Income Tax Appellate Tribunal - Jaipur
Prem Sanghi, Jaipur vs Department Of Income Tax on 4 December, 2015
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IN THE INCOME TAX APPELLATE TRIBUNAL,
JAIPUR BENCHES, JAIPUR
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BEFORE: SHRI R.P. TOLANI, JM & SHRI VIKRAM SINGH YADAV, AM
vk;dj vihy la-@ITA No. 448/JP/2013
fu/kZkj.k o"kZ@Assessment Year : 2009-10
The DCIT cuke Shri Prem Kumar Sanghi
Circle- 2 Vs. 137, M.I. Road, Panch Batti
Jaipur Jaipur
LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: AGWPS 9875 R
vihykFkhZ@Appellant izR;FkhZ@Respondent
C.O. No.38/JP/2013
(Arising out of vk;dj vihy la-@ITA No. 448/JP/2013)
fu/kZkj.k o"kZ@Assessment Year : 2009-10
Shri Prem Kumar Sanghi cuke The DCIT
137, M.I. Road, Panch Batti Vs. Circle- 2
Jaipur Jaipur
LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: AGWPS 9875 R
vihykFkhZ@Appellant izR;FkhZ@Respondent
vk;dj vihy la-@ITA No. 782/JP/2014
fu/kZkj.k o"kZ@Assessment Year : 2010-11
The DCIT cuke Shri Prem Kumar Sanghi
Circle- 2 Vs. 137, M.I. Road, Panch Batti
Jaipur Jaipur
LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: AGWPS 9875 R
vihykFkhZ@Appellant izR;FkhZ@Respondent
vk;dj vihy la-@ITA No. 783/JP/2014
fu/kZkj.k o"kZ@Assessment Year : 2011-12
The DCIT cuke Shri Prem Kumar Sanghi
Circle- 2 Vs. 137, M.I. Road, Panch Batti
Jaipur Jaipur
LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: AGWPS 9875 R
vihykFkhZ@Appellant izR;FkhZ@Respondent
2 ITA No. 448/JP/2013
The DCIT, Circle- 2, Jaipur vs. Shri Prem Kumar Sanghi
jktLo dh vksj ls@ Revenue by: Shri M.S. Meena, CIT - DR
fu/kZkfjrh dh vksj ls@ Assessee by : Shri G.G. Mundra, CA
lquokbZ dh rkjh[k@ Date of Hearing : 4/11/2015
?kks"k.kk dh rkjh[k@ Date of Pronouncement : 04 /12/2015
vkns'k@ ORDER
PER R.P. TOLANI, JM:-
These are three appeals filed by department for aforementioned years against the respective orders of ld. CIT (A) - I, Jaipur dated 01-02-2013 and 19- 09-2014 and assessee's CO for AY 2009-10.
2.1 The department has effectively raised following common grounds of appeals relating to the allowability of deduction u/s 80 IB of the IT Act: -
"i. Whether on the facts and in the circumstances of the case and in law the Ld. CIT (A) has erred in allowing deduction u/s 80IB to the assessee who entered into a development agreement as the land owner and has not undertook development & construction of the housing project.
ii. Whether on the facts and in the circumstances of the case and in law the deduction u/s 80IB is allowable only to an undertaking involved in the business of developing and building housing projects and not to an individual who entered into a development agreement as the owner of the land.
iii. Whether on the facts and in the circumstances of the case and in law the Ld. CIT (A) has erred in allowing deduction u/s 80IB to the assessee when the completion certificate of the project was not furnished by assessee as required in clause (ii) of explanation below section 80IB (10) (a) of the Act."
3.1 The assessee's CO for AY 2009-10 raising following ground, is not pressed being only to support the order of ld. CIT (A), the same is accordingly dismissed as academic.
"The assessee having undertaken the activity of building and developing housing project within the meaning of Section 80IB (10) of I. T. 3 ITA No. 448/JP/2013 The DCIT, Circle- 2, Jaipur vs. Shri Prem Kumar Sanghi Act, 1961 and having complied all the conditions laid down under the said provision is entitled hundred percent deduction of profits derived therefrom in respect of profit amounting to Rs. 5,22,92,252/- in the previous year relevant to this assessment year and Ld. CIT (A) - I, Jaipur is correct in law in allowing the said deduction to assessee."
4.1 Brief facts are the assessee filed respective returns of income declaring taxable income after claiming deduction u/s 80IB (10) of I. T. Act, 1961 qua the business income derived from a housing project as a developer by sale of flats in a housing project. deriving income from capital gains, other sources and from Business. Details of returned income and claim u/s 80IB (10) are as under:-
A.Y. Returned income Deduction u/s 80IB (10)
2009-10 2,41,17,040/- 5,22,92,252/-
2010-11 3,66,51,240/- 7,91,87,666/-
2011-12 3,66,51,240/- 2,54,89,737/-
The assessee claims to have maintained duly audited separate books of accounts and separate statements of P & L A/cs, Balance Sheets etc. for all the years in respect of the impugned housing project and obtained prescribed audit reports in form 10CCB u/s 80IB (10) certifying that conditions stipulated by the I T Act qua relevant provisions of sec. 80 IB are satisfied. The relevant details for eligibility to claim u/s 80IB (10) were filed in the return and further in assessment proceedings as asked for by the ld. AO. The details about assesses claim under sec. 80 IB are Shri Chunni Lal Sanghi, assessee's father demised on 13-1-75, who owned some land acquired on distribution of family land by a settlement deed registered on 30-4-1971. The description thereof being Khasra No. 10 admeasuring to 11 bigha 9 biswa in vil. Durgapura Tehsil Sanganer.
