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TMI Blog2017 (1) TMI 187X X X X Extracts X X X X X X X X Extracts X X X X ..... 2010 dated 03/08/2010, issued by the CBDT, can only clarify the statutory provisions and cannot override the same or restrict the operation of the main enactment. It was also contended that the time limit of approval on/or after 01/04/2004 will not be applicable in the case of proviso to section 80IB(10) of the Act. Reliance was placed upon the decision in Ramesh Gunshi Dedhia Vs. Income Tax Officer (2014) 148 ITD 356 (Mum.-Trib.) and Income Tax Officer vs. M/s. Asha Kashiprasada Ringshia Pandurang Sadan (2013) 29 taxmann.com 160 (Mum. - Trib.). On the other hand, Shri O.P. Meena, ld. DR strongly defended the impugned order by contended that the assessee has not fulfilled the conditions contained in section 80IB(10) of the Act. It was also pleaded that the cases relied upon by the assessee are on different facts, therefore, not applicable to the case of the assessee. 2.2. We have considered the rival submissions and perused the material available on record. The facts in brief are that the assessee a partnership firm, originally declared income of Rs. 28,69,487/- on 31/10/2006. Later on, the assessee revised his return declaring "NIL" income. The assessee during the previous year r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sub-sections (3) to(11), (11A) and (11B) (such business being hereinafter referred to as the eligible business), there shall, in accordance with and subject to the provisions of this section, be allowed, in computing the total income of the assessee, a deduction from such profits and gains of an amount equal to such percentage and for such number of assessment years as specified in this section. xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx (10) The amount of deduction in the case of an undertaking developing and building housing projects approved before the 31st day of March, 2008 by a local authority shall be hundred per cent of the profits derived in the previous year relevant to any assessment year from such housing project if,- (a) such undertaking has commenced or commences development and construction of the housing project on or after the 1st day of October, 1998 and completes such construction,- (i) in a case where a housing project has been approved by the local authority before the 1st day of April, 2004, on or before the 31st day of March, 2008; (ii) in a case where a housing project has been, or, is approved by the local authority on or after the 1st day of Apri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ividual is the karta, (iii) any person representing such individual, the spouse or the minor children of such individual or the Hindu undivided family in which such individual is the karta. Explanation.-For the removal of doubts, it is hereby declared that nothing contained in this sub-section shall apply to any undertaking which executes the housing project as a works contract awarded by any person (including the Central or State Government). 2.7 It is noticed that section 80IB(10)(a)(i) of the Act lays down that where the housing project has been approved by the local authorities before the 1st day of April 2004 and the Explanation has clarified that:- (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. 2.8 We find that the Slum Rehabilitation Authority, vide communi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... condition of minimum plot size of one acre in the case of housing projects, as long as the projects are implemented in accordance with a scheme for reconstruction or development approved by the Central or State Government." 2.10. Notes on Clauses on the Finance Bill 2004 are reproduced hereunder:- "Under the existing provisions contained in sub-section (10), hundred per cent, deduction of the profits of an undertaking developing and building housing projects is allowed if the housing project is approved by a local authority before the 31st March, 2005 subject to the conditions specified in clauses (a) to (c) of the said sub-section. The existing provisions of the said sub-section provides that (a) the undertaking should have commenced development of the housing project after the 1st day of October, 1998, (b) the project should be on a size of a plot of land which has a minimum area of one acre, and (c) the residential unit should have a maximum built-up area of one thousand square feet where such