TaxTMI 
TaxTMI 
2014 (9) TMI 1009
X X X X Extracts X X X X
X X X X Extracts X X X X
....or hearing originally on 15.05.2014, whereat it came to light that the matter under reference is covered in the assessee's favour by the decision by the Tribunal in its' own case for the immediately preceding year, i.e., A.Y. 2007-08, being the first year for which the assessee disclosed profit, on a percentage completion basis, on the said project (in ITA No.3276/Mum(J)/2010 dated 28.09.2012/copy on record). The ld. Departmental Representative (DR) was allowed time to go through the tribunal's order and state the Revenue's stand in its respect, posting the hearing for 21/5/2014. The Revenue not raising any objection; rather, conceding to the matter being squarely covered by the tribunal's order for A.Y. 2007-08 (supra), the hearing was concluded on that basis. Subsequently, at the time of dictation, it was found that the Revenue had per its grounds of appeal (reproduced as under), invoked the decision by the hon'ble jurisdictional High Court in the case of CIT vs. Brahma Associates [2011] 333 ITR 289 (Bom) (which was in fact also noticed by the Bench at the time of hearing, only to be explained of it being on another aspect, and not relevant to the issue at hand), wherein it has b....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ligible in-as-much as its stands duly approved by the local authority on 13.05.2005 and completed on 26.03.2009. The bone of contention between the parties is the satisfaction or otherwise of clause (c) of section 80-IB(10); that of other clauses, i.e., clauses (a), (b) and (d) being not in dispute, the cumulative satisfaction of all of which would make the project eligible for deduction u/s.80-IB(10), which position is again undisputed. Clause (c) enlists the condition as to the maximum built-up area of a residential unit in the housing project, being at 1000 sq. ft. for the Mumbai region, where the assessee's housing project is located. That a fair percentage of residential units, covering 35% of the total built-up area, have a built-up area in excess of the prescribed limit of 1000 sq. ft., is also not in dispute. The assessee accordingly restricts its' claim for deduction to the balance 65% of the built-up area - the entire of which is residential, i.e., to 65% of the total profits, on the basis that the profit to that extent is attributable to residential units satisfying the condition of section 80-IB(10)(c) and, thus, all the conditions of section 80-IB(10). The Revenue, on ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....) (refer paras 8 and 19 of the tribunal's order), so that it can at best be considered as a view by a larger bench of the tribunal. Even otherwise, it is trite law that a decision is an authority on what it actually decides, and not what may remotely or even logically flow from it (refer: Goodyear India Ltd. v. State of Haryana [1991] 188 ITR 402 (SC)). None of the several decisions cited before it, and which the tribunal respectfully follows in deciding the issue in the manner it does, as we observe from a reading of it's order, as also from a perusal of the order in ITO vs. AIR Developers, reported at [2010] 122 ITD 125 (Nagpur) - which we find to be the only reported order, bears reference to or considers the decision by the hon'ble high court in the case of Brahma Associates (supra), which is binding on us, so that the ratio of the said decision shall have to be examined for being followed. The decision in the case of Brahma Associates (supra): 4.3 In the facts of that case, the assessment year being 2003-04, the Revenue similarly denied deduction on the ground that the assessee's housing project, which had a commercial area of 50% of the total area, was not an eligible h....
X X X X Extracts X X X X
X X X X Extracts X X X X
....eduction on a proportionate basis, i.e., as attributable to the residential area in the facts of that case, finding the same as without basis in law. It accordingly approved the deduction qua the profits of the entire project. The ratio of the said decision is squarely applicable in the facts of the case. Each of the conditions of s. 80-IB(10) is a qualifying condition, and is to be independently satisfied. There is, accordingly, no concept of pro rata deduction where a condition is partly satisfied. The principle that quantification follows eligibility is axiomatic. We are, thus, in principle, in complete agreement with the Revenue that the prescription and mandate of the decision in Brahma Associates (supra) does not admit of proportionate deduction in-as-much as either housing project qualifies, or not so, under s.80-IB(10). 4.4 We may next consider the condition of section 80-IB(10)(c), reproducing the provision itself, which reads as under: 'Deduction in respect of profits and gains from certain industrial undertakings other than infrastructure development undertakings. 80-IB. (1) Where the gross total income of an assessee, being a Developer, includes any profits and ga....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ard in this behalf; (c) the residential unit has a maximum built-up area of one thousand square feet where such residential unit is situated within the city of Delhi or Mumbai or within twenty-five kilometres from the municipal limits of these cities and one thousand and five hundred square feet at any other place; and (d) the built-up area of the shops and other commercial establishments included in the housing project does not exceed five per cent of the aggregate built-up area of the housing project or two thousand square feet, whichever is less.' [(*) '2008' by Finance (No.2) Act, 2009, w.r.e.f 01.04.2009, i.e., A.Y. 2009-10 onwards] As would be apparent from a close reading of clause (c) to s. 80-IB, it does not, in terms, provide a condition as to the area qua 'each' or 'all' or 'every' residential unit comprised in the housing project. It does not, it may be noted, refer thereto - which is the first time the word 'residential unit' is mentioned in the provision, in plural terms. We state so as these would indicate or signify that the condition of clause (c) is to be necessarily complied by all such units. Further, correspondingly, there is, in contradistinction, ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the residential units admittedly not satisfying the test of section 80- IB(10)(c), in view of the subsequent amendment to section 80-IB(10) by way of insertion of clauses (e) and (f) thereto; the restriction of its claim by the assessee in the first place being only by way of a concession. The argument presupposes that such a plea is permissible. There is we are afraid no concept of bargain plea under the Indian tax jurisprudence. Be that as it may, we shall consider the plea on its merits. Our decision on merits clearly negates such a view, i.e., as being canvassed. Rather, we consider the argument as not maintainable at the threshold. Our order being appealable, it would only be fair to state our reasons for so considering. Firstly, the assessee is not in appeal. In fact, the dispute all through was confined to the eligibility of the assessee's housing project 'Ekta Medows' to deduction u/s.80-IB(10); the Revenue itself stating that, if found to be so, the entire profits of the project would be eligible for deduction thereunder (also refer para 4.1 above). Thirdly, clauses (e) and (f) of the provision stand inserted by Finance Act (No.2), 2009 w.e.f. 01.04.2010. Even as clarifie....
X X X X Extracts X X X X
X X X X Extracts X X X X
....g, is, with respect, clearly inconsistent with the express and clear verdict by the hon'ble jurisdictional high court as extracted here-in-above. The other decisions by the tribunal being relied upon by the assessee, rendered without considering the decision by the hon'ble court in Brahma Associates (supra), are also thus apparently in conflict therewith in-as-much as the same opine in favour of deduction, which extends to the entire profit of the project, with reference to the profit attributable to the residential units satisfying the condition of section 80-IB(10)(c), i.e., to a part of the project. The proposition is even otherwise inconsistent with the fundamental principle that any deduction is subject to eligibility, i.e., satisfaction of each of the conditions precedent. Further, our reading of those decisions by the tribunal, did not exhibit any discussion on or an interpretation of section 80-IB(10)(c), as indeed was also the case for the judgment by the hon'ble court in Brahma Associates (supra). The provision is accordingly examined closely, to find clause (c) as worded differently from the other clauses of section 80-IB(10), setting forth the conditions precedent fo....