TaxTMI 
TaxTMI 
TaxTMI 
2015 (3) TMI 980
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.... Housing Development Corporation (HHDC) is engaged in building construction activities for the last several years. It has commenced construction of one project entitled "Heritage" on various plots of land bearing Plot F. P. 18-19/11 to 15, 16B (18-19/109), 20 pt, 28, 29, 31, 32, 33, 88, 89, 90 to 99, 100, 102, 106, 107 of TPS VI of Santacruz (W), admeasuring about 88,251.34 sq. mtrs. Thereafter the said HHDC got prepared a scheme of Development of said large property under "Slum Rehabilitation Scheme" under section 45 of Maharashtra Regional and Town Planning Act, 1966 to erect buildings on said plot of land. The said Authority has given Letter of Intent vide No.SRA/ENN/448//GI/LOI dated 25/05/2000 already submitted in our earlier submission and principally approved the Development Scheme under which the rehabilitation component is 72966.66 sq. Meters, and sale component permissible is 72966.66 sq. meters taking into account both Slum Plot and Non-Slum Plot. The sale component permissible is hereinafter called the "Free Sale Residential component ","Free Sale Commercial component "and Rehabilitation Component is hereinafter called the "Rehab Component". The Developers have also pre....
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.... by disallowing the claim of deduction u/s. 80IB(10) of the Act and completed the assessment for assessment year 2005-06. 3. The assessee carried the matter before the Ld. CIT(A) and reiterated its claim. After considering the facts and the submissions, the Ld. CIT(A) was of the opinion that since the housing project was approved before 31.3.2005, the amended provisions do not apply to the facts of the case. After drawing support from various decisions of the Tribunal, the Ld. CIT(A) allowed the claim of the assessee u/s. 80IB(10) of the Act. 4. Aggrieved by this, the Revenue is before us. 5. The sum and substance of the grievance of the Revenue for assessment year 2005-06 is that the Ld. CIT(A) erred in allowing the claim of deduction u/s. 80IB(10) of the Act even though the assessee has not complied with the mandatory condition for the claim of deduction u/s. 80IB(10) of the Act. 6. In assessment year 2006-07, while scrutinizing the return of income, the AO noticed that the assessee has allocated maintenance expenses to residential and commercial building. The AO was of the opinion that the allocation by the assessee is highly disproportionate. The AO found that the assessee ....
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....0) of the Act. 8. Aggrieved, The assessee carried the matter before the Ld. CIT(A). In so far as allocation of maintenance expense is concerned, the Ld. CIT(A) was convinced with the submissions made by the assessee and observed that the AO has not properly appreciated the full facts of the case nor has verified the respective expenditure of residential building and commercial building. The Ld. CIT(A) further observed that when two separate accounts are there with reference to residential as well as commercial building, can such apportionment be done on assumption basis. The Ld. CIT(A) rejected the apportionment of expenditure as made by the AO and deleted the addition. 8.1. In so far as the claim of deduction u/s. 80IB is concerned, the Ld. CIT(A) followed the findings given in assessment year 2005-06 and after relying upon the same decisions as relied upon in A.Y 2005-06, the Ld. CIT(A) allowed the claim of deduction u/s. 80IB(10) of the Act. 9. Aggrieved by this, the Revenue is before us. Facts of assessment year 2007-08 are identical to the facts of assessment year 2006-07 in so far as apportionment of maintenance expenditures are concerned. The claim of assessee from deduct....
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....igh Court of Bombay in the case of Happy Home Enterprises 271 CTR 524. The Ld. Counsel concluded by stating that the claim cannot be denied on the ground of commercial area. In so far as the objection of the AO that certain flats were sold as one unit, the Ld. Counsel stated that the responsibility of the builder is only upto the date of handing over of the possession, what the purchasers do after taking the possession cannot be used against the builder. Therefore, the observations of the AO are without any basis and the Ld. CIT(A) has rightly allowed the claim. 12. We have heard the rival submissions and carefully perused the orders of the authorities below and the relevant documentary evidences brought on record and referred to during the course of the hearing. There is no dispute that the slum rehabilitation authority has approved the Slum Rehabilitation Scheme u/s. 45 of Maharashtra Regional and Town Planning Act, 1966 and allowed the assessee to erect building as per the scheme on the land approved by the SRA. It is also not in dispute that the assessee has prepared the plans for construction of 17 Rehab buildings, 4 residential buildings and one commercial building. The disp....
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....March, 2008 thereby making the incomes arising from such projects eligible for deduction u/s. 80IB(10) from the assessment year 2005-06 onwards." 12.6. In the footnote to this corrigendum, there is an explanatory memorandum which reads as under: " As the provisions of Sec. 80-IB(10) apply only to housing projects approved before 31.3.2008, the above notification would also be deemed to apply to housing projects approved by a local authority under the aforesaid scheme on or after the 1st day of April, 2004 and before 31st day of March, 2008." 12.7. Going through the notification, we find that the notification has been issued for the scheme contained in Regulation 33(10) of Development Control Regulation for Greater Mumbai 1991 subject to the following conditions: i) slum Development falling in Category VII mentioned in notification No. TPB-4391/4080(A)/UD-11(RDP) dt. 3rd June, 1992 shall be excluded from the scheme. ii) slum development falling within clause 7.7 of the Appendix IV of regulation 33(10) which provides for M/s. Heritage Housing & Development 11 Corpn. joint development of slum and non-slum areas shall be excluded from the scheme; and iii) Any amendment in the Sch....
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....for A.Yrs. 2006-07 and 2007-08 are late by 465 days. Similarly, the C.O for 2005-06 is late by 1047 days and C.O. for A.Yrs 2006-07 and 2007-08 are late by 156 days. In all these appeals and cross objections, identical application for condonation of delay is filed by the assessee. 16. Let us understand the facts for A.Y. 2005-06, The assessment order was made on 28.12.2007 u/s. 143(3) of the Act. The assessee preferred appeal before the Ld. CIT(A) on 28.1.2008. Meanwhile, the CIT issued notice u/s. 263 of the Act for allocation of the market value of F.S.I between residential and commercial buildings. According to the CIT, this aspect needed verification. In the meantime, the Ld. CIT(A) vide order dt. 24.2.2009 allowed assessee's appeal. 17. The Revenue preferred an appeal against the order of the Ld. CIT(A) on 23.4.2009. The CIT u/s. 263 of the Act directed the AO to do the allocation on reasonable basis vide order dt. 29.8.2009. Against this order of the CIT, assessee preferred an appeal before the Tribunal which was disposed off by the Tribunal on 29.6.2012 upholding the order of the CIT. This order of the Tribunal was received on 13.7.2012. The assessee has filed the appeals ....
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....project has to be gathered from the rules/regulation framed by the local authority. Since the local authorities could approve a project to be a housing project with or without the commercial user, it is evident that the legislature intended to allow Sec. 80IB(10) deduction to all housing projects approved by local authority without all with commercial user to the extent permitted under the rules. This is further verified by clause (d) of Sec. 80IB(10) inserted with effect from 1.4.2005. It provides that even though shops and commercial establishments are included in the housing project, deduction u/s. 80IB(10) w.e.f. 1.4.2005 would be allowable where such commercial user does not exceed 5% of the aggregate built up area of the housing project or 2000 Sq.ft whichever is lower. By the Finance Act, 2010, clause (d) was amended to the effect that the commercial user should not exceed 3% of the aggregate built up area of the housing project or 5000 sq.ft whichever is higher. The expression "included" in clause (d) makes it amply clear that commercial user is an integral part of a housing project. 19. Applying the above ratio of the Hon'ble High Court to the facts of the present case, t....