4 ITA No. 448/JP/2013The DCIT, Circle- 2, Jaipur vs. Shri Prem Kumar Sanghi Consequent to death his two sons Shri Manik Lal Sanghi and Prem Kumar Sanghi inherited the said land and after leaving a part of land for 80 ft. wide road got the said land converted into non-agricultural land by adopting due procedure. As a result of conversion of land as non agriculture, Govt. of Rajasthan granted lease deeds for 99 years for setting up a small scale industry for automobile Body building, repairing, and manufacturing ancillaries. which were registered in 1983-84. Thereafter on 12-8-2004 the land was partitioned by a partition deed executed between assessee and his brother. By these antecedents assessee became owner of a plot of land admeasuring to 1,37,973.25 Sq. ft.. Assessee intended to develop the plot for a housing project, therefore, applied to JDA competent authority for conversion of the impugned land from Industrial to Residential use and JDA vide registered lease deed dated 2-06-05 converted the said land measuring to 15,225.58 Sq. yds on 99 years lease for residential use which is placed on the record. The assessee for developing a Housing Project on this plot of land entered into a joint development agreement on 30-6-2005 with another reputed builder of Jaipur, M/s Unique Builders & Developers (Realty) hereinafter referred as UDB (Reality) for development and construction of a housing project on this plot of land. As per agreement assessee obtained the necessary permissions and other necessary approvals for proper development and construction of said Housing project from JDA. Necessary letter of approval dated 30-8-05 was issued in the name of assessee. As per this joint development agreement M/s UDB (Reality) 5 ITA No. 448/JP/2013 The DCIT, Circle- 2, Jaipur vs. Shri Prem Kumar Sanghi undertook to bear the cost of construction of project and construct the flats under assessee's supervision in accordance with JDA approved plans in the name of the assessee. Under this arrangement, it was further stipulated that assessee will hand over the land, there will be joint supervision and after construction of housing project; ownership of 46% of constructed flats will be retained by assessee and 54% constructed flats will go to M/s UDB (Reality) as share as consideration of its part of work. The assessee on 30-6-2005 converted the said plot of land from fixed asset to stock-in-trade and in accordance with section 45(2) offered and paid capital gain tax in the AY 2006-07 on the fair market value of said capital asset, which is accepted by the department.
Consequent to development and construction of the said housing project assessee sold the flats in respective years and offered the business income thereon in respective years by proper computing the same after deducting fair market value of land. This computation is not disputed by ld. AO. Being eligible as a developer of housing project, assessee claimed deduction u/s 80IB(10) from business profits derived from the sale of housing project flats in respective years as mentioned above. The Ld. A.O. however held that assessee is not eligible to deduction u/s 80IB(10) making various observations which are summarized as under: -
(1) By giving the meaning of 'developer' used in Section 80IB(10) the Ld. A.O. held
(a) That no expenses related to construction of project are debited in the books of accounts of assessee, 6 ITA No. 448/JP/2013 The DCIT, Circle- 2, Jaipur vs. Shri Prem Kumar Sanghi
(b) Right from preliminary work till end of construction all work to be done by UDB (Reality), the assessee has no control or supervision on the project reference made to clause 5(v), 8(b), 10, 17 & 18 of Development agreement and M/s UDB (Reality) is bearing project related risks as well as complying the rules and so assessee is neither a builder or developer. The difference of land lord vs. developer was given and Ld. A.O. held that the deduction u/s 80IB is allowable to undertaking developing and building housing projects and therefore deduction is not allowable to assesee. Ld. AO relied on Ahmedabad ITAT judgement in case Radhey Developers & others (2007) 113 TTJ
300.
(c) In AY 2009-10 it was held that assessee did not filed copy of completion certificate issued by local authority only copy of application for issue of completion certificate filed. The contents of Instruction No. 2009 dated 30-6-2009 issued by CBDT supporting assessee's claim were rejected.
Ld. A.O. thus held that assessee was not eligible for claim of deduction u/s 80IB (10) and denied the same in all these years.
4.2 Aggrieved assessee preferred 1st appeals before ld. CIT (A) who after considering the facts, circumstances, judicial precedents and submissions filed by the assessee allowed the claim u/s 80IB (10). Detailed order in for AY 2009- 10 which has been followed in subsequent years; relevant extract of ld. CIT(A) order for AY 2009-10 is as under: -
"4.3 I have carefully perused the order of the AO and the submissions of the AR. The facts of the case and the law applicable to these facts are discussed below to bring clarity to the issue:
1. The appellant and his brother Shri Manik Lal Sanghi inherited agricultural land in Durgapura Tehsil, Sanganer on the death of his father Shri Chunni Lal Sanghi on 13/01/1975.7 ITA No. 448/JP/2013
The DCIT, Circle- 2, Jaipur vs. Shri Prem Kumar Sanghi
2. The use of land was got converted from agricultural to industrial for setting up of a manufacturing unit for automobile body building and repairs, from the Govt. of Rajasthan in 1983-84.
3. On 12/01/2004 there was a partition between the brothers vide a registered partition deed whereby land measuring 137973.25 sq. ft. came to the share of the appellant.
4. On 02/06/2005 the use of land measuring 15225.58 sq. yards was gotten converted from industrial to residential use vide an order of the JDA.
5. On 30/06/2005 the assessee converted the land from fixed assets to stock-in-trade. He paid capital gains tax u/s 45 (2) at FMV on the full value of consideration on that date.
6. On 30/06/2005 the assessee signed a Development Agreement with M/s Unique Builders & Developers (Reality) for construction of the housing project.
The above facts of the case are examined in view of the provisions of section 80IB (10) and the finding of the AO. First of all, on perusal of section 80IB (10) it is seen that the provision provides for exemption on profits as follows subject to certain conditions:
"The amount of deduction in the case of an undertaking developing and building housing projects approved before the 31st day of March, 2008 by a local authority shall be hundred per cent of the profits derived in the previous year relevant to any assessment year from such housing project."
It is pertinent to note that the exemption has been given to an 'undertaking' and not to an individual assessee. In this case, such an undertaking came into existence with the signing of the Development Agreement between the appellant and M/s UDB (Reality). As per this agreement the appellant was to contribute his land and M/s UDB (Reality) was to develop and construct in accordance with the permission given by the local 8 ITA No. 448/JP/2013 The DCIT, Circle- 2, Jaipur vs. Shri Prem Kumar Sanghi authorities the residential complex. It was also mentioned (Page 3) in the agreement that this agreement was being resorted to, because the appellant did not have the required resources by way of finances, manpower and know how to construct the residential complex.
On perusal of the Development Agreement it is seen that the undertaking fulfills all the criterion required for claiming exemption u/s 80IB (10). However, the undertaking would not have come into existence if the appellant had not contributed the land. So if the undertaking is entitled for exemption u/s 80IB it logically ensues that the appellant is entitled to the exemption u/s 80IB (10) on the profits earned by him from this undertaking.
Secondly, it has been clearly stated that the appellant did not have the financial and infrastructural wherewithal for construction of the residential complex, and that is why he had to resort to signing an agreement with M/s UDB (Reality) for the purpose of development and construction of the residential complex. The creation of the eligible 'undertaking' was initiated by the appellant when he converted his asset by way of land into stock-in-trade and signed the Development Agreement with the intention of developing and setting up of the residential complex.
