TaxTMI 
TaxTMI 
2016 (11) TMI 365
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.... 01.4.2004) ought to have been completed u/s. 80-IB(10)(a)(i) r/w Explanation (ii) thereto. The assessee's case, on the other hand, rests on the fact that seven of the eight buildings comprising the project, i.e., except Building A-4, stand completed by 31.3.2008, as signified by completion certificates. The assessee be accordingly allowed proportionate deduction, i.e., other than on the profit relatable to building A-4. The ld. CIT(A) has allowed the assessee's claim following the decision by the first appellate authority in the assessee's case for A.Y. 2009-10, wherein reference is made to the following decisions: CIT vs. Vandana Properties [2013] 353 ITR 36 (Bom); Vishwas Promoters (P) Ltd. vs. ACIT [2013] 29 Taxmann.com 19 (Mad); and CIT vs. Brahma Associates [2011] 333 ITR 289 (Bom) 3. We have heard the parties, and perused the material on record, including the cited judgments. 3.1 We begin by reproducing the provision 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 includes any profits and gains derived from any....
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....'housing project' could be under the circumstances restricted to seven buildings, or that each building be considered as a separate housing project for the purposes of section 80-IB(10), so that a proportionate deduction there-under is exigible, is misplaced and does not follow a reading of the decisions cited and relied upon. Rather, the Hon'ble jurisdictional High Court in Brahma Associates (supra) has categorically held that the project as approved by the local authority is to be considered as the housing project for the purposes of section 80-IB(10) and, two, that a project there-under is a single project, on the entire of which, where eligible, deduction u/s. 80-IB(10) is to be allowed. We extract the relevant part of the said decision, which is clear and unambiguous, as under: (refer para 31/pgs. 302-303, also catch notes at pgs. 290-291) 'Section 80-IB(10) allows deduction to the entire project approved by the local authority and not to a part of the project. If the conditions set out in section 80-IB(10) are satisfied, then deduction is allowable on the entire project approved by the local authority and there is no question of allowing deduction to the part of the pr....
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....ven one building with several residential units would constitute a "Housing Project" u/s. 80IB(10) of the Act. Similarly, in the case of Vishwas Promoters (P) Ltd. vs. ACIT (2013) 29 Taxmann.com 19 (Mad), which has been also relied upon by the appellant, it has been held that each block could be considered as a separate housing project when larger project consisted of various blocks. In this case, deduction u/s. 80IB(10) on the principles of proportionality as well as by reason of construction on the meaning of expression "Housing Project" has been held to be allowable. The Hon'ble Madras High Court while delivering the judgment in this case has relied upon the decisions of Hon'ble Bombay High Court in the case of CIT vs. Brahma Associates (2011) 333 ITR 289 and CIT vs. Vandana Properties (2012) 206 Taxman 584. Since the facts of the case of the appellant are identical the decisions of Hon'ble Bombay High Court in the case of Vandana Properties (supra) and Hon'ble Madras High Court in the case of Vishwas Promoters (P) Ltd. (supra) clearly support the case of appellant. Moreover, the decision of Hon'ble Bombay high Court being jurisdictional one, is binding on me. Therefore,....
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....er was approved independently on 11/10/2002, only after the status of the land was converted from 'surplus vacant land' to 'within ceiling land' by the State Government. And was therefore to be considered as a separate project, independent of the earlier project, with which it had no relation. As long as therefore the land size as per the project as approved was not less than one acre, deduction could not be denied. It was in this context that a separate building was considered as an independent project. The decision nowhere contradicts the earlier decision by the Hon'ble Court in Brahma Associates (supra). The decision in Vishwas Promoters (P.) Ltd. (supra) stood again rendered in a different context, i.e., of section 80-IB(10)(c), wherein restriction is cast on the size of the residential units in a housing project. Clearly, a residential unit and a housing project, of which the former is a part/component, are conceptually different, signifying different objects/notions. To say, therefore, that each residential unit is a housing project for the purposes of section 80-IB(10)(c), apart from being inconsistent with reality, in contradiction with the decision in Brahma Associates (su....
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....struction of the housing project, which stands provided in the provision itself as being the date on which the completion certificate is issued in respect of such housing project by the local authority (Explanation (ii) to sec. 80-IB(10)(a)). The first issue therefore would be if the project could be considered as complete, i.e., in terms of the Act, to any extent, in view of the admitted position that the provision contemplates the completion of the entire project and not a part of it. That is, if cognizance could be given under the provision to this fact or, put differently, could the housing project be considered as complete to any extent where the same does not extend to all the buildings of the project? We consider it as so. Our reason for so stating is that each of the buildings, stated to be seven (being A1, A2, A3, B1, B2, C1 and C2), stand granted a completion certificate in terms of Regulation 6(6) of the Development Control Regulations for Greater Mumbai, 1991 issued under Maharashtra Regional and Town Planning Act, 1966 (MRTP Act), which, along with Regulations 6(7) and 6(8), reads as under: '6) Completion certificate:- The owner, through his licensed plumber, shall ....
