Commissioner Of Income Tax, Bikaner v. This Appeal Has Been Preferred By The Appellantagainst The Order Dated 13.8.2018 Passed By The Incometax Appellate Tribunal, Jodhpur Bench Jodhpur (For Short‘th

HIGH COURT OF JUDICATURE FOR RAJASTHAN ATJODHPUR D.B. Income Tax Appeal No. 42/2019 Commissioner of Income Tax, Bikaner Versus ----Appellant Smt. Seema Fulfagar, D/o Shri Paras Mal Kothari, Pincha Street,Nokha, Dist :- Bikaner (Rajasthan) ----Respondent For Appellant(s) : Mr. K.K. Bissa, Mr. Gajendra SinghChouhan HON'BLE MR. JUSTICE VIJAY BISHNOI HON'BLE MR. JUSTICE ANOOP KUMAR DHAND 15/11/2021 Judgment / Order This appeal has been preferred by the appellantagainst the order dated 13.8.2018 passed by the IncomeTax Appellate Tribunal, Jodhpur Bench Jodhpur (for short‘the ITAT’). Brief facts of the case are that the assessee, whowas having land at Sriperumbudur, Chennai, entered in ajoint venture with a company known as Prince FoundationPrivate Limited (for short ‘the company’) to develop residential flats on the land belonging to her. According tothe agreement entered in between the assessee and thecompany, the assessee was entitled to 20% of the superbuilt area after completion of the project in lieu of theland offered by the assessee and her active participationin obtaining clearances, building approach road, makingthe land conducive for the construction, supervision andpromotion of the project. After construction of the flatson the land, the assessee along with one Shri JethmalJain were allocated 84 flats. Thereafter, the assessee andShri Jethmal Jain had executed conveyance deed infavour of the respective purchasers. After completion ofthe project, the joint venture accounts were settled andthe assessee was given a sum of Rs.7,95,00,000/- afterdeducting expenses in lieu of her share of super built uparea. While filing returns, the assessee claimed deductionin respect of Rs.7,95,00,000/- under Section 80IB of theIT Act, 1961 (for short ‘the Act of 1961’) in respect of theproject jointly undertaken by her with the builder,however, the Assessing Officer had refused the assessee’sclaim of deduction. The assessee has preferred an appeal before theCommissioner of Income Tax (Appeals), Bikaner (forshort ‘the CIT(A)’), which came to be dismissed on (3 of 6) 3.1.2018. Being aggrieved with the same, the assesseepreferred appeal before the ITAT, which came to beallowed by the order dated 13.8.2018, against which, theappellant has preferred the instant appeal. Learned counsel for the appellant has argued that the ITAT has grossly erred in allowing deduction underSection 80IB of the Act of 1961 to the assessee withouttaking into consideration the fact that she was notinvolved in development and construction of the housingproject. It is submitted that the Assessing Officer as wellas the CIT(A) after carefully gone through the evidencehas rightly held that the assessee is not entitled fordeduction under Section 80IB of the Act of 1961 as shewas not at all involved in the project in any manner.Learned counsel for the appellant, thus, prayed that theimpugned order passed by the ITAT may be set aside. The revenue has proposed the following substantialquestion of law in the matter :- “Whether on the facts and in thecircumstances of the case, the learned ITATwas justified in allowing relief ofRs.7,95,00,000/-byholdingliberalinterpretation of the provisions of section80IB of the IT Act, 1961?” Heard learned counsel for the appellant and gonethrough the material available on record. under :- The revenue has proposed the following substantialquestion of law in the matter :- “Whether on the facts and in thecircumstances of the case, the learned ITATwas justified in allowing relief ofRs.7,95,00,000/-byholdingliberalinterpretation of the provisions of section80IB of the IT Act, 1961?” Heard learned counsel for the appellant and gonethrough the material available on record. under :- “47. It is clear from the above findings andobservation that the Id. AO and CIT(A) withoutexamining all the documents, affirmations, inthe true prospective as well as not coming toterms with the changing and evolving groundrealities kept on harping that the assessee wasmerely a land owner and her role was to signthe documents. The Id. AO winked over thename of assessee only on the land patta, chitha,adangal which tantamount to conversion asdiscussed in detail in the preceding paras.Further the Id. AO also turned a blind eye to theaddress of the assessee being mentioned on theNOC for construction, which clearly signifies thatthe same was applied and obtained by theassessee. The NOC has given recognition to thestatus of company being bestowed with civilconstruction responsibility contained its name. Ifthe company had obtained the NOC it wouldhave borne the name of company itself. 