TMI Blog2014 (6) TMI 1020X X X X Extracts X X X X X X X X Extracts X X X X ..... roportionate deduction u/s.80IB(10) of the I.T. Act, 1961. We are of the considered opinion that the assessee is eligible for pro-rata claim of deduction u/s.80IB(10) with respect to the eligible units of the housing project. We, therefore, uphold the order of Ld.CIT(A) for A.Yrs. 2003-04 to 2007-08. The order of Ld.CIT(A) for A.Y. 2008-09 is set-aside and the AO is directed to allow proportionate deduction for the eligible units. - ITA Nos.316 to 319/PN/2013, 1830/PN/2013, 272/PN/2014 (A.Ys: 2004-05 to 2007-08, 2008-09) - - - Dated:- 26-6-2014 - Shri Shailendra Kumar Yadav and Shri R.K. Panda, JJ. Assessee by : Shri V.L. Jain Department by : Shri S.P. Walimbe ORDER R.K. Panda, ITA Nos.316 to 319/PN/2013 filed by the Revenue are directed against the common order dated 07-11-2012 of the CIT(A)-I, Pune relating to Assessment Years 2004-05 to 2007-08 respectively. ITA No.1830/PN/2013 filed by the assessee is directed against the order dated 30-08-2013 of the CIT(A)-I, Pune relating to Assessment Year 2008-09 and ITA No.272/PN/2014 filed by the assessee is directed against the order dated 13-12-2013 passed u/s.154 by the CIT(A)-I, Pune relating to Ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... peace of mind he is surrendering deduction claimed u/s.80IB(10) for the said scheme. In view of the above the AO noted that the assessee is not eligible for claiming the deduction u/s.80IB(10) amounting to ₹ 2,79,35,311/-. He accordingly disallowed the same. 2.2 It may be pertinent to mention here that in view of the survey undertaken u/s.133A on 13-05-2008 where the assessee surrendered the claim of deduction u/s.80IB(10) re-assessment proceedings were initiated u/s.147 and the AO in the orders passed us/.143(3) r.w.s. 147 disallowed the claim of deduction granted earlier amounting to ₹ 29,98,262/- for A.Y. 2004-05, ₹ 60,00,309/- for A.Y. 2005-06, ₹ 1,70,70,777/- for A.Y. 2006-07 and ₹ 2,51,91,854/- for A.Y. 2007-08. 2.3 The assessee went in appeal wherein the Ld.CIT(A) vide order dated 17-07-2012 for A.Yrs. 2004-05 to 2007-08 following the decision of the Coordinate Bench of the Tribunal in the case of M/s.Ramsukh Properties Vs. DCIT vide ITA No.84/PN/2011 order dated 25-07-2012 allowed proportionate claim of deduction u/s.80IB(10) by observving as under : 3.4 After considering the submissions made and the factual material that is available ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hout prejudice to his contention that he was entitled to deduction u/s 80IB(10) on the completed part of the project. Any statement made by the appellant during the course of survey, it is felt, cannot stand in the way of a claim that the appellant is legally entitled to. Keeping in view the same it is held that any legal claim by an assessee has to be entertained at any stage of the proceedings, unless it is specifically prohibited by the laws of limitation, if any applicable. In this background, it becomes necessary to adjudicate on the second and main ground of appeal which relates to allowance of deduction u/s 8016(10), which is also intrinsically related to the additional ground raised in the appellate proceedings. 3.6 Coming to the main issue on which the appeals for the four impugned assessment year hinges i.e. Ground No. 1, it is seen from the record that the appellant received permission for construction of 9 buildings, namely A8, A9, B 8, B9, B10, C8, C9, C10, and D3 in its housing project called Vardhman Township located at Survey No. 44A, Sasane Nagar, Hadapsar, Pune. The first approval (commencement certificate) from PMC Building Control Department, was received o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed and approved by PMC vide Ref. No. 4434 dated 20.5.2002. Therefore, the construction carried out by the appellant of housing project has to 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, namely 20.5.2002. 3.9 Section 80IB(10) as it relates to the facts of the impugned assessment years, reads as under: 80IB (10) The amount of deduction in the case of an undertaking developing and building housing projects approved before the 31st day of March, 2007 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 April, 2004, within four years from th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation would not apply where (he approval is granted to different housing projects. In the present case, as noted earlier, construction of 'E' building constitutes an independent housing project and, therefore, the date on which the earlier housing project had commenced construction could not be applied to the housing project consisting of 'E' building merely because the conditions set out while granting approval to the earlier housing project have also been made applicable to the housing project in question. 