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TMI Blog2012 (4) TMI 54X X X X Extracts X X X X X X X X Extracts X X X X ..... ts constructed by the assessee ?" 2. The assessment years involved herein are AY 20042005 and 20052006. 3. Since several appeals are filed in this Court raising similar questions, we have heard counsel for various parties as intervenors. 4. The respondent - assessee is a registered partnership firm engaged in the business of construction and development of housing projects. 5. For the sake of convenience, we set out the facts in Income Tax Appeal No.3633 of 2009. The relevant facts in that appeal are that on a plot of land, admeasuring 2.36 acres situated at Kandivali (West), Mumbai, the assessee had constructed buildings A, B, C and D over a period of years. Intimation of disapproval in respect of those buildings were granted during the year 1993 to 1996. By following the work in progress method of accounting, the assessee offered to tax the income earned by constructing buildings A, B, C and D from timetotime. Deduction under Section 80IB (10) of the Act on the income earned from buildings A, B, C and D buildings was not claimed as the approval for construction of those buildings were granted prior to 1st October 1998. Pursuant to an order passed by the State Government in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duction under Section 80IB (10) was disallowed for AY 20052006. 10. The appeals filed by the assessee against the disallowance of the claim under Section 80IB (10) were dismissed by the Commissioner of Income Tax (Appeals). 11. On further appeals filed by the assessee, the Tribunal by its orders dated 29th April 2009 and 27th May 2009 held that the assessee is entitled to the deductions under Section 80IB (10). Challenging the aforesaid order, the present appeals are filed by the Revenue. 12. Mr.Suresh Kumar, learned Counsel for the Revenue argued before us that the amount of deduction under Section 80IB (10) of the Act is available to an undertaking where the development and construction of the housing project has commenced on or after 1st October 1998 and is completed within the time stipulated therein. In the present case, approval for construction of 'E' building was granted on 11th October 2002 as and by way of extension of the approval granted to the earlier housing project consisting of A, B, C and D buildings. Since approval to the housing project consisting of A, B, C, D and E building was first granted in the year 1993, it must be held in view of the Explanation to Sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of March, 2005 by a local authority, shall be hundred per cent of the profits derived in any previous year relevant to any assessment year from such housing project if, ( a) such undertaking has commenced or commences development and construction of the housing project on or after the 1st day of October, 1998; (b) the project is on the size of a plot of land which has a minimum area of one acre; and (c) the residential unit has a maximum builtup area of one thousand square feet where such residential unit is situated within the cities of Delhi or Mumbai or within twentyfive kilometers from the municipal limits of these cities and one thousand and five hundred square feet at any other place." 16. Section 80IB (10) substituted with effect from 1st April 2005, to the extent relevant herein, reads thus : "( 10) The amount of deduction in the case of an undertaking developing and building housing projects approved before the 31st day of March, 2007 by a local authority shall be hundred per cent of the profits derived in the previous year relevant to any assessment year from such housing project if, ( a) such undertaking has commenced or commences development and construction of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... units of the size not exceeding 1000 square feet ('E' building in the present case) would constitute a 'housing project' under Section 80IB (10) of the Act. 20. The question, then, to be considered is, whether construction of 'E' building is an independent housing project or extension of the housing project already existing on the plot in question. It is the contention of the Revenue that since the approval for construction of 'E' building was granted by the local authority subject to the conditions set out in the first approval granted on 12th May 1993 for construction of A and B building, construction of 'E' building must be considered to be the extension of the earlier housing project for which approval was granted prior to 1st October 1998 and, therefore, the benefit of Section 80IB (10) cannot be granted. There is no merit in the above argument, because, when the plans for A, B, C and D buildings were approved during the period from 1993 to 1996, construction of 'E' building was not even contemplated on the plot in question. It is only in the year 2001 when the status of the land was converted from surplus vacant land into within the ceiling limit land by the State Governmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eek amendment of the building plan at several stages of the construction and the same may be approved. In such a case, the explanation provides that for the purposes of Section 80IB (10) the housing project shall be deemed to have been approved on the date on which the first approval was granted by the local authority. Thus, the Explanation to Section 80IB (10)(a) refers to the approval granted to the same housing project more than once and the said Explanation would not apply where the approval is granted to different housing projects. In the present case, as noted earlier, construction of 'E' building constitutes an independent housing project and, therefore, the date on which the earlier housing project had commenced construction could not be applied to the housing project consisting of 'E' building merely because the conditions set out while granting approval to the earlier housing project have also been made applicable to the housing project in question. 23. The next argument of the Revenue is that to avail the deduction under Section 80IB (10), the housing project must be on the size of a vacant plot of land which has minimum area of one acre. In the present case, there are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted would defeat the object with which Section 80IB (10) was enacted. 27. Moreover, plain reading of Section 80IB (10) does not even remotely suggest that the plot of land having minimum area of one acre must be vacant. The said Section allows deduction to a housing project (subject to fulfilling all other conditions) constructed on a plot of land having minimum area of one acre and it is immaterial as to whether any other housing projects are existing on the said plot of land or not. In these circumstances, construing the provisions of Section 80IB (10) by adding words to the statute is wholly unwarranted and such a construction which defeats the object with which the Section was enacted must be rejected. 28. Apart from the above, the Central Board of Direct Taxes (CBDT) by its letter dated 4th May 2001 addressed to the Maharashtra Chamber of Housing Industry has stated thus : "The undersigned is directed to refer to your letter No.MCHI:RSA:m:388/19799/3 dated 1st January 2001 and to state that the additional housing project on existing housing project site can qualify as infrastructure facility under Section 10(23G) and 80IB (10) provided it is taken up by a separate undertaki ..... 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