TMI Blog2012 (11) TMI 583X X X X Extracts X X X X X X X X Extracts X X X X ..... nder section 80IB(10)even if the project had commercial element in excess of 10%. section 80IB(10) allows deduction to the entire project approved by the local authority and not to a part of the project. If the conditions set out in section 80IB(10) are satisfied, then deduction is allowable on the entire project approved by the local authority and there is no question of allowing deduction to a part of the project.In the present case hold that assessee is entitled for deduction under section 80IB on pro-rata basis. The A.O. is therefore, directed to allow the deduction under section 80IB(10) on pro-rata basis as discussed above. This ground of appeal is allowed. In the result, Revenue’s appeal is dismissed. Rectification order – Court has specifically mentioned that the writ petition was misconceived and therefore liable to be dismissed. The ratio laid down by the High Court in the said case was that writ petition against order under s. 254(2) cannot be rejected on the ground of availability of alternate remedy. The Madras High Court has not considered anything concerning the merit of the issue that whether in the circumstances stated above the assessee could claim deduction un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , para 17 18 of the order with direction to the Registry to fix the appeal for hearing on ground No.2 on an earlier possible date with advance notices to the parties. 3. So the limited issue before us is with regard to allowability of prorata claim u/s.80IB(10) with reference to the residential portion of the housing project. In this regard, Ld. Authorised Representative submitted that this issue of allowability of prorata claim u/s.80IB(10) with reference to area of residential unit of housing project has been decided in favour of the assessee by Mumbai Tribunal in DCIT Vs. Ekta Housing Pvt. Ltd., wherein it has been held as under: 11. Rival contentions heard. On careful consideration of the facts and circumstances of the case and on perusal of the papers on record, orders of the authorities below as well as the case laws cited before us, we hold as follows:- i) The controversy can be brought out by extracting para-6 from the assessment order, which reads as under:- 6. The submissions of the assessee have been duly considered. The same are not acceptable as section 80IB(10) does not lay down the theory of proportionate deduction. If the assessee satisfies ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om each unit separately. v) Mumbai G Bench of this Tribunal in Sheth Developers Pvt. Ltd. (supra), has held as follows: .... As regards the A project assessee is eligible for relief on prorata basis in respect of the flats which did not have a built-up area exceeding 1,000 sq.ft. quantum of deduction in respect of the flats which have built-up area less than 1,000 sq.ft., has to be worked out on pro-rata basis A.O. accordingly directed to verify the claim of the assessee and allow the deduction on pro-rata basis in respect of flats in A Project. vi) Kolkata C Bench of this Tribunal in Bengal Ambuja Housing Development Ltd. vs. DCIT, ITA No.1595/Kol./2005, vide order dated 24th March 2006, held as under:- It is apparent from the perusal of section 8018(10) that this section has been enacted with a view to provide incentive for businessmen to undertake construction of residential accommodation for smaller residential units and the deduction is intended to be restricted to the profit derived from the construction of smaller units and not from larger residential units. Though the A.O. has denied the claim of the assessee observing that larger units were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sue before the High Court is when there is a commercial element in a residential project, will the assessee be denied the entire exemption. In this case, the Hon'ble High Court has observed that when the local authority approved a plan as a housing project or a residential cum commercial project, the assessee would be entitled to claim for deduction under section 80IB(10) even if the project had commercial element in excess of 10%. At paras-27 and 28, the Court observed as follows: 27. The question then to be considered is, whether the Special Bench of the Tribunal was justified in holding that the projects having commercial area upto 10% of the built-up area of the plot are eligible for deduction under section 80IB(10) on the entire project upto 1.4.2005. Once the basic argument of the revenue that the housing projects with commercial user are not entitled to section 80IB(10) deduction is rejected, then in the absence of any restriction imposed under the Act, it was not open to the Tribunal to hold that the projects approved by the local authorities having residential buildings with commercial user upto 10% of the plot area would alone be entitled to deduction under sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le Jurisdictional High Court in Brahma Associates (supra), does not come to the rescue of the Revenue. x) On the other hand, all the decisions of the co-ordinate Benches of the Tribunal cited before us are in favour of the assessee. Respectfully following the same, we uphold the following finding of the Commissioner (Appeals), vide Para-2.8 of his order:- 2.8 The appellant's claim is supported by the decision of Hon'ble Mumbai ITAT in case of M/s. Saroj Sales Organisation ITA no.4008/Mum./2007 order 24.1.2008, wherein on identical facts the Hon'ble ITAT following the Hon'ble Supreme Court decision in the case of Bajaj Tempo Ltd., reported in 196 ITR 188 has observed that the provisions should be interpreted liberally. Further, following the Hon'ble /TAT decision in the case of Bengal Ambuja Housing Development Ltd. Kolkata, the Hon'ble Mumbai ITAT allowed the assessee's claim on prorata basis on qualifying units which satisfied the conditions laid down by section 80IB(10). The Hon'ble ITAT Kolkata in the case of Bengal Ambuja Housing Development Ltd. vs DCIT (ITA no.1595/Kol./2005, A. Y. 2002-03, Bench C', order dated 24.3.2006 (2007) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... romotors (P) Ltd., has been confirmed by the Madras High Court. The Madras High Court in its writ order has dealt with only the writ application filed by the assessee against the order of the tribunal dismissing the miscellaneous petition filed by the assessee. The Court has specifically mentioned that the writ petition was misconceived and therefore liable to be dismissed. The ratio laid down by the High Court in the said case was that writ petition against order under s. 254(2) cannot be rejected on the ground of availability of alternate remedy. The Madras High Court has not considered anything concerning the merit of the issue that whether in the circumstances stated above the assessee could claim deduction under s.80IB(10) or not. The Court clarified that it was still open for the assessee to appeal against the finding of the Tribunal on merits of the issue in appeal before the High Court permitted under s.260A. Therefore it is premature to hold that the order of the Tribunal, Chennai Bench in the case of Asst. CIT vs. Viswas Promotors (P) Ltd. has been upheld by the jurisdictional High Court. Where the jurisdictional High Court has dismissed the appeal ag ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
