TaxTMI 
TaxTMI 
TaxTMI 
2014 (8) TMI 42
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....law, the ITAT was justified in upholding the order of the CIT(A) deleting the disallowance/addition of Rs. 22,44,480/- u/s 40(a)(ia) of the Income Tax Act, 1961, holding that the provisions of Section 40(a)(ia) as amended by the Finance Act, 2010 w.e.f. 1.4.2010, are of clarificatory nature and, therefore, retrospective without considering the fact that the relevant portion of the Memorandum Explaining the provisions in Finance Bill, 2010 clearly states that this amendment is proposed to take effect retrospectively from 1.4.2010 and will, accordingly, apply in relation to the Assessment Year 2010-11 and subsequent years ? 2. However, it is required to be noted that by an order dated 31.3.2014, the Division Bench of this Court answered the question no. 2 in favour of the assessee and against the revenue and directed to issue notice for final disposal only insofar as question no. 1 is concerned. Under the circumstances, as such, this Court is required to consider the present appeal qua aforesaid substantial question no.1. 3. The facts leading to the present Tax Appeal, in nut-shell, are as under: 4. That the assessee, a builder and developer, filed e-return of income declaring tot....
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....ribunal by impugned judgment and order has dismissed the said appeal confirming the order passed by the CIT(A). 7. Feeling aggrieved by and dissatisfied with the impugned judgment and order passed by the learned Tribunal, the revenue has preferred the present Tax Appeal to consider the aforesaid substantial question of law. 8. Mr. K.M. Parikh learned advocate appearing for the appellant-Revenue has vehemently submitted that as such the question involved in the present Tax Appeal is now not res integra in view of the recent decision of the Division Bench of this Court dated 5 & 11/03/2014 passed in Tax Appeal No. 549/2008 and other allied Tax Appeals. It is submitted that in the said decision, the Division Bench of this Court has upheld the view of the Revenue that the profit relatable to the sale of unutilized FSI would not be eligible for deduction under section 80IB(10) of the Act. It is submitted that in view of the above, the question no. 1 raised in the present appeal be answered in favour of the revenue and against the assessee, and consequently allow the present appeal. 9. Mr. S.N. Soparkar learned senior counsel appearing for the assessee has fairly conceded that, as suc....
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....erent zones controlling development activities in different areas for regulated and orderly development of urban areas, these regulations also provide for various other details such as maximum height upto which the construction can be carried out, maximum area on the ground floor or on other floors which can be covered under construction, margin to be left on sides, parking facilities to be provided depending on the nature of building and most importantly, the maximum construction that can be carried out on a given piece of land. The last element, namely, the ratio of the land area versus the maximum construction permissible on such land, is referred to as floor space index (FSI for short).It is this FSI which will decide the maximum area of construction that can be carried out on any given piece of land. It is, therefore, not difficult to appreciate that besides several other factors of situational and other advantages and disadvantages, FSI permissible for the land in question would be an important factor in the context of development of the land. Given all other factors same, higher the FSI, the greater the value of the land. 29. It is in this context, we have to appreciate the....
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....r section 80IB(10) of the Act on the profit earned on sale of the property? If this concept is accepted, in a given case, an assessee may put up construction of only 100 sq. ft. on the entire area of one acre of plot and sell the same to a single purchaser and claim full deduction on the profit arising out of such sale under section 80IB(10) of the Act. Surely, this cannot be stated to be development of a housing project qualifying for deduction under section 80IB(10) of the Act. This is not to suggest that for claiming deduction under section 80IB (10) of the Act, invariably in all cases, the assessee must utilize the full FSI and any shortage in such utilization would invite wrath of the claim under section 80IB(10), being rejected. The question is where does one draw the line. In our opinion, the issue has to be seen from case to case basis. Marginal underutilization of FSI certainly cannot be a ground for rejecting the claim under section 80IB(10) of the Act. Even if there has been considerable underutilization, if the assessee can point out any special grounds why the FSI could not be fully utilized, such as, height restriction because of special zone, passing of high tension ....