TMI Blog2014 (9) TMI 1009X X X X Extracts X X X X X X X X Extracts X X X X ..... m/2012 - - - Dated:- 12-9-2014 - SHRI SANJAY ARORA, AM AND SHRI AMIT SHUKLA, JM For the Appellant : Shri Prakash L. Pathade For the Respondent : Shri S. C. Tiwari And Ms. Natasha Mangat ORDER Per Sanjay Arora, A. M.: This is a set of two Appeals by the Revenue directed against the separate Orders by the Commissioner of Income Tax (Appeals)-26, Mumbai ( CIT(A) for short) for the assessment years (A.Ys.) 2008-09 2009-10, allowing the assessee s appeal contesting its assessments u/s.143(3) of the Income Tax Act, 1961 ( the Act hereinafter) for the relevant years. The Issue 2. The issue arising in the instant case is the eligibility of the assessee s (an Association of Persons (AOP) of M/s. Sankalp Developers (45%), Shri Ashok G. Mohanani (30%) and Shri Vivek A. Mohanani (25%)), a builder and developer, profits from its housing project Ekta Medows at Mumbai-66, to deduction u/s.80-IB(10) of the Act. The background facts and arguments 3. The appeals came up for hearing originally on 15.05.2014, whereat it came to light that the matter under reference is covered in the assessee s favour by the decision by the Tribunal in its own cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee s own case for the preceding year, it was considered proper that the parties be heard in the matter. Accordingly, the case was reposted for hearing on 13/6/2014, and the matter heard afresh. Both the parties reiterated their respective stands, relying on the order/s of the authorities below as favourable to them. The ld. Authorized Representative (AR) could not however furnish any satisfactory answer in rebuttal to the specific and pertinent query raised by the bench in this regard, i.e., that vide the said decision the hon ble jurisdictional court has unequivocally clarified that it is a single project, as approved by the local authority, that would stand to be regarded as either an eligible project, or not so, i.e., in terms of section 80-IB(10). Analysis 4. We have heard the parties, and perused the material on record. 4.1 We firstly observe that the tribunal in the assessee s own case for A.Y. 2007-08 has upheld proportionate deduction on the assessee s housing project Ekta Meadows , being otherwise eligible in-as-much as its stands duly approved by the local authority on 13.05.2005 and completed on 26.03.2009. The bone of contention between the parties is the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e raised before it by the Revenue (refer para 14 of the tribunal s order). No binding ratio or judicial precedent thus arises out of the said decision by the hon ble Calcutta high court for being followed; it, rather, refraining from answering the question/s of law raised by the Revenue, considering its appeal as, in effect, incompetent. There is also reference to the tribunal s order in the case of the assessee s sister concern, Ekta Housing (P.) Ltd. (in ITA No. 3649/Mum/2009) at para 7 of the order, reproducing there-from, and which again follows other decisions by the tribunal, also adverting to the approval afore-referred by the hon ble Calcutta high court in Bengal Ambuja (supra). The tribunal also refers to the decision by the tribunal in the case of Third Member in the case of Sanghvi and Doshi Enterprises vs. ITO (in ITA No. 259 and 260/Mad/2010 dated 19.05.2011). The third member has again decided the matter with reference to the decision by the hon ble high court in Bengal Ambuja Housing Development Ltd. (supra) (refer paras 8 and 19 of the tribunal s order), so that it can at best be considered as a view by a larger bench of the tribunal. Even otherwise, it is trite ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ousing project could not be ousted on the ground that the commercial area there-under exceeds a particular limit. The tribunal fell in error in prescribing such a limit at 10% of the total area, which was plainly arbitrary and de hors any rule of interpretation of statutes. It is the entire housing project, i.e., as approved by the local authority; the extent of commercial area notwithstanding, which would qualify to be an eligible project u/s.80-IB(10); and d) the tribunal was thus wrong in confirming the deduction to the area attributable to the residential units. However, as the assessee was not in appeal, the deduction as affirmed by the tribunal was approved. The hon ble jurisdictional high court has clearly held that an eligible housing project u/s.80-IB(10) is the whole project, so that it either qualifies, or not so, there-under, in terms of the relevant provision. Accordingly, either the profits derived from a project would be subject to deduction under the provision, i.e., wholly, or not so, and there is no scope for deduction on a proportionate basis, i.e., as attributable to the residential area in the facts of that case, finding the same as without basis in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ial year in which the housing project is approved by the local authority. Explanation.