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TMI Blog2015 (6) TMI 798X X X X Extracts X X X X X X X X Extracts X X X X ..... , the projects essentially remained residential housing projects and that was also quite apparent from the certificates issued by the local authority and, therefore, neither the absence of such provision of commercial shops nor on account of such commercial construction having exceeded the area contemplated in the prospective amendment could the deduction be denied to the assessee whose plans were sanctioned according to the prevalent rules. The assessee was entitled to deduction under section 80-IB (10). We following the above decision are of the view that clause (d) to section 80 IB (10) which has been inserted w.e.f. 1-4-2005 will not be applicable in the instant case where the project was approved on 31-7- 2002. We therefore, set aside the order of the CIT (A) on this issue. As the issue of allowability under section 80 IB (10) has been restored by the CIT (A) to the file of the A.O. with certain direction against which no appeal has been filed by both the parties. Therefore, those directions remained and A.O. is directed to consider the issue in light of the said directions of the CIT (A). - Decided in favour of assessee. - I.T.A.No.3262/Ahd/2009,I.T.A.No.276 /Ahd/2013,I. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the section 80 (10) has not been satisfied. iii) The land is not in the name of the assessee firm and that ownership of lands is an essential element which carries with it the right to develop the land and build housing projects thereon. According to A.O. the developer should first develop the land and then take necessary permission to construct. iv) Assessee in the instant case has acted merely as an agent for collection of the land consideration on behalf of the land owner and a contractor for the construction of the house on behalf of the unit holders. v) The approval of the project is not in the name of the assessee firm. 5. Against the aforesaid disallowance assessee filed appeal before the CIT (A). 6. Before the CIT (A) assessee reiterated the arguments made before the A.O. and drawn attention to the decision of Special Bench of the Tribunal in the case of Brahma Associates vs. JCIT 122 TTJ 433 (SB) (Pune). 7. On appeal the CIT (A) confirmed the disallowance made by A.O. 8. Before us, Authorised Representative of the assessee submitted that in A.Y. 2005-06 the claim for deduction of the assessee under sec. 80-IB (10) was disallowed by the As ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the housing project on or after the 1st day of October, 1998 and completes such construction, -- (i) in a case where a housing project has been approved by the local authority before the 1st day of April, 2004 on or before the 31st day of March, 2008. (ii) In a case where a housing project has been, or, is approved by the local authority on or after the 1st day of April, 2004, within four years from the end of the financial year in which the housing project is approved by the local authority. Explanation --- For the purposes of this clause,--- (i) in a case where the approval in respect of the housing project is obtained more than once, such housing project shall be deemed to have been approved on the date on which the building plan of such housing project is first approved by the local authority; (ii) the date of completion of construction of the housing project shall be taken to be the date on which the completion certificate in respect of such housing project is issued by the local authority; (b) the project is on the size of a plot of land which has a minimum area of one acre: Provided that nothing contained in clause (a) or clause (b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. For the above, the assessee relied upon the decision of the Hon ble S.C. in the case CIT vs. M/s. Veena Developers Others wherein it was held as under:- (e) Clause (d) inserted to Section 80 IB(10) with effect from 1- 4-2005 i.e. prospective and not retrospective and hence cannot be applied for the period prior to 1-4-2005. 14. We find that the issue under consideration is squarely covered by the decision of the Hon ble jurisdictional High Court in the case of Manan Corporation vs. ACIT [2013] 356 ITR 44 (Guj.) wherein it was held as under :- The object of section 80-IB (10) of the Income-tax Act, 1961, was essentially to provide incentive to undertakings in developing and building housing projects. Section 80-IB (10) originally indicated 100 per cent. deduction on the profits derived from housing projects approved by a local authority subject to certain conditions set out in the provision. However, this provision was amended by the Finance (No. 2) Act, 2004, with effect from April 1, 2005. By virtue of the amendment having come into effect from April 1, 2005, deduction is permissible to housing projects having residential units with commercial units to the ext ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation necessary for claiming such deduction and that the assessee violated the condition laid down under the provision. The principal objection was of nonfulfilment of the condition of limitation of built up area being more than 1,500 sq. ft and its ratio to commercial shops being more than 5 per cent. of the created built up area of housing project or 2,000 sq. ft, whichever is less. This was upheld by the Tribunal. On appeal to the High Court: Held, that there was no criteria for making commercial construction prior to the amendment of the section and the plans were approved as housing projects by the local authority for both the projects of the assessee. Permission for construction of shops had been allowed by the local authority in accordance with rules and regulations, keeping in mind presumably the requirement of large townships. However, the projects essentially remained residential housing projects and that was also quite apparent from the certificates issued by the local authority and, therefore, neither the absence of such provision of commercial shops nor on account of such commercial construction having exceeded the area contemplated in the prospective amendment c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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