2011 (5) TMI 954

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....gaged in the business of builders and land developers and during the assessment year made a claim for deduction u/s.80IB(10) for a sum of ₹ 24,42,380/-. It was mainly argued that assessee's project was duly approved by the municipal authorities with permissible commercial area. It was argued that commercial area could not be de-linked from the housing project and, therefore, assessee was entitled to deduction u/s.80IB(10). After considering the submission, AO observed that the deduction is in respect of "Bhumiraj Retreat" and sales were out of the closing stock of this project. He also found that out of the total area of 108576 sq.fts. only 97162 sq.fts. was residential area and balance 11414 sq.fts. was commercial area and thus, comm....

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.....(d) of cl.(iii) of sec.80IB(10) through which commercial area was restricted to 5% or 2000 sq.fts. of the aggregate area whichever was lower, was effective from A.Y 2005-06 and, accordingly, he confirmed the action of the AO. 4. Before us, Ld.counsel of the assessee submitted that the housing project of the assessee was approved as residential-cum-commercial project vide certificate dated 27-3-2001 and the copy of the same is available at page-1 of the paper book. The project was completed on 31-3-2003 and copy of the occupancy certificate is at page 6 of the paper book. Thus, it is clear that this project was completed much before the amendment came in sec.80IB[10][d]. He then referred to the order of the Tribunal for the A.Y 2004-05 in ....

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....5/Mum/2009 order dated 26-11-2010 (Ann.V) 6. On the other hand, Ld.DR supported the order of the CIT(A). 7. We have considered the rival carefully and find that basically two disputes are involved. The first dispute is whether deduction u/s.80IB[10] can be allowed even in cases where the commercial area is more than 10%. This issue now stands concluded in favour of the assessee by the decision of the Hon'ble Bombay High Court in the case of CIT vs. Bramha Associates [supra]. In this case the conclusions have been summarized at para 30 which read as under: 30. In the result, the questions raised in the appeal are answered thus:- a) Upto 31/3/2005 (subject to fulfilling other conditions), deduction under Section 80IB(10) is allowable t....

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....the above, it is clear that if the project has been approved by the local authority even with higher percentage of commercial area, then deduction u/s.80IB[10] has to be allowed on the whole of the project. In any case, further similar view was taken in assessee's own case for the A.Y 2004-05 in I.T.A.No.2170/M/09. 8. The second dispute is whether the amended provisions of sec.80IB[10] w.e.f. 1-4-2005, could be applied to the projects which have been approved before the amendment. This issue came up for consideration before the Tribunal in the case of Saroj Sales Organisation vs. ITO [supra]. The relevant portion of the head-note reads as under: "Further, the housing project having been approved before 31st March, 2005, the condition of ....