3.12. A careful analysis of the Bombay High Court decision cited above would show that in the case decided by the High Court the assessee had already constructed buildings A, B, C and D during the period 1993 to 1996 i.e. prior to 1.10.1998 when sec. 80IB(10) was not on the statute. In the year 2001 the land was converted from surplus vacant land into land within ceiling limit by the State Govt, thereby giving the appellant extra FSI. Accordingly, approval for construction of additional building E was submitted and approved by the local authority on 11.10.2002. It is in view of these peculiar facts, that in this case, the High Court held that building E cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the PMC has granted approval in respect of the housing project named Vardhman Township more than once due to modifications proposed by the appellant and therefore, the housing project could be deemed to have been approved as on the original date of approval viz. 20.5.2002. Since the appellant has failed to complete the construction of the entire housing project on or before 31.3.2008 as per the existing provisions of law, it is held that the appellant is not entitled to claim deduction u/s 80IB(10). Therefore, the first ground of appeal relating to sec. 80IB(10) fails and is accordingly, dismissed for all the impugned assessment years. 4. The third issue detailed at para 3.4 (c) supra, relates to claim of the appellant for proportionate deduction u/s 8016(10), which has been raised by wav of additional ground of appeal and which was already raised before the Assessing Officer vide letter dated 28.5.2008 and subsequent letter dated 14.7.2008 The appellant has submitted, (in connection with the additional ground filed on 12.11.2009 for grant of pro-rata deduction) that assuming all 12 buildings are together considered as a single project, proportionate deduction should be granted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... commercial user is allowed in accordance with the DC Rules and hence the assessee was entitled to section 80-IB(10) deduction on the entire project approved by the local authority. However, the assessee has not challenged the decision of the Tribunal in restricting the deduction to a part of the project. Therefore, while holding that in law, the assessee was entitled to section 80-IB(10) deduction on the profits of the entire project, in the facts of the present case, since the assessee has not challenged the decision of the Tribunal, we are not inclined to disturb the decision of the Tribunal in restricting the section 80-IB(10) deduction only in respect of the profits derived from 15 residential buildings. 4.2. Thus, applying the logic of the Mumbai High Court's decision in Brahma Associates case, it appears that in case the conditions of section 80IB(10) are not satisfied, deduction under that section cannot be allowed on part of the project. A plain reading of the Section shows that it speaks only about completion and there are no adjectives that are used with the words completion. By choosing not to qualify the word approved or completed in Section 80IB(10)(a), t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Authorised Representative has argued that the facts of this decision are applicable squarely to the facts of his own case. It has been stated that even during the survey proceedings on 13.5.2008, the appellant had mentioned that deduction u/s 80IB(10) had been claimed in anticipation of completion by March,2008, but due to unforeseen circumstances beyond his control, the same could not be completed. It is stated that there was an accident on site leading to unfortunate death of 3 labourers in May 2007, leading to police complaint and criminal proceedings. Further, there was labour unrest due to agitation against non-Maharashtrian labour in January, 2008 due to which majority of labour left Maharashtra, causing delay in work. This was also brought to the notice of the Assessing Officer vide appellant's letter dated 28.5.2008, referred to in para 3.5 supra. : 4.5. I have considered the submissions made vis-a-vis the facts of the case and the law applicable. To my mind, section 80IB(10(a) read with Explanation (i) and (ii) very clearly specifies the completion dates vis-a-vis the date on which the housing project was first approved by the local authority. As discussed in the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rata claim u/s 80IB(10) with reference to the eligible units of the housing project. 4. The appellant craves leave to alter, amend or delete any of the grounds of appeal or add to the same, if deemed necessary. 