9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2016 (6) TMI 482 - AT - Income TaxEntitlement for claiming deduction u/s 80IB(10) - commercial area of the project exceeded 2000 sq.ft as laid down in section 80IB(10)(d) - Held that - We find that the issue under appeal is covered by the decision of the Hon ble Supreme Court in the case of CIT vs Sarkar Builders 2015 (5) TMI 555 - SUPREME COURT wherein held the housing project contemplated under sub-section (10) of Section 80IB includes commercial establishments or shops also. Now by way of an amendment in the form of Clause (d) an attempt is made to restrict the size of the said shops and/or commercial establishments. Therefore by necessary implication the said provision has to be read prospectively and not retrospectively. As is clear from the amendment this provision came into effect only from the day the provision was substituted. Therefore it cannot be applied to those projects which were sanctioned and commenced prior to 01.04.2005 and completed by the stipulated date though such stipulated date is after 01.04.2005. Thus High Court was correct in allowing the exemption to assessee in present case since this amendment is prospective and has come into effect from 01.04.2005 this condition would not apply to those housing projects which had been sanctioned and started earlier even if they finished after 01.04.2005 as that of assessee. Also see Veena Developers 2015 (5) TMI 193 - SUPREME COURT - Decided in favour of assessee.
Issues Involved:
1. Entitlement of the assessee to claim deduction under section 80IB(10) of the Income Tax Act, 1961. 2. Applicability of the amendments to section 80IB(10) brought by the Finance (No.2) Act 2004. 3. Assumption of jurisdiction under section 147 of the Income Tax Act, 1961. Detailed Analysis: 1. Entitlement of the Assessee to Claim Deduction Under Section 80IB(10): The primary issue in the appeals was whether the assessee was entitled to claim deduction under section 80IB(10) of the Income Tax Act, 1961. The assessee had claimed deductions for two housing projects, which included commercial areas exceeding the limits prescribed by the amendment introduced by the Finance (No.2) Act 2004, effective from AY 2005-06. The Assessing Officer (AO) disallowed the deduction, arguing that the commercial area exceeded the permissible limit of 2000 sq. ft., thus making the project ineligible for the deduction under the amended section 80IB(10). 2. Applicability of the Amendments to Section 80IB(10): The CIT(A) and the Tribunal had to determine whether the amendments to section 80IB(10) were retrospective or prospective. The CIT(A) relied on the Special Bench of Pune ITAT in Brahma Associates Vs. JCIT and the Mumbai High Court's decision, which held that the amendments were prospective and applicable only from AY 2005-06. The CIT(A) observed that prior to AY 2005-06, there was no statutory restriction on the commercial area within a housing project. Therefore, the assessee's claim for deduction for AY 2004-05 was valid as the project met all conditions applicable at that time. 3. Assumption of Jurisdiction Under Section 147: The cross objections raised by the assessee concerned the AO's assumption of jurisdiction under section 147 of the Act. However, since the main issue was settled in favor of the assessee on merits, the cross objections were not pressed. Tribunal's Conclusion: The Tribunal upheld the CIT(A)'s decision, noting that the issue was covered by the Supreme Court's ruling in CIT vs. Sarkar Builders, which clarified that the amendments to section 80IB(10) were prospective. The Tribunal concluded that the assessee was entitled to the deduction as the project was approved and commenced before the amendments took effect. The Tribunal also referenced the Supreme Court's decision in CIT vs. Veena Developers, which supported the view that the amendments were not retrospective. Final Order: The appeals of the revenue were dismissed, and the cross objections of the assessee were dismissed as not pressed. The Tribunal found no infirmity in the order of the CIT(A) and affirmed that the assessee was eligible for the deduction under section 80IB(10) for the relevant assessment years. The judgment was pronounced in open court on May 11, 2016.
|
