCE THE FOLLOWING CLASSIC STATEMENT OF LAW FROM PERRY V. CLISSOLD [1907] AC 7 3 (PC) QUOTED WITH APPROVAL IN NAIR SERVICE SOCIETY LTD. V. K. C. ALEXANDER AIR 1968 SC 1165 : 'IT CANNOT BE DISPUTED THAT A PERSON IN POSSESSION OF LAND IN THE ASSUMED CHARACTER OF OWNER AND EXERCISING PEACEABLY THE ORDINARY RIGHTS OF OWNERSHIP HAS A PERFECTLY GOOD TITLE AGAI NST ALL THE WORLD BUT THE RIGHTFUL OWNER. AND IF THE RIGHTFUL OWNER D OES NOT COME FORWARD AND ASSERT HIS TITLE BY THE PROCESS OF LAW WITHIN THE PERIOD PRESCRIBED BY THE PROVISIONS OF THE STATUTE OF LIMI TATION APPLICABLE TO THE CASE HIS RIGHT IS FOR EVER EXTINGUISHED AND TH E POSSESSORY OWNER ACQUIRES AN ABSOLUTE TITLE.' ITA NO.2500/AHD/2010 40 PODAR CEMENT'S CASE [1997] 226 ITR 625 (SC) IS UNDER THE INCOME-TAX ACT AND HAS TO BE TAKEN AS A TREND-SETTE R IN THE CONCEPT OF OWNERSHIP. ASSISTANCE FROM THE LAW LAID DOWN THE REIN CAN BE TAKEN FOR FINDING OUT THE MEANING OF THE TERM 'OWNE D' AS OCCURRING IN SECTION 32(1) OF THE ACT. IN OUR OPINION THE TERM 'OWNED' AS OCCURRING IN SE CTION 32(1) OF THE INCOME-TAX ACT 1961 MUST BE ASSIGNED A WIDER MEANING. ANYONE IN POSSESSION OF PROPERTY IN HIS OWN TITLE E XERCISING SUCH DOMINION OVER THE PROPERTY AS WOULD ENABLE OTHERS B EING EXCLUDED THEREFROM AND HAVING THE RIGHT TO USE AND OCCUPY TH E PROPERTY AND/OR TO ENJOY ITS USUFRUCT IN HIS OWN RIGHT WOULD BE THE OWNER OF THE BUILDINGS THOUGH A FORMAL DEED OF TITLE MAY NOT HAVE BEEN EXECUTED AND REGISTERED AS CONTEMPLATED BY THE TRAN SFER OF PROPERTY ACT THE REGISTRATION ACT ETC. 'BUILDING OWNED BY THE ASSESSEE' THE EXPRESSION AS OCCURRING IN SECTION 32 (1) OF THE INCOME-TAX ACT MEANS THE PERSON WHO HAVING ACQUIRED POSSESSION OVER THE BUILDING IN HIS OWN RIGHT USES THE SAME FO R THE PURPOSES OF THE BUSINESS OR PROFESSION THOUGH A LEGAL TITLE HAS NOT BEEN CONVEYED TO HIM CONSISTENTLY WITH THE REQUIREMENTS OF LAWS SUCH AS THE TRANSFER OF PROPERTY ACT AND THE REGISTRATION A CT ETC. BUT NEVERTHELESS IS ENTITLED TO HOLD THE PROPERTY TO TH E EXCLUSION OF ALL OTHERS. 43 IN VIEW OF DECISION OF THE SUPREME COURT IN THE CASE OF MYSORE MINERALS LTD.(SUPRA) WHEREIN THE TERM OWNED IN S ECTION 32 HAS BEEN GIVEN A WIDER MEANING BY HOLDING THAT IF AN ASSESSE E WAS IN POSSESSION OF A PROPERTY AND HAD ACQUIRED DOMINION OVER IT TO THE EXCLUSION OF OTHERS HE WOULD BE ENTITLED DEPRECIATION U/S.32 IRRESPECTI VE OF THE LEGAL TITLE. IN THE PRESENT CASE THE DEVELOPMENT AGREEMENT AND A GREEMENT TO SALE THE UNDERTAKING DEVELOPING AND BUILDING HOUSING PRO JECTS AND CLAIMING DEDUCTION OF PROFITS FROM SUCH HOUSING PROJECT THE RE IS DEFINITELY A DOMINION OF THE DEVELOPER OVER THE LAND TO THE EXCL USION OF OTHERS INASMUCH AS POSSESSION OF THE LAND IS GIVEN TO THE DEVELOPER BY THE LAND- OWNERS