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2020 (9) TMI 1137 - HC - Income TaxEligibility for deduction u/s 80IB - housing projects - satisfaction of the requirements as laid down in clauses (a) to (d) of sub-Section (1) of Section 80IB - individual units measuring less than 1500 sq.ft. - object of Section 80IB(10) of the Act is to provide 100% deduction of the profits derived by an undertaking from developing and building housing projects - HELD THAT - In the instant case, the housing project of the assessee was approved in respect of an area of 48,939 square feet, which is more than one acre i.e., 43,500 square feet, therefore, we hold that the assessee has complied with requirement contained in Clause (b) of Section 80IB(10). 32% of the units of the assessee are having an area of more than 1,500 square feet - It is well settled rule of statutory interpretation that when a situation has been expressed differently, the legislation must be taken to have been tended to express a different intention. SEE 'COMMISSIONER OF INCOME TAX, NEW DELHI VS. EAST WEST IMPORT AND EXPORT (P) LTD' 1989 (2) TMI 1 - SUPREME COURT . On plain reading of clause (c) of Section 80IB(10) of the Act, it is evident that the same does not exclude the principle of proportionality in any manner. Therefore, we hold that the CIT (Appeals) as well as the Tribunal have rightly found that the assessee has complied with the requirement contained in clause (c) of Section 80IB(10). Requirement of commercial area in a project not exceeding 5 % of build up area - The Supreme Court in RADHASOAMI SATSANG Vs. COMMISSIONER OF INCOME-TAX' 1991 (11) TMI 2 - SUPREME COURT has held that even though principles of res judicata do not apply to income tax proceedings, but where a fundamental aspect permeating through the different Assessment Years has been found as the fact one way or the other and the parties have allowed the position to be sustained by not challenging the order, it would not be at all appropriate to allow the position to be changed in subsequent year. For this reason also, in the facts of the case, a different view cannot be taken. It is held that the assessee has complied with the requirements contained in clauses (a), (b), (c) (d) of Section 80IB(10) of the Act. The substantial questions of law framed by a bench of this court are answered against the revenue and in favour of the assessee.
Issues Involved:
1. Eligibility for deduction under Section 80IB of the Income-Tax Act. 2. Proportionate deduction under Section 80IB for units less than 1500 sq.ft. 3. Commercial area exceeding 5% in the project. 4. Project area being less than 1 acre. Detailed Analysis: 1. Eligibility for Deduction under Section 80IB: The appellate authorities held that the assessee firm is eligible for deduction under Section 80IB of the Income-Tax Act. The revenue argued that the conditions in clauses (a) to (d) of sub-Section (1) of Section 80IB were not met. However, the Tribunal and Commissioner of Income Tax (Appeals) had previously allowed similar claims for earlier assessment years, which were upheld by higher courts. The court noted that the object of Section 80IB(10) is to provide 100% deduction of profits derived from developing and building housing projects. The court emphasized that the legal principles regarding the interpretation of clauses (b) and (c) of Section 80IB(10) remained unchanged post-amendment. 2. Proportionate Deduction under Section 80IB for Units Less Than 1500 sq.ft.: The revenue contended that the entire project must meet the condition of having units less than 1500 sq.ft. The appellate authorities allowed proportionate deduction for individual units meeting this criterion. The court noted that the Tribunal had consistently held that the principle of proportionality applies, and this view was affirmed by the Supreme Court in the assessee's case for previous assessment years. The court found that the legislature's omission of the word "each" in clause (c) indicated an intention to allow proportionate deductions. 3. Commercial Area Exceeding 5% in the Project: The revenue argued that the commercial area in the project exceeded the permissible 5%. The appellate authorities held that each residential block should be considered separately for computing the percentage of commercial area. The court noted that the Tribunal had upheld this view in the assessee's case for previous years, and the Supreme Court had dismissed the revenue's appeals. The court agreed with the Tribunal's interpretation that individual residential blocks should be treated as separate projects. 4. Project Area Being Less Than 1 Acre: The revenue contended that the project area was less than 1 acre, as required by Section 80IB(10). The appellate authorities found that the project area was initially more than 1 acre but was reduced due to compliance with local authority conditions. The court noted that the approved plan showed an area of 48,939 sq.ft., which is more than 1 acre. The court referred to CBDT's clarification that any project approved by the local authority as a housing project should be considered adequate for Section 80IB(10). The court concluded that the assessee complied with the requirement of having a project area of at least 1 acre. Conclusion: The court held that the assessee complied with the requirements of Section 80IB(10) and dismissed the revenue's appeal. The substantial questions of law were answered against the revenue and in favor of the assessee. The court emphasized the importance of adhering to the statutory language and previous judicial interpretations, affirming the principle of proportionality and the separate consideration of residential blocks.
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