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The Commissioner of Income Tax Versus M/s. Raviraj Kothari Punjabi Associates

2015 (5) TMI 361 - BOMBAY HIGH COURT

Deduction u/s.80IB(10) - whether ITAT allowing deduction u/s.80IB(10) for A.Ys.2003-04 even though the project had been sanctioned as residential + commercial by Pune Municipal Corporation and was thus not a housing project ? - Held that:- Since the project is admittedly approved prior to 1.4.2005 the assessee is covered in the case of the Commissioner of Income Tax Vs. M/s. Happy Home Enterprises decided in [2014 (9) TMI 707 - BOMBAY HIGH COURT] wherein which one of us (Shri S.C. Dharmadhikari, .....

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t from 1.4.2005. No substantial questions of law. - Decided against revenue. - Income Tax Appeal Nos. 1628, 1629, 1931, 2235, 2469, 354 of 2013 - Dated:- 24-4-2015 - S. C. Dharmadhikari And A. K. Menon,JJ. For the Petitioner : Mr Vimal Gupta, Senior Counsel a/w Mr Sham Walve i/b Mr V A Bajpayee For the Respondent : Mr Mihir Naniwadekar ORDER P.C. 1. These six appeals pertain to assessment years 2003-04 to 2008-09. Each of these appeals propose different set of questions all of which have now bee .....

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and was thus not a housing project ? (2) Whether on the facts and circumstances of the case, the Hon'ble Income Tax Appellate Tribunal erred in holding that up to 31.03.2005, deduction u/s. 80IB(10) was allowable to housing project approved by the local authority having residential units with commercial user to the extent permitted under the DC rules/regulations framed by the respective local authorities, irrespective of whether the project is approved as a "housing project" or as .....

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d and understood on common parlance i.e. as a project consisting of residential houses, and, therefore, was no need whatsoever to resort to any interpretation ? (4) Whether on the facts and circumstances of the case, the Hon'ble Income Tax Appellate Tribunal erred in not appreciating the fact that the word "included" in clause (d) of Sec.80IB(10) which was introduced w.e.f. 1.4.2005, to hold that commercial user is an integral part of the housing project and, therefore, would have .....

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assessment year 2003-04 can be taken up conveniently for the purpose of all these appeals. The Respondent is a developer who had obtained approval of a project by Pune Municipal Corporation for constructing residential and commercial premises consisting of 10 buildings. The Assessing Officer held that in respect of assessment year 2003-04 the assessee declared total sales in relation to its project "Citadel" at ₹ 13,97,83,157/- on which net profit was shown at ₹ 4,88,52,973 .....

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f section 80IB(10). 3. The Assessee contended that constructed commercial premises was part of project and required to be constructed as per mandatory requirement of Pune Municipal Corporation and the City Engineer of Pune Municipal Corporation. It was categorically required to include the aforesaid commercial area. The Assessing Officer also observed that the commercial premises number 1, 2, 3, 4, 5 on the first floor of the building D and commercial premises number 1, 2, 3, 4 of building D-1 h .....

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. ft. and on this count alone the assessee was not eligible for deduction. 5. In appeal before the Commissioner of Income Tax it was contended that the amendment to section 80IB(10) with effect from 1.4.2005 did not clarify whether it took effect before the amendment or post amendment. The Commissioner held that amended provisions with effect from 1.4.2005 cannot have retrospective effect so as to be applicable to assessment year 2003- 04 but the implication of inclusion of definition of built-u .....

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stand that Commerical area constructed was more than permissible area of 2000 sq. ft. or at 5% of total built up area whichever is less, reliance placed by the revenue on clause (d) of section 80IB(10) was misplaced in view of the judgment of this Court in case of Brahma Associates which laid down that the provision was prospective and not retrospective in nature and therefore, cannot be applied retrospectively. 7. The Tribunal also held that the contention that only a pure housing project was .....

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05. The tribunal once again decided issue in favour of the assessee and directed the Assessing Officer to allow deduction under section 80IB(10). 8. Mr.Gupta, learned Senior Counsel submitted that the Assessee had constructed one building (being part of the 10 then being constructed) which was fully commercial in nature. He submitted that this commercial development in the project disentitles the Assessee to claim benefit of section 80IB(10). Mr.Gupta submitted that for the assessment year 2005- .....

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