-For the purposes of this clause,- (i) in a case where the approval in respect of the housing project is obtained more than once, such housing project shall be deemed to have been approved on the date on which the building plan of such housing project is first approved by the local authority; (ii) the date of completion of construction of the housing project shall be taken to be the date on which the completion certificate in respect of such housing project is issued by the local authority; (b) the project is on the size of a plot of land which has a minimum area of one acre: Provided that nothing contained in clause (a) or clause (b) shall apply to a housing project carried out in accordance with a scheme framed by the Central Government or a State Government for reconstruction or redevelopment of existing buildings in areas declared to be slum areas under any law for the time being in force and such scheme is notified by the Board in this behalf; (c) the residential unit has a maximum built-up area of one thousand square feet where such residential unit is si ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts of the housing project which otherwise satisfies the conditions of section 80-IB(10), as referable to the residential units having a maximum built-up area as prescribed per clause (c), would qualify for deduction there-under, to the exclusion of other residential units. The deduction u/s.80-IB(10) would thus have to be computed or arrived at in two steps. Firstly, that derived from the eligible housing project, and then that part thereof as attributable to the residential units satisfying the condition of section 80-IB(10)(c). This is in fact what the tribunal has advocated per the several decisions referred to in its order dated 28.09.2012 supra, i.e., in the assessee s case for A.Y. 2007-08. 4.5 Before parting with our order, we may also clarify another aspect of the matter. The ld. AR, Shri S. C. Tiwari, upon being apprised that we are not inclined to treat the matter as covered in view of the decision by the hon ble jurisdictional high court in Brahma Associates (supra), would contend that in that case the assessee would also claim deduction qua the residential units admittedly not satisfying the test of section 80- IB(10)(c), in view of the subsequent amendment to sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t subject to deduction there-under and not so. The following words capture the decision, which follows a comprehensive discussion on the various aspects, and in harmony and agreement with it s understanding, of the matter: (refer para 31 at pgs. 302-303, also catch notes at pgs. 290-291) Section 80-IB(10) allows deduction to the entire project approved by the local authority and not to a part of the project. If the conditions set out in section 80-IB(10) are satisfied, then deduction is allowable on the entire project approved by the local authority and there is no question of allowing deduction to the part of the project. [emphasis ours] That the same is rendered upon examining the provision in a different context would be of no moment, which though prevailed with the tribunal in the case of Ekta Housing (P.) Ltd. (supra) (copy on record) in-as-much as it is trite law that it is the ratio of the decision which is binding and has precedent value. The said order by the tribunal, in-so-far as it does not state any legal reasons for so deviating, is, with respect, clearly inconsistent with the express and clear verdict by the hon ble jurisdictional high court as extracte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... court. Also, fiscal statutes are to be strictly interpreted, and so are the exemption provisions. It is only once an entity or income, which is the subject matter of exemption, is found, on such construction, to be within the ambit of the provision, that a liberal approach is to be adopted toward effectuating the object of the provision, for which we may refer to Bajaj Tempo Ltd. vs. CIT [1992] 196 ITR 188 (SC) relied upon by the tribunal in the various orders, as far as appears on a reading of their extracts as listed in the tribunal s order for A.Y. 2007-08 (supra). The interpretation is also in accord with a purposive and liberal approach, advocated by the apex court in, inter alia, Bajaj Tempo Ltd. (supra). The provision being an incentive provision, toward promoting the growth of affordable housing in the country, the construction enables the same, while at the same time operating to exclude the extension of the incentive to housing that is not covered or targeted by the provision, as sought to be included by the ld. AR. Again, it is trite law that the benefit of any ambiguity, if any, in the language of the provision, so that two reasonable views are permissible, is to go to ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
