Tribunal allows retrospective application of Finance Act 2004, distinguishes sectors for deductions.

The Tribunal held that the amendments introduced by the Finance Act, 2004, apply retrospectively. It determined that Sector No.1 and Sector No.7 are distinct projects, allowing deductions for Sector No.1. Additionally, the Tribunal ruled in favor of pro-rata deductions for completed units in Sector No.7 until 31.03.2008. The Tribunal partially allowed the assessee's appeals and dismissed those of the Revenue.

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Issues Involved:
1. Deduction under section 80-IB(10) of the Income-tax Act, 1961.
2. Applicability of amendments brought by the Finance Act, 2004.
3. Whether Sector No.1 and Sector No.7 are separate projects.
4. Pro-rata deduction for completed units in Sector No.7.

Detailed Analysis:

1. Deduction under section 80-IB(10) of the Income-tax Act, 1961:
The main issue in the appeals was the assessee's claim for deduction under section 80-IB(10) for housing projects. The Assessing Officer (AO) denied the deduction because the project was not completed by the stipulated date of 31.03.2008. The CIT(A) upheld the AO's decision for Sector No.7 but allowed the deduction for Sector No.1, treating them as separate projects.

2. Applicability of amendments brought by the Finance Act, 2004:
The assessee argued that the amendments brought by the Finance Act, 2004, which introduced a time limit for project completion, should not apply retrospectively to projects approved before 01.04.2004. The AO and CIT(A) disagreed, stating that the amendments were clarificatory and thus applicable retrospectively. The Tribunal upheld this view, referencing the Supreme Court's ruling in Reliance Jute and Industries Ltd. vs. CIT, which established that the law in force during the assessment year applies unless specified otherwise.

3. Whether Sector No.1 and Sector No.7 are separate projects:
The assessee contended that Sector No.1 and Sector No.7 were separate and independent projects, each eligible for deduction under section 80-IB(10). The CIT(A) accepted this argument, noting that the sectors were separated by a road and had separate FSI calculations and approvals. The Tribunal upheld this finding, emphasizing that each sector met the conditions of section 80-IB(10) independently.

4. Pro-rata deduction for completed units in Sector No.7:
The assessee sought pro-rata deduction for units in Sector No.7 that were completed by 31.03.2008. The CIT(A) denied this, stating that the entire project must be completed to qualify for deduction. The Tribunal disagreed, citing precedents from the Madras High Court and various Tribunal decisions, which allowed pro-rata deductions for completed units within a composite project. The Tribunal directed the AO to verify and allow pro-rata deductions for completed units in Sector No.7 for the relevant assessment years.

Conclusion:
The Tribunal concluded that:
- The amendments to section 80-IB(10) by the Finance Act, 2004, apply retrospectively.
- Sector No.1 and Sector No.7 are separate projects, and the assessee is entitled to deductions for Sector No.1.
- The assessee is eligible for pro-rata deductions for completed units in Sector No.7 up to 31.03.2008.
- The appeals of the assessee were partly allowed, and those of the Revenue were dismissed.

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