To say that the assessee had not debited any expenses related to the construction of the project in the P & L A/c would be an erroneous interpretation of the facts because cost of the land was his contribution to the cost of the project which has been properly accounted for at the initiation of the project wherein the appellant paid capital gains tax on conversion of this asset into stock-in-trade. It was precisely because he did not have the necessary financial and human resources that the agreement was signed and the undertaking came into existence.
Thirdly, clauses 4 & 5 of the Development Agreement further establish that the appellant was not a mere owner of land but also a developer. As per these clauses M/s UDB (Reality) had to deposit a total sum of refundable/adjustable security deposit of Rs. 2,19,00,000/- with the appellant. It has been clearly mentioned that in case the builder did not commence construction work within the period of 3 years & 5 month than 9 ITA No. 448/JP/2013 The DCIT, Circle- 2, Jaipur vs. Shri Prem Kumar Sanghi the owner would be at a liberty to cancel the Agreement and would refund the deposit and the agreement would become null and void. Thus, the builder was accountable to the appellant for completing the project within time for which he deposited the security money. This clearly establishes that the primary onus for developing the project was with the appellant.
Furthermore, there was a clear cut demarcation of the share between the two parties of the undertaking in the agreed ratio of 46% to the appellant and 54% to M/s UDB (Reality). After the construction, the appellant was free to negotiate and sell independently the flats in his possession directly to the purchasers. Which was done by him and the proof of the same was placed on record.
Even after the development agreement the appellant continued to undertake all activities as per the agreement, for example, correspondence with the various departments etc. proof of which has been placed on file. Therefore, the mere fact that certain clauses have been included in the agreement to safeguard the independence of M/s UDB (Reality) for executing the work of construction of the residential complex and to prevent unnecessary interference by the appellant considering that he did not have the knowledge in these professional matters, should not be interpreted to mean that he was not a developer. In fact he has maintained the right to supervise and give suggestions as long as these do not interfere with the day to day working of the project. The AO has discussed extensively the development agreement with respect to certain clauses to show that the assessee was not a developer. However, on perusal of these clauses it is apparent that they were included to safeguard the professional functioning of the other party of the undertaking that is M/s UDB (Reality).
The other observation of the AO was that the assessee had not filed the completion certificate and so was not entitled to the exemption. It is pertinent to note that search and seizure proceedings were carried out at the business and residential premises of M/s UDB (Reality). The assessment orders for the block period for A.Ys. 2006-07 to 2008-09 were adjudicated upon by CIT (A), Jaipur vide a single order dated 05/03/2012 wherein after examining all the facts he has allowed the claim of section 80IB (10) on its portion of profits from this 10 ITA No. 448/JP/2013 The DCIT, Circle- 2, Jaipur vs. Shri Prem Kumar Sanghi undertaking in these assessment years. Considering that the appellant has claimed the exemption u/s 80IB (10) in the next A.Y. that is 2009-10 when the first sale has been made by him it cannot be held that the project was not complete just because of the non availability of the completion certificate by the JDA.
Moreover, even on perusal of the sale deed executed by the appellant in favour of Smt. Sheela Jain on 25/09/2008 it is seen that the appellant has sold a unit at 710 being a flat with a buildup area of 1291.49 sq. ft. As per clause 4 it is seen that at the time of execution of sale deed the seller handed over the possession of the unit in a good condition and not a piece of vacant terrace. Since this sale was registered by the Dept. of Stamp and Registration Govt. of Rajasthan it is seen that a Govt. Department recognized the fact that a flat was transferred and not an open space, which tantamounts to recognition of the fact that the construction of flat was completed and that is why it was registered as such. The appellant cannot be therefore penalized because the concerned Govt. Dept. had delayed in giving the completion certificate officially even though another Govt. Dept. had recognized and registered the transfer of a completed flat.
The AO has relied on the finding of the Hon'ble ITAT, Ahmadabad in the case of Radhey Developers and Others V/s ITO (2008) 113 TTJ Ahd. 300 while denying the claim of the appellant. I have carefully perused the order relied on and find that the facts of the case are completely different from the facts of the case of the appellant. The Hon'ble ITAT Ahmadabad Bench has observed that as per the Development Agreement, in the case of Radhey Developers and others, the land lord was entitled to the cost of land owned and not to any profit earned by the developer by execution of the said scheme. Further, it was the appellant who was required to obtain all the permissions from the competent authority. The land lord was not responsible for money received by the developer from the members of the scheme. It was the responsibility of the developer to execute the sale deed after construction. As per the Development Agreement the land lord was only entitled to the cost of land. He was not entitled to an profit earned by the developer from the execution of the above scheme. Thus the Development Agreement was held to be effectively an agreement of sale under which the land owner handed over the 11 ITA No. 448/JP/2013 The DCIT, Circle- 2, Jaipur vs. Shri Prem Kumar Sanghi possession to the developer which entitled the developer to develop the property entirely at his choice. For all purposes, therefore, the land owner extinguished his interest in this land in favour of the developer on execution of this Development Agreement. It was further enunciated that "the development means the realization of potentialities of land or territory by building or mining." The Hon'ble ITAT in the said case give a finding as follows: -
"In the present case in hand, the landowner has not made any conscious attempt to develop the property except ensuring their rights as landowner so that the sale value of the land could be realized to them as per the terms of 'Agreement to Sale' and the 'Development Agreement'. The landowner, no doubt, have not thrown themselves into development of property."
On the basis of the above facts the Hon'ble ITAT Ahmadabad held that the appellant who was the developer was entitled to the claim of deduction u/s 80IB (10) even though he was not the owner of the land.
In the case of the appellant that is Mr. Prem Sanghi it is seen that the facts of the case are completely distinct from the facts of M/s Radhey Developers and others V/s ITO (Supra). First of all, the appellant did not relinquish his right to the land; he undertook all the activities required for developing the land from getting the use of land converted from industrial to residential etc. and even subsequent to signing of the Development Agreement continued to correspond with the respective authorities as a co signatory of the undertaking for requisite permissions etc. Thus he did not extinguish his right to develop the land in fact he retained with him the power to cancel the agreement if the developer did not adhere to the time schedule of construction of the residential complex.
Secondly, he did not sell the land to the developer under the garb of Development Agreement neither did he opt out of the risk associated with the business. He was entitled to 46% of the project and share of profits there from. He undertook the sale of his share of the developed property independently as per the sale deed placed on record.
