The ITO, Ward-1,, Anand v. M/s. Chitrakut Corporation, Anand

ITA 3044/AHD/2011 | 2003-2004
Pronouncement Date: 30-03-2012 | Result: Dismissed

Appeal Details

RSA Number 304420514 RSA 2011
Assessee PAN AACFC6983E
Bench Ahmedabad
Appeal Number ITA 3044/AHD/2011
Duration Of Justice 3 month(s) 25 day(s)
Appellant The ITO, Ward-1,, Anand
Respondent M/s. Chitrakut Corporation, Anand
Appeal Type Income Tax Appeal
Pronouncement Date 30-03-2012
Appeal Filed By Department
Order Result Dismissed
Bench Allotted C
Tribunal Order Date 30-03-2012
Date Of Final Hearing 22-03-2012
Next Hearing Date 22-03-2012
Assessment Year 2003-2004
Appeal Filed On 05-12-2011
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH C AHMEDABAD BEFORE SHRI MUKUL KUMAR SHRAWAT JUDICIAL MEMBER AND SHRI T.R. MEENA ACCOUNTANT MEMBER ITA NO.3044/AHD/2011 ASSESSMENT YEAR:2003-04 INCOME TAX OFFICER WARD-1 ANAND / V/S . M/S. CHITRAKUT CORPORATION 708 THAKKAR ARCADE SARDAR GUNJ ROAD ANAND 388001 PAN NO.AACFC6983E / APPELLANT .. / RESPONDENT /BY APPELLANT SHRI H.K.LAL SR-DR /BY RESPONDENT SHRI S.N.SOPARKAR SR-AR /DATE OF HEARING 22-03-2012 /DATE OF PRONOUNCEMENT 30-03-2012 !' !' !' !' / // / O R D E R PER T.R.MEENA ACCOUNTANT MEMBER:- THIS APPEAL BY THE REVENUE IS ARISING OUT OF THE O RDER OF LD. COMMISSIONER OF INCOME-TAX (APPEALS)-IV BARODA IN APPEAL NO. CAB/IV/A- 216/2010-11 DATED 01-09-2011. THE ASSESSMENT WAS FR AMED BY INCOME TAX OFFICER WARD-1 ANAND VIDE ORDER DATED 223-12-2010 U/S. 143(3) R.W.S. 254 OF THE INCOME-TAX ACT 1961 (HEREINAFTER REFERRED TO A S THE ACT) FOR THE ASSESSMENT YEAR 2003-04. 2. SOLE GROUND RAISED BY THE REVENUE AS UNDER:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE THE LD. CIT(A) ERRED IN ALLOWING DEDUCTION U/S 80IB(10) AMOUNTING TO RS.28 57 756/- IGNORING THE FACT THAT THE ASSESSEE WAS MERELY A CO NTRACTOR WHO WAS NOT AN OWNER OF THE LAND AND WHO IS NOT GIVEN APPRO VAL FOR THE HOUSING PROJECT BY LOCAL AUTHORITY FOR CONSTRUCTION COMPLE TELY IGNORING THE ITA NO.3044/AHD/2011 A.Y. 2003-04 ITO WD-1 ANAND V. M/S CHITRAKUT CORPN . PAGE 2 UNDERLYING FACT THAT THE PERSON TO WHOM THE APPROVA L IS GRANTED FOR DEVELOPING AND BUILDING HOUSING PROJECT AND THE PER SONS ACTUALLY CARRYING ON THE PROJECT ARE SO COMPLETE INTEGRATED IN THE SCHEME THAT SECTION 80IB(1) R.W.S. 80IB(1) EXPLANATION BELOW SE CTION 80IB(10) AND RULE 80BBB CANNOT BE VIEWED TO ADMIT ANY SPITTING U P OF THE FREE ENTITIES. 3. FACTS IN BRIEF ARE THAT ASSESSEE IS ENGAGED IN C ONSTRUCTION OF BUILDING AND FILED HIS RETURN OF INCOME ON 23-10-2003 DECLAR ING TOTAL INCOME NIL AFTER CLAIMING DEDUCTION U/S. 80IB(10) OF THE ACT. THE R ETURN WAS ACCOMPANIED WITH STATUTORY REPORT IN FORM NO.3CB & 3CD AS REQUIRED B Y PROVISIONS OF SECTION 44AB ALONG WITH PROFIT AND LOSS ACCOUNT AND BALANCE -SHEET AND CERTIFICATE IN FORM NO.10CCB ISSUED BY THE AUDITOR. THE CASE OF TH E ASSESSEE WAS SELECTED FOR SCRUTINY ASSESSMENT. THE ASSESSING OFF ICER DESCRIBED ALL THE ISSUE AT LENGTH IN HIS ASSESSMENT ORDER DATED 24-03 -2006 WHICH WAS CONFIRMED BY LD. CIT(A). THE MAIN ISSUE IN THIS CAS E IS TO DECIDE BY THE ITAT IS WHETHER THE ASSESSEE