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....o the issue of an occupancy certificate. Further, though the Act postulates a completion certificate in respect of a housing project, the same, under the relevant law, is only issued qua each separate building comprising the project. This also explains as to how and why completion certificates were issued at different times (from 22/7/2005 to 27/3/2008, and finally to the eighth building on 25/11/2009) for different buildings in the present case (refer para 3 of the assessment order). Even assuming that a completion certificate is finally issued, i.e., on the completion of the entire work as per the sanctioned plans - of which there is though no indication, it is clear that the same regulations that provide for application for a completion certificate, i.e., for the entire project, signifying its' completion as per the approved plans, also envisage the issue of a completion and, subsequent thereto, occupancy certificate for a building or part of it, observing the same procedure and adhering to the same guidelines, by the same authority, and on the same basis, i.e., a satisfaction, on the same parameters, as it does for granting completion and, following it, occupancy certificate fo....
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.... a school, dispensary, a park, a convenient shopping facility, a community or health/sports centre, etc., i.e., amenities, or common utilities, which is/are not complete. Surely, pending the completion of the same, or such like parts of the project, forming an integral part of and servicing the entire project, the project cannot be regarded as complete to any extent. Where, on the other hand, the same concerns two parts of the project, which are independent of each other, as (say) two residential buildings, it is unexceptional as to why the project cannot be regarded as 'complete' to that extent, i.e., in terms of and following the completion parameters as prescribed by the Act itself. The independence of-course should be both with reference to construction as well as functional. The two buildings being independent of each other, could be constructed independent of each other, as signified by the issue of a separate completion certificate qua each building, as in the present case. We say so as the completion of one such (independent) building, in respect of which completion (occupancy) certificate stands issued, admits of habitation, providing the inhabitants access to all the infr....
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....n'ble Court held that the provision is qua deduction on the profits of the entire housing project, which is one, indivisible project. The term 'housing project' being not specifically defined in section 80-IB(10), the same was to be taken as approved by the local authority, i.e., for the purpose of section 80-IB(10). Further, being a substantive provision, section 80-IB(10)(d) would have no retrospective application. The relevant year being A.Y. 2003-04, for which there was no restriction in section 80-IB(10) as to commercial user, the tribunal, it clarified, had erred in restricting the disallowance to the commercial area qua which therefore no stipulation, i.e., to any extent, which could not be imported in the provision, noting, with reference to the D&C Regulations of different Municipal Corporations, the commercial user as varying between 5% and 50% of the total built-up area. The said decision stands since upheld in Sarkar Builders (supra). The word 'project' in Brahma Associates (supra) is being thus read by us as including that part of the approved project which has all the attributes of the entire project. This is toward and by way of a harmonious construction and recon....
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....'s case for A.Y. 2009-10, which stands since upheld by the tribunal (supra), which found the decisions in the case of Vandana Properties (supra) and Brahma Associates (supra) as squarely covering the issue at hand. There is no discussion of the facts of those cases and/or the ratio decendi of those decisions, or even of the law laid down per the said decisions, which alone is binding. The same, holding a project as approved as being the housing project u/s. 80- IB(10) and, therefore, as one, single project, so that there is no question of a deduction on a part of the project, which forms the basis of the decision in these judgments, the said order by the tribunal, rather than following the Hon'ble High Court, is, with respect, in apparent conflict therewith and de hors the same. The decision in Vishwas Promoters P. Ltd.(supra), the other decision relied upon in-as-much as the same stands referred to in the order by the first appellate authority which finds reproduction in the tribunal's order (supra), is also in direct conflict with the decision in Brahma Associates (supra), since affirmed by the apex court in Sarkar Builders (supra). It is also axiomatic that a project either qual....
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....and construction of a housing project. The same cannot be said of clause (a) thereof, which must therefore be regarded as the stipulation. What thus obtains for s. 80-IB(10)(d) may not hold good in the context of clause (a) thereof. This is also the conclusion that follows a careful reading of the provision of law (sec. 80-IB(10)) as well as the cited decisions. In Brahma Associates (supra), binding on us, the Hon'ble High Court was considering the condition of sec. 80-IB(10)(d), which impinges on an inherent feature, the configuration or a qualitative aspect of the project. This thus then distinguishes the said decision, i.e., with reference to the present case; it being trite that a decision to be read in the factual backdrop and the context in which it is rendered. This is as the words take their colour from the context in which they are used (CIT vs. Venkateswar Hatcheries (P.) Ltd. [1999] 237 ITR 174 (SC)). Again, as explained in Goodyear India Ltd. vs. State of Haryana and Another [1991] 188 ITR 402 (SC), a precedent is an authority only for what it actually decides and not what may remotely or even logically follow from it (also: CIT v. Sun Engineering Works (P.) Ltd. (1992)....
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....ctional aspects, meeting all the infrastructural facilities that on completion would accrue to the residents thereof, can only be regarded as representing the project as approved, bearing its ingredients, so that it would qualify as an eligible project even where a part of the residential complex is not complete by the specified date. This is as it is again trite law that though being required to be strictly construed, in-as-much as an exemption is an exception to the general rule, once the subject falls within the purview of the provision, so that the same is applicable, it is to be construed liberally (refer: Union of India v. Wood Papers Ltd. (1990) 4 SCC 256: AIR 1991 SC 2049 (at pp. 2051-52); Hansraj Gordhandas v. H.H. Dave AIR 1970 SC 755). We also derive support from Bajaj Tempo Ltd. vs. CIT [1992] 196 ITR 188 (SC), wherein it stands held as under: [Head Notes at pg. 189] 'A provision in a taxing statute granting incentives for promoting growth and development should be construed liberally; and since a provision for promoting economic growth has to be interpreted liberally, the restriction on it too has to be construed so as to advance the objective of the section and not....