12 ITA No. 448/JP/2013The DCIT, Circle- 2, Jaipur vs. Shri Prem Kumar Sanghi In the order relied on by the AO the Hon'ble ITAT Ahmadabad has itself noted that "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."
Thus in the case of the appellant it is observed that as a co- signatory of the Development Agreement which resulted in creation of an eligible undertaking, his share of contribution, risk and the profit of the undertaking was determined at 46%. Therefore, he is clearly entitled to the claim of deduction u/s 80IB (10) to the extent of 46% of the total profits of the undertaking.
It is seen that the facts of the case are also covered in his favour by the finding of the Hon'ble ITAT Jaipur Bench in the case of ACIT Vs. M/s Indo Continental Hotel & Resorts Ltd.
ITA No. 351/JP/2010 dated 06/05/2011.In view of the above discussion regarding the facts of the case of the appellant and the law applicable to these facts it is held that the appellant was entitled to the claim of exemption u/s 80IB (10) of Rs. 5,22,92,252/-."
4.3 Aggrieved revenue is before us.
4.4 The Ld. DR relied on the orders of AO and contends that ld. CIT(A) has failed to appreciate that assessee cannot be regarded as a developer of the impugned housing projects in terms of sec. 80IB (10). He has not incurred any expenditure on the development of project and contributed no activity for development. That business profits are result of a scheme of sharing flats, for the development activities which were in fact carried out only by UDB (reality) and not by assessee. Ld. AO has made detailed observation in this behalf and relied on the ITAT judgment in the case of Radhey Developers (supra) which is confirmed by Hon'ble Gujarat High Court. AO's order is heavily relied 13 ITA No. 448/JP/2013 The DCIT, Circle- 2, Jaipur vs. Shri Prem Kumar Sanghi contending that the order of ld. CIT(A) may be reversed and that of AO may be upheld.
4.5 Ld. Counsel for the assessee on the other hand contends that there is no dispute about the facts that:
i. Assessee with intention to develop the impugned plot for housing project approached the JDA authorities for conversion of industrial plot into residential plot.
ii. Necessary plans of development and construction of housing project were obtained by assessee and stand issued in his name. Thus the relevant record reflects that in the eyes of rules, regulations and law assessee is the developer and builder of impugned housing project.
iii. For various commercial reasons it was not viable and feasible for assessee to develop the project on his own and required outsourcing of manpower and marketing skills to sell the flats, consequently assessee entered into an agreement with M/s UDB (Reality). A harmonious reading of various clauses of the agreement reveal that it was a joint development agreement. M/s UDB (Reality) agreed or contributed cost of construction, activity of construction under joint supervision and marketing of developed housing project in accordance with rules, regulations and terms of approval granted by competent authorities in the name of assessee. iv. The UDB (Reality) being an experienced organization undertook to provide the services of financial nature i.e bearing the cost of construction and marketing services as a part of their input in the project. For the services rendered it was to be reimbursed by 56% share of constructed flats. This was a viable commercial arrangement under a methodology which was very much prevalent in construction industry. No dispute or doubt has been raised by ld. AO about the genuineness of agreement or rendering of services by UDB (Reality). Thus the cost of land, administrative approval, clear title of land and other connected issues which are imperative for development of a housing project was attributable to assessee and financial and market aspects were outsourced from UDB (Reality) as per a valid and commercially expedient revenue sharing agreement arrangement which has not been disputed. v. Development agreement obligated each party to be strictly responsible for its own acts and shall keep the other party indemnified (clause - 17 of agreement). The assessee retained 14 ITA No. 448/JP/2013 The DCIT, Circle- 2, Jaipur vs. Shri Prem Kumar Sanghi control and supervision over the housing project as stipulated in clause(s) (v), 8(a), 8(b), 9, 10 of this development agreement and AO has failed to bring on record any evidence to indicate that he did not supervised the development project. A plain reading of agreement reveals that assessee did not transfer all rights of development and construction in favor of UDB (Reality). This was otherwise also not possible as the change of ownership of project required various govt. approvals, ld. AO has not indicated any evidence or least of all even an effort in this direction. UDB (Reality) and assessee are not related at all it is futile to assume that the agreement was make believe in nature.
vi. This is not a even alleged by AO as there is not even a whisper suggesting that agreement was not genuine or that the parties were related in any manner. The power of control, supervision and ownership over the development project as stipulated by clauses of agreement is evident from the fact that all the approvals, permissions and power to executed sale deeds of flats remained with assesse till the project was completely developed. vii. As per agreement which stands accepted by the ld. AO, assessee was entitled to the share of profits in the form of 46% of flats after successful contribution of his part of obligations which flowed from the said development agreement. The agreement was executed with M/s UDB (Reality) with explicit stipulations that parties have entered into this agreement on principal to principal basis. Each party shall be strictly responsible for its own acts and shall keep the other party indemnified for any losses caused by the acts of commission or omission by other party.
viii. The assessee had control and supervision over the development of housing project is further clear from the stipulations in clause(s)
(v), 8(a), 8(b), 9, 10 of the development agreement empowering the assessee to supervise the development of project. A harmonious reading of agreement will demonstrate that assessee gave away his rights of control and supervision and merely sold his land to M/s UDB (Reality). It is further manifested by the fact that the most important power of executing sale deeds in favor of purchasers of flats after successful completion of construction of housing project remained with assessee only. Had it been a simple case of sale of merely land or assessee had not been an integral part of development of housing project, M/s UDB (Reality) will have never allowed this power to remain with assessee. It was for assessee to ultimately ensure successful completion of development of impugned housing project as per JDA approved plan, to deal with authorities and obtain required completion 15 ITA No. 448/JP/2013 The DCIT, Circle- 2, Jaipur vs. Shri Prem Kumar Sanghi certificate for the housing project from competent authorities which stood his own name and not in the name of M/s UDB (Reality).
ix. All these facts clearly demonstrate that assessee was an integral and indispensable part of the development and construction of the impugned housing project as envisaged by sec. 80IB (10) of I. T. Act, 61 and CIT(A) rightly upheld the entitlement of deduction in favor of assessee after examining the relevant provision.
x. The development agreement was between totally unrelated entities, the cost involved was in multiple crores, approvals stood in the name of assessee along with power to execute sale deed. With all these explicit stipulations there is no room for assuming that assessee sold or transferred the land by this agreement. Ld. CIT(A) has appreciated all these aspects carefully and after applying a series of judicial precedents on similar facts allowed the claim of the assessee.
