The DCIT, Central Circle-1,, Baroda v. M/s. Mangala Properties, Baroda

ITA 3028/AHD/2010 | 2007-2008
Pronouncement Date: 11-10-2013 | Result: Dismissed

Appeal Details

RSA Number 302820514 RSA 2010
Assessee PAN AABCM3105E
Bench Ahmedabad
Appeal Number ITA 3028/AHD/2010
Duration Of Justice 2 year(s) 11 month(s) 7 day(s)
Appellant The DCIT, Central Circle-1,, Baroda
Respondent M/s. Mangala Properties, Baroda
Appeal Type Income Tax Appeal
Pronouncement Date 11-10-2013
Appeal Filed By Department
Order Result Dismissed
Bench Allotted A
Tribunal Order Date 11-10-2013
Date Of Final Hearing 26-09-2013
Next Hearing Date 26-09-2013
Assessment Year 2007-2008
Appeal Filed On 04-11-2010
Judgment Text
ITA NO 3028/ AHD/ 2010 . A.Y. 2007-0 8 1 IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH AHMEDABAD (BEFORE SHRI G.C.GUPTA VICE PRESIDENT & SHRI ANIL C HATURVEDI A.M.) I.T. A. NO.3028 /AHD/2010 (ASSESSMENT YEAR:2007-08) THE D.C.I.T CENTRAL CIRCLE-1 BARODA (APPELLANT) VS. M/S MANGALA PROPERTIES 101 TO 107 K.P. SHOPPING COMPLEX KARELIBAUG BARODA (GUJARAT) (RESPONDENT) PAN: AABCM3105E APPELLANT BY : SHRI O.P. BATHEJA. SR. D.R . RESPONDENT BY : SHRI HIREN TRIVEDI A.R. ( )/ ORDER DATE OF HEARING : 26-09-2013 DATE OF PRONOUNCEMENT : 11-10-2013 PER SHRI ANIL CHATURVEDI A.M. 1. THIS APPEAL IS FILED BY THE REVENUE AGAINST THE ORD ER OF CIT(A)-IV AHMEDABAD DATED 12.08.2010 FOR A.Y. 2007-08. 2. THE FACTS AS CULLED OUT FROM THE ORDERS OF LOWER AU THORITIES ARE AS UNDER: ITA NO 3028/ AHD/ 2010 . A.Y. 2007-0 8 2 3. ASSESSEE IS A COMPANY ENGAGED IN THE BUSINESS OF DE VELOPMENT OF LAND AND CONSTRUCTION OF HOUSING AND OTHER PROJECTS. AS SESSEE FILED ITS RETURN OF INCOME FOR A.Y. 2007-08 ON 16.10.2007 DECLARING TOTAL INCOME AT RS. 13 22 890/-. THE CASE WAS SELECTED FOR SCRUTINY AN D THEREAFTER THE ASSESSMENT WAS FRAMED UNDER SECTION 143(3) VIDE ORD ER DATED 08.05.2009 AND THE TOTAL INCOME WAS DETERMINED AT RS. 31 65 51 0/-. AGGRIEVED BY THE ORDER OF A.O. ASSESSEE CARRIED THE MATTER BEFO RE CIT(A). CIT(A) VIDE ORDER DATED 12 TH AUGUST 2010 GRANTED PARTIAL RELIEF TO THE ASSESSEE . AGGRIEVED BY THE AFORESAID ORDER OF CIT(A) THE REV ENUE IS NOW IN APPEAL BEFORE US AND HAS RAISED THE FOLLOWING EFFEC TIVE GROUND :- 1. THE LEARNED CIT(A) ERRED IN LAW AND ON FACTS IN DELETING ADDITION OF RS. 18 42 620/- MADE BY THE ASSESSING OFFICER ON ACCOUN T OF DISALLOWANCE OF DEDUCTION U/S. 80IB(10) OF THE I.T. ACT. 4. DURING THE COURSE OF ASSESSMENT PROCEEDINGS A.O. N OTICED THAT ASSESSEE HAS CLAIMED DEDUCTION UNDER 80IB(10). A.O. WAS OF T HE VIEW THAT ASSESSEE IS NOT ELIGIBLE FOR DEDUCTION FOR THE REAS ON THAT THE ASSESSEE