2013 (5) TMI 871 - AT - Income Tax

Summary

Issues Involved:
1. Deduction u/s 80IB(10) of the Income Tax Act, 1961.
2. Compliance with conditions prescribed in Section 80IB(10)(a)(i), (b), and (d).

Summary:

Issue 1: Deduction u/s 80IB(10) of the Income Tax Act, 1961

The common issue in the cross-appeals pertains to the assessee's claim for deduction u/s 80IB(10) amounting to Rs. 15,95,015/-. The Assessing Officer (AO) denied the claim on the grounds of non-compliance with conditions in clauses (a)(i), (b), and (d) of Section 80IB(10).

Issue 2: Compliance with Section 80IB(10)(a)(i)

The AO argued that the project was approved before 01.04.2004 and should have been completed by 31.03.2008, which was not done. The CIT(A) upheld this objection. However, the Tribunal noted that the requirement for completion by 31.03.2008 was introduced by the Finance (No.2) Act, 2004, effective from 01.04.2005, and did not apply retrospectively. The Tribunal referenced the Hon'ble Madras High Court's decision in CIT vs. Jain Housing & Constructions Ltd., which supported the assessee's position. Consequently, the Tribunal set aside the CIT(A)'s order and directed the AO to allow the deduction.

Issue 3: Compliance with Section 80IB(10)(b)

The AO contended that the plot size was less than one acre. The Tribunal, referencing its earlier decision in the assessee's own case for assessment years 2003-04 and 2004-05, held that the plot size was indeed one acre, thus complying with Section 80IB(10)(b). The CIT(A)'s decision to uphold the assessee's plea on this ground was affirmed.

Issue 4: Compliance with Section 80IB(10)(d)

The AO claimed that the built-up area of shops and commercial establishments exceeded the prescribed limit. The Tribunal, citing its previous decision and the Hon'ble Bombay High Court's ruling in CIT vs. Brahma Associates, concluded that the amended clause (d) effective from 01.04.2005 did not apply to the assessee's project approved before this date. The CIT(A)'s decision to negate the AO's objection was upheld.

Conclusion:

The appeal of the assessee is allowed, and the appeal of the Revenue is dismissed. The Tribunal directed the AO to allow the deduction u/s 80IB(10) as claimed by the assessee.

Order pronounced in the open Court on 23rd May, 2013.