48. In view of the foregoing, we observe that theassessee is an integral part of the developmentand construction activities. The assessee is notmerely the land owner who had agreed to partwith the land. Normally, once the land istransferred to the developer, the developer doesthe entire activity, whereas in the instant case,the assessee as mentioned above, has also doneadditional activities, which are integral parts todevelop the project. Therefore, it was held in thejudgment of Sharvanee Construction that theassessee is entitled to the benefit of tax underthe aforesaid provisions. The contention of theassessee is fortified by the following judicialpronouncements in the case of M/s ShravaneeConstruction is parimateria to that of theassessee. The ration of the decision is fully andsquarely applicable on the instant case of theappellant. Like in the case of M/s ShravaneeConstruction the appellant also activelyparticipated in the development work and eligiblefor deduction u/s 80IB of the IT Act. The case of the assessee is also covered by the ratio ofdecision pronounced in the case of Mr. AbdulKhader, Bangalore vs ACIT on 13 April, 2012 ITANo.57/Bang/2011 in which it was held that it wasalso clear from the joint development agreementthat the undertaking of developing and buildinghousing project was jointly undertaken by theassessee and M/s Reddy Structures Pvt. Ltd.,therefore, the assessee was entitled for thebenefit of deduction u/s 80IB(10) of the Act.From the record we found that the assessee hadpurchased land at Sriperumudur along withSh. Jethmal Sancheti on 17.07.2006. Both ofthem contributed land and were involved indevelopment and construction of the project. Allthe documents which mention the name of theassessee in relation to the project work alsocontain the name of Sh. Jethmal Sancheti. He isassessed to tax at Silchar. The assessment in hiscase was completed under section 143(3) of theIT Act by granting the deduction under section80IB(10) of the IT Act in relation to the incomederived from the housing project. Later on thejurisdictional commissioner of income taxinitiated the revisional proceeding under section263 of the IT Act. After due examination, thehon’ble commissioner held the claim fordeduction in order and did not disturb the findingof the AO. The case of the assessee is identicalwith that of Sh. Jethmal Sancheti. It is also notthe case of Department that full deductionu/s.80IB (10) has been given to M/s. PrinceFoundation Limited. The Prince FoundationLimited has claimed deduction only to the extentof profit attributable to its share of super built uparea after completion of the project. 20% shareof built up areas since belongings to the assesseeas per the joint venture agreement, the assesseehas claimed deduction only to this extent,therefore, there is no reason to declineassessee’s claim for deduction with respect to hershare of super built up area which amounts toRs. 7,95,50,498/-. Furthermore, the issue issquarely covered by the decision of Hon’bleKarnataka High Court in case of M/s ShravaneeConstruction. No contrary decision was placed onrecord by learned AR or by any of the lower authorities so as to suggest that assessee is notentitled to deduction with respect to her share inbuilt up area.” From the above findings of the ITAT, it is clear that the assessee has actively participated in completing theproject and was not merely a land owner. The KarnatakaHigh Court in its order dated 28.2.2012 passed in ITANo.421/09 - CIT Vs. M/s Shravanee Construction,while dealing with the similar circumstances, has heldthat the assessee is entitled for deduction under Section80IB of the Act of 1961. In view of the categorical findings recorded by theITAT and after carefully scrutinizing the material availableon record, we do not find any case for interference in theimpugned order passed by the ITAT and also do not findany substantial question of law requiring adjudication bythis Court while exercising powers under Section 260A ofthe Act of 1961. Resultantly, this appeal being devoid of any force ishereby dismissed summarily. (ANOOP KUMAR DHAND),J (VIJAY BISHNOI),J