TaxTMI 
TaxTMI 
2008 (2) TMI 458
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....roject. (c) On the facts and circumstances of the case, the learned Commissioner of Income-tax (Appeals) has erred in deleting disallowance of Rs. 1,81,37,291 on account of expenses on completed project. (d) On the facts and circumstances of the case, the learned Commissioner of Income-tax (Appeals) has erred in granting relief of Rs. 1,64,38,558 on account of deduction under section 80-IB(10) of the Income-tax Act, 1961." 1* * * * 2. As regards ground No. 4 relating to the assessee' s claim for deduction under section 80-IB(10), the facts relevant to this issue are that in its return of income filed for the year under consideration deduction under section 80-IB(10) was claimed by the assessee at Rs. 1,64,38,558 in respect of profits derived from Tower 1 and Tower 5 of residential housing project viz., Sushant Estates in Sushant Lok, Gurgaon. During the course of assessment proceedings, the assessee was called upon by the Assessing Officer to explain as to whether all the conditions have been fulfilled by it as required for claiming the said deduction under section 80-IB(10). After consideration of the submissions made on behalf of the assessee-com....
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....learned Commissioner of Income-tax (Appeals) found the stand of the assessee to be acceptable and after admitting the fresh evidence filed by the assessee as well as relying thereon, he held that the requisite condition for grant of deduction under section 80-IB(10) was duly satisfied by the assessee-company. Accordingly, he deleted the disallowance made by the Assessing Officer on account of the assessee' s claim for deduction under section 80-IB(10). 3. At the time of hearing before us, the learned Departmental representative has not made any submissions to challenge the finding given by the learned Commissioner of Income-tax (Appeals) on the basis of additional evidence produced by the assessee in the form of occupation certificate that the projects for which the deduction under section 80-IB(10) was claimed by the assessee-company had been completed before March 31, 2003. He however has raised a new plea to challenge the allowability of the assessee' s claim for deduction under section 80-IB(10) in respect of the relevant projects by submitting that the date of completion of project as earlier prescribed in section 80-IB(10) as March 31, 2001 was extended to March 31....
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....extend the benefits available under the provisions of section 80-IB(10) even to the projects completed within the extended period. He also contended that the interpretation sought to be given by the learned Departmental representative to the amendment made by the Finance Act, 2000 thus is not logical and the same is likely to result in absurdity. 5. We have considered the rival submissions and also perused the relevant material on record. In so far as the new plea sought to be raised by the learned Departmental representative for the first time before us, it is observed that the same is based on the relevant provisions of the statute as amended from time to time and since the issue involved before us in this appeal of the Revenue is liable to be decided by applying the said provisions, we find it difficult to sustain the objection raised by learned counsel for the assessee for entertaining the said plea. As rightly contended by the learned Departmental representative, the provisions of law which are applicable to the year involved in the case cannot be overlooked especially when the said provisions are directly applicable to the issue specifically involved in an appeal. It is al....
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....icted only to passing orders on the subject-matter of the appeal. However, the words " as it thinks fit" in section 254(1) even then will have to observe the prohibitions of the Income-tax Act and do not mean that the Tribunal can think " fit" to disregard the clear mandates of the statute. The Tribunal as such as any other authority has to carry out the dictates of the statute. As clarified and explained by the hon' ble Supreme Court in the case of Hukumchand Mills Ltd. v. CIT [1967] 63 ITR 232, the rule is that the subject-matter of the appeal must be ascertained and a claim sought to be raised before the Tribunal for the first time is to be permitted if it relates to the same subject-matter. In the case of J. S. Parkar v. V. B. Palekar [1974] 94 ITR 616, it was held by the hon'ble Bombay High Court that the Tribunal was under statutory obligation to entertain the plea involving a pure question of law and decide the same, no matter at what stage it was taken. In the case of CIT v. Ice Suppliers Corporation [1967] 64 ITR 195 (Punjab) the order of the Tribunal accepting an alternative case of the Department after giving leave to the assessee in that regard was upheld by the....
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....s specifically made applicable only to the assessment year 2001-02 and subsequent years. In support of this contention, he has relied on the Explanatory Note reported in [2000] 242 ITR (St.) 100-101 explaining the legislative intention behind the aforesaid amendments made in section 80-IB(10) which reads as under : " Clause 36 seeks to amend section 80-IB of the Income-tax Act relating to deduction in respect of profits and gains from certain industrial undertakings other than infrastructure development under takings. Under the existing provisions, . . . . . . Under the existing provisions contained in sub-section (10), hundred per cent. deduction of the profits of an undertaking deve loping and building housing projects approved by a local authority is allowed, if such undertaking has commenced or commences development and construction of the housing project on or after October 1, 1998, and completes the same before March 31, 2001. Sub-clause (d) proposes to provide that the housing project approved by a local authority before March 31, 2001, and completed before March 31, 2003, will be allowed deduction under this sub-section. These am....
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....is not certainly in consonance with the legislative intention. Moreover, the profits derived from the same project for the assessment year 2001-02 and subsequent years would be eligible for the said benefits which cannot be accepted as logical interpretation going by the common sense. It may also lead to absurd results even in the cases of the assessee' s following two different methods of accounting to recognize the income derived from the projects eligible for benefits under section 80-IB. In a case where the assessee follows a project completion method, he will be able to avail the benefit of section 80-IB in respect of entire profits of the projects completed after March 31, 2001, but before March 31, 2003, whereas the assessee following percentage completion method (WIP method) will be able to avail the said benefits in respect of profits of the project completed after March 31, 2001 but before March 31, 2003, only to the extent of profit declared on percentage completion method in the assessment year 2001-02 and subsequent year and lose that benefit on the profits of the very same project declared on percentage completion method in the assessment years 1999-2000 and 2000-....