The ITO, Ward-9(1),, Ahmedabad v. M/s. Sakar Corporation, Ahmedabad

ITA 3207/AHD/2010 | 2007-2008
Pronouncement Date: 25-10-2013 | Result: Dismissed

Appeal Details

RSA Number 320720514 RSA 2010
Assessee PAN ABEFS1823N
Bench Ahmedabad
Appeal Number ITA 3207/AHD/2010
Duration Of Justice 2 year(s) 10 month(s) 22 day(s)
Appellant The ITO, Ward-9(1),, Ahmedabad
Respondent M/s. Sakar Corporation, Ahmedabad
Appeal Type Income Tax Appeal
Pronouncement Date 25-10-2013
Appeal Filed By Department
Order Result Dismissed
Bench Allotted B
Tribunal Order Date 25-10-2013
Date Of Final Hearing 01-10-2013
Next Hearing Date 01-10-2013
Assessment Year 2007-2008
Appeal Filed On 03-12-2010
Judgment Text
ITA NO 3207/AHD/2010 . A.Y. 2007- 08 1 IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH AHMEDABAD (BEFORE SHRI MUKUL KR. SHRAWAT J.M. & SHRI ANIL C HATURVEDI A.M.) I.T. A. NO. 3207/AHD/2010 (ASSESSMENT YEAR:2007-08) THE I.T.O WARD- 9(1) AHMEDABAD (APPELLANT) VS. M/S SAKAR CORPORATION 27 PARTH TENAMENTS KATHWADA ROAD NARODA AHMEDABAD (RESPONDENT) PAN: ABEFS 1823 N APPELLANT BY : SHRI P.L. KUREEL SR. D.R. RESPONDENT BY : SHRI U. S. BHATI ( )/ ORDER DATE OF HEARING : 01-10-201 3 DATE OF PRONOUNCEMENT : 25 -10-2013 PER SHRI ANIL CHATURVEDI A.M. 1. THIS APPEAL IS FILED BY THE REVENUE AGAINST THE ORD ER OF CIT(A)-XV AHMEDABAD DATED 11.10.2010 FOR A.Y. 2007-08. 2. THE FACTS AS CULLED OUT FROM THE MATERIAL ON RECORD ARE AS UNDER. 3. ASSESSEE IS A FIRM ENGAGED IN THE BUSINESS OF CONST RUCTION OF HOUSING PROJECTS. IT ELECTRONICALLY FILED ITS RETURN OF IN COME FOR A.Y. 07-08 ON 29.10.2007 DECLARING TOTAL INCOME OF RS. NIL AFTER CLAIMING DEDUCTION ITA NO 3207/AHD/2010 . A.Y. 2007- 08 2 UNDER SECTION 80IB(10) OF RS. 64 49 398/-. THE CASE WAS SELECTED FOR SCRUTINY AND THEREAFTER THE ASSESSMENT WAS FRAMED U NDER SECTION 143(3) VIDE ORDER DATED 14.12.2009 AND THE TOTAL INCOME WA S DETERMINED AT RS. 64 49 398/-. AGGRIEVED BY THE ORDER OF A.O. ASSES SEE CARRIED THE MATTER BEFORE CIT(A) CIT(A) VIDE ORDER DATED 11.10.2010 G RANTED PARTIAL RELIEF TO THE ASSESSEE. AGGRIEVED BY THE AFORESAID ORDER O F CIT(A) THE REVENUE IS NOW IN APPEAL BEFORE US AND HAS RAISED THE FOLLO WING GROUNDS:- 1. THE LD. CIT(A)-XV AHMEDABAD HAS ERRED IN LAW AND O N FACTS IN DIRECTING THE ASSESSING OFFICER TO ALLOW THE ASSESSEES CLAIM FOR DEDUCTION OF RS. 64 49 398/- U/S. 80IB(10) OF THE ACT. 2. THE LD. CIT(A)-XV AHMEDABAD HAS ERRED IN HOLDING T HAT THE ASSESSEE FULFILLS THE CONDITIONS LAID DOWN FOR CLAIMING DEDUCTION U/S. 80 IB(10) EVEN WHEN THE LAND WAS