WAS NOT THE OWNER OF THE LAND BUT IT HAD BOUGHT DEVELOP MENT RIGHTS FROM VARIOUS LAND OWNERS ON WHOSE LAND THE PROJECT WAS T O BE DEVELOPED. ONCE THE PROJECT WAS DEVELOPED THE ASSESSEE BECAME A THIRD PARTY IN THE SALE DEED WHICH WAS MADE BETWEEN THE LAND OWNER AND THE PURCHASER OF HOUSING UNIT. THE A.O. WAS FURTHER OF THE VIEW THA T THE ASSESSEES CLAIM COULD NOT BE ACCEPTED BECAUSE THE APPROVAL FROM MUN ICIPAL CORPORATION WAS GIVEN TO THE LAND OWNER AND NOT TO THE ASSESSEE AND THE ASSESSEE WAS ACTING AS A MERE CONTRACTOR AND THE RESPONSIBIL ITIES DUTIES AND RISKS WITH REGARD TO THE PROJECT LAY WITH THE LAND OWNERS AND NOT WITH THE ITA NO 3028/ AHD/ 2010 . A.Y. 2007-0 8 3 ASSESSEE. HE ACCORDINGLY DISALLOWED THE CLAIM OF DE DUCTION UNDER 80IB(10) AMOUNTING TO RS. 18 42 620/-. AGGRIEVED BY THE ORDER OF A.O. ASSESSEE CARRIED THE MATTER BEFORE CIT(A). CIT(A) D ECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE FOR THE REASON THAT IN A.Y. 03-04 04-05 & 05-06 ON IDENTICAL FACTS THE ISSUE WAS DECIDED BY HIS PR EDECESSOR IN FAVOUR OF THE ASSESSEE. CIT(A) ALSO CONCLUDED THAT THE ASSES SEE HAD ACQUIRED THE DOMINANCE OVER THE LAND AND THE LAND WAS UNDER THE POSSESSION OF THE ASSESSEE AND FOR ALL PRACTICAL PURPOSES THE ASSESS EE WAS THE DE FACTO OWNER OF THE LAND AND HAD DEVELOPED THE HOUSING PRO JECT BY INCURRING ALL THE EXPENSES AND TAKING ALL THE RISKS INVOLVED THER EIN. HE THUS FOLLOWING THE DECISION OF AHMEDABAD TRIBUNAL IN THE CASE OF R ADHE DEVELOPERS AND OTHERS VS. ITO AND THE DECISION IN THE CASE OF SHAK TI CORPORATION DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE. AGGRIEVED BY T HE ORDER OF CIT(A) THE REVENUE IS NOW IN APPEAL BEFORE US. 5. BEFORE US THE LD. D.R. RELIED ON THE ORDER OF A.O. THE LD. A.R. ON THE OTHER HAND SUBMITTED THAT ON IDENTICAL FACTS IN THE CASE OF ASSESSEE FOR EARLIER YEARS THE ISSUE HAS BEEN DECIDED IN FAVOUR OF THE ASSESSEE BY THE HON. TRIBUNAL. HE PLACED ON RECORD THE COPY OF A CONSOLIDATED ORDER OF TRIBUNAL DATED 14.08.2013. HE THUS SUBMITTED THAT SINCE THE FACTS OF THE CASE IN THE YEAR UNDER APPEAL ARE IDENTICAL TO THAT OF EARLIER YEARS THE ISSUE BE DECIDED IN FAVOUR OF THE ASSESSEE. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. WE FIND THAT FOR ASSESSMENT YEARS 03-04 04-05 & 05 -06 IN ITA NO. 2286 2287 2288/AHD/2009 ORDER DATED 14.08.2013 ONE OF THE ISSUE BEFORE THE CO-ORDINATE BENCH OF TRIBUNAL WAS WITH R ESPECT TO DEDUCTION ITA NO 3028/ AHD/ 2010 . A.Y. 2007-0 8 4 UNDER 80IB(10). THE CO-ORDINATE BENCH OF TRIBUNAL D ECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE BY HOLDING AS UNDER:- 7 . FROM THE ABOVE PARA OF THE ORDER OF