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TMI Blog2015 (12) TMI 1622X X X X Extracts X X X X X X X X Extracts X X X X ..... o close relatives and did not produced the details of the premises taken on rent, purpose of utilization of the premises for business purposes and genuineness of the transaction - Held that:- Even if, the said expenses are disallowed, the assessee is eligible for deduction u/s 80 IB(10) on enhanced income for the project as the said expenses worked laid against the income from the eligible project by placing reliance upon the decision in Liberty India Ltd. (2009 (8) TMI 63 - SUPREME COURT) wherein held that the devices adopted to reduced on inflate the profits of eligible business has to be rejected while calculating deduction u/s 80IB. As that during assessment proceeding the details of payment of rent of ₹ 1,20,00/- is to Shri. Amit Ringshia and Shri. Aditya Ringshia, with respect to Andheri office premises and ₹ 1,80,000/- to Shri. K.G. Ringshia (HUF) for our office premises in Vile-Parle were filed by the assessee. The payment of rent was duly authenticated by relevant documents. No Contrary decision or facts were brought to our notice by either side and more specifically the Revenue. Thus, we find on infirmity in the conclusion drawn by the Ld. CIT (A) in deleti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1,54,59,252, out of which a sum of ₹ 1,47,11,5733, was claimed as deduction under section 80IB(10) of the Act. 3. During the course of assessment proceedings, the Assessing Officer noticed that the size of plot of land on which the housing project was undertaken by the assessee was only 1064.70 sq.mtrs. i.e., less than one acre. The Assessing Officer required the assessee to submit Slum Rehabilitation Authority (for short SRA ) details, copy of approval, I0D, 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 sum 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.e.f. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ules for Greater Mumbai, 1991, r/w provision of notification no.PB- 4391/4080(A)/UD-II(ROP), dated 3rd June 1992, in the following manner, subject to the following conditions:- (i) Slum development falling in Category VII mentioned in notification no.TPB 4391/4080(A)/UD 11(RDP) dated 3rd June 19992, shall be excluded from the scheme; (ii) Slum development falling within clause 7.7 of the appendix IV of regulation 33(10) which 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 80IB from the A.Y. 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not justified, either in law or on facts. He made detail submission with reference to various documents filed by the assessee and the findings of the Assessing Officer as well as learned Commissioner (Appeals). 10. On the other hand, the learned Counsel submitted that the Department has raised no such ground about the furnishing of a fresh evidence and moreover this is a Govt. notification which does not require any investigation of facts, therefore, the learned Commissioner (Appeals) has rightly taken into cognizance. 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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Engineer, SRA, and in response to which commencement certificate was issued on 17th October 2004. After the amendment brought in the statute by Finance Act, 2004, w.e.f. 1st April 2004, various conditions laid down in clauses (a) and (b) and particularly in clause (b), wherein one of the conditions for availing the deduction under section 80-IB(10), was that the project should 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 1st day of April, 2004, on or before the 31 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dated 5th January 2011, wherein it was provided that:- In the notification of the Govt of India in the Ministry of Finance, Department of Revenue, (Central Board of Direct Taxes) number S.O. 1898(E), dated the 3rd August, 2010 (2010) 233 CTR (ST.) 56 2010) 43 DTR (St.) 8] published in the Gazette of India, Extraordinary, Part II, section 3, sub section (ii), 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 205 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roval given by the SRA becomes operative. Thus, the contentions of the learned Departmental Representative cannot be sustained. 16. In ground no.2, the Revenue has challenged that the date of approval of SRA 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 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 C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me for the project as the said expenses worked laid against the income from the eligible project by placing reliance upon the decision in Liberty India Ltd. (317ITR 218(SC) wherein, the Hon ble Apex Court held that the devices adopted to reduced on inflate the profits of eligible business has to be rejected while calculating deduction u/s 80IB. 3.3 We find that, as mentioned in para 4.3 of the impugned order, that during assessment proceeding the details of payment of rent of ₹ 1,20,00/- is to Shri. Amit Ringshia and Shri. Aditya Ringshia, with respect to Andheri office premises and ₹ 1,80,000/- to Shri. K.G. Ringshia (HUF) for our office premises in Vile-Parle were filed by the assessee. The payment of rent was duly authenticated by relevant documents. No Contrary decision or facts were brought to our notice by either side and more specifically the Revenue. Thus, we find on infirmity in the conclusion drawn by the Ld. CIT (A). It is affirmed Finally Appeal of the Revenue is dismissed. This Order was pronounced in the open court in the presence of ld. representatives from both sides at the conclusion of the hearing on 03/12/2015. - - TaxTMI - TMITax - Income ..... X X X X Extracts X X X X X X X X Extracts X X X X
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