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TMI Blog2024 (7) TMI 1234X X X X Extracts X X X X X X X X Extracts X X X X ..... he facts and circumstances of the case and in law, the Hon'ble Tribunal was justified in granting deduction u/s. 80IB (10) without considering the DVO's report available on record wherein violation relating to two row houses having area more than 1500 sq.ft. was shown?" 4. At the outset, it is being fairly pointed out at the bar that the question of law as raised would stand covered by the decision of Supreme Court in Commissioner of Income-tax vs. Sarkar Builders [2015] 375 ITR 392 (SC) wherein the Supreme Court while examining the scheme of Section 80-IB of the Act, held that insofar the position prior to 1 April, 2005 was concerned, on the basis of the plans as approved by the Planning Authority, it was legitimate and permissible for the assessee to claim deduction under section 801B (10), as for such period (prior to 1 April, 2005), the concept of built-up area as inserted by clause (a) in Section 80IB (14), which included inner measurement of the residential unit at the floor level, including the projections and balconies, as increased by the thickness of the walls, but excluding the common areas, shared with other residential units, cannot be the consideration. It was held ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Thereafter, by Finance Act, 2003, further amendments were made to Section 80IB (10), which read as under: "(10) The amount of profits in case of an undertaking developing and, building housing projects approved before the 31st day of March 2005 by a local authority, shall be hundred per cent of the profits derived in any 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; (b) the project is on the size of a plot of land which has a minimum area of one acre; and (c) the residential unit has a maximum built-up area of one thousand square feet where such residential unit is situated within the cities of Delhi or Mumbai or within twenty-five kilometres from the municipal limits of these cities and one thousand and five hundred square feet at any other place." 16. As can be seen from the aforesaid provision, now the only changes that were brought about were that with effect from 1.4.2002: (i) the housing project had to be approved before 31.03.2005; and (ii) there was no time limit prescribed for comp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... find that the only way to resolve the issue would be to hold that clause (d) is to be treated as inextricably linked with the approval and construction of the housing project and an assessee cannot be called upon to comply with the said condition when it was not in contemplation either of the assessee or even the Legislature, when the housing project was accorded approval by the local authorities. 20. Having regard to the above, let us take note of the special features which appear in these cases: (a) In the present case, the approval of the housing project, its scope, definition and conditions, all are decided and dependent by the provisions of the relevant DC Rules. In contrast, the judgment in M/s. Reliance Jute and Industries Ltd. was concerned with income tax only. (b) The position of law and the rights accrued prior to enactment of Finance Act, 2004 have to be taken into account, particularly when the position becomes irreversible. (c) The provisions of Section 80IB (10) mention not only a particular date before which such a housing project is to be approved by the local authority, even a date by which the housing project is to be completed, is fixed. These dates ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... establishments. Therefore, by necessary implication, the said provision has to be read prospectively and not retrospectively. As is clear from the amendment, this provision came into effect only from the day the provision was substituted. Therefore, it cannot be applied to those projects which were sanctioned and commenced prior to 01.04.2005 and completed by the stipulated date, though such stipulated date is after 01.04.2005. 5. Admittedly insofar as the facts of the present appeals are concerned, the project "Roseland Residence" was sanctioned prior to 1 April, 2005. 6. Learned counsel for the assessee has also drawn our attention to an order passed by the co-ordinate Bench of this Court in the case of The Commissioner of Income Tax-15, Mumbai vs. Tinnwala Industries Income Tax Appeal No. 3315 of 2010 dated 13 April, 2012 wherein in similar circumstances and in relation to assessment year 2004-05, the Division Bench considering the question 'whether the Income Tax Appellate Tribunal was justified in holding that the area of balcony and rewas are not to be included while computing the built up area of the residential units, in housing project eligible for deduction under secti ..... 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