IN INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR BEFORE: SHRI KUL BHARAT, JM & SHRI VIKRAM SINGH YADAV, AM ITA No. 216/JP/2016 Assessment Year : 2012-13. Dy. Commissioner of Income Tax, Shri Prem Sanghi, Circle-2, Vs. 137, M.I. Road, Panch Batti, Jaipur. Jaipur. PAN No. AGWPS 9875 R Appellant Respondent Revenue by : Smt. Roshanta Meena (JCIT) Assessee by : Shri G.G. Mundra (CA) Date of Hearing : 19.10.2016. Date of Pronouncement : 21/10/2016. ORDER PER SHRI KUL BHARAT, JM. This appeal by revenue is directed against order of ld. CIT (A)-I, Jaipur dated 29.12.2015 pertaining to A.Y. 2012-13. revenue has raised following grounds of appeal :- i. Whether on facts and in circumstances of case and in law ld. CIT (A) has erred in allowing deduction/s 80IB to assessee who entered into development agreement as land owner and has not undertook development & construction of housing project. ii. Whether on facts and in circumstances of case and in law of developing and building housing projects and not to individual who entered into development agreement as owner of land. iii. Whether on facts and in circumstances of case and in law ld. CIT (A) has erred in allowing deduction u/s 80IB to assessee when completion certificate of project was not furnished by assessee as required in clause (ii) of explanation below section 80IB (10)(a) of Act. 2 ITA No. 216/JP/2016 Shri Prem Sanghi, Jaipur. 2. Briefly stated facts of case are that case of assessee picked up for scrutiny assessment and assessment under section 143(3) of Income Tax Act, 1961 (hereinafter referred to as Act) was framed vide order dated 09.03.2015. While framing assessment, AO disallowed claim of deduction of Rs. 96,24,923/- under section 80IB(10) of Act. assessee aggrieved by this order, preferred appeal before ld. CIT (A), who after considering submissions and following decision of Coordinate Bench of Tribunal in assessee s own case for assessment years 2009-10, 2010-11 and 2011-12 allowed deduction. 3. Aggrieved, revenue has filed present appeal. 4. ld. D/R has supported order of A.O. 4.1. On contrary, ld. Counsel for assessee reiterated submissions as made in written submission and at outset submitted that issue is squarely covered in favour of assessee by decision of Coordinate Bench in assessee s own case pertaining to A.Ys 2009-10, 2010-11 and 2011-12 in ITA Nos. 448/JP/2013, 782/JP/2014 and 783/JP/2014. ld. Counsel submitted that identical grounds were raised by revenue in these assessment years which have been decided in favour of assessee. 4.2. We have heard rival contentions and perused material available on record. revenue in assessment year 2009-10 has raised identical grounds as reproduced by Coordinate Bench in ITA No. 448/JP/2013 as under :- i. Whether on facts and in circumstances of case and in law ld. CIT (A) has erred in allowing deduction/s 80IB to 3 ITA No. 216/JP/2016 Shri Prem Sanghi, Jaipur. assessee who entered into development agreement as land owner and has not undertook development & construction of housing project. ii. Whether on facts and in circumstances of case and in law deduction u/s 80IB is allowable only to undertaking involved in business of developing and building housing projects and not to individual who entered into development agreement as owner of land. iii. Whether on facts and in circumstances of case and in law ld. CIT (A) has erred in allowing deduction u/s 80IB to assessee when completion certificate of project was not furnished by assessee as required in clause (ii) of explanation below section 80IB (10)(a) of Act. We find that Coordinate Bench after considering submissions of assessee has decided issue as under :- 4.9 We have heard rival contentions and perused material available on record. As facts emerge, assessee undertook various activities from inception over long period of time which included:- i. Undertaking comprehensive and fundamental tedious process of getting land converted for residential use from competent authorities and obtaining patta from JDA for its residential use; ii. Coordination, compliance and meeting lengthy queries about sanction of plan for development and construction of housing project on impugned land from local authority which is undisputedly carried over by assessee over period of time. These activities are fundamental and crucial for development of housing project. There is no dispute on these glaring facts. iii. Making impugned land usable for purpose permission of development of housing construction by providing proper road and easy approach to site which is precondition for sanction of plan. This work has been done by assessee. 