Case Law Details
Pr. CIT Vs Green Associates (Gujarat High Court)
Assessee had claimed deduction in respect to the income arising out of such activity under section 80IB (10) of the Income Tax Act. The Assessing Officer disallowed the claim mainly on the ground that the assessee was not the owner of the land and the approval of the project was not in the name of the assessee. The issue ultimately reached the Tribunal where the Revenue also contended that the assessee had not sold the residential spouse in the housing project but had sold the residential plots with construction upto plinth level. The assessee therefore cannot be considered as a developer of a housing project but was mere a contractor. The Tribunal followed its earlier judgment in case of similar assessee and confirmed the decision of CIT (A) allowing the claim.
Various issues arising out of the claim of different assesses under section 80IB (10) of the Act came to be thrashed out by a Division Bench judgment of this Court in case of Commissioner of Income Tax vs. Radhe Developers, reported in 341 ITR 403. The Court took note of various development agreements executed by the assessee in favour of individuals claiming that they had been engaged in the activity of housing development. Revenue’s contention, that the nature of activities carried on by the assessees would only qualify them to be the contractors executing works contract, was also considered. It was held that the assessee had undertaken the development of housing project at their own risk and cost. The owner of the land had accepted the full price of the land. He was therefore not concerned with the successor or failure of the housing project. In such background, reference was made to the definition of term “transfer” under section 2(47) of the Act and held that merely because the land was held by the original owner when the housing development project was executed, would not be detrimental to the assessee’s claim of deduction under section 80IB(10) of the Act.
FULL TEXT OF THE HIGH COURT ORDER / JUDGMENT
Revenue is in appeal against the judgment of the Income Tax Appellate Tribunal, Ahmedabad [“Tribunal” for short] dated 14th March 2018. The following questions are presented for our consideration:-
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