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Issues involved: Appeal against disallowance of deduction u/s 80IB(10) for housing project including commercial establishments.
Summary: Issue 1: Allowance of deduction u/s 80IB(10) for housing project with commercial establishments The appeal by the Revenue contested the allowance of deduction u/s 80IB(10) disallowed by the A.O. but granted by the CIT(A) for a housing project named Ravindra Arcade. The A.O. disallowed the claim due to the presence of commercial establishments exceeding the permissible limit. However, the CIT(A) held that the deduction was allowable for the entire project as the commercial shops were less than 5% of the housing project. The Revenue argued that the assessee was not eligible for the deduction post the statutory amendment w.e.f. 01.04.2005. The ITAT considered the issue in light of previous cases and upheld the CIT(A)'s decision based on the approval of the project before the specified date, rejecting the Revenue's grounds. Issue 2: Judicial precedents supporting deduction u/s 80IB(10) The ITAT referred to the case of Saroj Sales Organization where it was held that separate housing projects with distinct characteristics should not be combined to deny statutory relief. The High Court upheld this decision, emphasizing that the benefit under section 80IB(10) is not restricted to residential units only, and the amendment regarding shops and commercial establishments does not have retrospective application. As the ITAT's order was upheld by the High Court, the Revenue's appeal was dismissed, affirming the allowance of deduction u/s 80IB(10) for the housing project. In conclusion, the appeal by the Revenue was dismissed, and the order of the CIT(A) granting deduction u/s 80IB(10) for the housing project with commercial establishments was upheld based on judicial precedents and statutory provisions.
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