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2025 (3) TMI 704 - AT - Income TaxDeduction u/s. 80IB(10) - profits derived from a housing project approved by the Slum Rehabilitation Authority (SRA) of Maharashtra - HELD THAT - As not disputed that in the instant case the scheme for slum development has been prepared by the Maharashtra Government (SRA). Assessee s housing project is carried out in accordance with scheme of reconstruction or redevelopment of slum area. The scheme has been notified by CBDT. According to the settled legal position the circulars or directions cannot be permitted to curtail the substantive provisions of the Act. The circular cannot therefore curtail the benefit conferred on assessee or be contradictory to the Act. CIT(A) has failed to rationally appreciate and diligently apply the law applicable to the facts of the present case. The impugned order is thus set aside. The facts of the present case are almost similar to the facts of Ramesh Gunshi Dedhai 2014 (9) TMI 653 - ITAT MUMBAI We therefore respectfully agree with the findings arrived at by the coordinate bench of this Tribunal. Accordingly hold that the appellant assessee is entitled to the claim of deduction u/s. 80IB(10) of the Act. Assessee appeal allowed.
ISSUES PRESENTED and CONSIDERED
The primary issue considered in these appeals is whether the appellant assessee is entitled to claim a deduction under Section 80IB(10) of the Income Tax Act, 1961, for the profits derived from a housing project approved by the Slum Rehabilitation Authority (SRA) of Maharashtra. The specific legal question involves the applicability of the conditions under Section 80IB(10) and whether the CBDT notification dated 05.01.2011 can restrict the eligibility of the project for deduction based on the approval date. ISSUE-WISE DETAILED ANALYSIS Relevant Legal Framework and Precedents Section 80IB(10) of the Income Tax Act provides for a deduction of 100% of the profits derived from housing projects approved before 31st March 2008, subject to certain conditions. The section includes specific provisions for projects approved before and after 1st April 2004, with different completion deadlines. A proviso to this section states that the conditions in clauses (a) and (b) do not apply to projects carried out under a government scheme for slum redevelopment, provided the scheme is notified by the CBDT. Court's Interpretation and Reasoning The Tribunal examined whether the CBDT notification could impose additional conditions not present in the statute itself. The Tribunal determined that the notification's condition, limiting the benefit to projects approved after 1st April 2004, was inconsistent with the legislative intent of the proviso to Section 80IB(10). The Tribunal emphasized that the proviso was intended to relax conditions for slum redevelopment projects, not to impose new restrictions. Key Evidence and Findings The Tribunal noted the project's approval dates and the issuance of occupancy certificates, which demonstrated compliance with the completion deadlines specified in Section 80IB(10). The Tribunal also referenced a prior decision in the case of Ramesh Gunshi Dedhia, where similar issues were adjudicated, supporting the assessee's position. Application of Law to Facts The Tribunal applied the legal framework to the facts, concluding that the assessee's project, approved under the SRA scheme, was eligible for the deduction under Section 80IB(10). The Tribunal found that the CBDT notification's condition regarding approval dates could not override the statutory provisions of the Act. Treatment of Competing Arguments The Tribunal addressed the revenue's argument that the notification imposed a valid restriction on eligibility. However, the Tribunal rejected this argument, stating that the notification could not curtail the substantive provisions of the Act. The Tribunal relied on the principle that statutory provisions must be strictly construed, and notifications cannot introduce conditions contrary to the statute. Conclusions The Tribunal concluded that the assessee was entitled to the deduction under Section 80IB(10) for both assessment years in question, as the project met the statutory requirements and the proviso's relaxation applied. SIGNIFICANT HOLDINGS The Tribunal held that the proviso to Section 80IB(10) allows for the relaxation of conditions for projects under a notified slum redevelopment scheme, regardless of the approval date. The Tribunal stated, "The Board cannot insert a new condition in the provisions of a statute which is repugnant to the provisions itself as well as against the very object and scheme of the said provision of the statute." The Tribunal established that the intent of the legislature was to exempt certain conditions for slum redevelopment projects to facilitate urban development and alleviate housing shortages in metropolitan areas. The Tribunal's final determination was that the assessee's appeals for both assessment years were allowed, and the disallowance of the deduction was reversed.
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