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TMI Blog2011 (2) TMI 1441X X X X Extracts X X X X X X X X Extracts X X X X ..... ts viz. Construction of housing project known as Poonam Sagar Complex at Mira Road (East), Dist Thane, consisting of four building namely J-55, J-56, I-62 I-63 consisting of 118 residential flats and 28 shops having total construction area of 70,559 sq.ft, which includes residential area of 66,177 sqft and commercial area of 4382.sqft. During the year under consideration, the assessee has completed the housing project and declared net profit on the same at ` 4,68,03,762/-. The assessee claimed deduction u/s 80IB(10) on the entire profit so declared from the residential project. 2.1 During the course of assessment proceedings, the assessee also filed various documents such as commencement certificate, project completion certificate from the architect and occupation certificate to justify the claim of deduction u/s 80IB(10). On verification of the details filed during the course of assessment proceedings, the Assessing Officer noted that the commercial area of shops included in the assesee s project is 4382 sq.ft which is in excess of the permissible limits laid down in clause (d) of sec. 80IB(10) of the I T Act. 2.2 On being questioned by the Assessing Officer to justi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nces, the CIT(A) and the Tribunal have taken a view that the basis of the amendment to the provisions of sec. 80IB(10) (d) should be made applicable with reference to the date of the approval of the housing project. The decision of the Tribunal in the case of Saroj Sales Organization vs ITO reported in 115 TTJ 485 (Mum) was also brought to the notice of the CIT(A). 4 Based on the various arguments advanced by the assessee and following the decision of the Tribunal in the case of Saroj Sales Organization(supra) and a number of other decisions including the decision of the Special Bench of the Tribunal in the case of Brahman Associates vs JCIT reported in 119 ITD 255, the CIT(A) allowed the claim of the assessee. 5 Aggrieved with such order of the CIT(A), the revenue is in appeal before us with the following grounds: i) On the fact and in the circumstances of the case and law, the ld CIT(A) has erred in holding that the assessee is entitled to deduction u/s 80IB(10) of ₹ 4,68,03,760/- ignoring the facts the ITAT Special Bench Pune (2009) 30 SOT 155 in the case of M/s Brahmha Associates has categorically held that the provisions of clause (d) of sec. 80IB(10), i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e with the decision of the coordinate Benches of the Tribunal; therefore, the same has to be upheld and the ground raised by the revenue should be dismissed. 6.3 The ld DR while supporting the order of the Assessing Officer fairly conceded that this issue stands covered in favour of the assessee and against the revenue by the decision of the Tribunal relied on by the ld counsel for the assessee. 7 We have considered the rival arguments made by both the parties, perused the orders of the authorities below. We have also considered the two decisions relied on by the ld counsel for the assessee. There is no dispute to the fact that the assessee has undertaken a housing project at the plot of size of land of 243103.25 sq.ft and the plan of construction of housing project have been approved by the local authority i.e. Mira Bhyander Municipal Corporation by letter dated 19.7.2003. There is also no dispute to the fact that the assessee has obtained occupation certificate from the local authority of Bldg. No.55 56 type I ; 62 63 Type J on 12.7.2005. We find the Assessing Officer disallowed the claim of deduction u/s 80IB(10) on the ground that as per clause (d) of sec. 80IB(10 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e completed before 31-3-2001 (d) Size of the plot of land for the project should have a minimum of 1 acre. (e) The residential unit has a maximum built-up area of one thousand square feet where such residential unit is situated within the city of Delhi or Mumbai or within twenty-five kilometres from the municipal limits of these cities and one thousand and five hundred square feet at any other place. 2002-03 (a) Housing project to be approved by local authority (b) Project to be approved by local authority before 31-3-2001 (c) Project was to commence on or after 1-10-1998 (d) Size of the plot of land for the project should have a minimum of 1 acre. (e) The residential unit has a maximum built-up area of one thousand square feet where such residential unit is situated within the city of Delhi or Mumbai or within twenty-five kilometres from the municipal limits of these cities and one thousand and five hundred square feet at any other place. 2003-04 2004-05 (a) Housing project to be approved by local authority (b) Project to be approved by local authority before 31-3-2005 (c) Project was to commence on or after 1-10-199 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing project in the previous year relevant to asst. yr. 2002-03. As per the law as it stood in the previous year relevant to asst. yr. 2002-03 up to 2004-05, there was no time-limit within which the construction has to be completed or any restriction regarding commercial area that can be built in a housing project. Let us assume that the assessee complies with all the conditions for allowing relief under s. 80-IB(10), i.e., it is approved as a housing project by the local authority but the area of commercial space as approved by the local authority is more than 2,000 sq. ft. The assessee commences the project but is able to complete only in the previous year relevant to asst. yr. 2005-06. As per the change in law from asst. yr. 2005-06 with regard to the area of commercial space in a housing project the assessee would loose his eligibility to claim deduction. In such cases, there is definitely grave hardship to the assessee. The interpretation sought to be canvassed by the learned Departmental Representative will also lead to absurd situation. Let us assume an assessee obtains approval of a housing project prior to 1st April, 2005 say in previous year relevant to asst. yr. 2002-03. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as categorically held that the provisions of clause (d) of sec. 80IB(10), inserted by finance Act 2004 w.e.f 1.4.2005 has no retrospective effect and applied only w.e.f 1.4.2005 relevant to Assessment Year 2005-06 and onwards which ahs binding effect in this case. ii) On the fact and in the circumstances of the case and law, the ld CIT(A) has in law erred in holding that the assessee is entitled to deduction u/s 80IB(1) of ` 88,32,430/- ignoring the clear cut applicability of sec 80IB(10) (d) which is very much applicable in the present case. iii) On the fact and in the circumstances of the case and law, the ld CIT(A) has erred in holding that the assessee is entitled to deduction u/s 80IB(10) of ` 88,32,430/- based on irrelevant fact of approval of plan of project earlier to 1.4.2005, without any legal mandate. 9 After hearing both the sides, we find the grounds raised in the impugned appeal are identical to the grounds of appeal raised in ITA No. 2003/Mum/2010. We have already decided the issue and the grounds raised by the revenue have been dismissed. Following the same ratio, the grounds of appeal in the impugned appeal are also dismissed. 10 In t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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