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TMI Blog2020 (9) TMI 1137X X X X Extracts X X X X X X X X Extracts X X X X ..... HI VS. EAST WEST IMPORT AND EXPORT (P) LTD' [ 1989 (2) TMI 1 - SUPREME COURT] . On plain reading of clause (c) of Section 80IB(10) of the Act, it is evident that the same does not exclude the principle of proportionality in any manner. Therefore, we hold that the CIT (Appeals) as well as the Tribunal have rightly found that the assessee has complied with the requirement contained in clause (c) of Section 80IB(10). Requirement of commercial area in a project not exceeding 5 % of build up area - The Supreme Court in RADHASOAMI SATSANG Vs. COMMISSIONER OF INCOME-TAX' [ 1991 (11) TMI 2 - SUPREME COURT] has held that even though principles of res judicata do not apply to income tax proceedings, but where a fundamental aspect permeating through the different Assessment Years has been found as the fact one way or the other and the parties have allowed the position to be sustained by not challenging the order, it would not be at all appropriate to allow the position to be changed in subsequent year. For this reason also, in the facts of the case, a different view cannot be taken. It is held that the assessee has complied with the requirements contained in clauses (a), (b), ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CKGROUND FACTS: 2. Facts leading to filing of this appeal briefly stated are that the assessee is engaged in the business of construction, property development and real estate. The assessee filed return declaring an income of ₹ 98,15,55,940/-. The return was processed under Section 143(1) of the Act. However, the assessee filed a revised return of income on 30.03.2009, in which the income returned was reduced from ₹ 98,15,55,940/- to ₹ 49,96,89,936/-. In the revised return, the assessee claimed deduction under Section 80IB(10) of the Act to the extent of ₹ 61,60,49,743/- as against deduction of ₹ 11,19,14,742/-, which was claimed earlier. The case was selected for scrutiny and notice under Section 143(2) of the Act was issued. The Assessing Officer by an order dated 31.12.2009 inter alia held that Section 80IB(10) of the Act does not permit a claim on proportionate basis, only in respect of units, which were less than 1500 square feet. It was also held that the assessee has used 60% of the total built up area for commercial purposes as against 5%, which is permissible in law. It was also held that the assessee company in almost every block had a ho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th. It is contended that the expression 'residential unit' used in clause (c) of Section 80IB(10) of the Act, has to be read as 'residential unit comprised in the housing project'. It is further contended that assessee cannot claim each tower to be project by itself and the reliance by the Commissioner of Income Tax (Appeals) and the Tribunal with regard to decisions of previous assessment years in the case of assessee is misconceived as the dispute in the decisions of Previous assessment years related to built up area and therefore, the aforesaid decisions do not apply to the fact situation of the case. It is also urged that the conditions mentioned in clauses (a) to (f) of Section 80IB(10) of the Act are cumulative and have to be fulfilled by the assessee in order to claim the benefit of deduction under Section 80IB(10) of the Act. It is also argued that conditions (a) to (f) of Section 80IB(10) are in the realm of exemption provisions and have to be strictly construed and in case of any ambiguity, the benefit has to be given to the revenue. In support of aforesaid submissions, reliance has been placed on decisions in 'COMMISSIONER OF INCOME-TAX VS. M.K.KIRTIK ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submissions, reliance has been placed on decisions of Supreme Court in 'CIT VS. RAGHAVENDRA CONSTRUCTIONS', (2013) 354 ITR 194 (KARNATAKA), 'CIT VS. VANDANA PROPERTIES', (2013) 353 ITR 36 (BOMBAY), (2008) 119 TTJ 269 (BANGALORE), ITA 412/BANG/09, ITA 763/2009 C/W 25/2009, ITA 1355/BANG/2010, ITA 61/2012, SLP AGAINST 25/2009 IN CC 2309/2013, SLP AGAINST 763/2009 IN CC 20865/2012, SLP AGAINST 61/2012 IN CC 9188/2013, R.P.WAS DISMISSED IN RP(C) NO.490 OF 2013, 'ACIT VS. 'G.R.DEVELOPERS IN ITA 405/BANG/2010, 'CIT VS. M/S G.R. DEVELOPERS IN ITA NO.68/2011, 'CIT VS. M/S G.R.DEVELOPERS IN ITA NO.355/2009, ' PCIT VS. OCEANUS DWELLINS (P.) LTD.', (2017) 395 ITR 376 (KARNATAKA), 'CIT VS. SJR BUILDERS IN ITA NO.32/2012, 'CIT VS. ANRIYA PROJECT MANAGEMENT SERVICES (P.) LTD', (2013) 353 ITR 12 (KARNATAKA), 'PCIT VS. SHREENATH BUILDCON', R/TAX APPEAL NO.289/2008, 'PCIT VS. SHREENATH BUILDCON', SLP NO.42736/2018, (2019) 110 TAXMANN.COM 390 (SC), 'VISWAS PROMOTERS (P.) LTD. VS. ACIT', (2013)214 TAMAN 524 (MADRAS), 'CIT VS. SREEVATSA REAL ESTAETS (P.) LTD.', (2014) 222 TAXMAN 105 (MADRAS), and 'CIT VS. SG ESTAT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s under: Prior to 01.04.2005 (10) The amount of profitsin case of an undertaking developing and building housing projects approved before the 31st day of March, 2005 by a local authority, shall be hundred per cent of the profits derived in any 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; (b) the project is on the size of a plot of land which has a minimum area of one acre; and (c) the residential unit has a maximum built-up area of one thousand square feet