5. The Ld. Counsel for the assessee at the outset submitted that the Pune Bench of the Tribunal in the case of Siddhivinayak Shree Vs. ACIT vide ITA No.883/PN/2010 for A.Y. 2006-07 order dated 30-07-2013 and Siddhivinayak Shree Vs. ITO, Ward-2(2), Pune vide ITA No.179/PN/2011 and ITA No.913/PN/2011 order dated 30-07-2013 for A.Y. 2005-06 and 2007-08 after considering the decision of the Mumbai Bench of the Tribunal in the case of Everest Home Construction India Pvt. Ltd. (Supra) and Sainath Estate Pvt. Ltd. (Supra) has allowed the claim of pro-rata deduction u/s.80IB(10). Further, the Pune Bench of the Tribunal in the case of M/s. Raviraj Kothari Punjabi Associates Vs. ACIT vide ITA No.223/PN/2011 order dated 22-03-2013 for A.Y. 2007-08 after considering the decision of Mumbai Bench of the Tribunal in the case of Everest Home Construction India Pvt. Ltd. (Supra) has allowed the claim of pro-rate deduction. 5.1 So far as the reliance on the Mumbai High Court s decis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Everest Home Construction India Pvt. Ltd. (Supra) and the decision of the Mumbai High Court in the case of Brahma Associates (Supra). 7.1 We find the Pune Bench of the Tribunal in the case of Siddhivinayak Shree (Supra) after considering the decision in the case of Sainath Estate Pvt. Ltd.(Supra), the decision of the Mumbai Bench of the Tribunal in the case of Everest Home Construction India Pvt. Ltd. (Supra) has allowed the claim of proportionate deduction u/s.80IB(10) of the I.T. Act, 1961. The relevant observation of the Tribunal from Para 13 onwards read as under : 13. We have considered the rival arguments made by both the sides, perused the orders of the AO and the CIT(A) and the Paper Book filed on behalf of the assessee. We have also considered the various decisions cited before us. We find the AO in the instant case denied the claim of deduction u/s.80IB(10) on the ground that (a) the assessee has not obtained the completion certificate on or before 31-03-2008 (b) that the project includes shops and other commercial areas in excess of the prescribed limit and (c) that the assessee has claimed deduction u/s.80IB(10) since A.Y. 2001-02 and the assessee is showing th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... S BCO/03/146 05/10/2005 05/10/2005 G (Gold) 101 0 BCO/03/146 05/10/2005 05/10/2005 H (Crown) 68 0 TOTAL 169 0 The completion certificate in respect of building I+K in respect of 80 flats is not granted so far by PMC although the assessee has duly applied for the same on 04-04-2006 as per application for occupancy certificate received by PMC on 04-04-2006, a copy of which is placed at Paper Book Page No.12. 14.2 It is the submission of the Ld. Counsel for the assessee that the project A and building I K of Project B are complete before May 2006 since the assessee has applied for completion on 04-04-2006. Similarly the assessee has applied on 05-10-2005 for Project B (G H building) which was received by the assessee. The permission was not rejected but was withheld for technical reasons, i.e. non allotment of built up area in terms of section 20 of the Urban Land an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee filed requisite form before the local authorities intimating the completion of the project. The said certificate/intimation was accepted by the local authority without any amendments or objections. Local authority has not raised any queries on the quality construction of the building or the completion of the same as per the plans approved by such authority. In such circumstances, in our opinion, the delay in obtaining the completion certificate on 10-10-2008 is certainly not attributable to the assessee and obtaining the said certificate before 31-03-2008 is beyond the control of the assessee. Assessee s job includes the completion of the building in accordance with the approved plans and intimation of the same to the local authority by way of filing the requisite Forms together with the Completion Certificate given by the Architect, the specialist in the matter and the assessee has done his job scrupulously in this case. However, the local authority has neither objected to the said application of the assessee and the Architect by raising any objections nor accepted by issue of said completion certificate till 10-10-2008. Therefore, the delay in grant of the said certifi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n was not rejected on the ground that construction was not completed, but the some other technical ground. In that view of the matter, granting benefit of deduction cannot be held to be illegal 8. In the result, the Tax Appeal is dismissed. 