LEARNED CIT( A) WE FIND THAT A CLEAR FINDING IS GIVEN BY THE LEARNED CIT(A) THAT AS PER THE DEVE LOPMENT AGREEMENT PRICE AT WHICH THE LAND WOULD BE SOLD IS FIXED AND THIS FINDING IS ALSO GIVEN BY HIM THAT THE LANDOWNER WILL GET SUCH FIXED PRICE EITHER IMMEDIAT ELY OR OVER A FIXED PERIOD IRRESPECTIVE OF WHETHER OR NOT THE LAND IS ACTUALL Y DEVELOPED BY THE DEVELOPER. THIS FINDING OF FACT COULD NOT BE CONTROVERTED BY THE LE ARNED DR. HENCE IT IS UNDISPUTED FACT THAT THE LAND IN QUESTION HAD A FIXED PRICE AN D THE POSSESSION WAS HANDED OVER TO THE ASSESSEE FOR DEVELOPMENT OF THE PROJECT AS PER THE DEVELOPMENT AGREEMENT. HENCE EVEN IF THE TITLE OF THE LAND IN QUESTION REMAINED WITH THE LANDOWNERS AND WAS NOT TRANSFERRED IN THE NAME OF THE ASSESSEE DEVELOPER IT HAS TO BE ACCEPTED THAT THE ACTUAL BENEFICIAL OWNER OF THE LAND IS THE ASSESSEE DEVELO PER BECAUSE ANY APPRECIATION IN THE PRICE OF THE LAND WILL GO TO THE COFFERS OF THE ASS ESSEE DEVELOPER AND THE LANDOWNER HAS NO SHARE IN SUCH APPRECIATION OF PRICE. AS PER THE JUDGMENT OF THE HON'BLE GUJARAT HIGH COURT IN THE CASE OF M/S. RADHE DEVELO PERS (SUPRA) THE VITAL QUESTION WHICH IS TO BE SEEN IS THIS AS TO WHETHER THE ASSES SEE DEVELOPER IS HAVING DOMINANT CONTROL OVER THE LAND IN QUESTION AND WHETHER THE A SSESSEE DEVELOPER IS BEARING ENTIRE RISK AND ENTITLED TO THE ENTIRE REWARD. IN THE LIGH T OF THESE UN-CONTROVERTED FACTS AS DISCUSSED ABOVE IN OUR CONSIDERED OPINION ALL THE SE PRE-REQUIREMENTS ARE SATISFIED IN THE FACTS OF THE PRESENT CASE AND THEREFORE TH IS JUDGMENT OF THE HON'BLE GUJARAT HIGH COURT IS SQUARELY APPLICABLE IN THE PRESENT CA SE AND AS PER THE SAME THE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE. RESPECTFULLY FOLLOWING THE SAME WE DECLINE TO INTERFERE WITH THE ORDER OF THE LEARNED CIT(A) ON T HIS ISSUE. 7. IT IS THUS SEEN THAT THE ASSESSEE IN THE PAST HAS B EEN ALLOWED THE BENEFIT OF DEDUCTION U/S. 80IB(10) AND THE BENEFIT HAS NOT BEEN WITHDRAWN BY THE COURT . FURTHER SINCE THE FACTS OF THE CASE IN THE YEAR UNDER APPEAL ARE IDENTICAL TO THAT OF EARLIER YEARS RESPECTFULLY FO LLOWING THE AFORESAID ORDER ITA NO 3028/ AHD/ 2010 . A.Y. 2007-0 8 5 OF THE CO-ORDINATE BENCH OF EARLIER YEARS WE FIND NO REASON TO INTERFERE WITH THE ORDER OF CIT(A). THUS THIS GROUND OF REVE NUE IS DISMISSED. 8. IN THE RESULT THE APPEAL OF THE REVENUE IS DISMISS ED. ORDER PRONOUNCED IN OPEN COURT ON 11-10 - 2013. SD/- SD/- (G.C.GUPTA) (ANIL CHATURVEDI) VICE PRESIDENT ACCOUNTANT MEMBER AHMEDABAD. TRUE COPY RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR. ITAT AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT AH MEDABAD