TaxTMI 
TaxTMI 
2014 (3) TMI 643
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....It is not disputed that the project was approved on 11.03.2004 and construction of Park-II commenced on the same day whereas Park-I commenced its operations on 26.03.2004. In other words, both the projects commenced before 31st March, 2004. Admittedly the built up area of each flat is less than 1000 sq.ft. and the projects have been completed within the period stipulated in section 80IB of the Act, i.e. completion certificate was obtained in respect of Park-II on 05.12.2005 whereas in respect of Park-I completion certificate was obtained on 04.01.2006. 4. Undertakings developing and building housing projects fall in the eligibility criteria under section 80IB of the Act subject to certain conditions in force at the time when the projects were approved. Section 80IB stipulates the following conditions in order to claim benefit of 100% deduction from the profits earned from undertaking, developing and building housing projects approved prior to 31.03.2005, which the assessee had fulfilled: - i. It has to commence development of housing project on or after 1st October, 1998 ii. The area of the plot of land should not be less than one acre. iii. Each residential unit should....
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....the Statute book w.e.f. 01.04.2005. Under these circumstances the AO was of the opinion that the assessee is not entitled to deduction under section 80IB(10) of the Act. On the other hand, the case of the assessee was that the conditions stipulated in clause 'd' of section 80IB(10) cannot be made applicable to the profits earned from the housing project approved in the case of the assessee since the approval was obtained prior to the amendment carried out by the Finance (No. 2) Act, 2004. In other words, the law as on the date, when the approval of the housing project was obtained and the project commenced, should be made applicable while considering a case as to whether the assessee is entitled to deduction as per the provisions of the Statute. It was further contended that clause 'd' was introduced w.e.f. 01.04.2005 whereby an assessee developing housing project should not construct built up area of shops in excess of 2,000 sq.ft. whereas prior to the said amendment there was no such pre-condition for availability of deduction and the only condition was that the project ought to be approved as "housing project". In the case of the assessee there is no dispute that....
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.... the law, as it stood at the relevant point of time, the assessee would be entitled to deduction under section 80IB(10) of the Act so long as the project is approved as a housing project and the amended law, which has come into force w.e.f. 01.04.2005, would not be applicable merely because the construction was completed during the previous year relevant to A.Y. 2005-06. Applicability of the conditions stipulated under section 80IB(10) would have to be considered at the point of time when the project was approved and construction commenced and so long as the construction was completed within the period stipulated in the Act, as it existed at the relevant point of time, the subsequent amendment which was prospective in nature cannot take away the right accrued to the assessee to claim the benefit. In other words, the provisions of the Act has to be given effect to so as to advance the object of the legislation and it should not be interpreted narrowly so as to take away the vested right accrued to the assessee with regard to the claim of deduction of profit from the project. Reliance was also placed upon several decisions of the ITAT Mumbai Benches wherein it was held that the amend....
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....e. It deserves to be noticed here that the instruction referred to by the CIT-D.R. was issued to clarify that an assessee can claim the benefit of deduction on year to year basis depending on the method followed by the assessee subject to the condition that completion of the project should be within the time limit specified under section 80IB(10) of the Act and if the construction is not completed before the specified date deduction granted in the earlier years should be withdrawn. In the case of the assessee here, even as per the pre-amended provisions the project was completed within the time limit stipulated under section 80IB(10) of the Act. The CIT-D.R. also referred to Circular No. 5 of the CBDT dated 15.07.2005 to highlight that extension of time limit for obtaining approval of housing project under the said provision would apply in relation to A.Y. 2005-06 and subsequent years. In the instant case the assessee has completed the projects in the previous year relevant to A.Y. 2006-07; in the opinion of the learned CIT-D.R., the amended provisions are applicable. He also filed detailed submissions alongwith certain case law to submit that it is a cardinal principle of tax law ....
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.... of the ITAT Pune Special Bench was upheld. Adverting our attention to the decision of the Hon'ble Bombay High Court in the case of Brahma Associates 333 ITR 289 the learned counsel for the assessee submitted that the Hon'ble jurisdictional High Court has specifically referred to the provisions of section 80IB of the Act and it has also taken into consideration clause 'd' inserted in section 80IB(10) w.e.f. 01.04.2005 and upon analysing the matter the Hon'ble Court concluded that the amended provision is prospective in nature and it cannot be applied to a case where the project was approved and construction commenced prior to introduction of clause 'd'. He, therefore, submitted that the decision of the Hon'ble jurisdictional High Court has to be followed in preference to the decision of any other High Court. At any rate, even after the decision of the ITAT Mumbai Bench in the case of Everest Home Construction (I) P. Ltd., the ITAT Mumbai Bench had an occasion to consider this very issue in the light of the decision of the Hon'ble Gujarat High Court in the case of Manan Corporation vs. ACIT 356 ITR 44 wherein this very issue had come up before the....