IN THE NAME OF SOCIETY WHICH IS A SEPARATE LEG AL ENTITY IN THE EYE OF LAW AND THE ASSESSEE ENTERED INTO THE PROJECT BY A DEVELOPM ENT AGREEMENT WITH THE OWNER OF LAND THE PERMISSIONS FOR CONSTRUCTION AS WELL A S BU PERMISSION WAS ISSUE IN THE NAME OF THE LAND OWNER I.E. THE SOCIETY. SINCE GROUND NO. 1 AND 2 ARE INTERCONNECTED AND ARE WITH RESPECT TO DEDUCTION UNDER SECTION 80IB(10) BOTH ARE CONSIDERE D TOGETHER. 4. DURING THE COURSE OF ASSESSMENT PROCEEDING A.O. N OTICED THAT ASSESSEE HAD CONSTRUCTED A HOUSING PROJECT AND EARNED A NET PROFIT OF RS. 64 49 398/- WHICH WAS ENTIRELY CLAIMED AS DEDUCTION UNDER SECTION 80IB(10). THE ASSESSEE WAS ASKED TO SUBSTANTIATE IT S CLAIM. THE SUBMISSIONS MADE BY THE ASSESSEE IN SUPPORT OF THE CLAIM WAS NOT FOUND ACCEPTABLE TO THE A.O. HE WAS OF THE VIEW THAT ASSE SSEE IS NOT ENTITLED TO DEDUCTION UNDER 80IB(10) FOR THE FOLLOWING REASONS: - (I) ASSESSEE IS NOT A DEVELOPER BECAUSE IT DID NOT CONC EPTUALIZE AND OWN THE PROJECT. THE ASSESSEE WAS NOT THE OWNER OF THE LAND AND THE APPROVAL WAS ALSO NOT ISSUED TO IT BY THE LOCAL AUTHORITY. (II) THE A SSESSEE HAD ENTERED INTO A ITA NO 3207/AHD/2010 . A.Y. 2007- 08 3 PROJECT BY A DEVELOPMENT AGREEMENT WITH THE LAND OW NER AND THE CONSTRUCTION WAS DONE AS PER THE AGREEMENT AND HENCE THE ASSESSE E WAS MERELY A CONTRACTOR FOR THE PURPOSE OF CONSTRUCTION OF THE P ROJECT. (III) THE ASSESSEE HAD NOT SOLD ANY UNIT TO THE PURCHASER BUT THE ASSE SSEE HAD EXECUTED THE SALE DEEDS AS A SELLER AND THE ASSESSEE HAD ASSIGNED ONL Y AS CONFIRMING PARTY TO BE TRANSACTION. 5. A.O. THUS CONCLUDED THAT THE ASSESSEE HAS FAILED TO SATISFY THE CONDITION LAID DOWN IN SECTION 80IB(10) AND THEREFORE IS NOT ELIGIBLE FOR DEDUCTION. HE ACCORDINGLY DENIED THE CLAIM TO THE ASSESSEE. 6. AGGRIEVED BY THE ORDER OF A.O. ASSESSEE CARRIED T HE MATTER BEFORE CIT(A) CIT(A) ALLOWED THE CLAIM OF THE ASSESSEE BY HOLDING AS UNDER:- 6. IT IS SEEN THAT THE AO HAS NOT DISPUTED THAT THE APPELLANT DID NOT FULFILL ANY OF THE CONDITIONS SPECIFIED IN SECTION 80IB(10) FROM CLAUS E (A) TO (D) WITH RESPECT TO TIME LIMIT OF APPROVALS FROM LOCAL AUTHORITY COMPLETION OF PROJECT WITHIN THE SPECIFIED TIME LIMITS; ONE ACRE OF LAND CONDITION; 1500 SQ.FT. BUI LT-UP AREA CONDITION OF EACH RESIDENTIAL UNIT IN THE PROJECT AND THAT OF PERCENT AGE OF CONSTRUCTION FOR COMMERCIAL USE. HIS OBJECTION IS THAT THE APPELLANT IS NOT THE OWNE R OF THE LAND AND THAT THE APPROVALS WERE GIVEN BY THE LOCAL AUTHORITY NOT TO IT BUT TO SOME OTHER PERSONS AND THIS MAKES THE APPELLANT A BARE CONTRACTOR. THIS OBJECTION OF THE AO HAS TO BE SEEN IN THE LIGHT OF THE TESTS LAID DOWN BY HON'BLE ITAT BENCH A AHMEDAB AD DECISION DATED 7.11.2008 IN THE CASE OF M/S.SHAKTI CORPORATION. BARODA IN ITA NO.1503/AHD/2008 IN AY 2005-06. 