residential units is situated within the cities of Delhi or Mumbai or within twenty-five kilometers from the municipal limits of these cities and one thousand and five hundred square fee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rovided other conditions as mandated by Section 80IB(10) of the Act are fulfilled. Thus, the said relaxation granted to slum rehabilitation and redevelopment projects in City of Mumbai/Delhi for being developed on plot size of less than one acre is curative in nature and is intended to remove unintended hardship caused to the approved projects in the city of Mumbai/Delhi where there is shortage of land and the approved project sizes are less than one acre and such relaxation shall apply to existing approved projects also , provided other conditions being fulfilled to remove the un-intended hardship faced by these projects in city of Mumbai/Delhi. 2.11 From the plain reading of section 80IB(10) of the Act it would be seen that the condition precedent for availing the deduction under section 80IB(10), has been given in clauses (a) and (b). On these conditions, rider has been put by the proviso which starts with a kind of non-obstante clause that "nothing contained in clauses (a) and (b) shall apply" to a housing project which has been carried out in accordance with the scheme framed by the Central Govt. or State Govt. for re-construction or re-development in areas to be slum under a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... then exemption provisions are to be liberally construed to give the full intended benefit to the tax-payer so that the intended purposes of beneficial provisions can be fully achieved. The Courts shall not adopt to the principles of contemporance expositio when the plain language of the statute is clear and unambiguous. 2.13 The principle of strict interpretation of taxing statutes was best enunciated by Rowlatt J. in his classic statement in Cape Brandy Syndicate v I.R.C. (1 KB 64, 71): "In a taxing statute one has to look merely at what is clearly said. There is no room for any intendment. There is no equity about a tax. There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can look fairly at the language used." If the revenue satisfied the court that the case falls strictly within the provisions of the law, the subject can be taxed. A taxing statute is to be strictly construed. The wellestablished rule in the familiar words of LORD WENSLEYDALE, reaffirmed by LORD HALSBURY and LORD SIMONDS, means: "The subject is not to be taxed without clear words for that purpose; and also that every Act of Parliament must be read according to the natur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te v. IRC, (1921) 1 KB 64, p. 71 (ROWLATT, J.); referred to in Canadian Eagle Oil Co. Ltd. v. R., (1945) 2 All ER 499, p. 507 (HL); Gursahai v. CIT, AIR 1963 SC 1062, p. 1064 : 1963 (3) SCR 893; Banarsi Debi v. Income Tax Officer, AIR 1964 SC 1742, p. 1744; Commissioner of Central Excise Pondicherry v. ACER India Ltd., (2004) 8 SCC 173, p. 183 : (2004) 8 JT 53. See further CIT v. Firm Muar, AIR 1965 SC 1216, p. 1221 : 1965 (1) SCR 815; CIT, Patiala v. Shahzadanand & Sons, AIR 1966 SC 1342, p. 1347 : (1966) 3 SCR; Janapada Sabha, Chhindwara v. Central Provinces Syndicate, AIR 1971 SC 57, p. 60 : (1971) 1 SCC 509; Owen Thomas Mangin v.IRC, (1971) 2 WLR 39, p. 42 (PC); Controller of Estate Duty v. Kantilal Trikamlal, AIR 1976 SC 1935, p. 1943 : (1976) 4 SCC 643; Tarulata Syam v. Commissioner of Income-tax, West Bengal, AIR 1977 SC 1802 : (1977) 3 SCC 305; Member Secretary, Andhra Pradesh State Board for Prevention and Control of Water Pollution v. Andhra Pradesh Rayons Ltd., AIR 1989 SC 611, p. 614 : (1989) 1 SCC 44; Aphali Pharmaceuticals Ltd. v. State of Maharashtra, AIR 1989 SC 2227, p. 2239 : (1889) 4 SCC 378; Goodyear India Ltd. v. State of Haryana, AIR 1990 SC 781, p. 793 : 1990 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ltd., AIR 1978 SC 1765, p. 1769 : (1979) 1 SCC 193; Member Secretary, Andhra Pradesh State Board for Prevention and Control of Water Pollution v, Andhra Pradesh Rayons Ltd., AIR 1989 SC 611, p. 614 : (1989) 1 SCC 44; Mathuram Agrawal v. State of Madhya Pradesh, JT 1999 (8) SC 505, pp. 511, 512 : AIR 2000 SC 109, p. 113 : (1999) 8 SCC 667. See further Hansraj & Sons v. State of Jammu & Kashmir, AIR 2002 SC 2692, pp. 2698, 2699 : (2002) 6 SCC 227; Commissioner of Central Excise, Pondicherry v. ACER India Ltd., (2004) 8 SCC 173, p. 