TMI Blog2015 (6) TMI 461X X X X Extracts X X X X X X X X Extracts X X X X ..... ly claimed that deduction section 80IB(10) of the Act may be permitted proportionately with respect to the residential construction only and it came to be accepted by the learned CIT(A) and the learned tribunal and the assessee has been allowed deduction under section 80IB(10) of the Act proportionately with respect to the residential construction only and the same has been accepted by the assessee.3.05. At this stage it is required to be noted that as such the amendment in section 80IB(10) of the Act with respect to clause (d) is brought into effect w.e.f. 1/4/2005 which is held to be perspective and as held by the Hon'ble Supreme Court in the aforesaid decision, for the project approved prior to 30/5/2005, assessee shall be entitled to deduction under section 80IB(10) of the Act with respect to residential as well as commercial construction in housing project, however, subject to approval by the development authority in accordance with the Development Rules. - Decided in favour of assessee. - Tax Appeal No. 36/2015 - - - Dated:- 5-5-2015 - M R Shah And S H Vora,JJ. For the Appellant : Mr K M Parikh, Adv. For the Respondent : Mr B S Soparkar, Adv. ORDER (Per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has shown net profit at ₹ 54,53,349/- as having derived from the development and building of housing project. The profit of the business was claimed as deduction at 100% from the total income of the assessee firm under section 80IB(10) of the Act. The A.O. also observed that the project included construction of commercial complex admeasuring 729.34 sq.mtrs. The assessee firm had obtained approval for 25 shops on the ground floor of the flats designated as Type F G. The total FSI demarcated for 25 shops was 468.54 sq.mtr. The A.O. disallowed the claim of the assessee made under section 80IB(10) of the Act for the reasons that the land was not in the name of developer and the built up area in the commercial construction of the housing project was more than 5% which exceeds the maximum permissible limits. The A.O. in the alternate recorded the finding and restricted the claime of the deduction under section 80IB(10) of the Act to the sale of net utilised FSI, in case, the assessee is held eligible for deduction under section 80IB(10) of the Act.2.04. Feeling aggrieved and dissatisfied with the order passed by the A.O., the assessee preferred an appeal before the learned CIT(A) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rcial area being below 2000 sq.ft. However, the learned CIT(A) accepted the alternative plea of the assessee i.e. it is eligible for proposed deduction in respect of the residential area considering the decision of the Special Bench of the learned tribunal in the case of M/s. Brahma Associates Vs. Jt. CIT, reported in 119 ITD 255 (Pune) (SB). Consequently, the learned CIT(A) partly allowed the said appeal.2.08. Feeling aggrieved and dissatisfied with the order passed by the learned CIT(A), the revenue preferred appeal before the learned tribunal being ITA No.712/Ahd/2011 and by the impugned judgement order the learned tribunal has held that the assessee is eligible for deduction under section 80IB(10) of the Act when he is not owner of the land on which the housing project is developed, but in view of the decision of the Jurisdictional High Court in the case of CIT Vs. Radhe Developers, reported in (2012) 341 ITR 403 (Gujarat). That by the impugned judgement and order, the learned tribunal has also confirmed the order passed by the learned CIT(A) in so far as allowing deduction under section 80IB(10) of the Act on proportionate basis with respect to total built up area for residenc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al authority much prior to the amendment in section 80IB(10) of the Act i.e. 1/4/2005. In the case of Commissioner of Income Tax-I V/s. CHD Developers Limited, rendered in ITA No.298 of 2013, the Delhi High Court had an occasion to consider deduction claimed under section 80IB(10) of the Act with respect to housing project approved prior to 1/4/2005, the date from which amendment in clause (d) in section 80IB(10) of the Act came to force and it is held that where approval of the housing project was given by the development authority prior to 1/4/2005 i.e. by inserting clause (d) to section 80IB(10), the same is prospective in operation and as such insistence of issuance and obtaining completion certificate within a period four years, was not necessary.3.02. In the recent decision, the Hon'ble Supreme Court in the case of CIT Central Pune V/s M/s. Veena Developers and others in Special Leave to Appeal (C) No. 22450 of 2011 and other allied matters, the Hon'ble Supreme Court, in para 30 has confirmed the following conclusion of the High Court:- 30. In the result, the questions raised in the appeal are answered thus :-a) Upto 31/3/2005 (subject to fulfilling other conditio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to deduction under section 80IB(10) of the Act, with respect to the housing project which was approved by the local authority prior to 30/3/2005.3.04. It is required to be noted and it is not the case on behalf of the revenue that the commercial activity was permitted beyond the development rules and/or was in excess to the permissible commercial use. In the present case, however, the assessee alternatively claimed that deduction section 80IB(10) of the Act may be permitted proportionately with respect to the residential construction only and it came to be accepted by the learned CIT(A) and the learned tribunal and the assessee has been allowed deduction under section 80IB(10) of the Act proportionately with respect to the residential construction only and the same has been accepted by the assessee.3.05. At this stage it is required to be noted that as such the amendment in section 80IB(10) of the Act with respect to clause (d) is brought into effect w.e.f. 1/4/2005 which is held to be perspective and as held by the Hon'ble Supreme Court in the aforesaid decision, for the project approved prior to 30/5/2005, assessee shall be entitled to deduction under section 80IB(10) of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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