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TMI Blog2013 (10) TMI 418X X X X Extracts X X X X X X X X Extracts X X X X ..... n the case of Manan Corporation vs. ACIT [2012 (9) TMI 700 - Gujarat High Court] - Amendment of s. 80-B(10) and the insertion of cl. (d) w.e.f. 1 April, 2005 is prospective only and cannot be applied retrospectively; assessee's two housing projects having been approved prior to 31st March, 2005 and the built-up area of commercial use being 5.12 per cent and 3.5 per cent respectively, it was entitled to deduction under s. 80-IB(10) – In the present case, permission of development was granted by AUDA on 16.10.2002 and BU permission was granted on 01.03.2004. The amendment by way of insertion in clause (d) of 80-IB(10) came to effect from 01.04.2005 and it is prospective in nature and therefore, it cannot be applied for housing projects approved prior to 01.04.2005 – Decided in favor of Assessee. - ITA No. 485/Ahd/2010, ITA No. 2859/Ahd/2011, I.T.A. No.2232/Ahd/2012, ITA No.2741/Ahd/2010 - - - Dated:- 4-10-2013 - Shri A. Mohan Alankamony, AM And Shri Kul Bharat, JM,JJ. For the Petitioner : Shri K. C. Mathew, Sr. DR For the Respondent : Shri S. N. Divetia, AR ORDER Per A. Mohan Alankamony: These appeals are preferred by the assessee and revenue aggrieved by the d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rred in law and /or on facts in upholding validity of the notice issued u/s. 16.7.2009 by AO. 1.4 That in the facts and circumstances of the case as well as in law, the Ld. CIT(A) ought not to have upheld the validity of re- asstt. proceedings initiated by AO u/s. 147, though there was a clear change of opinion on his part without any new or fresh material on record. The Ld. CIT(A) has erred in upholding the validity of re-asstt. by relying upon the amendment by way of insertion of Explanation to Sec. 80-IB(10) though the reasons recorded by AO did not mention about it. 2.1 The Ld. CIT(A) has grievously erred in law or on facts in confirming the disallowance of the deduction u/s. 80-IB(10) by relying upon the appellate order for A.Y. 2006-07 though the facts of the case were different and distinguish from the facts of the year under appeal. The appellant strongly objects to the findings of the CIT(A) that facts were the same for both the years. 3.1 That in the facts and circumstances of the case as well as in law, the Ld. CIT(A) ought not to have confirmed the disallowance of the claim of deduction u/s. 80-IB(10). 4.1 Without prejudice to the above and in the alternative, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing project exceeded 5% of the aggregate built up area or 2000 sq.ft. Whichever is less. 6. Before us, ld. A.R. vehemently argued that with respect to the fixed remuneration of Rs.50 lacs, the amount was development fee charged @ Rs. 2 lacs for each bungalow as agreed between the assessee and the Co-operative Housing Society and that had not altered in any way the risk undertaken by the assessee, as a Developer. On regard to construction of 26 residential houses, the ld. A.R. stoutly denied stating that the assessee had constructed only 25 residential houses and accordingly raised the bills. Further, with respect to the BU permission dated 01.03.2004 for having obtained permission for construction of residential houses over and above 1500 sq.ft., per residential house, it was submitted that the additional construction was carried by the parties after handing over the possession to them and also there was a mistake in the BU permissions certificate with respect to mentioning of permissible limit of construction. Finally, the ld. A.R. also cited the decision of the Jurisdictional High Court's case Manan Corporation vs. ACIT cited in [2012] 78 DTR (Guj.) 2005 to overcome the limit o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dditional construction in Bunalow no. 10 and no. 18. Dear Sir, We hereby seek to clarify the issue of additional construction doen in Bungalow no.10 and no.18 of our society i.e. Kalsash Twin Bungalows at Motera, Ahmedabad. The additional construction done in Bungalow no.10 and no.18 of our society has been carried out by the members themselves occupying the said bungalows subsequent to taking possession of their respective units that were originally constructed by you as per the AUDA approved plans. The additional construction in unit no.18 was undertaken in 2007 and construction in unit 10 is underway. These members have not taken required permission from either the society or concerned authorities for the additional construction carried out by them. The society does not take any responsibility for such unauthorized construction carried out by the members. For, Devalaya Co-operative Housing Soc. Ltd., Secretary" 9. From the above i.e., considering the DVO Report and the letter from the society, the assessee has tried to establish that it had not constructed any area beyond the prescribed limits. Further, the Revenue has not made any categorical finding to counter th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n under s. 80-IB(10). 11. In the case, before us, the permission of development was granted by AUDA on 16.10.2002 (paper book page no. 109) and BU permission was granted on 01.03.2004 (paper book page no. 119). The amendment by way of insertion in clause (d) of 80-IB(10) came to effect from 01.04.2005 and it is prospective in nature and therefore, it cannot be applied for housing projects approved prior to 01.04.2005 as held by the Hon'ble Jurisdictional High Court mentioned (supra). Therefore, the second concise ground mentioned hereinabove is also decided in favour of the assessee. Assessment Year 2006-07(Revenue's Appeal) "1). The Ld. Commissioner of Income-Tax (Appeals)-XV, Ahmedabad has erred in law and on facts in deleting the penalty of Rs. 14,13,765/- levied u/s. 271(1)(C) of the Act. 2). On the facts and in the circumstance of the case, the Ld. Commissioner of Income-Tax (Appeals)-XV, Ahmedabad ought to have upheld the order of the Assessing Officer." 12. Since, we have allowed both the appeals of the assessee, levy of penalty by the Revenue have become bad in law and therefore, we hereby dismiss the appeal of the Revenue. 13. In the result, both the appeals of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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