TO CARRY OUT THE CONSTRUCTION ACTIVITY OF TH E HOUSING PROJECT. THE ASSESSEE-DEVELOPER HAS COMPLIED WITH ALL THE CONDIT IONS AS PROVIDED U/S.80-IB (10) OF THE ACT SO AS TO CLAIM DEDUCTION . THE ASSESSEE HAS ALSO PASSED ON THE PART CONSIDERATION FOR ACQUIRING THE LAND THROUGH AN AGREEMENT TO SALE AND IN VIEW OF THE PROVISIONS O F SECTION 2(47) READ WITH SECTION 53-A OF THE TRANSFER OF PROPERTY ACT 1882 THE ASSESSEE HAS COMPLETELY PERFORMED HIS PART OF THE CONTRACT AND D EVELOPED THE HOUSING PROJECT AND TRANSFERRED THE FLATS/TENEMENTS TO THE BUYERS IN VIEW OF AGREEMENT TO SALE AS WELL AS DEVELOPMENT AGREEME NT. IT SHOWS THAT THE ASSESSEE WAS IN FULL POSSESSION OF THE LAND FOR THE DEVELOPMENT OF HOUSING PROJECT AND HAS CARRIED OUT ALL THE ACTIVIT IES OF A COMPLETE HOUSING PROJECT BY TAKING ALL RISKS ASSOCIATED WITH THIS BU SINESS. THE ASSESSEE IS ITA NO.2500/AHD/2010 41 ENGAGED IN COMPLETE INFRASTRUCTURE INCLUDING ENGAGI NG ARCHITECTS STRUCTURAL CONSULTANTS DESIGNING AND PLANNING OF T HE HOUSING SCHEMES PAYMENT OF DEVELOPMENT CHARGES OBTAINING NECESSARY PERMISSIONS ON BEHALF OF THE LAND OWNERS GOT THE PLANS APPROVED HIRING OF MACHINERY AND EQUIPMENTS HIRING ENGINEERS APPOINTING CONTRA CTORS ETC. 44 AS DISCUSSED ABOVE AND IN VIEW OF THE CASE-LAW OF THE SUPREME COURT IN THE CASE OF MYSORE MINERALS LTD (SUPRA) W HEREIN IT HAS BEEN CATEGORICALLY OBSERVED AS REGARDS TO OWNERSHIP THAT ANYONE IN POSSESSION OF PROPERTY IN HIS OWN TITLE EXERCISING SUCH DOMINI ON OVER THE PROPERTY AS WOULD ENABLE OTHERS BEING EXCLUDED THERE FROM AND H AVING THE RIGHT TO USE AND OCCUPY THE PROPERTY AND/OR TO ENJOY ITS USU FRUCT IN HIS OWN RIGHT WOULD BE THE OWNER OF THE BUILDINGS THOUGH A FORMAL DEED OF TITLE MIGHT NOT HAVE BEEN EXECUTED AND REGISTERED AS CONTEMPLAT ED BY THE TRANSFER OF PROPERTY ACT THE REGISTRATION ACT ETC. IN T HE PRESENT CASE BEFORE US BY VIRTUE OF AGREEMENT TO SALE AND DEVELOPMENT A GREEMENT THE ASSESSEE HAS ACQUIRED DOMINION OVER THE LAND TO THE EXCLUSION OF OTHERS AND HE HAS COMPLETED THE PROJECT IN TERMS AND CONDI TIONS LAID DOWN U/S.80-IB(10) OF THE ACT TO CLAIM DEDUCTION ON TH E PROFIT DERIVED FROM CONSTRUCTION AND DEVELOPMENT OF RESIDENTIAL HOUSING PROJECT. THERE IS NO EXPLICIT CONDITION ENUMERATED IN SECTION 80-IB(10) OF THE ACT AS REGARDS TO REQUIREMENT OF OWNERSHIP FOR THE CLAIM OF DEDUCTION . IN VIEW OF ABOVE FACTS AND CIRCUMSTANCES OF THE CASE AS WELL AS LEGA L PROPOSITION LAID DOWN BY THE SUPREME COURT IN THE CASE OF MYSORE MINERALS LTD.(SUPRA) WE HOLD THAT THE ASSESSEE IS ENTITLED FOR CLAIM OF DEDUCTIO N ON THE PROFIT DERIVED FROM CONSTRUCTION AND DEVELOPMENT OF RESIDENTIAL HO USING PROJECT. 