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TMI Blog2017 (1) TMI 442X X X X Extracts X X X X X X X X Extracts X X X X ..... scheme project is 3rd July 2003, and is not covered by the Notification no.2 of 2011, which was issued to clarify the earlier notification dated 3rd August 2010. Such a ground taken by the Department is wholly misconceived as there is no such scheme dated 3rd July 2003. The said date of 3rd July 2003, is when the assessee has applied before the SRA for its approval of the project. The scheme in which the approval has been granted is DCR no.33 (10), which has been notified by the CBDT. Thus, there is no merit in ground taken by the Revenue - Decided in favour of assessee - ITA No.5458/Mum/2014, ITA No.5459/Mum/2014 - - - Dated:- 4-11-2016 - SHRI R.C.SHARMA, AM AND SHRI RAVISH SOOD, JM For The Assessee : Mr. A. Ramachandran For The Revenue : Mr. Rishabh Shah ORDER PER R.C.SHARMA (A.M) : These are the appeals filed by the Revenue against the order of CIT(A) for the assessment years 2005-2006 and 2006-2007, in the matter of order passed u/s. 143(3) read with Section 147 of the IT Act. 2. In these appeals, revenue is aggrieved for deleting the disallowance of deduction u/s.80IB(10). 3. We have considered rival contentions and found that assessee is eng ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IOD, etc., in respect of the said project. The assessee submitted that it had applied for approval from SRA through letter of intent on 3rd July 2003, and intimation of approval was given on 4th August 2003, with certain condition to be fulfilled. On verification of these details, the Assessing Officer found that the assessee's Dharavi Project is in slum area, which is a slum project and area of the plot of land is less than one acre, therefore, the assessee does not fulfill the basic condition of the claim for deduction under section 80-IB(10). In response to the show cause notice, the assessee submitted that this condition of project size should be on a plot of one acre has been removed by the Finance Act, 2004, w.ef 1st April 2005, in case of housing project being carried out in slum areas as per the Govt. scheme. The assessee's project has been approved by SRA, Govt. of Maharashtra, which provides for strict compliance of various Rules and Acts and which again is guided by Circulars and Notifications, therefore, the developer has no say in its implementation and execution. Further, the assessee has complied with all the conditions prescribed in section 80lB(10 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provides for joint development of slum and non-slum area shall be excluded from the scheme, and (iii) Any amendment in the scheme hereby notified shall be required to be re-notified by the Board. 7. The said notification dated 3rd August 2010, was to come into force w.e.f. from the date of its publication. Later on, the assessee also furnished the Notification number 2 of 2011, dated 5th January 2011, issued by the CBDT, clarifying that this notification shall be deemed to apply to the projects approved by a local authority under the aforesaid scheme on or after 1st day of April 2004, and before 31st day of March 2008, thereby making the income arising from such project eligible for deduction under sub section (10) of section 80lB from the A. Y. 2005-06 onwards . 8. In view of this specific clarification by the CBDT, the Commissioner (Appeals) directed the Assessing Officer to allow the deduction under section 801B( 10) on the ground that the conditions provided in the proviso to section 801B( 10) stands fulfilled. The relevant findings of the Commissioner (Appeals), for the sake of ready reference, is reproduced herein below:- 3.4 Therefore, in view of specific ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y investigation of facts, therefore, the learned Commissioner (Appeals) has rightly taken into cognizance. Further, Taken into congnizance. Further, he submitted that in view of the amended provisions brought by the Finance Act, 2004, w.e.f 1st April 2005, by which proviso was inserted, has relaxed the condition of minimum area of one acre for the housing project in a case where the housing project is carried out in a slum area as per the Govt. scheme. Once this benefit has been made available, the assessee is entitled to deduction from assessment year 2005- 06 onwards. Regarding approval date of 4th August 2003, by SRA, he submitted that the said approval was given with lot of conditions to be fulfilled before the commencement of the project and it was only when the assessee had fulfilled all the terms and conditions given in the intimation of approval dated 4th August 2003, the final commencement certificate was given on 17th October 2004. Therefore, for all the practical purposes, the date of 17th October 2004, should be taken as the date of approval. Without prejudice, he submitted that the amendment in section 80- IB(10), brought by the Finance Act, 2004, is curative in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be on the plot of land which has a minimum area of one acre, has been relaxed by insertion of a proviso. The amended provision of section 80IB(10)) r/w proviso, reads as under:- SECTION 80-IB(10) 1103(10) The amount of deduction in the case of an undertaking developing and building housing projects approved before the 31st day of March, 2007, by a local authority shall be hundred per cent of the profits derived in the previous year relevant to any assessment year from such housing project if,- (a) such undertaking has commenced or commences development and construction of 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 1 st 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 res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , dated the 3rd August, 2010, in paragraph 2 for This notification shall come into force with effect from the date of its publication , read This notification shall be deemed to apply to projects approved by a local authority under the aforesaid scheme on or after the 1st day of April, 2004, and before 31st day of March, 2008, thereby making the incomes arising from such projects eligible for deduction under sub section (10) of section 80IB from the assessment year 2005-06 onwards. 13. The proviso inserted w.e.f 1st April 2005, thus relaxes the conditions given in clauses (a) and (b) of section 80-IB to remove the problem of rehabilitation and development of slum area. The intention of the legislature in bringing such an amendment can also be gazed from the speech of the Finance Minister at the time of introduction of the bill, which reads as under;- 110. A small problem has plagued the reconstruction and development of existing buildings under approved plans in the city of Mumbai. Perhaps the problem is there in some other cities too. I, therefore, propose to relax the condition of minimum plot size of one acre in the case of housing projects, as long as the proje ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cation dated 3rd August 2010. Such a ground taken by the Department is wholly misconceived as there is no such scheme dated 3rd July 2003. The said date of 3rd July 2003, is when the assessee has applied before the SRA for its approval of the project. The scheme in which the approval has been granted is DCR no.33 (10), which has been notified by the CBDT. Thus, there is no merit in ground no.2, taken by the Revenue 17. In view of our above findings, we do not find any reason to deviate from the ultimate findings given by the Commissioner (Appeals) and, consequently, the same is hereby confirmed by holding that the assessee is eligible for deduction under section 80- IB(10), for ₹ 1,47,11,573, in respect of its development project carried out in Dharavi slum area, which was a scheme framed by Maharashtra Govt. and duly notified by the CBDT. Accordingly, the grounds raised by the Revenue are treated to be dismissed . 2.2 If the observation made in the assessment order, leading to addition made to the total income, conclusion drawn in the impugned order, material available on record, assertions made by the Id. respective counsel, if kept in juxtaposition and analyzed ..... X X X X Extracts X X X X X X X X Extracts X X X X
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