where such residential unit is situated within the cities of Delhi or Mumbai or within twenty- five kilometers from the municipal limits of these cities and one thousand and five hundred square feet at any other place. AFTER 01.04.2005 80-IB. (10) The amount of deduction in the case of an undertaking developing and building housing projects approved before the 31st day of March, 2008 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,-- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e feet, whichever is higher;(e) not more than one residential unit in the housing project is allotted to any person not being an individual; and (f) in a case where a residential unit in the housing project is allotted to a person being an individual, no other residential unit in such housing project is allotted to any of the following persons, namely:-- (i) the individual or the spouse or the minor children of such individual, (ii) the Hindu undivided family in which such individual is the karta, (iii) any person representing such individual, the spouse or the minor children of such individual or the Hindu undivided family in which such individual is the karta. Explanation.--For the removal of doubts, it is hereby declared that nothing contained in this sub- section shall apply to any undertaking which executes the housing project as a works contract awarded by any person (including the Central or State Government). 10. Thus, from close scrutiny of Section 80IB(10) of the Act, prior to its amendment with effect from 01.04.2005 as well as after its amendment with effect from 01.04.2005, it is evident that clauses (b) and (c) have not been subjected to a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eme Court in STATE OF WEST BENGAL VS. KESORAM INDUSTRIES LTD.', (2004) 10 SCC 201 cited a passage from JUSTICE G.P.SINGH'S TREATISE on Principles of Statutory interpretation summed up the following principles with regard to interpretation of taxing statute. (i) in interpreting a taxing statute, equitable considerations are entirely cut of place. Taxing statutes cannot be interpreted on any presumption or assumption. A taxing statute has to be interpreted in the light of what is clearly expressed; it cannot imply anything which is not expressed; it cannot import provisions in the statute so as to supply any deficiency; (ii) before taxing any person it must be shown that he fails within the ambit of the charging section by clear words used In the Section; and (iii) if the words are ambiguous and open to two interpretations, the benefit of interpretation is given to the subject. There is nothing unjust in the tax- payer escaping if the letter of the law falls to catch him on account of Legislature's failure to express itself clearly. The aforesaid principles were referred to with approval by another constitution bench decision of Supreme Court in 'COMMISSIO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the decision of the Income Tax Appellate Tribunal dated 29.08.2008 in case of assessee itself for the Assessment Year 2004-05 has reversed the finding recorded by the Assessing Officer in this regard. The Tribunal by an order dated 07.09.2012 has held that as per the approved plan, the total area of the land is 48,939 square feet, which is more than one acre and part of the land was handed over to the BBMP by the assessee for public purposes. It was further held that the land area, which was ultimately sold to the purchasers of various flats was only 38,573 square feet. The Tribunal by placing reliance on decision of Mumbai Bench of the Tribunal in M/s Veedhi Builders vs. ITO in ITA No.1212/2009 for Assessment Year 2005-06 held that size of the plot has to be taken as a whole and the area surrendered for the public purpose viz., for roads and gardens cannot be excluded. It is pertinent to note that Central Board of Direct Taxes (CBDT) has issued a letter dated 04.05.2001 to Maharashtra Chamber of Housing Industry and has clarified that any project, which has been approved by the local authority as a housing project should be considered adequate for the purpose of Section 10(23G) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent to note that similar view was taken in favour of the assessee in respect of Assessment Year 2005-06 and 2006-07 and the SLP against the order passed by this court has been dismissed vide orders dated 04.01.2013 and 14.03.2014 respectively. The aforesaid issue has therefore, attained finality. It is also pertinent to mention here that clause (c) of Section 80IB(10) of the Act, the Legislature has used the expression 'residential unit' and has specifically omitted to use the expression 'each'. It is also pertinent to mention here that in several Sections like Section 5A, 6(5), 10(10), 35D(1), 44AD(3), 80HHB, 80I(5), 153C, 153D, 158DA, 293A(3), 296 and 298(4) of the Act as well as under Rules 2BA, 20(4), 22(3), 62(3), 74(2), 74(6) and 104 of the Rules, the Legislature has expressly used the word 'each'. It is well settled rule of statutory interpretation that when a situation has been expressed differently, the legislation must be taken to have been tended to express a different intention. [SEE: 'COMMISSIONER OF INCOME TAX, NEW DELHI VS. EAST WEST IMPORT AND EXPORT (P) LTD' 1989 (1) SCC 760]. On plain reading of clause (c) of Section 80IB(10) of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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