TMI Blog2015 (1) TMI 51X X X X Extracts X X X X X X X X Extracts X X X X ..... ere absent in the section prior to its amendment - the housing projects were approved prior to 31st March, 2005 - the Legislature did not intended to give any retrospectivity to clause (d) of section 80-IB(10) - it is clearly a condition that relates to and/or is linked with the approval and construction of the housing project - clause (d) of subsection (10) of section 80-IB cannot have any application to housing projects that are approved before 31st March, 2005 - The said clause (d) being inextricably linked to the date of approval of the housing project, it will have to be held that the clause operates only prospectively i.e. for housing projects approved after 1st April, 2005 - the project was approved prior to 1.4.2005 on 10.01.2005 by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntoor, the assessee has claimed deduction u/s 80IB(10) of the Act. Whereas, the commercial area in this housing project was approximately 12,381 sq. ft. Accordingly, the Assessing Officer asked the assessee as to why the deduction u/s. 80IB(10) be not disallowed. The assessee contended that the project was approved prior to 01.04.2005 and, therefore, the amended provisions of section 80IB(10) w.e.f 1.4.2005 vide Finance Act, 2004 whereby the condition of maximum area of commercial project is provided under clause (d) is not applicable in the case of the assessee. The Assessing Officer did not accept the contention of the assessee and disallowed the claim of deduction u/s 80IB(10) on the ground that area of commercial establishment in the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ces Pvt. Ltd (supra), wherein the Hon'ble Jurisdictional High Court after considering the entire history of section 80IB(10) as well as the various decision on this point held in para 35 as under:- 35. However, the provisions of section 80-IB(10) were substantiallyamended by way of Finance (No.2) Act, 2004 w.e.f. 1st April, 2005. As can be noted from the amended provisions, there were several conditions that were imposed in the newly substituted section 80-IB(10) that were absent in the said section prior to its amendment. One such condition inserted w.e.f. 1st April, 2005 was clause (d) that put a restriction on the quantum of commercial area that could be included in a housing project in order to entitle the assessee to claim the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion (10) of section 80-IB merely because he has offered his profits to tax in A.Y. 2005-06 or thereafter, even though his housing project was approved before 31st March 2005, would be requiring the Assessee to virtually do a humanly impossible task. This, in our opinion, could never have been the intention of the Legislature. In fact, to our mind, it would run counter to the very object for which these provisions were introduced, namely to tackle the shortage of housing in the country and encourage investment therein by private players. It is therefore clear that clause (d) of subsection (10) of section 80-IB cannot have any application to housing projects that are approved before 31st March, 2005. The said clause (d) being inextricably li ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ould negate the very object and purpose for which section 80-IA(4F) and thereafter section 80-IB(10) were introduced in the first place. In that view of the matter, the condition/restriction imposed by clause (d) of section 80-IB(10) and which came into effect from 1st April 2005, can apply only to such housing projects which are approved on or after 1st April, 2005. It would not be out of place to mention that the said judgment of the Karnataka High Court was challenged before the Supreme Court and the Special Leave Petition against the same was dismissed on 7th January, 2013. 41. We also find that a similar issue as the one raised in these Appeals came up for consideration before the Division Bench of Gujarat High Court in the case of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of such deduction is to facilitate the construction of residential housing project and while approving such project when initially there was no such restriction in taxing statute and the permissible ratio for commercial user made 5 per cent to the total built-up area by way of amendment and reduction of which by further amendment to 3 per cent of the total built-up area, has to be necessarily construed on prospective basis. 35. As is very apparent from the record, there was no criteria for making commercial construction prior to the amended section and the plans are approved as housing projects by the local authority for both the projects of the appellant. Permission for construction of shops has been allowed by the local authority in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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