HAS IN FACT PURCHASED THE L AND FOR A FIXED CONSIDERATION FROM THE LAND-OWNER AND HAS DEVELOPED THE HOUSING PROJECT AT ITS OWN COST AND RISKS INVOLVED IN THE PROJECT. THE LAND IN QUESTION HAS BEEN BROUGHT BY THE DEVELOPER AND IT ACTED ON BEHALF OF THE LAND-OWNER AND IN HIS CONTROL THE PROJECT HAS DEVELOPED HAS GOT THE FIXED CONSIDERATION FROM THE LAND-OWNER TO DEVELOP HOUSING PROJECT AT HIS OWN RI SKS. THE ASSESSEE SUBMITTED COPY OF SALE AGREEMENT VIDE LETTER DATED 07-12-2010 IN ENGLISH VERSION BUT NO XEROX COPY OF THE ORIGINAL SALE AGRE EMENT ANNEXED WITH THE LETTER. THE AO ISSUED LETTER DATED 15-12-2010 CALLI NG FOR THE ORIGINAL REGISTERED DOCUMENTS TO VERIFY WHETHER THE ASSESSEE HAS PURCHA SED THIS LAND AND DEVELOPED THEREAFTER. FURTHER ON PERUSAL OF SUPPORT ING DOCUMENTS FILED TO CLAIM DEDUCTION U/S. 80IB(10) WHERE IT HAS BEEN OB SERVED THAT THE PERMISSION BY THE ANAND URBAN DEVELOPMENT AUTHORITY WAS GRANTE D FOR CONSTRUCTION OF BUILDING AND NOT FOR DEVELOPING AND HOUSING PROJECT AND THAT TOO IN THE NAME OF THE SHRI GUNVANT RAMJIBHAI RAJA & OTHERS THAT IN DICATE THE PERMISSION SOUGHT FOR GRANTING FOR CONSTRUCTION ON THE AREA OF LAND OWNED BY SHRI GUNVANTRAI R RAJA & OTHERS. ON VERIFICATION THE ADD ITIONAL INFORMATION ITA NO.3044/AHD/2011 A.Y. 2003-04 ITO WD-1 ANAND V. M/S CHITRAKUT CORPN . PAGE 3 SUBMITTED BY THE ASSESSEE ON 20-12-2010 IT CAME TO KNOW THAT THE PLOT OF LAND WAS SOLD BY GUNVANTBHAI R RAJA & OTHERS AND EXECUTE D THE SALE DEED DIRECTLY IN THE NAME OF PURCHASER. IT MEANS THAT THE OWNERSH IP OF THE LAND WAS OF SHRI GUNVANBHAI R RAJA & OTHERS AND NOT THE ASSESSEE-FIR M. THE AO AGAIN CALLED FOR ORIGINAL REGISTERED AGREEMENT OF SALE & PURCHAS E DEED OF LAND FOR VERIFICATION OR ANY OTHER SUPPORTING EVIDENCE ON WH ICH ASSESSEE PROVED THAT ASSESSEE-COMPANY WAS THE LAND OWNER. BUT THE ASSESS EE FAILED TO PROVE HIS OWNERSHIP OF THE LAND IN QUESTION WHERE THE HOUSING PROJECT WAS CONSTRUCTED. UNDER THE FACTS AND CIRCUMSTANCES THE AO DISALLOWED THE CLAIM OF DEDUCTION U/S 80IB(10). 4. BEING AGGRIEVED THE ASSESSEE PREFERRED APPE AL BEFORE FIRST APPELLATE AUTHORITY. THE LD. CIT(A) AFTER CONSIDERING THE FAC TS DELETED THE ADDITION MADE BY ASSESSING OFFICER VIDE PARA-2.9 OF HIS APPELLATE ORDER WHICH REPRODUCED AS UNDER:- 2.9 IN VIEW OF ABOVE FACTS AND DISCUSSION THE CLA IM OF DEDUCTION OF RS.28 57 756/- AS MADE BY THE APPELLANT U/S.80IB(10 ) OF THE ACT FOR THE YEAR UNDER CONSIDERATION IS ALLOWABLE. I THEREFORE DELETE THIS DISALLOWANCE OF RS.28 57 756/- AS MADE BY THE AO UN DER THIS SECTION FOR THE YEAR UNDER CONSIDERATION. AGGRIEVED BY THIS ORDER OF LD. CIT(A) REVENUE PREF ERRED APPEAL BEFORE US. 5. BEFORE US THE LD. AR OF THE ASSESSEE CONTEN DED THAT THERE IS DIRECT DECISION ON THIS ISSUE IN THE CASE OF CIT V. RADHI DEVELOPER (2012) 341 ITR 403 (GUJ) WHERE THE HONBLE JURISDICTIONAL HIGH CO URT HAS HELD THAT OWNERSHIP OF PROPERTY NOT A CONDITION PRECEDENT FOR GRANT OF DEDUCTION U/S.80IB(10) OF THE ACT. IT MADE AGREEMENT WITH LAND OWNER WHO DEVELOPE D THE PROPERTY AND BUILT A RESIDENTIAL UNITS. THE DEVELOPER IS HAVING FULL AUTHORITY AND BEARING ALL RISKS AND