TMI Blog2013 (5) TMI 871X X X X Extracts X X X X X X X X Extracts X X X X ..... nt of profit was claimed as deduction under Section 80IB(10) of the Act. The Assessing Officer has denied the claim of the assessee on the ground that such claim was violative of the three conditions enumerated in clauses (a)(i), (b) (d) of Section 80IB(10) of the Act. 3. The aforesaid three objections are enumerated as follows. Firstly, as per the Assessing Officer, the project of the assessee was approved by the local authority before 01.04.2004 and therefore in terms of the condition prescribed by Section 80IB(10)(a)(i) read with Explanation (ii) thereof, construction ought to have been completed on or before 31.03.2008. As the same was not done therefore it violated the condition laid down in Section 80IB(10)(a)(i) read with Explanation (ii) thereof. 4. Secondly, as per the Assessing Officer, the plot of land on which the impugned project has been developed is of a size less than one acre, which was violative of the condition prescribed in Section 80IB(10)(b) of the Act. 5. Thirdly, as per the Assessing Officer, the built-up area of the shops and other commercial establishments included in the impugned housing project was 4880 sq.ft., which was violative of the norm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... objection of the Assessing Officer in the following manner :- 11. So far as the dispute regarding area of the land meant for the project is concerned, as discussed above, the A.O remained of the view that it is less than 1 acre of land. In this regard, he noted that the area of the plot demarcated in the revised plan sanctioned on 17.4.2001 was 4044.770 sq. mts. and after excluding area of 536.89 sq.mts. reserved for D.P. Road, the net area of land available for construction was 3507.88 sq. mts. The A.O., therefore, held that the total area of land available for construction even if considered as 4044.77 sq. mts. equivalent to 43537.90 sq.ft. was less than 1 acre because 1 acre is equivalent to 43561.31 sq.fts. The submission of the Ld. A.R. in this regard remained that land used by the assessee for the project is exactly 1 acre. In support, he referred copies of agreement for purchase of land dated 4.9.2000 and 7/12 Extract made available at page Nos. 1 to 14 of the paper book. Having gone through that, we find that the area of land meant for the project has been shown as 1 acre of land. He has also referred copies of various plans made available at page Nos. 15 to 18 of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al premises was done as per the plan revised by the PMC and no construction has been done more than the sanctioned plan. It was submitted that the difference in the area between what had been actually reflected as per the agreement/sale deeds with customers and that deduction by the A.O on physical inspection resulted into inclusion of basement area, top terrace area etc., in the total area. The A.O has considered the access of basement area and top terrace area to the restaurant as the total area for commercial construction. As per the rule of the PMC, the said restaurant was to have access to basement as well as top terrace. The A.O was wrong in drawing inference that the said areas were to be used by the restaurant. Further, the construction in front of the restaurant referred by the A.O was temporary and could be demolished by the PMC at any time and the developer did not process any legal right to sale the same. It was also pointed out that the A.O through oversight has included the area of 363 sq.ft. of the small hall area twice to arrive at the total area of the commercial units. It was submitted that if these submissions are considered, the actual area of the land of the co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... espectfully following the decision of the Hon ble jurisdictional Bombay High Court in the case of CIT Vs. Brahma Associates (Supra) hold that the A.O was not justified in denying the claimed deduction u/s. 80 IB (10) of the Act to the assessee on the basis that the commercial area constructed by the assessee was more than 5% of the total built up area or 2000 sq.ft, whichever is less, as per clause (d) to Section 80IB(10) of the Act. 12. The aforesaid discussion shows that as per the Tribunal, the Assessing Officer could not have applied the newly amended clause (d) of Section 10IB(10) of the Act to the instant claim of the assessee, because the project of the assessee was approved by the local authority prior to 31.03.2005 whereas the amended Section 10IB(10)(d) was brought on the statute with effect from 01.04.2005. In the present case, it is an admitted position that the project of the assessee was approved by the Pune Municipal Corporation (i.e. the local authority) on 17.10.2000 and the construction was commenced on the same date i.e. well before the operation of the amended Section 80IB(10)(d) of the Act. Following the precedent which is in line with the judgement of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ered the rival submissions. Undisputably, the objection with regard to the completion of project is on the basis of the provisions of Section 80IB(10)(a) of the Act as inserted by the Finance (No.2) Act, 2004 with effect from 01.04.2005. It is also evident that so far as the aforesaid amendment is concerned the legislature has not provided that the same is retrospective in its application. Prior to the insertion of the amended Section 80IB(10)(a) of the Act with effect from 01.04.2005 there was no requirement as regards the completion of construction of a project. In fact, the pre-amended provisions of Section 80IB(10) vis- -vis the amended provisions of Section 80IB(10)(a) with effect from 01.04.2005, have been considered by the Hon ble Madras High Court in the case CIT vs. Jain Housing Construction Ltd. (supra) and the following discussion is worthy of notice :- 9. As is evident from the substitution of Section 80IB(10) of the Act, prior to the amendment, there was no such requirement as regards furnishing of completion certificate and the deduction provision pointed out to the grant of 100% deduction on the profits derived from a housing project, if the undertaking had com ..... X X X X Extracts X X X X X X X X Extracts X X X X
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