14.8 From the details furnished by the Ld. Counsel for the assessee we find the assessee has allotted the built up area of 944.10 sq.mtrs against 942 sq. mtrs as per condition of sanction before 27-02-2008. Therefore, we find merit in the submission of the Ld. Counsel for the assessee that the assessee has complied with the condition of allotment on 27-02-2008 which is before 31-03-2008. We find merit in the submission of the Ld. Counsel for the assessee that since the ULC Act was repealed in the year 2009, therefore, PMC/ULC department and Secretariat to Mantralaya are not responding, therefore, the assessee cannot be held responsible. 14.9 We find the Pune Bench of the Tribunal in the case of M/s. Ramsukh Properties Vs. DCIT vide ITA No.84/PN/2011 has held as under : 6. After going through rival submissions and material on record, we find that the assessee is a firm engaged in business of builder and promoter. The issue before us ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n he is incapacitated in completing project in time for the reasons beyond his control. In case before us, as stated on behalf of assessee, that assessee submitted certain modifications/rectifications for top floors of building. The said modification/rectification could not be completed as local authority could not approve the modification as their files have been taken over by concern intelligence department for investigation of violation of urban land ceiling Act applicable to land in question at relevant point of time. This fact has not been disputed on behalf of revenue. Thus, assessee was prevented by sufficient reasonable cause which compelled the impossibility on part of the assessee to have completion certificate in time. It is settled legal position that the law always give remedy and the law does wrong to no one. We agree to proposition put forward by Ld. Departmental Representative that plain reading of section 80IB(10) of the Act suggests about only completion of construction and no adjective should be used alongwith the word completion. This strict interpretation should be given in normal circumstances. However, in case before us, assessee was prevented by reasonable c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dropped the idea of construction of the same. It is also the submission of the learned counsel for the assessee that it has applied for completion certificate on 22-01-2004 and since the PMC has a legal problem, which is subjudice, the PMC is not able to grant the completion certificate. It is also the submission of the learned counsel for the assessee that Corporation has started levying municipal taxes, the flat owners have started paying electricity bills and the project on which Building Nos. A, C, D and E and 17 row houses are constructed are on a plot of area of more than 1 acre. Therefore, the assessee is entitled to deduction u/s.80IB(10) on the 4 buildings and 17 row houses which it has completed. 19. We find the Managing Director Shri Pradeep Amrutlal Runwal in his statement recorded during the course of survey u/s.133A has replied to Question Nos. 7, 8, 9, 10 12 as under : Q.7. Have you received the Completion Certificate from PMC for Runwal Paradise Project ? Ans. The Completion Certificate for Row Houses 7 to 18 was received. However for other buildings on Runwal Paradise Project we have not received the Completion Certificate as on today though we have ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efore 31-03-2008 we find the assessee through his architect vide application dated 22-01-2004 has applied to PMC for occupancy certificate. (Page 119 of the Paper Book). The submission of the learned counsel for the assessee that the PMC has not yet rejected the said application till date could not be controverted by the Revenue. The further submission of the learned counsel for the assessee that all the flat owners/row house owners have been given possession between 26-10-2002 to 15-01-2007, i.e.prior to 31-03-2008 could not be controverted by the learned DR (Page 55 to 63 of the Paper Book). The learned DR also could not controvert the submission of the learned counsel for the assessee that PMC has started levying municipal taxes and the Electricity Meters are in the name of the flat owners who have started paying electricity bills. 20.1 We find the Pune Bench of the Tribunal in the case of City Development Corporation Vs. ACIT ITA No. 57 and 1287/PN/2010 order dated 27-09-2012 has held as under : 12. We have carefully considered the rival submissions. Quite clearly, the dispute is with regard to the completion certificate of building 'E' having been issued by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... situation can it be said that the assessee's project did not comply with the condition prescribed in sub-clause (i) of clause (a) to section 80-IB(10) of the Act whereby the construction was to be completed on or before 31-3-2008. Somewhat similar situation was considered by our co-ordinate Bench in the case of Hindustan Samutha Awas