9911796707
TMI Blog2006 (7) TMI 534X X X X Extracts X X X X X X X X Extracts X X X X ..... at Rs. Nil, which was arrived at after claiming deduction under section 80-IB(10) of Rs. 8,74,331. The claim of the assessee under section 80-IB(10) was rejected by the Assessing Officer mainly on two grounds, i.e., the project contains of some commercial area of 3,143 sq. feet and that the project was within the 25 kms. from the city of Mumbai and consisted of six residential units built-up more than 1,000 sq. feet area. The ld. counsel for the assessee submitted that the housing project is approved by KDMC, which is a local authority. He submitted that the housing project is not defined under section 80-IB(10) of the Act. As per Explanation to section 80HHBA(4) "Housing Project" means a project for the construction of any building, road, bridge or other structure in any part of India. The local authority or any corporation sanctions the building plans under three zones, namely, Residential zone, Commercial zone, and Industrial zone. The assessee's site fall under residential zone. The ld. counsel for the assessee submitted that the provisions of section 80-IB(10) were introduced to promote housing in the country. The housing project has to provide in a planned manner facilities ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (10)(c) of the Act, the area of 25 kms. is from the municipal limits of the city of Mumbai and not from the outer limits of the Municipal Corporation of BMC, which includes the districts of Mumbai and Thane both. He referred to the various other provisions such as section 80-IB(7), section 54G, section 139 of the Act where the municipal jurisdiction of Municipal Corporation of Mumbai has been referred to instead of that of Mumbai city. The ld. counsel for the assessee relied on the decision of Pune Tribunal in the case of Mangalam Inorganics (P.) Ltd. v. Asstt. CIT [IT Appeal Nos. 622 and 622A (PN) of 2001] for the assessment years 1992-93 and 1993-94, wherein held that the distance between the municipal limit and the assessee's industrial undertaking is to be measured having regard to the road distance and not as be the crow's flies, i.e., a straight line as observed by the CIT. He submitted that the distance between the municipal limit of Mumbai city and the site of housing project of the assessee per the road distance is more than 25 kms. and, therefore, there is no violation of the provisions of section 80-IB(10)(c) since the assessee can build a maximum built-up area of 1,500 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r to claim exemption under the provisions of section 80-IB(10) of the Act. The ld. Departmental Representative submitted that the distance of 25 kms. has to be seen from the outer limits of municipality of Mumbai and there being only "BMC" having jurisdiction over the municipal limits of Mumbai, the site of building project of the assessee has to be measured from the outer municipal limits of 'BMC' only. He submitted that the straight line distance has to be measured in accordance with provisions of section 11 of General Clauses Act. The Assessing Officer has given a finding that the distance of assessee's site is within 25 kms. of the municipal limits of the BMC. 4. The ld. counsel for the assessee in rejoinder submitted that the provisions of General Clauses Act have been considered by the Pune Tribunal in the decision in ITA Nos. 622 & 622A/PN/01 cited (supra) and there being no contrary decision on the issue by another Tribunal, the same may be followed for measuring the distance of 25 kms. for the purpose of section 80-IB(10)(c) of the Act. He submitted that the assessee's site is well within residential zone and, therefore, the benefit of section 80-IB(10) should be allowed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cities of Delhi or Mumbai or within twenty five kilometers from the municipal limits of these cities and one thousand and five hundred square feet at any other place." The first issue before us is whether the building project of the assessee at village Gajbandhan, Dombivali is a "housing project" of the assessee for the purposes of section 80-IB(10) of the Act. Both the assessee and the Revenue stated before us that the amendment brought by Finance No. (2) Act, 2004 with effect from 1-4-2005 introducing sub-clause (d) in the provision of section 80-IB(10) shall have no application to the case of the assessee for the reason that the amendment is not retrospective in nature. The assessee has admittedly constructed commercial area of 3,143 sq. feet in its building project. The word "Housing Project" is not defined under section 80-IB(10) of the Act. We find that in the Explanation to section 80HHBA(4) defining "Housing Project" is in entirely different context and therefore, has no bearing on the issue before us. The Legislature has introduced the provision of section 80-IB(10) to encourage residential housing projects of units not exceeding specified built-up area. In order to avail ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee that while dealing with the provision of section 5(1)(iv) of the Wealth-tax Act, various Courts held that house used for commercial purposes was also eligible for exemption and, therefore, commercial property should be considered as a housing property, is not sustainable, since the decisions relating to the provision of section 5(1)(iv) of Wealth-tax Act were in the context of exemption of housing property for the purpose of the Wealth-tax Act and has no bearing to the present issue before us with regard to exemption of "housing project" under the provisions of Income-tax Act, 1961. We are of the considered view that no proportionate deduction can be allowed to the assessee to the extent of residential units constructed by it in the building project for the simple reason that the building project should be eligible first in order to claim exemption under the provision of section 80-IB(10) of the Act by fulfilling the conditions precedent for its application and the non-fulfilment of a single pre-condition as detailed in the provision of section 80-IB(10) of the Act shall dis-entitle the assessee from claiming exemption of any part of its income, which may accrue from i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that straight line distance has to be measured in accordance with provisions of section 11 of the General Clauses Act whereas the case of the assessee is that the distance between the municipal limits and the assessee's site has to be measured having regard to the road distance only. We find that the issue regarding distance to be measured with regard to road distance or a straight line distance is covered with the decision of the Pune Tribunal in the case of Mangalam Inorganics (P.) Ltd. (supra) wherein held that the distance between the municipal limits and assessee's industrial undertaking is to be measured having regard to the road distance and not as per the crow's flies, i.e., a straight line distance as canvassed by the Revenue. There being no contradictory decision before us on this issue, we hold that the distance of 25 kms. for the purpose of section 80-IB(10) of the Act has to be measured as per the road distance and not as per the straight line distance on a horizontal plain. The other issue regarding whether this section 80-IB(10)(c) referred the outer limit of city of Mumbai or outer limits of Municipal Corporation of Greater Mumbai, we find that it is the "BMC" havi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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