16 THE FACTS INVOLVED IN THE CASE OF THE ASSESSEE ARE SIMILAR TO THE FACTS IN THE CASE OF RADHE DEVELOPER S (SUPRA) AND ACCORDINGLY WE ARE OF THE VIEW THAT THE ASSESSE E HAS ACQUIRED THE DOMINANT OVER THE LAND AND HAS DEVELOP ED THE HOUSING PROJECT BY INCURRING ALL THE EXPENSES AND T AKING ALL THE RISKS INVOLVED THEREIN. WE MAY MENTION HERE THAT I N OUR OPINION THE DECISION IN THE CASE OF RADHE DEVELOPE RS (SUPRA) WILL NOT APPLY IN A CASE WHERE THE ASSESSEE HAS ENT ERED INTO THE AGREEMENT FOR A FIXED REMUNERATION MERELY AS A CONTRACTOR TO CONSTRUCT OR DEVELOP TH HOUSING PROJECT ON BEHAL F OF THE LANDOWNER. THE AGREEMENT ENTERED INTO IN THAT CASE WILL NOT ENTITLE THE DEVELOPER TO HAVE THE DOMINANT CONTROL OVER THE PROJECT AND ALL THE RISKS INVOLVED THEREIN WILL VES T WITH THE LANDOWNER ONLY. THE INTEREST OF THE DEVELOPER WILL BE RESTRICTED ONLY FOR THE FIXED REMUNERATION FOR WHICH HE WOULD BE RENDERING THE SERVICES. THE DECISION IN THE CASE OF RADHE DEVELOPERS (SUPRA) HAS NOT DEALT WITH SUCH SITUATIO N. THE PROPOSITION OF LAW LAID DOWN IN THE CASE OF RADHE D EVELOPERS CANNOT BE APPLIED UNIVERSALLY WITHOUT LOOKING INTO THE ITA NO.2500/AHD/2010 42 DEVELOPMENT AGREEMENT ENTERED INTO BY THE DEVELOPER ALONG WITH THE LANDOWNER. IN THE CASE OF SHAKTI CORPORATI ON SINCE THE ASSESSEE HAS FILED COPY OF THE DEVELOPMENT AGREEMEN T AND CRUX OF THE AGREEMENT IS THAT THE ASSESSEE HAS PURC HASED THE LAND AND HAS DEVELOPED THE HOUSING PROJECT AT ITS O WN THEREFORE WE ARE OF THE VIEW THAT THE ASSESSEE WIL L BE ENTITLED FOR THE DEDUCTION U/S 80IB(10). THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF FAQIR CHAND GULATI (SU PRA) WILL NOT ASSIST THE REVENUE AS THE AGREEMENT IS NOT SHA RING OF THE CONSTRUCTED AREA. IN OTHER CASES THE COPY OF AGREEM ENT SINCE HAS NOT BEEN SUBMITTED BEFORE US IF SUBMITTED TH E TERMS AND CONDITIONS OF THE AGREEMENT WERE NOT SPECIFICALLY A RGUED BEFORE AND PLACED BEFORE US WE THEREFORE IN THE I NTEREST OF JUSTICE AND FAIR PLAY TO BOTH THE PARTIES SET ASIDE THE ORDER OF THE CIT(A) AND RESTORE ALL OTHER APPEALS TO THE FIL E OF THE AO WITH THE DIRECTION THAT THE AO SHALL LOOK INTO THE AGREEMENT ENTERED INTO BY EACH OF THE ASSESSEES WITH THE LAND OWNER AND DECIDE WHETHER THE ASSESSEE HAS IN FACT PURCHASED T HE LAND FOR A FIXED CONSIDERATION FROM THE LANDOWNER AND HA S DEVELOPED THE HOUSING PROJECT AT ITS OWN COST AND R ISKS 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 THA T THE DEVELOPER HAS ACTED ON BEHALF OF THE LANDOWNER AND HAS GOT THE FIXED CONSIDERATION FROM THE LANDOWNER FOR THE DEVELOPMENT OF THE HOUSING PROJECTS THE ASSESSEE SHOULD NOT BE ALLOWED DEDUCTION U/S 80IB(10) TO THE ASSESSEE. 17 IN THE RESULT ALL THESE APPEALS ARE ALLOWED FOR STATISTICAL PURPOSES. 