2013 (11) TMI 1641

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....on only and cannot be applied retrospectively. 3. On the facts and in the circumstances of the case and in law, the CIT(A) erred in upholding that the assessee was entitled for deduction u/s. 80IB(10), relying on the decision in the case of CIT Vs Brahma Associates, (2011)333 ITR 289(BOM), wherein the limitation on construction of commercial area was fixed at 10% as against the statutory limitation of 5% of the total built up area or 2000 sq. ft. , whichever was less. 4. The appellant prays that the order of the Learned CIT (A)-II, Thane, be cancelled and that of the A. O. restored. 5. The appellant craves leave to add, alter, amend or delete any or all the above grounds of appeal. 2. Assessee-firm, engaged in the business of construction filed its return of income on 24.09.2009 declaring income at Rs. 35,88,970/-.AO finalised the assessment on 23.12.2011 u/s. 143(3)of the Act determining the income of the assessee at Rs. 1,79,25,689/-.During the assessment proceedings AO found that the assessee had developed a housing project being buildings no. 7 and 8 at village Bolinj, Taluka Vasai, District Thane, that the housing project of the assessee had commercial area totaling....

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....,36,719/-u/s. 80IB(10) of the Act and added back the same to the income of the assessee for the year under consideration. 3. Assessee preferred an appeal before the First Appellate Authority(FAA).After considering the submissions of the assessee and the assessment order, he held that he intended to agree with the arguments of the assessee made before the AO, that in a number of judicial decisions it had been decided by various courts that the deduction to the Housing Projects u/s. 80IB(10) of the Act was to be allowed to the housing project of an undertaking even though it contain area of commercial establishments, that the AO had denied the deduction u/s. 80IB(10) mainly on the ground that the amended provisions of section 80IB(10)which came into effect from 01/04/2005, were applicable to the case of the assessee even though the project commenced prior to 01.04. 2005, that the project completed by the assessee was not eligible for the said deduction on its housing project, that such a view was not the correct interpretation of the provisions of section 80IB (10).FAA referred to the decision of the F Bench of Mumbai Tribunal delivered in the case of M/s. Saroj Sales Corporation wh....

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....per the Development Control Regulations of the local authority the assessee could not be denied the deduction u/s. 80 IB(l0).Finally, he allowed the appeal filed by the assessee. 4. Before us, Departmental Representative(DR)submitted that issue of 80IB(10)deduction was decided in favour of Revenue by the decision of I Bench of Mumbai ITAT(ITA. No. 7021/Mum/ 2008)delivered on 12.09.2012 in the case of Everest Home Construction(India)(P)Ltd. ,that assessee firm was not entitled to claim u/s. 80IB(10)of the Act. Authorized Representative (AR) submitted that issue in question was decided in favour of the assessee. He relied upon the following decisions: 1. Manan Corporation (Appeal No. 1953 of 2011 dt. 03.09.2012 Gujarat High Court). 2. Anriya Project Management Services (P) Ltd. (21 taxmann. come 140 (Kar). 3. G. R. Developers (22 taxmann. come 265 (Kar). 4. Raviraj Kothari Punjabi Associates(ITA No. 223/PN/2011 dt. 22.03.2013"B" Bench, ITAT, Pune). 5. Saroj Sales Organisation (3DTR 494 (2008)(Mum) 6. Ideal Realtors (ITA No. 7669/Mum/2011 dat. 14.08.2013 "I" Bench, ITAT, Mumbai). 7. Neel Siddhi Enterprises (ITA No. 1761,1762 &1763/Mum/2010 dt. 30.03.2012 "B" Bench, ITAT, Mumba....

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....assessee nor local authority responsible to approve the construction projects are expected to contemplate future amendment in the statute and approve and/or carry out constructions maintaining the ratio of residential housing and commercial construction as provided by the amended Act being 3% of the total built up area or 5000 sq. feet whichever is higher (now in post 2010 period)or 5% of the aggregate built up area or 2000 sq. feet whichever is less. Revenue is also in error to suggest that even if such conditions are onerous, they are required to be fulfilled. The entire object of such deduction is to facilitate the construction of residential housing project and while approving such project when initially there was no such restriction in taxing statute and the permissible ratio for commercial user made 5% to the total built up area by way of amendment and reduction of which by further amendment to 3% of the total built up area, has to be necessarily construed on prospective basis. 22. As is very apparent form the record, there was no criteria for making commercial construction prior to the amended Section and the plans are approved as housing projects by the local authority f....