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2015 (6) TMI 276 - ITAT MUMBAI

2015 (6) TMI 276 - ITAT MUMBAI - [2015] 44 ITR (Trib) 175 (ITAT [Mum]) - Entitlement to deduction u/s 80IB - CIT(A) allowed the claim - Held that:- In the appellant's case the provisions of section 801B(10) are applicable, as the appellant's project was approved prior to 01/04/05. The subsequent amendment will not affect the appellant's case in view of jurisdictional Bombay High Court decision in the case of Brahma Associates vs. JCIT (2011 (2) TMI 373 - BOMBAY HIGH COURT). As it is evident from .....

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the direction is with reference to the issues which were originally objected to by the AO and the AO cannot take advantage of the order of ITAT for repeating the addition, defying the directions of the ITAT. At least the senior officer such as Commissioner of Income Tax should have carefully perused the record and CIT(A)'s order before granting authorisation. The very fact that the AO filed the appeals without even verifying the year, which was mentioned in the grounds of appeal, also indicates .....

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DER Per D Manmohan,VP. These appeals by the Revenue are directed against the orders passed by CIT(A)-7, Mumbai and they pertain to assessment years 2005-06, 2006-07 and 2007-08. 2. Following grounds were urged before us: - 1. On the facts and in the circumstances of the case and in law, the learned CIT(A) erred in allowing the assessee's claim of deduction of ₹ 1,97,63,000/- u/s 80IB, following and applying the decision of the Hon'ble Bombay High Court in the case of Brahma Associa .....

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ates 119 ITD 255 for AY 2003-04 has categorically held that the position with effect from AY 2005-06 would be different in view of the specific restriction introduced by S 80IB(21)(d) which provides that the commercial use of built-up area shall not exceed 2000 sq.ft. or 5% of the aggregate built up area, whichever is less. 3. On the facts and circumstances of the case and in law, the learned CIT(A) erred in holding that the amended section 80IB(10)(d) would not apply to the assessee's proje .....

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ee. It may be noticed that though authorisation was for A.Y. 2005-06 to 2007- 08, in the grounds of appeal for A.Y. 2007-08 the appellant AO has mechanically filed the grounds which were to be filed for A.Y. 2006-07. 3. This case has a chequered history. In the first round of litigation the AO disallowed the claim of deduction under section 80IB(10) of the Act mainly on two grounds, i.e., (a) commercial construction is in excess of prescribed limit, and (b) project was not completed by 31.03.200 .....

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or deciding the issue keeping in view the decision of the ITAT Pune Bench in the case of Brahma Associates which in turn refers to other conditions to be fulfilled but the assessee has not furnished particulars with regard to fulfilment of other conditions. It deserves to be highlighted that in the first round of litigation the AO has not disallowed the claim of deduction under section 80IB(10) on any other ground other than the two specific issues mentioned above and the said two issues having .....

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ble Bombay High Court, wherein the decision of the ITAT Special Bench, Pune was confirmed (333 ITR 289), subsequent amendment will not affect assessee's case and the appellant having complied with all the necessary conditions, as envisaged under section 80IB(10) of the Act, assessee is eligible for deduction under section 80IB(10). He directed the AO accordingly. The operative portion of the order of the learned CIT(A) is extracted for immediate reference: - "4.12 I have considered the .....

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bay High Court decision in the case of Smt. Prabhavati Shah vs. CIT (1998) 231 fl'R I (Born.) and also of the Apex Court decision in the case of National Therrnal Power Co. Ltd. v/s CIT [229 ITR 383 (SC)] & Jute Corporation of India Ltd. v/s CIT [187 ITR 688 (SC), the appellant's additional evidence is admitted, as the same is having full relevance on the issue involved in this appeal. 4.13 Having considered all the factual position of the case, I find that as per original order the .....

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for the A.Y. 2005-06 and A.Y. 2006-07, the matter is restored to the file of AO to decide the dispute keeping in view the decision of Pune Special Bench of ITAT in case of Brahma Associates (supra) and to which both the departmental as well as authorized representative of the appellant have agreed upon that common issue involved in these appeals w.r.t. construction of commercial area exceeding then permitted area under clause (d) of Sec. 80IB(10) of the Act. The observation made by Hon'ble .....

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all the conditions of Sec. 80IB(10) as were applicable for the projects sanctioned on or before 01- 04-2005 and therefore the prospective amendments cannot be considered to be applicable for the appellant's projects which are already approved before 01-04-2005 in view of the conditions laid down u/s. 80IB(10) of the IT Act, 1961. I also relied upon number of judgments of Hon'ble ITAT's and various Hon'ble Courts which are also relied upon by the appellant Company. I find that th .....

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to that the appellant's 'Housing Project' was approved by local authority prior to 01.04.2005, which has not been disputed at all by A.O. anywhere in his order. Further to that, as the jurisdictional Bombay High Court in the case of CIT vs. Brahma Associates (supra) has very categorically held that "Housing Project - Special Deduction under section 80IB(10) - Law Applicable - Restriction inserted with effect from 01/04/2005 as to permissible limit of commercial use in project - .....

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se cannot be applied for the period prior to April 1, 2005. Clause (d) seeks to deny section 80IB(10) 'deduction to projects having commercial use beyond the limit prescribed under clause (d), even though such commercial user is approved by the local authority. Therefore, the restriction imposed under the Act for the first time with effect from April 1, 2005, cannot be applied retrospectively. Order the Special Bench in BRAHMA ASSOCIATES vs. JOINT CIT [2009] 315 ITR (AT) 268 (Pune) affirmed .....

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ew that in the appellant's case the provisions of section 801B(10) are applicable, as the appellant's project was approved prior to 01/04/05. The subsequent amendment will not affect the appellant's case in view of jurisdictional Bombay High Court decision in the case of Brahma Associates vs. JCIT (supra). As it is evident from the appellant's submission that the appellant comply all necessary conditions as envisaged under the provisions of law for claiming deduction u/s 80IB(l0) .....

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