4 ITA No. 216/JP/2016 Shri Prem Sanghi, Jaipur. iv. Assessee had not transferred land to M/s UDB (Reality) and as per agreement retained rights of jointly supervising development and construction of impugned housing project. v. assessee apart from said rights of supervision retaining rights of transferring flats falling in his share in name of prospective purchasers. Since project was big, it falls well within commercial expediency that project is jointly developed. Therefore, assessee s endeavor of making joint venture with M/s UDB (Reality) cannot be looked at with suspicion. It is settled law that revenue authorities should not step into shoes of businessman and decide on their own perception what, when and how businessman should conduct his business. Be that as it may, joint development agreement has not been doubted by ld. AO. impression carried by ld. AO is to effect that assessee has merely transferred his land and income derived from sale of flats is not eligible for deduction u/s 80IB. Besides case of Radhey Developers (supra) is relied to disentitle assessee. 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 land in question, undertook various activities for conversion of land user, tedious activities for approval for development of housing project and constructing approach road which was mandatory for development permissions. All approvals, permissions and completion certificates are in name of assessee. All this copious evidence available on record and filed in paper book along with detailed written submissions supports contentions and claim of assessee. In our considered view following judicial precedents which are on similar facts as that of assessee support eligibility of his claim u/s 80 IB(10) in all these years:- Jaipur ITAT in case of M/s Indo Continental Hotels & Resorts Ltd.(supra) held that approval of project was granted Gaziabad Development Authority in name of assessee M/s Indo Continental Hotels & Resorts Ltd. i.e. assessee and not in name of M/s Parswanath Developer, therefore it cannot be said that assessee was only name lender in development of housing development project. agreement entered by assessee with M/s Parswanath 5 ITA No. 216/JP/2016 Shri Prem Sanghi, Jaipur. Developers provided that assessee will participate in Housing Project and will do necessary work assigned to it. After completion of Project, profit ratio was shared in 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 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 Housing Project and was eligible for claim u/s 80 (IB). In our considered view facts and circumstance of M/s Indo Continental Hotels are similar to assessee s case and being 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 eligibility of claim u/s 80(IB) on similar facts. Hon ble court held that - contention of 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 requirement of law and keeping in mind, object with which this provision is introduced when all persons who have made investments in this housing project and have complied with all conditions prescribed under aforesaid provision, both of them are entitled to hundred percent benefit of tax deduction as provided under 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 eligibility of this deduction, dispels doubts which 6 ITA No. 216/JP/2016 Shri Prem Sanghi, Jaipur. 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 development plans and other approvals are in name of assessee, its claim for deduction u/s 80(IB) cannot be denied on basis that some other agency was involved in construction. This is quite understandable as for all practical purposes, assessee retains status of developer of housing project in record of JDA, other concerned regulatory laws and agencies of govt. related to housing and urban development and I T department takes view which is at variance with concerned govt. departments. This leads to anomalous situation of contradiction amongst 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 facts and circumstances mentioned in details above and respectfully following these judicial precedents, we find no infirmity in orders of ld. CIT(A) for impugned assessment years. Consequently impugned orders of ld. CIT(A) are upheld. ld. D/R has not pointed out any contrary binding precedent, therefore, taking consistent view of matter, we do not see. any infirmity in order of ld. CIT (A), same is hereby upheld. ground raised by revenue in this appeal is dismissed. 2. In result, appeal of revenue is dismissed. Order pronounced in open court on 21/10/2016. Sd/- Sd/- fo e flag ;kno ( dqy Hkkjr) (VIKRAM SINGH YADAV) ( KUL BHARAT ) ys[kk lnL;@Accountant Member U;kf;d lnL;@Judicial Member Jaipur Dated:- 21 /10/2016. Das/ 7 ITA No. 216/JP/2016 Shri Prem Sanghi, Jaipur. vkns'k dh izfrfyfi vxzsf"kr@Copy of order forwarded to: 1. Appellant- DCIT, Circle-2, Jaipur. 2. Respondent- Shri Prem Sanghi, Jaipur. 3. CIT(A). 4. CIT, 5. DR, ITAT, Jaipur 6. Guard File (ITA No. 216/JP/2016) vkns'kkuqlkj@ By order, lgk;d iathdkj@ Assistant. Registrar Dy. Commissioner of Income-tax, Circle-2, Jaipur v. Prem Sanghi