7. WE FIND THAT THE LD. CIT(A) IN THE INSTANT CASE FOLLOWING THE AFORESAID DECISIONS IN THE CASE OF M/S SHAKTI CORPO RATION(SUPRA) & M/S RADHE DEVELOPERS(SUPRA) CONCLUDED THAT SINCE THE ASSESSEE PURCHASED THE LAND FOR FIXED CONSIDERATION AND DEVE LOPED THE HOUSING PROJECT ON ITS OWN COST AND RISK AND THAT THE LAND OWNERS DID NOT HAVE ANY RIGHT TO RECEIVE PROFIT OF THE PROJECT AND RECEIVED ONLY THE AGREED LAND PRICE WHILE THE DEVELOPER DID NOT ACT AS A CONTRACTOR FOR FIXED REMUNERATION AND THERE WAS NO JOINT VENTURE WITH THE LAND OWNERS AND THEREFORE IN TERMS OF TH E DECISION OF M/S SHAKTI CORPORATION WERE ELIGIBLE FOR DEDUCTION U/S 80IB(10) OF THE ACT. THE REVENUE HAVE NOT PLACED BEFORE US ANY MATE RIAL CONTROVERTING THE AFORESAID FINDINGS OF THE LD. CIT (A) NOR BROUGHT TO ITA NO.2500/AHD/2010 43 OUR NOTICE ANY CONTRARY DECISION. IN THESE CIRCUMST ANCES ESPECIALLY WHEN THE LD. CIT(A) MERELY FOLLOWED THE DECISIONS OF THE ITAT IN THE CASE OF M/S SHAKTI CORPORATION(SUPRA) & M/S RADHE DEVELOPERS(SUPRA) WHILE THERE IS NO MATERIAL BEFORE US TO TAKE A DIFFERENT VIEW IN THE MATTER WE ARE NOT INCLINED T O INTERFERE. THEREFORE GROUND NO. 1 RAISED BY THE REVENUE IN TH IS APPEAL IS DISMISSED. 8. NO ADDITIONAL GROUND HAVING BEEN RAISED IN TE RMS OF RESIDUARY GROUND NO.2 IN THE APPEAL ACCORDINGLY THIS GROUND IS DISMISSED. 9. IN THE RESULT APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE COURT TODAY ON 4-03-2011 SD/- SD/- (D K TYAGI) JUDICIAL MEMBER (A N PAHUJA) ACCOUNTANT MEMBER DATED : 4-03-2011 COPY OF THE ORDER FORWARDED TO: 1. M/S SITARAM DEVELOPERS 2 RAVIRAJ SOCIETY ABHI LASHA CROSSING NEW SAMA ROAD BARODA 2. ITO WARD-3(2) BARODA 3. CIT CONCERNED 4. CIT(A)-V BARODA 5. DR ITAT AHMEDABAD BENCH-B AHMEDABAD 6. GUARD FILE BY ORDER DEPUTY REGISTRAR ASSISTANT REGISTRAR ITAT AHMEDABAD IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH 'B' BEFORE SHRI D K TYAGI JUDICIAL MEMBER AND SHRI A N PAHUJA ACCOUNTANT MEMBER ITA NO.2500/AHD/2010 44 ITA NO.2500/AHD/2010 (ASSESSMENT YEAR:-2006-07) THE INCOME-TAX OFFICER WARD-3(2) BARODA V/S M/S SITARAM DEVELOPERS 2 RAVIRAJ SOCIETY ABHILASHA CROSSING NEW SAMA ROAD BARODA PAN: AAZFS 7125 F [APPELLANT] [RESPONDENT] CORRIGENDUM A N PAHUJA: IN LINE NO.1 OF PARAGRAPH-6 ON PAGE-4 OF THE ORDER DATED 04-03-2011 IN THE AFORESAID APPEAL IN PLACE OF WORDS WE HAVE HEARD BOTH THE PARTIES AND GONE THROUGH THE FOLLOWING WORDS ARE SUBSTITUTED:- WE HAVE HEARD THE LEARNED DR AND GONE THROUGH SD/- SD/- (D K TYAGI) JUDICIAL MEMBER (A N PAHUJA) ACCOUNTANT MEMBER DATE : 28-03-2011 COPY OF THE ORDER FORWARDED TO: 1. M/S SITARAM DEVELOPERS 2 RAVIRAJ SOCIETY ABHI LASHA CROSSING NEW SAMA ROAD BARODA 2. THE ITO WARD-3(2) BARODA 3. CIT CONCERNED 4. CIT(A)-V BARODA 5. DR ITAT AHMEDABAD BENCH-B AHMEDABAD 6. GUARD FILE BY ORDER DEPUTY REGISTRAR ASSISTANT REGISTRAR ITAT AHMEDABAD