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TMI Blog2022 (7) TMI 31X X X X Extracts X X X X X X X X Extracts X X X X ..... aid shops and/ or commercial establishments. Therefore, Hon ble Supreme Court, by necessary implication noted that the provision has to be read prospectively and not retrospectively. Accordingly, in view of the decision of Hon ble Supreme Court in the case of Sarkar Builders ( 2015 (5) TMI 555 - SUPREME COURT ] we allow the appeal of the assessee. - ITA No. 2259/Chny/2007 ITA No. 194/Mad/2008 - - - Dated:- 29-6-2022 - SHRI MAHAVIR SINGH , VICE PRESIDENT AND SHRI MANOJ KUMAR AGGARWAL , ACCOUNTANT MEMBER Appellant by : Shri G. Baskar , Advocate Respondent by : Shri Varuvooru Sreedhar , Addl. CIT ORDER PER MAHAVIR SINGH , VICE PRESIDENT : This ITA 194/Mad/2008 is arising out of the order of the Commissioner of Income Tax (Appeals)-V, Chennai in appeal No. 103/2006-07 order dated 02.10.2007. The Assessing Officer challengedrectification order passed by CIT(A) in ITA 103/2006-07, rectifying the order of CIT(A) in ITA No. 103/2006- 07 dated 26.06.2007. In ITA No. 2259/Chny/2007, the assessee is in appeal before Tribunal against the order of Commissioner of Income Tax (Appeals)-V, Chennai in ITA No. 103/2006-07 order dated 26.06.2007. Assessment was framed by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9 18.12.2009 M.P. No. 257/2009 in ITA No. 194/2008 order dated 10.07.2009 dismissed 10 08.01.2010 M.P. No. 259/2009 in ITA No. 2259/2007 order dated 04.04.2008 dismissed. TABLE EXPLAINING TCA Nos TCA No Against order of Tribunal in Order of Tribunal 797/2010 M.P. No. 257/2009 dated 18.12.2009 (By Assessee) Prayer to recall order of ITAT dated 10.07.2009 allowing Revenue s appeal. 870/2010 M.P. No. 259/2009 dt. 08.01.2010 (By Assessee) Prayer for recall of order of ITAT dated 04.04.2008 in ITA No. 2259/2008. 871/2010 ITA No. 194/2008 dt. 10.07.2009 (By Assessee) Tribunal Cancels CIT(A) order dated 02.10.2007 and restores earlier order dated 26.06.2007. 4. It means that now the issue before us for adjudication remains in ITA No. 2259/Chny/2007 which is restored by Hon ble High Court in TCA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ilt up area sanctioned: 15843.85 sq.m 170547.36 sq.ft Residential Built up area sanctioned: 15617.13 sq.m 168106.83 sq.ft Commercial area sanctioned: 226.72 sq.m 2440.47 sq.ft The AO noted from the copies of plans sanctioned furnished before him that the commercial block consists of 98.46 sq.m. of departmental store in the ground floor and a committee room in the first floor for the residents association. According to AO, the project consists of commercial area and hence, he disallowed the claim of deduction by observing in para 4.1 read as under: From the above, it is clear that the deduction was envisaged for housing project only and there was no mention of allowing any commercial area in it. In the present case, the commercial area was part of the stock-in-trade of the assessee and forms part of the whole project. Also, the assessee could not establish the existence of the Notification statedly issued by CBDT, upon which reliance was placed. In view of this, this project is not considered as a housing project within the meaning of section 80IB, but a housing cum commercial project, which does not qualify for deduction under that section. In view of this, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Finance Act, 2004 w.e.f. 01.04.2005 and he argued that the assessee s project is approved before 31.03.2005 by the local authorities and other conditions to claim deduction as per the provisions of section 80IB(10) of the Act are also complied with. Ld. Counsel for the assessee took us through the details filed before the AO during original assessment proceedings vide letter dated 13.03.2006 which are reproduced in the assessment order, which read as under:- 1. The plan approval was obtained before 01.04.2004, i.e. on 04.05.2001 from CMDA the designated authority under the Act. 2. Total land area of the project was 2.45 acres which is more than the prescribed minimum area of 1 acre. 3. All the residential units has a built up area of less than 1500 sq.ft. In view of the above facts the company has complied all the conditions stipulated u/s 80IB(10) of the Income tax Act 1961. 8. Ld. Counsel stated that there is no objection raised by the AO as regards to non fulfilment of of any of the conditions as per the provisions of section80IB(10) of the Act and assessee has complied with all the provisions of the Act and as noted by Hon ble Madras High Court, this iss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed that the clause permitting the housing project to include commercial area up to 5% of the aggregate built up area was brought in by legislature w.e.f. 01.04.2005 and according to us the same can be given effect to the assesse s case retrospectively. This view of our is supported by the decision of the Hon ble Supreme Court in the case of Sarkar Builders (supra), wherein it is held as under: (g) From this provision, therefore, it is clear that the housing project contemplated under sub-section (10) of Section 80IB includes commercial establishments or shops also. Now, by way of an amendment in the form of Clause (d), an attempt is made to restrict the size of the said shops and/or commercial establishments. Therefore, by necessary implication, the said provision has to be read prospectively and not retrospectively. As is clear from the amendment, this provision came into effect only from the day the provision was substituted. Therefore, it cannot be applied to those projects which were sanctioned and commenced prior to 01.04.2005 and completed by the stipulated date, though such stipulated date is after 01.04.2005. These aspects are dealt with by various High Courts el ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or thereafter, the said housing project would have to comply with the provisions of clause (d of section 80-IB(10). To our mind, we do not think that the condition/restriction laid down in clause (d) of section 80-IB(10) has to be revisited and/or looked at and complied with in the assessment year in which the profits are offered to tax by the Assessee. When the Assessee claims a deduction under section 80-IB(10), the Assessee is required to comply with such a condition only if it is on the statute-book on the date of the approval of the housing project and it has nothing to do with the year in which the profits are brought to tax by the Assessee. We have come to this conclusion only because we find that clause (d) of section 80-IB(10) is inextricably linked to the date of the approval of the housing project and the subsequent development/construction of the same, and has nothing to do with the profits derived therefrom. We may hasten to add that if a particular condition is not inseparably linked to the date of approval of the housing project, different considerations would arise. However, we are not called upon to decide any such condition and hence we are not laying down any gen ..... X X X X Extracts X X X X X X X X Extracts X X X X
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