Ld. AO while rejecting assesses claim has mistakenly relied on the ITAT judgment in the case of Radhey Developers & Ors Vs. I.T.O. (2008) 113 TTJ 300 (Ahd-Trib) which is on altogether different facts. The issue was "whether the assessee is eligible for the claim of deduction u/s 80IB (10) of the I. T. Act, 61 on the profit derived from developing and building housing project:-
i. When the land is not registered in assessee's name ii. Whether the ownership of land is a precondition to claim deduction u/s 80IB (10) of the Act".
iii. Land holder was entitled to the cost of land i.e. consideration was determined on per sq. mt. basis. The land holder was not entitled to any profit earned by developer in development of housing project.
Whereas in assessee's case there is no dispute on the facts that he was absolute owner of the land, permission for development of housing project, maps thereof and completion certificate. Further assessee was entitled to profits of the development of housing project quantified in 46% of the constructed flats. Thus the facts of Radhey Developers case (supra) being quite different than the case 16 ITA No. 448/JP/2013 The DCIT, Circle- 2, Jaipur vs. Shri Prem Kumar Sanghi of assessee its ratio was not at all applicable to assessee. In that case the development agreement itself transferred all the rights of development and construction and to deal with the land in favor of main developer. The Radhey Developers case (supra) ITAT judgement at para 29 last 5 lines held: "The requirement for claiming deduction is that such an undertaking must develop and build housing project, be it on their own 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 owner of the land" and further in para 33 it held "It may also be born in mind that deduction is not exclusively to an assessee but to an undertaking developing and building housing project, be it developed as a contractor or as an owner. This fact is evident on the bare reading of sub-s. (1) of s. 80-IB, sub-s. (2) of s. 80-IB, which provides that "this section applies to an undertaking which fulfills all the following conditions viz.... ". The judgment thus rather supports assessee's case that if owner of land, develops and builds the housing project part of such process is eligible for deduction u/s 80IB (10), even if development & building i.e. construction work of housing project is carried on through any other developer. The Gujarat High Court also, while confirming the Radhey Developers judgment of ITAT (Ahmedabad Bench) held that the essence of sub s.(10) of S.80-IB requires involvement of an undertaking in developing and building housing projects approved by the local authority.
The Jaipur Bench of ITAT in case of ACIT Vs. Indo Continental Hotel & 17 ITA No. 448/JP/2013 The DCIT, Circle- 2, Jaipur vs. Shri Prem Kumar Sanghi Resorts Ltd. for A.Y. 2007-08 (ITA No. 351/JP/2010 order dated 6-05-2011) on the similar facts decided the issue of eligibility to claim u/s 80-IB in favour of assesse by following observations (page - 17 line 5 onwards para 21.2 of order):
''21.2.....Therefore, it is not disputed that land in question was registered in the name of assessee as the department has accepted itself that land in question pertains to assessee. Thereafter assessee entered into agreement with M/s Parswanath Developers Ltd. for developing a Housing Project. Necessary permission and approval were obtained by the assessee for developing the Housing Project. The assessee filed application before Ghaziabad Development Authority (GDA) for conversion of use of land i.e. from Hotel Building to Residential Building that was also done on behalf of the assessee. Thereafter various details as required by the GDA were filed on behalf of the assessee. Thereafter the GDA vide its letter dated 25-4-2003 granted approval on various conditions i.e. 20 in numbers. This approval was granted in the name of Vice President and Managing Director of M/s Indo Continental Hotels & Resorts Ltd. (i.e. assessee). From this approval letter alone it is ascertainable that the approval of Housing project was approved in the name of assessee and not in the name of M/s Parswanath Developer, therefore it cannot be said that assessee is only a name lender. As per agreement entered by assessee with M/s Parswanath Developers Ltd. (PDL), in various clauses it has been provided that assessee will participate in the Housing Project and will do the necessary work assigned to the assessee. Thereafter on completion of the Project, the profit ratio was shared in the ratio of 1/3rd and 2/3rd as agreed upon by the assessee and M/s PDL. No doubt, assessee has not done any marketing activity as this was the duty of M/s PDL, who has done the marketing of the Housing Project and thereafter flats were sold in the market and as stated above, the profits were shared in terms of agreed ratio. From all these facts and circumstances of the case, it is amply proved that assessee was indulged in developing of the Housing Project.
21.3 The decision in case of M/s Radhey Developers relied upon by Ld. CIT D/R is altogether on different footing. In fact, in this case the land in question was not in the name of that assessee and, therefore, it was held that they are not entitled for deduction 18 ITA No. 448/JP/2013 The DCIT, Circle- 2, Jaipur vs. Shri Prem Kumar Sanghi under section 80IB. In the present case the land in question is in the name of assessee. Therefore, the ratio of this decision is not applicable on the facts of present case.
22.2 It is also a matter of fact that assessee has not claimed deduction under section 80IB(10) on entire profit of the project but has claimed deduction only on its share of profits. Provisions of section 80IB (10) are very clear by which it has been provided that on developing a housing project the deduction is allowable.'' A reading of the ITAT, Jaipur, judgment in the case of Indo Continental Hotel (supra) squarely applies to the facts of the case of assessee for entitlement to claim u/s 80IB(10).
4.6 Ld. Counsel adverting to facts again, contends that the development and building activities under taken by assessee as emerge from the record are as under: -
i) Undertaking the comprehensive and fundamental tedious process of getting the land converted for residential use from competent authorities and obtaining patta from JDA for its residential use;
ii) Coordination, compliance and meeting the lengthy queries about sanction of plan for development and construction of housing project on the impugned land from local authority which is undisputedly carried over by assessee over a period of time. These activities are fundamental and crucial for development of housing project. There is no dispute on these glaring facts.
iii) Making the impugned land usable for the purpose the permission of development of housing construction by providing proper road and easy approach to the site which is precondition for sanction of plan. This work has been done by the assessee.
iv) Assessee had not transferred the land to M/s UDB (Reality) and as per agreement retained the rights of jointly supervising the development and construction of the impugned housing project.
