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2015 (7) TMI 1399 - AT - Income TaxDeduction u/s 80IB - Claim denied as two units have exceeded the stipulated constructed area - definition of “Built up Area” in the newly inserted provisions of section 80IB(14)(a) - excess of area of maximum limit of 1500 sq. ft. to qualify for 80-IB(10) deduction and AO was of the view that the provisions of section 80IB are in respect of complete housing project and not individual unitwise, thereofre, 80IB deduction shall be allowed for complete housing project - Scope of newly inserted provision for definition of “Built up Area” in section 80IB(14)(a) - HELD THAT:- We would like to state that the assessee has been granted completion certificate as per the sanctioned plan and no deviations or compounding fee have been reported/levied. Further, we would also like to state that those conditions can be applied to the housing projects which were on the statute book on the date when the housing projects were approved by local authority. In other words, in case the housing projects were approved by the local authority prior to 31.3.2004 then the newly inserted definition of “Built up Area” in section 80(1B)(14a) shall not be applicable to such housing projects. An assessee cannot be asked to comply with the conditions which were not a part of the statute when the housing project was approved and more so when such conditions are inextricably linked with the approval granted to the housing project by the local authority under its own rules and regulations. If the condition of sub-section (14)(a) of section 80IB is held applicable to the projects approved prior to 1.4.2005 then the assessee has to necessarily seek for a modified plan otherwise the assessee will not be eligible for exemption u/s 80IB(10) and when the assessee obtained valid approval and constructed the building in all respect prior to Ist April, 2005, then also if the provisions are applied retrospectively, the assessee would not be entitled to benefit of tax exemption. We would like to mention that such beneficial provisions in the Act have been brought into to bring in investment and to encourage infra-structure development of middle income housing projects. If these amended provisions are made effective retrospectively then it will negate the object of the provision. If certain areas are not considered as part of built up area as per Municipal Act then the definition of built up area that is introduced in the Act at later stage shall not be substituted to the project approved prior to that date. It is a settled law that the Court has to harmonize the provision and interpret the same in a manner to achieve the object of legislature than to distress the said object. Therefore, in our considered view, the definition of ‘Built up area’ as inserted by subsection (14)(a) to section 80IB of the Act by the Finance Act (No. 2) 2004, cannot be applied retrospectively and if this definition is not applied, the measurement of constructed unit comes within the limit as provided in the Act. - Decided in favour of assessee.
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