2012 (12) TMI 415 - MADRAS HIGH COURT

Deduction u/s 80IB(10) - whether allowable on a prorata basis where both commercial and residential houses have been built and when there is no such provision under the statute to grant the same? - Held that:- Housing project defined under Section 80HHBA refers not only building, but also road, bridge or other structure in any part of India. Given the fact that the one and only definition we have on the 'housing project' is under Section 80HHBA and it refers to the project of construction of a building apart from other things, the expression 'housing project' as defined therein referring to "any building", should be taken as referable to a structure that is built irrespective of its usage as for residential/commercial usage for the purpose of understanding the scope of Section 80-IB(10). Thus, as rightly pointed out by assessee, irrespective of the purpose for which the housing project has been developed and constructed, so long as the conditions stipulated under Section 80-IB(10) are satisfied, the assessee would be entitled to the benefit of deduction under the said provision.

Given the object of the provisions under Section 80-IB(10) when the deduction to be granted is on the profits and gains of undertaking developing and constructing approved housing projects, in the absence of restrictive covenant under sub- Section (10) of Section 80-IB, no justifiable ground to hold that on the mere fact of some of the units having the built-up area exceeding the condition specified under clause (c), the claim for deduction would stand rejected on the entire project. As pointed out in CIT v. BRAHMA ASSOCIATES [2011 (2) TMI 373 - BOMBAY HIGH COURT] with zones classification permitting commercial establishment in residential flats too, once the local authorities approved the project with or without the commercial use as permitted under the Rules, the project approved is eligible for deduction under Section 80IB(10).

When the project fulfills the criteria for being approved as a housing project, then, deductions cannot be denied under Section 80IB(10) merely because the project is approved as residential plus commercial - In the case of mixed projects, the assessee's claim has to be allowed in full, if all the residential units satisfied clause (c); otherwise, to the extent of compliance, the relief has to be worked out. A housing project of commercial premises is entitled to 100% deduction, there being no necessity of looking at clause (c) for compliance - in favour of assessee.