v) The assessee apart from the said rights of supervision retaining the rights of transferring the flats falling in his share in the name of prospective purchasers.19 ITA No. 448/JP/2013
The DCIT, Circle- 2, Jaipur vs. Shri Prem Kumar Sanghi Thus the assessee undertook the aforesaid activities for development and construction of housing project which was quite big and for business expediency entered into a joint development agreement with M/s UDB by a duly executed development agreement. This type of commercial arrangement neither detracts his status being a developer nor militates against its claim for deduction under Section 80IB(10). Assessee having contributed the land, undertaken aforesaid activities over a period of time for development of the project leaves no doubt whatsoever that his status is of a 'Developer'. Assessee has duly complied with relevant conditions for claiming deduction under Section 80IB(10) of the Act, thus the claim is perfectly valid and rightly allowed by ld. CIT(A). As is clear from the development agreement, the undertaking of developing and building housing project was jointly undertaken by the assessee and M/s UDB (Reality). The assessee thus being a developer for all practical purposes is entitled to the impugned claim of deduction u/s 80IB(10). Further reliance is placed on Hon'ble Karnataka High Court in case of CIT Vs. Shravanee Construction (2012) 22 Taxman.com 250 which is on the same facts as that of assessee. Hon'ble High Court held that:
...."the contention of the revenue that the assessee did not undertake any developmental or building activity and therefore, he cannot individually claim the benefit has no substance. That is not the requirement of law. Keeping in mind, the object with which this provision is introduced when all persons who have made investments in this housing project which is for the benefit of middle and lower class people and when they have complied with all the conditions prescribed under the aforesaid provision, both of 20 ITA No. 448/JP/2013 The DCIT, Circle- 2, Jaipur vs. Shri Prem Kumar Sanghi them are entitled to hundred percent benefit of tax deduction as provided under the said provision".
Following the above judgment of Hon'ble Karnataka High Court recently the ITAT, Bangalore Bench in case of Abdul Khader Vs. ACIT (2012) 137 ITD 188 (copy placed on record) held as under:
''During the course of scrutiny assessment, the Assessing Officer noticed that the assessee had entered into a joint development agreement with a company for developing the housing project on land owned by the assessee. From such facts, the Assessing Officer formed an opinion that deduction under section 80-IB(10) could not be allowed to the assessee since he was only a land owner and no construction activity had been carried out by the assessee in developing the housing project. Accordingly the claim of deduction under section 80-IB(10) was disallowed.' The assessee entered into an agreement with Reddy Structures (P) Ltd., for development of housing project on the land owned by the assessee. The assessee got 24 per cent share in the said project and sold 49 flats. [Para 9].
From the terms of the agreement it is clear that the assessee was engaged in the property development. The assessee got his agricultural land converted for non-agricultural purposes, i.e. for residential purposes and jointly undertook the development and construction of the schedule property by getting permission and plan sanctioned. [Para 10].
It is clear that the assessee contributed his property in lieu of capital contribution for joint development and construction and the second party, i.e. Reddy Structures (P) Ltd., was required to make investment for joint development and construction, whereas the assessee was required to make investment for all statutory approvals plan sanction etc. and in such type of cases, the approval and plan sanction is the first and initial stage which was to be taken by the assessee and for that purpose the assessee was required to make investments. So, it cannot be said that the assessee did not make any investment for the project under consideration [Para 11].
21 ITA No. 448/JP/2013The DCIT, Circle- 2, Jaipur vs. Shri Prem Kumar Sanghi In the instant case, the Assessing Officer denied the deduction to the assessee by stating that the assessee only contributed the land and had not carried out any construction activities. The provision contained in section 80-IB(10) is perused. [Para 12].
On a joint reading of sub-section (10) of section 80-IB and Explanation thereto it is clear that deduction is allowable to an undertaking developing and building housing project approved, it is nowhere mentioned that for claiming this deduction, construction has to be carried out by the undertaker, moreover, the explanation clarified that any undertaking which executed housing project as a works contract awarded by any person is not eligible for claiming this deduction which clearly shows that even if any undertaking is constructing the housing project under a works contract entered by a person is not eligible for deduction. The only condition for claiming the deduction under section 80-IB(10) is that the undertaking is developing and building housing projects approved by a local authority. In the instant case, it is not the case of the department that the project was not approved or developed and built by the assessee. The only reason for denying the deduction under section 80-IB(10) to the assessee was that the assessee had not carried out any construction activity, it is held that said reason is not sufficient to deny deduction under section 80-IB(10). In the instant case, the assessee made the contribution of his capital in the shape of land and incurred the initial expenses for development and building of housing project like sanction of plan. Therefore, merely on this basis that the assessee did not construct himself was not a ground to deny the deduction under section 80-IB(10), particularly when the assessee had undertaken the other work like making the land useful by getting it converted into non-agricultural purpose and getting plan sanctioned. [Para 14].
Therefore, considering the totality of the facts and following the ratio laid down by the Jurisdictional High Court in the case of CIT v. Shravanee Constructions [2012] 22 taxmann.com 250(Kar.), set aside the impugned order passed by the Commissioner (Appeals) and direct the Assessing Officer to allow the deduction under section 80-IB(10) to the assessee. [Para 15].
Recently the ITAT Hyderabad Bench also in case of Kura Homes P. Ltd. Vs. I.T.O. (2012) 139 ITD 460 (Placed on record) on similar facts held as follows:-
22 ITA No. 448/JP/2013The DCIT, Circle- 2, Jaipur vs. Shri Prem Kumar Sanghi ''27. Further, in the present case the assessee's project is approved by local authority prior to 1.4.2004 and there is no dispute regarding this. However, one of the dispute for denying deduction u/s 80- IB(10) is that there is no completion certificate furnished by the assessee for which its claim was denied. The meaning of "date of completion" has been given in Explanation (ii) to clause (a) to section 80-IB(10). Date of completion of construction would mean date on which completion certificate in respect of housing project was issued by the local authority. To grant deduction u/s 80-IB(10), where an assessee is following the percentage completion method is it necessary to obtain such completion certificate for each year of assessee's claim or it is sufficient that certificate is obtained on the completion of the housing project as a whole. Stipulation for obtaining completion certificate should not be so interpreted to mean that an assessee can claim exemption u/s 80-IB(10) only in the year of completion of whole of the housing project, even where the project stretches over a number of years and assessee returns its income based on percentage completion method. It would only mean that the assessee has to obtain such certificate on completion of the housing project, least it would lose the deduction already granted u/s 80-IB(10) for the earlier years if it is not so produced. As held by the Hon'ble Supreme Court in the case of Bajaj Tempo v. CIT [1992] 196 ITR 188/62 Taxman 480 a provision in the taxing statutes granting incentives for promoting growth and development of the nation should be construed liberally. When such liberal interpretation is to be given, the restriction placed in such provision granting the incentives also has to be considered so as to advance the objectives of the provisions and not to frustrate. Clause (a) of section 80-IB(10) specifies that the development and construction of the project has to start before 1.4.2004 and the project has to be completed within four years from the end of the financial year in which approval for project was received from the local authority. Thus, a project can have a span of not more than 4 years from the end of the financial year it has received approval. Explanation under clause (a) only specified how to reckon the day of approval and date of completion. It would not mean that the assessee can have the benefit of section 80- IB(10) only in the year of completion of the project, especially so, for an assessee not following project completion method for accounting its income. If otherwise interpreted, it would be equivalent to forcing an assessee to follow a particular method of accounting, which would never have been the intention of legislation. Intention would only have been that for the project as a whole, there should be certification from the relevant authority proving the commencement and completion, and not that a completion certificate should be there in every year of the project span. The certifications are for ensuring that the project span does not exceed 23 ITA No. 448/JP/2013 The DCIT, Circle- 2, Jaipur vs. Shri Prem Kumar Sanghi the prescribed period and nothing more. Of course if such period exceeded the prescribed limit. Revenue would be well within its rights to withdraw the claims already allowed, following the procedure prescribed under the Act. Thus, the Assessing Officer need not insist on the completion certificate in this assessment year, this is the right meaning of the statute. This view has also been taken by CBDT in its Instruction No. 4 of 2009 dt. 30.6.2009, paras 2 to 4 of which are reproduced hereunder:
-
"2. Clarifications have been sought by various Chief CITs on the issue whether the deduction under section 80-IB(10) would be available on a year-to-year basis where an assessee is showing project on partial completion or if it would be available only in the year of completion of the project under section 80-IB(10).
