TMI Blog2012 (7) TMI 91X X X X Extracts X X X X X X X X Extracts X X X X ..... eld to be retrospective; it applies only to such housing projects, which are approved subsequent to 01.04.2005 - Assessee, in the instant case, is entitled to the benefit of the aforesaid provision and hence the said substantial question of law is answered in favour of the assessee and against the revenue. Whether a housing project includes a commercial complex - if in the housing projects approved by the local authority, a commercial complex is also constructed, does it cease to be a housing project so as to disentitle the assessee from the benefit of Section 80-IB (10) of the Act - by way of amendment, introduction of clause 'd' of sub-Section 10 of Section 80-IB, it is clear that the housing project contemplated under sub-section 10 of Section 80IB includes commercial establishments or shops also – Held that:- By way of an amendment, an attempt is made to retract the size of the shops or commercial establishments - Therefore, necessarily the said provision also has to be read prospectively and not retrospectively. As is clear from the amendment, this provision came into effect only from the day the provision was substituted. Therefore, it cannot be retrospective - In favour o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... up area of many top floor flats with head rooms far exceeds the limit of 1500 sq. ft. The said head rooms were the integral part of the housing project. The assessee contended that as the construction of the head rooms were made by the purchasers, the said construction cannot be taken into account to find out whether the each unit is within the limit of 1,500 sq.ft. Similarly, the space occupied by the balcony also should be excluded as per National Building Code, as it does not fall within the definition of built-up area. If these two things are excluded all the 84 flats would be within the 1,500 sq.ft., and therefore the assessee is entitled to the benefit under Section 80-IB. However, the assessee did not claim benefit in respect of the commercial construction. The Assessing Officer held that as all these head rooms is so unique in style and design with spiral staircase and exactly the same material with same colour, if purchaser has constructed the same, such a similarity would not have been there. Therefore, he recorded a finding that the assessee has constructed these head rooms though in the registered sale deed it is not a part of it. The Assessing Authority held that there ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y to the sanctioned plan was built by the assessee or by the owners had not been proved by the Assessing Officer by shifting the burden when allowing deduction u/s. 80-IB(10) of the Act? ( ii ) Whether the Tribunal was correct in holding that the definition of "built up area" inserted by Finance No. 2 Act of 2004 w.e.f. 01.04.2005 to Section 80-IB(10) of the Act cannot be applicable to the current assessment year as the same is not clarifictory and would have to be read prospectively? ( iii ) Whether the Tribunal was correct in holding that the housing project over which deduction u/s. 80-IB(10) of the Act was claimed was entitled to the same despite a commercial complex also been constructed and wrongly applying the Board Circle? ( iv ) Whether the Tribunal was correct in allowing deduction u/s. 80-IB(10) of the Act when the same was to encourage infrastructure development of middle income housing projects recognizing the acute shortage of housing facilities in bigger cities and second tier cities so that the tax benefit should be passed onto the consumer when the assessee violated the norms prescribed in the Section and the sanctioned plan by availing of benefit not ent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion,- ( a ) "built-up area" means the inner measurements of the residential unit at the floor level, including the projections and balconies, as increased by the thickness of the walls but does not include the common areas shared with other residential units" 5. Prior to the insertion of this definition in the aforesaid section, built-up area did not include projections and balconies as per the National Building Code, Building Industry Practice and also according to the Building by-laws. Probably taking advantage of this fact, the builders provided these balconies and projections which made these residential units bigger than 1,500 sq. ft. and thus, had the benefit of this prevision on the one hand. Whereas the object, with which this provision was made in reality was defeated as probably such residential units would be beyond the each of the common man. 6. It is in this background, this amendment was brought to law by way of insertion making it clear that the said projection and balconies constitute common area shared with other residential units and they have to be included in the definition of built-up area and then such premises should satisfy the requirement of 1,50 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to have been approved on the date on which the building plan of such housing project is first approved by the local authority; ( ii ) the date of completion of construction of the housing project shall be taken to be the date on which the completion certificate in respect of such housing project is issued by the local authority; ( b ) the project is on the size of a plot of land which has a minimum area of one acre: Provided that nothing contained in clause(a) or clause (b) shall apply to a housing project carried out in accordance with a scheme framed by the Central Government or a State Government for reconstruction or redevelopment of existing buildings in areas declared to he slum areas under any law for the time being in force and such scheme is notified by the Board in this behalf; ( c ) the residential unit has a maximum built-up area of one thousand square feet where such residential unit is situated within the city of Delhi or Mumbai or within twenty-five kilometers from the municipal limits of these cities and one thousand and five hundred square feet at any other place, [***] ( d ) the built-up area of the shops and other commercial establishments in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tained in the building by-laws, the said plan also should be in conformity with the aforesaid provision under the Act. After preparing the plan, obtaining approval, he has to commence the construction and complete it within the period stipulated in the said provision. In the substituted provision, the legislature has consciously bifurcated such construction of housing project into three cases. The first case deals with the approval obtained by the local authority before the 1st day of April 2004; in the second case, after 1st day of April 2004 and before the 31st day of March 2005 and in the third case, approvals obtained after the 1st day of April 2005. 9. In respect of approvals obtained prior to 01.04.2005, if sub-section 14(a) of Section 80-IB is held to be applicable, then, the assessee has to necessarily seek for a modified plan. Otherwise, If he proceeds with the construction without obtaining the sanction of the modified plan, he would not be eligible for benefit of tax exemption under Section 80-IB(10). Similarly, if a valid approval is obtained and the building is constructed in all respects prior to 01.04.2005 and if the said substituted provision is held to be appli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the prescribed limit, the assessee has utilised the said land for the purpose of constructing a commercial complex also. When a housing project is constructed, it is meant for families living there. Normally these constructions are taken up either in the outskirts of the city or far away from the city. Naturally these residents do need to purchase basic requirements. If such a basic requirement are available where they reside probably they living in such residential apartments would be more meaningful. At the same time, such a commercial construction cannot be constructed within one acre of land, which is the minimum prescribed for attracting this provision at the cost of residential flats. If such an interpretation is placed, it would defeat the very object of the Act. But at the same time, probably experience has showed that under the guise of putting up a residential housing project and claiming benefits as in this case, a commercial building measuring about 17600 sq ft. is constructed which works out roughly to 9.3% of the total land. In that context, the legislature wanted to clarify the position and prevent such abuses in future. Therefore, prior to 01.04.2005, there was no ..... X X X X Extracts X X X X X X X X Extracts X X X X
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