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Case Law Details

Case Name : DCIT Vs Sahara India Sahkari Awas Samiti Ltd. (ITAT Delhi)
Appeal Number : ITA Nos.2481 & 2482/Del/2011
Date of Judgement/Order : 19/07/2021
Related Assessment Year : 2005-06
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DCIT Vs Sahara India Sahkari Awas Samiti Ltd. (ITAT Delhi)

In DCIT v. Sahara India Sahkari Awas [ITA Nos.2481 & 2482/Del/2011 and CO Nos.221 & 222/Del/2011 decided on July 19, 20201] Sahara India Sahkari Awas (Respondent), a cooperative society of Sahara India group and is engaged in the business of development and construction of residential and commercial units had executed a developer agreement with M/s Sahara India Commercial Corporation Ltd. (“SICCL”).

The assessing officer, while concluding the assessment proceedings observed that, the Respondent is not eligible to claim the deduction under section 80IB(10) of the Income Tax Act, 1961 (IT Act) since it does not fulfil the conditions laid down in the said section. Further, observed that the Respondent is not a ‘developer’ so as to avail the benefit of the provision.

The Hon’ble Income Tax Appellate Tribunal, Delhi observed that the condition of the developer was decided and allowed in the initial years of claim. Therefore, without disturbing the assessment for the initial assessment year it is not open to the Revenue to make disallowance of such deduction in the subsequent years by taking a contrary stand.

Further, merely appointing SICCL as a contractor for the development and construction of the project cannot lead to the conclusion that the said activities were not carried on by the Respondent. Since the Respondent is bearing the entire risks and responsibilities relating to the project and SICCL was appointed only to execute the project.

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