3. The above issue has been considered by the Board and it is clarified as under:
(a) The deduction can be claimed on a year-to-year basis where the assessee is showing profit from partial completion of the project in every year.
(b) In case it is late and it is found that the condition of completing the project within the specified time-limit of 4 years as stated in S.80-IB(10) has not been satisfied, the deduction granted to the assessee in the earlier years should be withdrawn.
4. The above instruction will override earlier clarification on this issue contained in Member (R.)'s D.O. Letter No. 58/Misc/2008/CIT(IT & CT), dt. 29th April, 2008 and Member (IT)'s D.O. Letter No. 279/Misc/462008-ITJ dt. 2nd May, 2008".
Thus on the facts of the case and position of law in view of said judgments the assessee is entitled to claimed deduction u/s 80IB(10) and it is prayed that same may be allowed to the assessee.
4.7 In connection with finding of Ld. A.O. that assessee has not submitted evidence for completion of project within specified period of four years from the end of financial year in which project was approved by the local authority , 24 ITA No. 448/JP/2013 The DCIT, Circle- 2, Jaipur vs. Shri Prem Kumar Sanghi it is submitted that housing project of assessee was approved by JDA on 30-6- 2005 and as per provisions of Section 80IB(10) the project was to the completed within five years from the end of the financial year in which the Housing project is approved by the local authority. The fact of date of approval of project is admitted by Ld. A.O. in para 4.10 of assessment order. Thus the required date of completion of housing project is 31-3-2011as per provisions of section 80IB(10)(a)(iii) inserted by Finance Act, 2010 and not 31-3-2010 as held by Ld. A.O. (also refer ITAT Bangalore Bench Judgement in case of RNS Infrastructure P. Ltd. (2012) 24 Taxman.com (copy placed on record). In any case none of these dates falls in this assessment year 2009-10.
4.8 The assessee declared the profits of housing project on 'percentage completion method' i.e. the profits on sale of flats declared in the year in which the same were transferred by way of sale within the meaning of Section 2(47) of I. T. Act, 61 and on not on project completion method and thus for the assessment pertaining to year ended on 31-3-2009 he was not required to submit completion certificate when housing project was to be completed by 31-3-2011 and completion certificate by local authority was to be issued thereafter. This view has been taken by CBDT in its instruction No. 4 of 2009 dated 30-6-2009 which was cited before Ld. A.O. but the same were not applied in its right perspective holding that completion certificate not filed even in assessment proceedings. It is submitted that the A.O. is to satisfy whether project completed 25 ITA No. 448/JP/2013 The DCIT, Circle- 2, Jaipur vs. Shri Prem Kumar Sanghi in time or not which of course can be from completion certificate issued by local authority and when completion certificate is yet to be issued by local authority the A.O. cannot arrive such satisfaction without any material on record. The Ld. A.O. is thus unjustified in not applying these CBDT instruction for AY 2009-10. The assessee completed the housing project within the prescribed time and applied for completion certificate to JDA on 28-12-2009 i.e. soon after completion of housing project on 25-12-2009 but on that application JDA took no there was no prescribed procedure with JDA to issue completion certificates to Housing projects and detailed procedure adopted involves lot of time in issuing certificate termed by JDA as occupancy certificate. The assessee sent last reminder to JDA on 19-03-2012 (P.B. Page 61) and thereafter JDA in its BPC Committee No. 127 on 30-11-2012 approved (copy on record no-
objection for issue of completion certificate (occupancy certificate). In case of D.K. Construction Vs. ACIT (2010 ) 17 TTJ 1 (Indore) (copy on record) it is held that date of issue of Completion Certificate is not crucial but date of completion of project is relevant, therefore, delay in obtaining the certificate will not affect adversely the assessee because the assessee can only apply within prescribed time and the powers of issuance of certificate lies with the authorities. If there is any delay on the part of authorities the assessee should not be penalized when in the certificate date of completion is clarified. A similar view has been taken by same Bench in case of Global Reality Vs. I.T.O. (2012) 134 ITD 408 following the said judgement. In case of RNS Infrastructure Ltd.
26 ITA No. 448/JP/2013The DCIT, Circle- 2, Jaipur vs. Shri Prem Kumar Sanghi Vs. DCIT (Bang. Bench) (2012) 24 Taxman.com reported at part - I of 138 ITD (copy submitted) it has been held that where assessee completed housing project within the time prescribed merely because 'occupancy certificate' was issued beyond stipulated date, it could not vitiate claim u/s 80IB(10). In view of the above facts of the case and position of law the Ld. A.O. erred in law and on facts in denying the assessee's claim of deduction u/s 80IB(10) in all these years. Ld. CIT(A) has appreciated all the relevant facts, legal provisions and applicable judicial precedents while allowing the deduction u/s 80IB(10) in all these years, there being no infirmities in his orders the deserve to be upheld.