Ltd. (supra) wherein also on the strength of architect's certificate, an application for obtaining completion certificate was moved to the local authority on 25-2-2008 but in actuality the completion certificate was issued by the local authority on 10-10-2008. The Tribunal noticed that the delay in issuing completion certificate was not attributable to the assessee as no objections were raised by the local authority. The Tribunal after considering its earlier decisions in the case of M/s. Satish Bohra Associates Vs. ACIT in ITA No. 713 and 714/PN/2010 for A.Y. 2004-05 and 2005-06 dated 7-1-2011; M/s. D.K. Constructions Vs. ITO ITA No. 243/PN/2010 for A.Y. 2006-07; dated 6-12-2010 and Sanghvi and Doshi Enterprises Vs. ITO and others ITA No. 259 to 263/MDS/2010 dated 19-5- 2011 for A.Y. 2005-06 and 2006-07 (TM) has concluded as follows: From ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eduction u/s 80-IB(10) on such score is uncalled for. In conclusion therefore, in the instant factual background, we hold that the assessee has complied with the condition of completing the construction of the project within the mandated date of 31-3- 2008 even with regard to building 'E', following the parity of the reasoning lid down in the case of Hindustan Samutha Awas Ltd. (supra). . 14. Sub-clause (i) of clause (a) to section 80-IB(10) of the Act requires that the undertaking, developing and building a housing project completes such construction or before 31-3-2008. In the present case, assessee has factually asserted right from the stage of assessment proceedings, that the construction of building 'E' was complete in all respects as per sanctioned plan and all the flats were handed over to the actual users/customers prior to 31-3-2008. In the background of the aforesaid factual position which has remained uncontroverted, in our view, on a plain reading of sub-clause (i) of clause (a) to section 80-IB(10) the condition prescribed therein is fulfilled., inasmuch as the construction of building 'E' was complete before 31-3-2008. However, on the read ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ture. In the present case, the assessee had completed the construction well before the last date, namely 31st March 2008 and had also sold several units which was completed and actually occupied, and it also applied for BU permission to the local authority. The local authority, however, for technical reasons, at one stage rejected such application in the year 2006 and thereafter upon revised efforts from the assessee granted the same by order dated 19th March 2009. We have perused the detailed discussion of the CIT(Appeals) as well as the Tribunal on the issue. IN particular, the Tribunal noted that the construction was completed in 2006. Application for BU permission to the Municipal authorities was filed on 15-02-2006 which was rejected on 1-07-06. Several residential units were occupied since the same was done without necessary permission. The assessee had done without necessary permission. The assessee had also paid penalty and got such occupation regularised. Several tenements were sold long before the last date. In the present case, therefore, the fact that the assessee had completed the construction well before 31st March 2008 is not in doubt. It is, of course, true th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... there is no objection raised by the AMC regarding deviation in the construction of the project approved by the AMC. 8. We have gone through the orders cited by the assessee s representative and find relevant paragraphs are required to be extracted for completion of the order. They are as follows. A. Extract from the decision of the Tribunal in the case of M/s. Satish Bora Associates vide ITA Nos. 713 714/pn/2010 19. . 1. In the case of PMC, the completion certificate in prescribed form issued by the licensed architect etc. who has supervised the construction is furnished with four sets of completion plan under Rule 7.6 of the DC Rules of the PMC. Thereafter PMC is required to return one of the sets duly certified as Completion Plan to the owner along with the issue of full Occupancy Certificate after inspection of the work under Rule 7.7 of the DC Rules. Since Explation (ii) to Section 80IB(10)(a) of the I.T. Act requires Completion Certificate issued by the local authority to be taken as the date of Completion of the Construction, a general understanding in our view is that a Completion Certificate which is issued by the local authority after conducting inspecti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9 dated 5.2.2010. In that case, assessee was denied deduction in the absence of completion certificate by the CMDA but completion certificate issued by the Corporation of Chennai was placed on record. The Tribunal