TMI Blog2014 (3) TMI 643X X X X Extracts X X X X X X X X Extracts X X X X ..... ong as the built up area of shops is less than 10% of the total built up area the assessee cannot be denied the benefit under section 80IB of the Act - the project undertaken by the assessee was approved as a 'housing project' by the local authority in March, 2004 and the construction also having been commenced in 2004 the pre-amended provisions are applicable in which event the assessee is entitled to claim deduction under section 80IB(10) of the Act - thus, the order of the CIT(A) is upheld – Decided against Revenue. - ITA No. 6901 & 8469/Mum/2010 - - - Dated:- 14-3-2014 - Shri D. Manmohan And Shri N. K. Billaiya,JJ. For the Appellant : Shri Rajesh Ranjan Prasad For the Respondent : Shri Reepal G. Tralshawala ORDER Per D. Manmohan, V. P. These two appeals are directed against the orders passed by the CIT(A)- 30, Mumbai and they pertain to assessment years 2006-07 and 2007-08. 2. Eligibility to claim deduction under section 80IB(10) of the Income Tax Act, 1961 is the subject matter of dispute before us. 3. The facts of the case revolve in a narrow compass. The assessee is engaged in the business of developing housing project. The assessee fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... subject to fulfilling of clause 'd' w.e.f. 01.04.2005. For immediate reference clause 'd' is reproduced hereunder: - the built up area of the shops and other commercial establishments included in the housing project does not exceed 5% of the aggregate built up area of the housing project or 2000 sq.ft., whichever is less. 6. During the course of assessment proceedings for the years under consideration the AO noticed that the assessee has catered some space for building shops and commercial establishments, the total of which is in excess of 2000 sq.ft. and as per sub-clause 'd' to section 80IB(10) of the Act the assessee is not entitled to the benefit of deduction if the built up area of the shops is in excess of 2000 sq.ft. It also deserves to be noticed that according to the assessee the total built up area of the shops in the project is 1816 sq.ft. but the AO has given reasons to establish that the built up area of commercial space is more than 2000 sq.ft. and the assessee has not preferred an appeal before us on this aspect. 7. The AO noticed that the assessee constructed 14 shops in the housing project and the total area of 1816 sq.ft. refers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Aggrieved, assessee raised a two fold contention before the CIT(A), i.e.; (a) Section 80IB(10)(d) was introduced into the Statute book w.e.f. 01.04.2005 which cannot be made applicable to the housing projects approved prior to the said date, and (b) the only pre-condition as per the pre-amended provision was that the project should be approved as a housing project and unlike the conditions prescribed under clause 'd' there is no such restriction with regard to the built up area of shops and hence, whether the built up area of shops is below 2,000 sq.ft. or above 2,000 sq.ft. would not make any difference for the purpose of making a claim under section 80IB(10) of the Act. Elaborating further it was contended that a beneficial provision such as section 80IB(10) has to be read in a way that would advance the legislative object and intent and it should not be interpreted in a way that it would make the provision redundant. In the instant case the local authority has approved the project as housing project and the assessee had developed more than 90,000 sq.ft. out of this the major portion is for residential units and only a meagre area was converted into shops for the conveni ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ousing project' by the local authority in March, 2004 and the construction also having been commenced in 2004 the pre-amended provisions are applicable in which event the assessee is entitled to claim deduction under section 80IB(10) of the Act and directed the AO accordingly. 11. Aggrieved, Revenue is in appeal before us. The learned D.R. (CIT-D.R.) has not disputed the factual matrix of the case. Admittedly, the extent of land which was taken up for development admeasures about six acres and the project was approved as housing project by the local authority and Park- I and Park-II projects were commenced prior to 31.03.2004. The CIT-D.R's emphasise was mainly on the amended provisions whereby the assessee would loose the benefit of deduction if the built up area utilised for shops, etc. exceeds 2,000 sq.ft. He adverted our attention to clause 'd' of section 80IB(10) of the Act which came into effect from 01.04.2005. In his opinion, the assessee having obtained completion certificate on 05.12.2005 in respect of Park-II and on 04.01.2006 in respect Park-I, the amended provisions will come into play and, therefore, the assessee is not entitled to deduction under s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erved that the provision as it stood at the time when the assessee is entitled to claim deduction is applicable; if during the eligibility period tax holiday period is extended the assessee can claim benefit as per the amended provisions. In the opinion of the CIT-D.R. the underlying ratio squarely applies to the case on hand which amply makes it clear that the amended provisions can be made applicable in the years in which the claim is made. He has also referred to the decision of the Indore Bench of the ITAT wherein similar view was taken. In the light of these decisions the learned CIT-D.R. was of the view that the law correctly laid down in a later decision should be preferred to that of the earlier decisions of the Tribunal or High Court. He has also referred to the decision of the Hon'ble Bombay High Court in the case of CIT vs. Thane Electricity Supply Ltd. 206 ITR 727 in support of his contention that the expression two views means two logical views and merely because one view, which is based on improper reasoning, is already taken by a Bench or a High Court it cannot be strictly treated as one permissible view and in such cases appellate forum is entitled to apply th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the Hon'ble Gujarat High Court and Hon'ble Bombay High Court have taken a uniform view that the amended provision and condition of built up area in respect of space utilised for construction of shop is prospective in nature and not applicable to the projects approved prior to 01.04.2005. He, therefore, submitted that in the absence of any contrary decision on section 80IB of any High Court, the decision of the Hon'ble Bombay High Court has to be followed and thus he justified the view taken by the learned CIT(A). 13. We have carefully considered the rival submissions and perused the record. It is not in dispute that the Hon'ble Bombay High Court in the case of Brahma Associates (supra) had considered this very issue and arrived at a conclusion that clause 'd' to section 80IB(10) is prospective in nature and cannot be made applicable to the projects approved prior to 01.04.2005. Though there was deviation from the earlier judgement by certain Benches of the Tribunal, but subsequent to the decision of the Hon'ble Gujarat High Court in the case of Manan Corporation (supra) the stand taken earlier by some of the Benches was not followed and all the Ben ..... X X X X Extracts X X X X X X X X Extracts X X X X
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