9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2013 (11) TMI 1641 - AT - Income TaxDeduction u/s 080IB - clause (d),inserted to the section 801B(10) with effect from 01/04/2005, was prospective and not retrospective and hence could not be applied to the period prior to 01/04/2005,that the restriction imposed by the introduction of sub-section(d) to section 801B(10) w. e, f. 1.4.2005 were therefore not applicable to the assessee as his project having commercial area was approved as well as commenced prior to the said date, that deduction u/s. 80IB(10) would be available to the housing projects irrespective of the fact that project was approved as a housing project or approved as residential with shopline ,that as long as the housing project was as per the Development Control Regulations of the local authority the assessee could not be denied the deduction u/s. 80 IB(l0)
Issues Involved:
1. Eligibility for deduction under Section 80IB(10) based on the decision in CIT vs. Brahma Associates. 2. Application of the limit on the built-up area of commercial establishments under Section 80IB(10)(d) retrospectively. 3. Entitlement to deduction under Section 80IB(10) considering the statutory limitation on commercial area. Issue-wise Detailed Analysis: 1. Eligibility for Deduction Under Section 80IB(10): The Assessing Officer (AO) challenged the eligibility of the assessee for deduction under Section 80IB(10), relying on the decision of the Bombay High Court in CIT vs. Brahma Associates. The AO argued that the commercial area in the assessee's housing project exceeded the prescribed limit, thus disqualifying it from the deduction. However, the First Appellate Authority (FAA) and the ITAT held that the project, approved before the amendment on 01/04/2005, was eligible for the deduction. The FAA referenced the Brahma Associates case, which allowed deductions for projects approved before the amendment, even if they contained commercial areas. 2. Retrospective Application of Section 80IB(10)(d): The AO contended that the amended provisions of Section 80IB(10)(d), effective from 01/04/2005, applied retrospectively to the assessee's project, which commenced prior to this date. The FAA and ITAT disagreed, stating that the amendment was prospective. They cited the Brahma Associates ruling, which clarified that the restriction on commercial area was not applicable to projects approved before the amendment date. The ITAT further supported this view with decisions from other judicial bodies, emphasizing that the amendment could not be applied retrospectively. 3. Limitation on Commercial Area in Housing Projects: The AO disallowed the deduction, arguing that the commercial area in the assessee's project exceeded the statutory limit of 5% or 2000 sq. ft., whichever was less. The FAA and ITAT, however, upheld that the limitation introduced by the amendment was not applicable to projects approved before 01/04/2005. They referenced multiple judicial decisions, including the Brahma Associates case, which supported the view that the restriction on commercial area was prospective. The ITAT also considered judgments from the Gujarat and Karnataka High Courts, which reinforced that amendments to Section 80IB(10) were not retrospective and thus did not affect projects approved before the amendment. Conclusion: The ITAT dismissed the AO's appeal, affirming that the assessee's project, approved before the amendment date, was eligible for deduction under Section 80IB(10) without the retrospective application of the commercial area limitation. The judgment relied heavily on the precedent set by the Brahma Associates case and other supporting judicial decisions, ensuring the interpretation of the law favored the assessee in line with the legislative intent.
|
