2015 (11) TMI 341 - HC - Income Tax

Deduction u/s 80IB - whether Tribunal did not err in holding that the clarification of the builtup area introduced by way of section 80IB(14)(a) with effect from 01-04-2005 can only be applied to projects which have been sanctioned after 01-4-2005? - Held that - The present controversy stands concluded in favour of the RespondentAssessee by the decision of this Court in CIT v/s. Raviraj Kothari Punjabi Associates 2015 (5) TMI 361 - BOMBAY HIGH COURT wherein held held that the clause (d) of section 80IB(10) is prospective in nature and would not apply to the housing projects commenced prior to 1.4.2005. Also see CIT v/s. M/s. Sarkar Builders 2015 (5) TMI 555 - SUPREME COURT - Decided in favour of assessee.

Summary

Issues:
1. Interpretation of Section 80IB(14)(a) of the Income Tax Act, 1961 for projects sanctioned before 1st April, 2005.
2. Whether the Tribunal's order was based on a comprehensive evaluation of all relevant facts and evidence.

Analysis:
1. The case involved an appeal by the Revenue challenging the Tribunal's order regarding the application of Section 80IB(14)(a) of the Income Tax Act, 1961 to a Housing Project in Pune sanctioned before 1st April, 2005. The main question was whether the clarification introduced by this section could be applied retroactively to projects approved before the amendment. The Respondent-Assessee, a builder, claimed deduction under Section 80IB(10) for the project. The Court referred to a previous decision and concluded that the controversy was settled in favor of the Assessee, citing a specific case and the decision of the Apex Court. As the project in question was sanctioned prior to the introduction of the amendment, the provision of Section 80IB(14)(a) was held not to apply.

2. The second substantial question of law raised in the appeal was whether the Tribunal's order was based on a comprehensive evaluation of all relevant facts and evidence, including circumstantial evidence. The Counsel for the Revenue acknowledged that the issue was settled in favor of the Assessee based on previous decisions. Consequently, both substantial questions of law were answered in the affirmative, favoring the Respondent-Assessee and ruling against the Revenue. The Court dismissed the appeal, with no order as to costs, based on the above analysis and conclusions.