in paragraph 3.5 of its order stated that the project layout plan may be required to be approved by the CMDA but as far as the construction of the building is concerned, the local authority, i.e. the Corporation of Chennai is the appropriate authority to regulate the construction as per the building bye-laws and sanction plans. When it is not disputed that the Corporation is the local authority, certificate issued by it cannot be disregarded. The assessee has placed on record the completion certificate issued by the Corporation by way of additional evidence. Since the allowability of the entire deduction depends on all the conditions being fulfilled deduction depends on all the conditions being fulfilled, we admit this additional evidence. The certificate clearly mentions that the building was inspected on 23.11.2007 and that it is found to be satisfied the building permit conditions. We may also mentions that the role of CMDA is quite distinct from that of the Corporatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of completion as 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 Authorities , it means Local Authorities is competent to certify the date of completion of Housing Project. The date of issue of such letter by the Local authorities is not so crucial but it should have clearly mentioned the date of completion of project. When the Project is completed on 31.3.2008 and the assessee has informed regarding such completion, the Local Authorities may take its own time for issue of certificate, which may be even after 6-7 months, but the letter so issued by the Local Authorities should clearly mention the date of completion of such project. Merely because such certificate is issued after gap of 8-9 months or even one year, will not adversely affect the assessee if it has mentioned clearly the date of completion of project prior to 31.3.2008. Once the letter for completion of project is given by the assessee to the Local Authority, it is the duty of the Local Authority to verify physically the Projects stated to be completed from its own parameters. This proc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In view of the above decisions we are of the considered opinion that since the assessee has done whatever possible on his part, i.e. duly applied to PMC for issue of completion certificate, handed over possession of the flats/row houses to the respective buyers, PMC has started levying municipal taxes and electricity bills paid by respective owners, therefore, deduction u/s.80IB(10) under the facts and circumstances of the case cannot be denied to the assessee for non-receipt of completion certificate from PMC before 31-03- 2008 which was beyond the control of the assessee. This view of ours is fortified by our decision in the case of M/s. Ramsukh Properties Vs. DCIT vide ITA No.84/PN/2011 order dated 25-07-2012 for A.Y. 2007-08 (wherein both of us are parties) wherein it has been held as under: 6. After going through rival submissions and material on record, we find that the assessee is a firm engaged in business of builder and promoter. The issue before us is regarding allowability of deduction u/s.80IB(10) of the Act on partially complete project. The Assessing Officer has denied the deduction on the ground that project was not complete within the stipulated time. There is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding. The said modification/rectification could not be completed as local authority could not approve the modification as their files have been taken over by concern intelligence department for investigation of violation of urban land ceiling Act applicable to land in question at relevant point of time. This fact has not been disputed on behalf of revenue. Thus, assessee was prevented by sufficient reasonable cause which compelled the impossibility on part of the assessee to have completion certificate in time. It is settled legal position that the law always give remedy and the law does wrong to no one. We agree to proposition put forward by Ld. Departmental Representative that plain reading of section 80IB(10) of the Act suggests about only completion of construction and no adjective should be used alongwith the word completion. This strict interpretation should be given in normal circumstances. However, in case before us, assessee was prevented by reasonable cause to complete construction in time due to intervention of CID action on account of violation of provisions of Urban Land Ceiling Act applicable to land in question. Assessee was incapacitated to complete the same in time ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee had constructed shops admeasuring about 9472 sq.ft. out of the aggregate built up area of 1,16,433 sq.ft. and therefore the commercial area is 8.37% of the aggregate