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2008 (2) TMI 458 - AT - Income TaxAppellate Tribunal Jurisdiction u/s 254 - Entitlement for the benefit of section 80-IB(10) - profits derived from residential housing project - Amendment in the provisions of section 80-IB(10) extending the period for completion of eligible projects was made w.e.f. 1-4-2001 apparently because as per the pre-amended provisions, such period was prescribed up to 31-3-2001 - HELD THAT - In the present case, what the ld. DR has sought to raise for the first time before the Tribunal is an alternative plea and not the additional plea and since the same cannot be said to change altogether the complexion of the case, we are of the view that he can be allowed to raise the same for the-first time before the Tribunal especially when the same involves legal issue which is based on the relevant provisions of law. It is well-settled that if a particular disallowance made on one basis by the Assessing Officer which is a subject-matter of appeal can be sustained on the basis of other provisions not invoked by him, the Tribunal can invoke the said provisions to sustain the said disallowance. It is no doubt true that the Tribunal's jurisdiction in an appeal before it is restricted only to passing orders on the subject-matter of the appeal. However, the words 'as it thinks fit' in section 254(1) even then will have to observe the prohibitions of the Income-tax Act and do not mean that the Tribunal can think 'fit' to disregard the clear mandates of the Statute. We, therefore, overrule the objection raised by the ld. Counsel for the assessee for entertaining the new plea sought to be raised by the ld. DR and proceed to consider and decide the same on merits now. Entitlement for the benefit of section 80-IB(10) - It is pertinent to note here that the period of commencement of the said projects in order to become eligible for benefits of section 80-IB(10) was also simultaneously specified as up to 31-3-2001 as against the period earlier prescribed as on or after 1-10-1998 which clearly means that the intention of the Legislature was to give the benefit of extended period of completion to all the projects which had already commenced on or after 1-10-1998. In this backdrop, if the interpretation to the said amendments as sought to be given by the ld. DR is accepted, the housing project commenced on or after 1-10-1998 but before 31-3-2001 and completed after 31-3-2001 would not be eligible for the benefits of section 80-IB especially in respect of profits derived from the said projects during the previous year relevant to assessment years 1999-2000 and 2000-01 which is not certainly in consonance with the legislative intention. It is a well-settled canon of construction that in construing the provisions of beneficial legislation, the Court should adopt the construction, which advances, fulfils and furthers the object of the Act rather than the one, which would defeat the same and render the benefit illusory. It is also equally well-settled that, without doing violence to the language used, a beneficial provision shall receive fair, liberal and progressive construction so that its true objects might be promoted. In the case of Gurucharan Singh v. Kamla Singh 1975 (9) TMI 183 - SUPREME COURT , Hon'ble Apex Court has held that interpretation of social-economic legislation should further the object and purpose of the legislation. Therefore, we find it difficult to accept the interpretation sought to be given by the ld. DR to the amendments made in the provisions of section 80-IB(10), which admittedly are beneficial provisions, because if the same is accepted, it will not only defeat the legislative intention clearly spelt out in the Explanatory Note to give the benefit of extended period of completion to all the projects which had already 'commenced, but shall also lead to the absurd results as discussed above. Accordingly, we reject the same and uphold the impugned order of the ld. CIT(A) holding that the assessee having completed the residential project in question before 31-3-2003, it was entitled to the benefit of section 80-IB(10). Ground No. 4 of the Revenue's appeal is accordingly dismissed. In the result, the appeal of the revenue is dismissed.
Issues Involved:
1. Deletion of addition on account of additional notional letting value of flats. 2. Allowance of relief on account of the provision of expenses for completion of the project. 3. Deletion of disallowance on account of expenses on completed project. 4. Granting relief on account of deduction under section 80-IB(10) of the Income-tax Act, 1961. Issue-wise Detailed Analysis: 1. Deletion of Addition on Account of Additional Notional Letting Value of Flats: The Revenue's grievance was that the learned Commissioner of Income-tax (Appeals) erred in deleting the addition of Rs. 3,89,47,635 made on account of additional notional letting value of flats. However, the judgment did not provide further details or analysis specific to this issue. 2. Allowance of Relief on Account of the Provision of Expenses for Completion of the Project: The Revenue contended that the Commissioner of Income-tax (Appeals) erred in allowing relief of Rs. 12,35,19,715 on account of the provision of expenses for the completion of the project. Again, the judgment did not delve into specifics regarding this issue. 3. Deletion of Disallowance on Account of Expenses on Completed Project: The Revenue argued that the Commissioner of Income-tax (Appeals) erred in deleting the disallowance of Rs. 1,81,37,291 on account of expenses on the completed project. The judgment did not provide further details or analysis specific to this issue either. 4. Granting Relief on Account of Deduction Under Section 80-IB(10): The primary focus of the judgment was on the fourth issue regarding the deduction under section 80-IB(10) of the Income-tax Act, 1961. - Facts and Background: The assessee claimed a deduction of Rs. 1,64,38,558 under section 80-IB(10) for profits derived from two residential housing projects. The Assessing Officer disallowed this deduction, stating that the completion certificate from the local authority was not produced before March 31, 2003. - Appeal and Additional Evidence: The assessee provided additional evidence, including an occupation certificate dated April 25, 2003, and a NOC from the Fire Department, during the appellate proceedings. The Commissioner of Income-tax (Appeals) admitted this evidence and accepted the assessee's claim, noting that the application for the occupation certificate was submitted before the deadline. - Departmental Representative's New Plea: Before the Tribunal, the Departmental representative raised a new argument, stating that the extension of the completion date to March 31, 2003, was applicable only from the assessment year 2001-02 onwards. This was based on the explanatory note to the Finance Bill, 2000. - Tribunal's Decision: The Tribunal allowed the new plea, noting that legal issues based on statutory provisions could be raised at any stage. However, the Tribunal rejected the Departmental representative's interpretation, emphasizing that the legislative intention was to extend the benefit to all projects commenced on or after October 1, 1998, and completed by March 31, 2003. The Tribunal highlighted that beneficial provisions should be construed liberally to advance their purpose and avoid absurd results. - Conclusion: The Tribunal upheld the Commissioner of Income-tax (Appeals)'s decision, confirming that the assessee was entitled to the deduction under section 80-IB(10) as the project was completed before the extended deadline. Final Judgment: The appeal of the Revenue was dismissed, and the order was signed, dated, and pronounced on February 15, 2008.
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