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TMI Blog2015 (12) TMI 1622X X X X Extracts X X X X X X X X Extracts X X X X ..... material available on record. In view of the above, we are reproducing here under the relevant portion of the order dt.12/09/2012 for ready reference:- "The present appeal preferred by the Revenue, is directed against the impugned order dated 31st January 2011, passed by the learned Commissioner (Appeals)-XXXII, Mumbai, for assessment year 2007-08, on the following grounds:- "1. On the facts and in the circumstances of the case and in law, the learned CIT(A) erred in allowing deduction under section 80IB(10) of Rs. 1,47,11,573, without appreciating the fact that the project is not eligible for deduction under section 80IB(10). We have considered the of the case and in law, the learned CIT(A) erred in appreciating that the date of approval of SRA scheme project is 03.07.2003 and is not covered by the notification no.02/2011 - Income Tax (F.no.178/37/2006-ITA-11) dt. 05.01.2011, issued to clarify the notification dt. 03.02.2010. 2. Briefly stated the facts of the case are that, the assessee is engaged in the business as builder and developer through a proprietorship concern namely M/s. K.R. Builders. During the year under consideration, the assessee has declared income under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 80-IB(10), should be otherwise allowed. 5. The Assessing Officer, after analysing the provisions of section 80- IB(10), which was applicable prior to 1st April 2005, and also after 1st April 2005, held that the assessee does not fulfill the conditions given in the proviso to section 80IB(10), which clearly states that the claim has to be notified by the CBDT, which, in the present case, the scheme on which the assessee has done her project has not been notified which is evident from the letter dated 23rd August 2007, issued by the CBDT. Accordingly, he disallowed the claim of Rs. 1,47,11,573, made under section 80-IB(10), vide order dated 24th December 2009. 6. Aggrieved, the assessee carried the matter in first appeal, wherein the assessee produced a copy of Notification dated 3rd August 2010, issued by the CBDT, wherein by the scheme of SRA of the Govt. of Maharashtra, was notified. It was submitted that the same could not be produced before the Assessing Officer as the notification was not issued till the time of completion of the assessment proceedings. After going through the notification, the Commissioner (Appeals) noted that the CBDT has notified the claim conta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Appendix IV of regulation 33(10) which provides for joint development of slum and non-slum area. Therefore, after the clarificatory notification issued by CBDT on 5.1.2011, the appellant is now eligible for deduction under section 80IB(10) in respect of the profits derived from housing project on a land though the same is less than 1 acre. Therefore, A.O. is directed to allow the deduction of Rs. 1,47,11,573 under section 80IB(10). Aggrieved, the Revenue is in appeal before the Tribunal. 9. The learned Departmental Representative, first of all, submitted before us that the notification issued by the CBDT, was a fresh evidence which was not available before the Assessing Officer, therefore, the Commissioner (Appeals) should have called for the remand report. Secondly, he submitted that approval was given by the SRA on 4th August 2003, whereas the subsequent notification of CBDT categorically states that the benefit of the scheme would be available on the projects approved after 1st April 2004, and therefore, the benefit of proviso, relaxing the conditions of one acre would not be available to the assessee. Accordingly, the deduction under section 80IB(10), allowed by the Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in redevelopment of slums under the approved scheme of the State or Central Govt., the same should be treated as retrospective. In support of this pleading of retrospective effect is such situation, he relied on two Supreme Court judgments namely CIT v/s Alom Extrusions Ltd. [2009], 319 ITR 306 (SC) and Allied Motors Pvt. Ltd. v/s CIT, [1997] 224 ITR 677 (SC). 11. We have carefully considered the rival contentions and have perused the findings of the learned Commissioner (Appeals) as well as the material available on record. The assessee has undertaken a project under the scheme of Slum Rehabilitation Authority (SRA) framed by the Govt. of Maharashtra for carrying out a housing project in Dharavi, which is one of the biggest slum areas. The assessee, vide letter of intent dated 3rd July 2003, had sought for an approval under Regulation of 2.3 of Appendix-4 of DCR no.33(10). The SRA has given the intimation of approval on 4th August 2003, wherein various terms and conditions were required to be fulfilled by the assessee before the commencement of the project. The assessee complied with all the objects and the terms given in the intimation of approval vide letter dated 12th April ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der any law for the time being in force and such scheme is notified by the Board in this behalf;" 12. From the plain reading of the above, 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 nonobstante 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 any law and it further provides that such a scheme should be notified by the Board in this behalf. Thus, an exception has been carved out by the proviso in cases of housing project development in slum area under a Govt. scheme and overrides the condition mentioned in clauses (a) and (b). The scheme of SRA contained in regulation 33(10) of Development Control Regulation for Greater Mumbai has been notified by CBDT Notification no.67, dated 3rd August 2010, which has been incorporated in the preceding paragraphs. This notification was further clarified by the CBDT i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the proviso for which it was enacted as in the said proviso, the time limit provided in clause (a) of section 80-IB(10) has not been specifically made applicable, therefore, such a time limit cannot be imposed by way of subordinate legislation. Such notification can only clarify the statutory provisions and not over-ride them or restrict the operation of the main enactment. Therefore, in our considered opinion, the time limit of approval on/or after 1st April 2004, will not be applicable in the case of the proviso to section 80-IB(10). 15. Moreover, in the instant case, the approval which was given on 4th August 2003, was loaded with lot of terms and conditions to be fulfilled before the commencement. It was only after such terms and conditions were fulfilled, the assessee was given the commencement certificate issued after 1 st April 2004, i.e., on 17th October 2004 to start the project. In such a case or situation, it cannot be held that the assessee's project is not liable for deduction under section 80- IB, once all other conditions are fulfilled. In this case, one can say that the date of commencement i.e., 17th October 2004, can be taken as the date of approval as it was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dered, thus, we find no infirmity, on this issue, in the order of the Ld.CIT(A). It is affirmed. 3. The next ground raised by the revenue pertains to deleting the disallowance to rent expenses of Rs. 4,20,000/-, ignoring that the assessee paid rent to close relatives and did not produced the details of the premises taken on rent, purpose of utilization of the premises for business purposes and genuineness of the transaction. 3.1 During hearing, Ld. DR, advanced arguments which is identical to the ground raised. On the other hand the Ld. Counsel for assessee defended the conclusion arrived at in the impugned order. 3.2. We have considered the rival submissions and perused the material available on record. If the observation made in the assessment order, leading to addition made to the total income, conclusion drawn in the impugned order, material available on record, assertions made by the ld. respective counsel, if kept in juxtaposition and analyzed. We note that before the Ld. CIT (A) as well as before the earlier Bench of this Tribunal, the assessee took the plea that , even if, the said expenses are disallowed, the assessee is eligible for deduction u/s 80 IB(10) on enhanced ..... X X X X Extracts X X X X X X X X Extracts X X X X
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