built up area and therefore is in excess of the prescribed limit u/s.80IB(10). We find, there is no dispute to the fact that the project, in the instant case, is approved on 11-01-1999 vide commencement certificate No.2117 for Plot No.3. Similarly, the PMC approved the first building plan in respect of Plot No.4 vide commencement certificate No.4410 dated 06-03-2000. Thus, the housing project has been approved before 31-03-2005. It has been held by the Hon ble Bombay High Court in the case of CIT Vs. Brahma Associates reported in 333 ITR 289 that the housing project approved before 31-03-2005 can include commercial area. It is the case of the Revenue that the ratio of Brahma Associates will not be applicable for A.Y. 2005-06 and subsequent years since in the case of Brahma Associates the assessment year involved was2003-04 and the position would be different w.e.f. A.Y. 2005-06. 15.1 We find the Hon ble Gujarat High Court in the case of Manan Corporation after considering the decision of Hon ble Bombay High Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case Hiranandani Akruti JV (Supra) has held that in those approved projects where construction has been started much earlier than 01-04-2005, the assessees are required to complete the plan as it has been approved. 15.4 In view of the decision of Hon ble Gujarat High Court in the case of Manan Corporation(Supra) it has to be held that the law as existed in the year when the assessee submitted its proposal and the permission is granted by the local authority and the assessee commences development is to be applied in determining its eligibility of the deduction claimed u/s.80IB(10). The assessee in the instant case cannot be denied the benefit of deduction for construction of commercial area which is more than 2000 sq.ft. or 5% of the built up area of the housing project whichever is less. It has been held by various judicial decisions including the decision of Hon ble Gujarat High Court in the case of Manan Corporation (Supra) that such amendment to provisions of section 80IB(10) is prospective in nature and not retrospective. We, therefore, hold that the assessee cannot be denied the benefit of deduction u/s.80IB(10) on this issue also. 15.5 So far as the 2 decisions reli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m of proportionate deduction by observing as under : 6. So, however, at the time of hearing the Ld.CIT DR appearing for the Revenue contended that the Tribunal held that the restrictions on permissible commercial area as per section 80IB(10)(d) of the Act was inserted by the Finance (No.2) Act 2004 w.e.f.01-04-2005 and that such amendment was prospective in nature and would not apply to the project in question. The Ld. CIT DR submitted that in this context the Mumbai Bench of the Tribunal in the case of ITO Vs. Everest Home Construction (India) (P) Ltd. vide ITA No.7021/Mum/2008 order dated 12-09-2012 has taken a contrary view to hold that the commercial area limit introduced by the Finance (No.2) Act 2004 w.e.f.01-04-2005 by insertion of Clause (d) section 80IB(10) shall be applicable to evaluate the deductions claimed by the assessee from the A.Y. 2005-06 onwards. 7. We have carefully considered the argument set up by the Ld. Departmental Representative and find that there is no reason to depart from the position decided by the Tribunal in the assessee s own case for the Assessment Years 2003-04 to 2006-07 vide its order dated 23-11- 2012 (Supra). The Tribunal had conclude ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Associates (Supra) holding that the restriction set out in Clause(d) of section 80IB(10) inserted by Finance (No.2) Act 2004 w.e.f.01-04-2005 was to be applied in A.Y. 2006-07, regardless of the date of approval of the project in question. The aforesaid position canvassed by the Tribunal in the case of Manan Corporation (Supra) was negated by the Hon ble Gujarat High Court on the basis of the judgment of the Hon ble Bombay High Court in the case of Brahma Associates (Supra). Therefore, in this manner, the reliance now sought to be placed by the Ld. CIT DR in the case of Everest Home Construction (India) Pvt. Ltd. (Supra) therefore is not of any help to the Revenue. Thus, following the parity of reasoning laid down in the order of the Tribunal dated 23-11-2012 (Supra), in assessee s own case, and which is in consonance with the judgment of the Hon ble Gujarat High Court in the of Manan Corporation (Supra), which has referred to and relied upon the judgment of the Hon ble Bombay High Court in the case of Brahma Associates (Supra), we therefore find it expedient to uphold the assessee s claim for deduction u/s.80IB(10) in relation to the Citadel project. In this manner, the claim of ..... 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