TMI Blog2006 (7) TMI 534X X X X Extracts X X X X X X X X Extracts X X X X ..... B(10) of the Act, we hold that all the conditions specified u/s 80-IB(10) are not satisfied by the assessee and accordingly the assessee is not entitled to any deduction u/s 80-IB(10) of the Act on this ground alone. This is a factual issue and in case the road way distance from the outer limits of Municipal Corporation of BMC is more than 25 kms. from the assessee s site, the assessee s construction of six residential units of built-up area of more than 1,000 sq. ft. (less than 1,500 sq. ft.), shall not be violative of condition mentioned in section 80-IB(10)( c ) of the Act, subject to verification in this regard. As we have already held that since the assessee s building project is not a Housing Project within the meaning of section 80-IB(10) of the Act and, therefore, the assessee is not entitled to any exemption claimed u/s 80-IB(10) of the Act, the above discussion regarding the measurement of 25 kms. distance from the assessee s site to the limits of Mumbai city is of academic interest only. Accordingly, the issue in the present appeal before us is decided in favour of the Revenue and the grounds of appeal of the assessee are dismissed. In the result, the appeal of the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ave held that the house used for commercial purposes was eligible for exemption and therefore, commercial property was considered as housing property. He relied on decisions in CWT v. Mrs. Najima Nizar [1992] 197 ITR 258 1 (Ker.) and CWT v. Smt. Shushila Devi Tamakuwala [1995] 212 ITR 203 (Pat.). The ld. counsel for the assessee submitted that both the reasoning of the Assessing Officer rejecting the claim of the assessee under section 80-IB(10) are untenable for the reason that the amendment to the provisions of section 80-IB(10) is effective from 1-4-2005, i.e., from the assessment year 2005-06 and they shall not be applicable to the case of the assessee, which pertains to the assessment year 2002-03. This amendment has curtailed the deduction by inserting clause ( d ) to the fact that deduction will be available only if the built-up area of the shops and other commercial establishments included in the housing project does not exceed 5 per cent of the aggregate built-up area of the housing project or 2,000 sq. feet, whichever is less. The ld. counsel for the assessee submitted that this amendment on the statute book is not retrospective in nature and, therefore, shall not apply t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d a number of decisions in support of his plea that a provision in the taxing statute granting incentives must be construed liberally. He relied on the decisions in Govindas v. ITO [1976] 103 ITR 123 (SC), Gem Granites v. CIT [2004] 271 ITR 322 (SC), Gujarat Industrial Development Corpn. v. CIT [1997] 227 ITR 414 (SC), Bajaj Tempo Ltd. v. CIT [1992] 196 ITR 188 (SC), CIT v. Madho Pd. Jatia [1976] 105 ITR 179 (SC), CIT v. Vegetable Products Ltd. [1973] 88 ITR 192 (SC). 3. The ld. Departmental Representative submitted that in order to avail exemption from tax, the assessee has to satisfy all the conditions precedent thereto simultaneously and even non-fulfilment of a single pre-condition shall disentitle the assessee from its claim of exemption from tax with regard to the particular transaction. The ld. Departmental Representative submitted that in this case there are two clear violation of the provisions of section 80-IB(10) of the Act by the assessee inasmuch as the assessee s project was approved as a "residential as well as commercial project" by the local authority and not as a "residential project" of the assessee. He submitted that the Explanation to section 80HHBA(4) of the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of section 80-IB(10) of the Act is a beneficial provision giving deduction at the rate of 100 per cent of the profits derived in any previous year from a housing project, if all the conditions mentioned therein are fulfilled by an assessee. In this case, the assessee is a registered firm engaged in the business of developing real estate project in Dombivali. The assessee has claimed exemption with regard to its building project at village Gajbandhan, Dombivali under section 80-IB(10) of the Income- tax Act, 1961. It has been denied by the Assessing Officer and the order of the Assessing Officer has been confirmed by the CIT(A). The ground of rejection of the claim of the assessee under section 80-IB(10) of the Act by the Department are two namely that the project contain commercial area of 3,143 sq. feet of shops and hence is not a housing project and the other reason is that the project was within 25 kms. from the city of Mumbai and consisted of six residential units of built-up area more than 1,000 sq. feet, which violates the provision of section 80-IB(10)( c ) of the Act. There is no dispute with regard to other conditions laid down under section 80-IB(10) of the Act, which are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of application of the provision of section 80-IB(10) of the Act. We find that in this case it was not established by the assessee that its building project is primarily a "Housing Project" in the facts of the case of the assessee. The building project of the assessee was approved by the local authority named Kalyan Dombivali Municipal Corporation (KDMC) as a residential as well as commercial project. The CIT(A) has given a clear cut finding on this issue on the basis of a copy of the approval letter by KDMC filed by the assessee. We are unable to accept the argument of the ld. counsel for the assessee that since the case pertains to pre-amendment period, the deduction under section 80-IB(10) will be available to the assessee even if the shops and other commercial establishments are included in the housing project of the assessee. If this argument of the assessee is accepted, then it shall nullify the very object of introducing the provision of section 80-IB(10) in the statute book for promotion of housing activity in the country since there shall be no limit of the total built-up area devoted to the construction of shops and other commercial establishments in the housing project ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the case of the assessee for the relevant year as the building project of the assessee was not a "Housing Project" and accordingly does not qualify for deduction under section 80-IB(10) of the Act. In view of our finding that the building project of the assessee was not a "Housing Project" and, therefore, the assessee s case does not qualify for deduction under section 80-IB(10) of the Act, we hold that all the conditions specified under section 80-IB(10) are not satisfied by the assessee and accordingly the assessee is not entitled to any deduction under section 80-IB(10) of the Act on this ground alone. 7. The other issue of measurement of distance of 25 kms. from Mumbai city and the six residential units of more than 1,000 sq. ft. built-up area constructed by the assessee, we find that the issue is merely of academic interest only for the reason that we have already held in the preceding paras of this order that the assessee s building project is not a "Housing Project" and, therefore, not entitled to the benefit of deduction under section 80-IB(10) of the Act. However, since much arguments were addressed from both the sides on this issue also, we proceed to record our findin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... road way distance between the assessee s project and the precincts of Mumbai even from toll Naka at Mulund side as verified by the Inspector sent by the Assessing Officer is 25.3 kms. This is a factual issue and in case the road way distance from the outer limits of Municipal Corporation of BMC is more than 25 kms. from the assessee s site, the assessee s construction of six residential units of built-up area of more than 1,000 sq. ft. (less than 1,500 sq. ft.), shall not be violative of condition mentioned in section 80-IB(10)( c ) of the Act, subject to verification in this regard. As we have already held that since the assessee s building project is not a "Housing Project" within the meaning of section 80-IB(10) of the Act and, therefore, the assessee is not entitled to any exemption claimed under section 80-IB(10) of the Act, the above discussion regarding the measurement of 25 kms. distance from the assessee s site to the limits of Mumbai city is of academic interest only. Accordingly, the issue in the present appeal before us is decided in favour of the Revenue and the grounds of appeal of the assessee are dismissed. 9. Before parting with the appeal, we want to place on rec ..... X X X X Extracts X X X X X X X X Extracts X X X X
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