4.9 We have heard the rival contentions and perused the material available on record. As the facts emerge, the assessee undertook various activities from inception over a long period of time which included:-
i. Undertaking the comprehensive and fundamental tedious process of getting the land converted for residential use from competent authorities and obtaining patta from JDA for its residential use; ii. Coordination, compliance and meeting the lengthy queries about sanction of plan for development and construction of housing project on the impugned land from local authority which is undisputedly carried over by assessee over a period of time. These activities are fundamental and crucial for development of housing project. There is no dispute on these glaring facts. iii. Making the impugned land usable for the purpose the permission of development of housing construction by providing proper road and easy approach to the site which is precondition for sanction of plan. This work has been done by the assessee.
iv. Assessee had not transferred the land to M/s UDB (Reality) and as per agreement retained the rights of jointly supervising the development and construction of the impugned housing project.27 ITA No. 448/JP/2013
The DCIT, Circle- 2, Jaipur vs. Shri Prem Kumar Sanghi v. The assessee apart from the said rights of supervision retaining the rights of transferring the flats falling in his share in the name of prospective purchasers.
Since the project was big, it falls well within the commercial expediency that the project is jointly developed. Therefore, assessee's endeavor of making a joint venture with M/s UDB (Reality) cannot be looked at with suspicion. It is settled law that the revenue authorities should not step into the shoes of a businessman and decide on their own perception what, when and how a businessman should conduct his business. Be that as it may, the joint development agreement has not been doubted by ld. AO. The impression carried by ld. AO is to the effect that assessee has merely transferred his land and the income derived from sale of flats is not eligible for deduction u/s 80IB. Besides the case of Radhey Developers (supra) is relied to disentitle the assessee. The facts of that case have been succinctly delineated above which in our considered opinion are distinct from assesses facts inasmuch as there is no doubt that assessee was owner of the land in question, undertook various activities for conversion of land user, tedious activities for approval for development of housing project and constructing the approach road which was mandatory for development permissions. All the approvals, permissions and completion certificates are in the name of assessee. All this copious evidence available on record and filed in paper book along with detailed written submissions supports the contentions and claim of the assessee. In our considered view the following 28 ITA No. 448/JP/2013 The DCIT, Circle- 2, Jaipur vs. Shri Prem Kumar Sanghi judicial precedents which are on similar facts as that of assessee support the eligibility of his claim u/s 80 IB(10) in all these years:-
''Jaipur ITAT in the case of M/s Indo Continental Hotels & Resorts Ltd.(supra) held that the approval of project was granted Gaziabad Development Authority in the name of assessee M/s Indo Continental Hotels & Resorts Ltd. i.e. assessee and not in the name of M/s Parswanath Developer, therefore it cannot be said that assessee was only a name lender in the development of housing development project. The agreement entered by assessee with M/s Parswanath Developers provided that assessee will participate in the Housing Project and will do the necessary work assigned to it. After completion of the Project, the profit ratio was shared in the ratio of 1/3rd and 2/3rd in this case it is 46% and 56%.. No doubt, assessee did not do any marketing activity as it was assigned to M/s PDL, and thereafter flats were sold in the market and profits were shared in terms of agreed ratio. ITAT held that all these facts and circumstances amply proved that assessee indulged in developing of the Housing Project and was eligible for claim u/s 80 (IB).'' In our considered view the facts and circumstance of M/s Indo Continental Hotels are similar to assessee's case and being a judgment of this bench only deserves to be followed. Hon'ble Karnataka High Court in case of CIT Vs. Shravanee Construction had occasion to decide the eligibility of claim u/s 80(IB) on similar facts. Hon'ble court held that - contention of the revenue that there is no eligibility to deduction u/s 80 (IB) as assessee did not undertake any developmental or building activity has no substance. That is not the requirement of law and keeping in mind, the object with which this provision is introduced when all persons who have made investments in this housing project and have complied with all the conditions prescribed under the aforesaid provision, both of them are entitled to hundred percent benefit of tax deduction as provided 29 ITA No. 448/JP/2013 The DCIT, Circle- 2, Jaipur vs. Shri Prem Kumar Sanghi under the said provision". Similar view has been taken by other judicial authorities as under:
i. Abdul Khader Vs. ACIT (2012) 137 ITD 188(Bang) ii. Kura Homes P. Ltd. Vs. I.T.O. (2012) 139 ITD 460(Hyd) iii. D.K. Construction Vs. ACIT (2010 ) 17 TTJ 1 (Indore) iv RNS Infrastructure Ltd. Vs. DCIT (Bang. Bench) (2012) 24 Taxman.com Hon'ble Karnataka High Courts clear judgment in Shravanee Construction (supra) besides correctly interpreting provisions of sec 80 (IB) has thrown guiding light on legislative purpose in incorporating the eligibility of this deduction, dispels doubts which are raised by ld. AO following Radhey Developers judgment, which is on deferent facts. Jaipur ITAT in M/s Indo Continental Hotels judgment (supra) also has adopted same view, as taken by Hon'ble Karnataka High Courts in Shravanee Construction '(supra). It has been held that if the development plans and other approvals are in the name of assessee, its claim for deduction u/s 80(IB) cannot be denied on the basis that some other agency was involved in construction. This is quite understandable as for all practical purposes, the assessee retains the status of a developer of housing project in the record of JDA, other concerned regulatory laws and agencies of govt. related to housing and urban development and I T department takes a view which is at variance with concerned govt. departments. This leads 30 ITA No. 448/JP/2013 The DCIT, Circle- 2, Jaipur vs. Shri Prem Kumar Sanghi to an anomalous situation of contradiction amongst the govt. departments, which has been duly addressed by Hon'ble Karnataka High Court. Respectfully following these judgments which are on similar facts, we are inclined to hold that assessee is eligible for claim u/s 80 (IB)(10). In the facts and circumstances mentioned in details above and respectfully following these judicial precedents, we find no infirmity in the orders of ld. CIT(A) for the impugned assessment years. Consequently the impugned orders of ld. CIT(A) are upheld.
5.0 In the results, revenue's appeals and assessee's C.O. stand dismissed.
Order pronounced in the open court on 04 /12/2015.
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1. vihykFkhZ@The Appellant- The DCIT , Circle- 2, Jaipur
2. izR;FkhZ@ The Respondent- Shri Prem Kumar Sanghi, Jaipur
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6. xkMZ QkbZy@ Guard File (ITA No.448/JP/2013) vkns'kkuqlkj@ By order, lgk;d iathdkj@ Assistant. Registrar