RESPONSIBILITY IN EXECUTING THE PROJECT. IT IS AN IMMATERIAL WHETHER IT WAS PAID REMUNERATION OR ENTITLE TO PROFIT THE DEVELOP ER HAS POSSESSED ON LAND TO PART PERFORMANCE OF CONTRACT AND HE IS ENTITLED FOR DEDUCTION U/S 80IB(10) OF THE ACT AND IS NOT A WORKS CONTRACT. THE AMENDMENT IN SECTION 80IB(10) AND ITA NO.3044/AHD/2011 A.Y. 2003-04 ITO WD-1 ANAND V. M/S CHITRAKUT CORPN . PAGE 4 EXPLANATION WAS INSERTED FROM 01-04-2001 FOR WORK C ONTRACT WHICH DOES NOT APPLY IN CASE OF DEVELOPER. 6. ON THE CONTRARY THE LD. SR-DR VEHEMENTLY RELIED ON THE ORDER OF ASSESSING OFFICER AND REQUESTED THAT NO DEDUCTION U /S. 80IB(10) IS TO BE GIVEN IN THIS CASE AND CONFIRMED THE ORDER OF AO. 7. WE HAVE PERUSED THE ASSESSMENT ORDER ORDER OF T HE LD. CIT(A) AND VERIFIED THE FACTS OF THE CASE AS WELL AS FACT OF T HE CASE RELIED UPON BY THE LD. CIT(A) AND THE LD. AR OF THE ASSESSEE. IT IS FOUND THAT THE LAND WAS OWNED BY SHRI GUNVANT RAMJIBHAAI RAJA & OTHERS WHEREAS THE DEVELOPMENT RIGHTS WERE WITH THE ASSESSEE BY ENTERING IN AN AGREEMENT WITH THE OWNER OF THE LAND. THE PERMISSION OF CONSTRUCTION OF BUILDING WAS GRANTED BY THE ANAND URBAN DEVELOPMENT AUTHORITY IN THE NAME OF OWNER OF THE L AND. THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF RADHI DEVELOPER (SUPRA) HAS CONSIDERED THIS ISSUE AND HAS HELD THAT LEGAL OWNER SHIP FOR CLAIMING OF DEDUCTION U/S. 80IB(10) IS NOT NECESSARY. THE AGREE MENT MADE WITH THE LAND OWNER BY THE ASSESSEE HAS ALL RIGHT TO DEVELOP THE PROJECT AND RISK IS WITH THE ASSESSEE AND HE HAD NOT GOT FIXED RECEIPT FROM THE LAND OWNER BUT GETTING PROFIT ON DEVELOPMENT. THIS IS TRANSFER OF OWNERSHI P OF LAND U/S.2(47)(V) WHICH IS REPRODUCED AS UNDER:- (47) [TRANSFER IN RELATION TO A CAPITAL ASSET I NCLUDES - (I) (II) .. (III) .. (IV) (V) ANY TRANSACTION INVOLVING THE ALLOWING OF THE P OSSESSION OF ANY IMMOVABLE PROPERTY TO BE TAKEN OR RETAINED IN PART PERFORMANCE OF A CONTRACT OF THE NATURE REFERRED TO I SECTION 5 3A OF THE TRANSFER OF PROPERTY ACT 1882 (4 OF 1882): OR IN THIS CASE NOT ONLY POSSESSION OF THE LAND HAS B EEN GIVEN TO THE ASSESSEE BUT ALSO CONSIDERATION HAS ALSO BEEN PASSED TO THE LAND OWNER AND ALL EXPENSES FOR DEVELOPMENT HAS BEEN DEBITED IN THE PR OFIT AND LOSS ACCOUNT OF THE ASSESSEE AND SALE PROCEED HAS BEEN CREDITED IN PROFIT AND LOSS ACCOUNT ITA NO.3044/AHD/2011 A.Y. 2003-04 ITO WD-1 ANAND V. M/S CHITRAKUT CORPN . PAGE 5 ALSO. KEEPING IN VIEW OF THE ABOVE DISCUSSION AND T HE JUDGMENT OF HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF RADHI DEVELOPER (SUPRA) WE FIND NO REASON TO INTERFERE WITH THE ORDER PASSED BY LD. CI T(A). THIS GROUND OF REVENUE IS DISMISSED. 8. IN THE RESULT APPEAL FILED BY THE REVENUE IS DISMI SSED. ORDER PRONOUNCED IN THE OPEN COURT ON 30/03/201 2 SD/- SD/- (MUKUL KUMAR SHAWART) (T.R.MEENA) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) #!$%- 30 /03/2012 )!! * DKP* !' !' !' !' ++ ++ ++ ++ - - - - / COPY OF ORDER FORWARDED TO:- 1. / APPELLANT 2. / RESPONDENT 3. $$+1 2 / CONCERNED CIT 4. 2- / CIT (A) 5. 56 +++1 +1 )!! / DR ITAT AHMEDABAD 6. 69: ;< / GUARD FILE. BY ORDER/ !' /TRUE COPY/ =/) $> +1 )!! *