7. AFTER GOING THROUGH RIVAL SUBMISSIONS I FIND TH AT THE APPELLANT HAD PRACTICALLY PURCHASED THE LAND AND IT BORE THE ENTIRE COST AND RISK OF DEVELOPING THE PROJECT AND HAS THUS BEEN FOUND MEETING THE TESTS LAID DOWN IN HON. ITAT BENCH A AHMEDABAD DECISION IN THE CASE OF M/S. SHAKTI CORPORATION BA RODA IN ITA NO. 1503/AHD/2008 IN A.Y. 2005-06. AND THEREFORE IN MY VIEW IT IS ELIGIB LE FOR DEDUCTION U/S. 80IB(10) AND THE A.O. IS DIRECTED TO ALLOW THE SAME. ITA NO 3207/AHD/2010 . A.Y. 2007- 08 4 7. AGGRIEVED BY THE ORDER OF CIT(A) THE REVENUE IS NO W IN APPEAL BEFORE US. 8. BEFORE US THE LD. D.R. SUBMITTED THAT THE ASSESSEE IS NOT ENTITLED TO DEDUCTION UNDER SECTION 80IB(10) AS THE ASSESSEE IS NOT THE OWNER BUT ONLY AS A CONTRACTOR. HE POINTED TO THE VARIOUS CL AUSES OF THE DEVELOPMENT AGREEMENT PLACED IN PAPER BOOK AND THER EFORE SUBMITTED THAT ASSESSEE IS NOT ENTITLED TO DEDUCTION UNDER 80 IB(10). HE THUS SUPPORTED THE ORDER OF A.O. 9. THE LD. A.R. ON THE OTHER HAND SUBMITTED THAT CIT(A ) AFTER EXAMINING THE CONDITIONS OF THE DEVELOPMENT AGREEMENT HAS HELD TH AT THE ASSESSEE HAD PRACTICALLY PURCHASED THE LAND AND BORE THE ENTIRE COST AND RISK OF DEVELOPING THE PROJECT AND HAS FURTHER HELD THAT TH E VARIOUS DECISIONS LAID DOWN BY AHMEDABAD TRIBUNAL IN THE CASE OF SHAKTI CO RPORATION HAS BEEN MET BY THE ASSESSEE. THE LD. A.R. FURTHER SUBMITTE D THAT ON IDENTICAL FACTS FOR A.Y. 08-09 IN THE ASSESSEES OWN CASE TH E MATTER HAS BEEN DECIDED IN FAVOUR OF THE ASSESSEE. HE PLACED ON REC ORD THE COPY OF ORDER OF TRIBUNAL IN ITA NO. 229/AHD/2012 A.Y. 08-09. THE LD. A.R. ALSO PLACED ON RECORD THE CHART SHOWING THE CONDITIONS AS PER THE DECISION OF HON. GUJARAT HIGH COURT IN THE CASE OF RADHE DEVELO PERS 341 ITR 403 (GUJ.) WHICH ARE REQUIRED TO BE FULFILLED BY DEVELO PER FOR BECOMING ELIGIBLE FOR DEDUCTION ORDER UNDER 80IB(10). FROM T HE CHART HE POINTED TO THE VARIOUS CONDITIONS OF THE AGREEMENT TO SUBSTANT IATE ITS STAND OF FULFILLING THE CONDITIONS FOR BEING ELIGIBLE FOR DE DUCTION UNDER 80IB(10). ITA NO 3207/AHD/2010 . A.Y. 2007- 08 5 HE THUS SUBMITTED THAT SINCE THE FACTS OF THE CASE IN THE YEAR UNDER APPEAL ARE IDENTICAL TO THAT OF 08-09 THE ORDER OF CIT(A) BE UPHELD. 10. