2011 (6) TMI 884

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... area exceeding 5% of the aggregate built-up area or 2000 sq.ft. whichever is less, which contravenes the stipulation of Sec.80IB(10)(d) for instant assessment disentitling the assessee from the claim of deduction u/s.80IB(10). 2. On the facts and in the circumstances of the case as well in law, the Learned CIT(A) has erred in holding that the assessee is entitled to deduction u/s.80IB(10) of Rs. 2,89,99,020/- ignoring the facts that the ITAT Special Bench, Pune (2009) 30 SOT 155 in the case of M/s Brahma Associates has categorically held that the provisions of clause (d) of sec.80IB(1)), inserted by Finance Act, 2004 wef 01-04-2005 has no retrospective effect and it applies only wef 01-04-2004 relevant to A.Y 2005-06 and onwards, ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....e had not developed the project and would be hit by the conditions prescribed u/s.80IB(2)(i) and deduction could not be allowed. 3. On appeal, Ld. CIT(A) allowed the deduction. 4. Now the Revenue is in appeal before us and has raised three issues by way of above four grounds which we have already produced. 5. At the outset Ld. Counsel of the assessee submitted that all these issues raised by the Revenue are squarely covered against the Revenue by various decisions relied on by the Ld. CIT(A) and in this regard he carried us through various paras of the appellate order. 6. He submitted that the first issue is regarding construction of commercial area in excess of 5% is squarely covered by the decision of the Hon'ble Bombay Hi....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....llate order and pointed out that CIT(A) has allowed the relief in unique circumstances of the case as well as by following the decision of the Tribunal in the case of Parth Corporation vs. ITO [supra], wherein it was clearly held that sec.80IB(2)(i) is not applicable for claiming deduction u/s.80IB(10). 9. We have considered the rival submissions carefully. We find that as far as the first objection raised by the Revenue regarding excess commercial area is concerned, the Hon'ble Bombay High Court in the case of CIT vs. Brahma Associates [supra] while reversing the decision of the Special Bench of the Tribunal in the case of Brahma Associates vs. JCIT 315 ITR (AT) 268 (PN) held as under: "Held that clause (d) inserted in sect....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....within which the construction has to be completed or any restriction regarding commercial area that can be built in a housing project. Let us assume that the Assessee complies with all the conditions for allowing relief u/s.80-IB (10) i.e., it is approved as a housing project by the local authority but the area of commercial space as approved by the local authority is more than 2000 sq.ft. The Assessee commences the project but is able to complete only in the previous year relevant to AY 05-06. As per the change in law from AY 05-06 with regard to the area of commercial space in a housing project the Assessee would loose his eligibility to claim deduction. In such cases there is definitely grave hardship to the Assessee. The interpretation ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ts proposal for slum rehabilitation and the permission for carrying out the development was accorded on 17.11.2003 and when the Assessee commenced development is to be applied. Therefore, following the above decision, we reject this objection also. 11. As far as the third objection is concerned, we find that the Ld. CIT(A) adjudicated this issue vide para 5.4 which is as under: "5.4 Thus, the reliance placed by Ld. AO is over ruled by the Spl. Bench of Pune ITAT. Further, in paragraph 6.3 Ld. AO has mentioned that project was approved on 19.07.2003. but AOP was formed on 26.04,2004 and in para 6.4 it is argued by the OC that Shri Harshad P. Doshi is holding the development right and not the AOP and he has sold out the propert....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....sq. ifs. Since major member is Mr. H P Doshi himself it cannot be said that the A.O.P. is not the owner of the land development rights and also it is being contributed capital in the form of land development rights by Mr. Doshi. Further, it is not pertinent to mention that section 80IB(2)(i) is not at all applicable to the deduction under section 80IB (10) since itself is a separate code and independent of the provisions of section8OlB (2). This fact has been considered and upheld in the case of Parth Corporation V5. ITO, ITAT Mumbai Bench 'C' reported at (23 SOT 420) and there is no necessity for such Appellant to be owner of the land or have approval in their name. According to this judgment the requirement for claiming deduction u/s.80IB....