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2016 (2) TMI 698 - AT - Income TaxRevision u/s 263 - Deduction u/s 80IB(10) to be disallowed - Held that:- Cl. (d) of s. 80-IB(10) inserted w.e.f. 1st April, 2005 which provides that deduction under s. 80-IB(10) would be allowable where the commercial user does not exceed five per cent of the aggregate built-up area of the housing project or two thousand square feet, whichever is less. In the absence of any restriction under the Act, it was not open to the Tribunal to hold that the projects approved by the local authorities having residential buildings with commercial user upto 10 per cent of the plot area are alone entitled to deduction under s. 80-IB(10). Restriction regarding commercial user has been imposed for the first time by inserting cl. (d) in s. 80-IB(10) w.e.f. 1st April, 2005. The argument of the Revenue that s. 80-IB(10) as amended by inserting cl. (d) should be applied retrospectively has no merit as cl. (d) has been specifically inserted w.e.f. 1st April, 2005 and, therefore, it cannot be applied for the period prior to 1st April, 2005. In the present case, the plan for construction of the Housing Project at 1/1, R.R.L.Mitra Road, Kolkata 700085 was sanctioned by the Kolkata Municipal Corporation 09.12.1999, i.e., prior to 1-4-2005. In view of the aforesaid decision on the point, we do not find that any useful purpose will be served by examining this issue again by the AO, as admittedly the plan sanction in the case of the Assessee was prior to the statutory amendment. In the given facts and circumstances we are of the view that jurisdiction u/s 263 of the Act has not been properly exercised by C.I.T. as the condition precedent for exercise of such power viz., that the order of the AO was erroneous and prejudicial to the interest of revenue for failure on the part of the AO to make proper enquiries before completion of assessment. The jurisdiction u/s.263 of the Act could not have also been exercised for the reason that the AO did not enquire or examine as to whether commercial area in the project exceeded to statutory limits laid down in Sec.80IB(10)(d) of the Act. We, therefore, quash the order u/s 263 of the Act and allow the appeal of the assessee.
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