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. WE FIND THAT CIT(A) WHILE HOLDING THAT THE ASSESSEE IS ELIGIBLE FOR DEDUCTION HAS NOTED THAT THE ASSESSEE HAD PRACTICAL LY PURCHASED THE LAND AND BORE THE ENTIRE COST AND RISK OF DEVELOPING THE PROJECT. CIT(A) HAS FURTHER HELD THAT THE ASSESSEE HAS MET THE TESTS LA ID DOWN BY AHMEDABAD TRIBUNAL IN THE CASE OF SHAKTI CORPORATION FOR BEIN G ELIGIBLE FOR DEDUCTION U/S. 80IB. 11. WE FURTHER FIND THAT IN THE ASSESSEES OWN CASE FO R A.Y. 08-09 THE CO- ORDINATE BENCH OF TRIBUNAL IN ITA NO. 229/AHD/2012 ORDER DATED 04.04.2012 HAS DECIDED THE ISSUE IN FAVOUR OF THE A SSESSEE BY HOLDING AS UNDER:- 4. WE HAVE CONSIDERED THE SUBMISSIONS OF THE LD. D .R. AND HAVE PERUSED THE ORDERS OF THE A.O. AND THE LD. CIT(A). WE FIND THAT THE ISSUE OF DEDUCTION U/S. 80IB(10) OF THE INCOME-TAX ACT 1961 WAS DECIDED IN FAVOUR OF THE ASSESSEE BY THE LD. CIT(A) IN THE IMMEDIATELY PRECEDING ASSESSMENT YEAR I.E. A.Y. 200 7-08 DATED 11.10.2011 WHEREIN THE DEDUCTION U/S 80IB WAS ALLOWED TO THE ASSESSEE. THE LD. CIT(A) HAS GIVEN A FINDING THAT THE ASSESSEE WAS NOT FOUND VIOLATING A NY OF THE CONDITIONS STIPULATED IN SECTION 80IB(10) AND WAS FOUND FULFILLING THE TESTS LAID DOWN BY THE ITAT A BENCH IN THE CASE OF M/S. SHAKTI CORPORATION BARODA FOR A.Y . 2005-06 DATED 07.11.2008. NO DISTINGUISHING FACTS IN THE RELEVANT ASSESSMENT YEA R 2008-09 COULD BE POINTED OUT ON BEHALF OF THE REVENUE. IN THESE FACTS OF THE CASE WE HOLD THAT NO INTERFERENCE IN THE ORDER OF THE LEARNED CIT(A) IS CALLED FOR WHICH IS CONFIRMED AND THE GROUNDS OF APPEAL OF THE REVENUE ARE DISMISSED. ITA NO 3207/AHD/2010 . A.Y. 2007- 08 6 12. BEFORE US THE ASSESSEE HAS ALSO PLACED A CHART SHO WING THE CONDITIONS WHICH ARE REQUIRED TO BE FULFILLED BY DEVELOPER SO AS TO BECOME ELIGIBLE FOR THE DEDUCTION UNDER 80IB(10) AND HOW THE SAME H AS BEEN MET BY THE ASSESSEE. BEFORE US THE LD. D.R. COULD NOT CONTROV ERT THE SUBMISSIONS OF ASSESSEE AND CIT(A) NOR COULD BRING ANY CONTRARY MA TERIAL ON RECORD. PARTICULARLY IN THIS CASE FOR A.Y. 08-09 THE RESPE CTED CO-ORDINATE BENCH HAS ALREADY TAKEN A VIEW IN FAVOUR OF THE ASSESSEE ON IDENTICAL FACTS HENCE RESPECTFULLY FOLLOWING THE DECISION OF THE CO -ORDINATE BENCH THE CLAIM U/S. 80IB(10) IS ADMISSIBLE FOR THIS YEAR AS WELL. IN VIEW OF THE AFORESAID FACTS WE FIND NO REASON TO INTERFERE WIT H THE ORDER OF CIT(A) AND THUS THIS GROUND OF REVENUE IS DISMISSED. 13. IN THE RESULT THE APPEAL OF THE REVENUE IS DISMISS ED. ORDER PRONOUNCED IN OPEN COURT ON 25 -10 - 2013. SD/- SD/- (MUKUL KR. SHRAWAT) (ANIL CHATURVEDI) JUDICIAL MEMBER 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 AHMEDABAD