184: (2004) 8 JT 53.) In refuting the doctrine of 'the substance of the matter' LORD TOMLIN observed: ""It is said that in revenue cases there is a doctrine that the court may ignore the legal position and regard what is called 'the substance of the matter'. This supposed doctrine seems to rest for its support upon a misunderstanding of language used income in some earlier cases. The sooner this misunderstanding is dispelled, and the supposed doctrine given its quietus, the better it will be for all concerned, for the doctrine seems to involve substituting 'the uncertain and crooked cord of discretion' for 'the golden and straig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... give Ito Charging words what is sometimes called a liberal construction who can say just how far this will go. It is much better that evasion should be met by amending legislation.") As stated by LORD SIMON: "It may seem hard that a cunningly advised tax-payer should be able to avoid what appears to be his equitable share of the general fiscal burden and cast it on the shoulders of his fellow citizens. But for the courts to try to stretch the law to meet hard cases (whether the hardship appears to bear on the individual tax-payer or on the general body of tax-payers as represented by the Inland Revenue) is not merely to make bad law but to run the risk of subverting the rule of law itself." The same rule applies even if the object of the enactment is to frustrate legitimate tax avoidance devices for moral precepts are not applicable to the interpretation of revenue statutes." (Ref: Ransom (Inspector of Taxes) v. Higgs, (1974) 3 All ER 949, p. 969 (HL) . Owen Thomas Mangin v. IRC, (1971) 2 WLR 39, p. 42 (PC).) It may thus be taken as maxim of tax law, which although not to be overstressed ought not to be forgotten that, "the subject is not to be taxed unless the words of the t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... annot import provisions in the statute so as to supply any assumed deficiency." The Hon'ble Supreme Court decision in the case of Joshi Technolgies Inc. v. UOI reported in (2015) 374 ITR 322(SC) has followed principles of strict interpretation of taxing statute by observing as under: "70. Keeping in mind the aforesaid principles and after considering the arguments of respective parties, we are of the view that on the facts of the present case, it is not a fit case where the High Court should have exercised discretionary jurisdiction under Article 226 of the Constitution. First, the matter is in the realm of pure contract. It is not a case where any statutory contract is awarded. 71. As pointed out earlier as well, the contract in question was signed after the approval of Cabinet was obtained. In the said contract, there was no clause pertaining to Section 42 of the Act. The appellant is presumed to have knowledge of the legal provision, namely, in the absence of such a clause, special allowances under Section 42 would be impermissible. Still it signed the contract without such a clause, with open eyes. No doubt, the appellant claimed these deductions in its income tax retu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the said deduction, then deduction provisions are to be liberally construed to give the full intended benefit of Section 80IB(10) of the Act to the assessee so that the intended purposes of beneficial provisions can be fully achieved. The Courts shall not adopt to the principles of contemporance expositio when the plain language of the statute is clear and unambiguous. Considering the factual matrix and the judicial precedent discussed hereinabove , we are of the view that the proviso introduced by Finance Act , 2004 clearly grant relief to slum redevelopment or reconstruction projects which are approved by Central Government or State Government and the scheme is notified by the Board. The Board Notification clearly stipulate that benefit shall be granted to the projects approved by a local authority under the aforesaid scheme on or after the 1st day of April, 2004, and before 31st day of March, 2008, while in the case of the assessee the projects are approved prior to 1st day of April 2004 as set out above in preceding para's, and the assessee is not able to establish its entitlement to deduction u/s 80IB(10) of the Act at the first stage itself for reason cited above. Thus, the c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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