TaxTMI 
TaxTMI 
2016 (12) TMI 1669
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....up the appeal of the Revenue (ITA No.8803/Mum/2011), wherein, the only ground raised pertains to non-consideration of amended provisions of section 80IB(10), w.e.f. 01/04/2005 on the housing projects approved before 01/04/2004, as per sub-clause (i) to clause (a) to section 80IB(10) of the Act. 2.1. During hearing, the ld. DR, Shri Suman Kumar, defended the addition made by the ld. Assessing Officer by arguing that the project was sanctioned in the year 2003 vide commencement certificate dated 03/07/2003 and completion certificate was issued on 02/03/2006, thus, the amendment made by the Finance Act is not applicable to the projects approved before 01/04/2004. On the other hand, Shri Pradip Kapasi, ld. counsel for the assessee defended the impugned order by claiming that, identically, in the case of sister concern, the claim of the assessee was allowed and placed reliance upon the decision in the case of Sarkar Builders (375 ITR 392)(SC). This factual assertion of the assessee was not controverted by the Revenue. 2.2. We have considered the rival submissions and perused the material available on record. The facts, in brief, are that the assessee is engaged in the business of ....
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.... M/s Sarkar Builders 375 ITR 392 (SC) has decided the issue, wherein, the decision from Hon'ble jurisdictional High Court in the case of Brahma Associates was also considered, wherein, Hon'ble Bombay High Court has held that clause (d) has prospective operation, viz., with effect from 01/04/2005, and this legal position is not disputed by the Revenue before us. What follows from the above is that prior to 01/04/2005, the developers/assessees who had got their projects sanctioned from the local authorities as 'housing projects', even with commercial user, though limited to the extent permitted under the DC Rules, were convinced that they would be getting the benefit of 100% deduction of their income from such projects under Section 80IB of the Act. Their projects were sanctioned much before 01/04/2005. As per the permissible commercial user on which the project was sanctioned, they started the projects and the date of commencing such projects is also before 01/04/2005. The assessee before us got the plan/project approved/sanctioned on 03/07/2003, which is much before 01/04/2005, therefore, the provision will be applicable on that particular time. Thus, the Revenue ca....
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....but this is not an absolute principle as the Court itself carved out exceptions thereto by making it clear that such exception can be either express or implied by necessary implication. Even the principle which is mentioned is qualified with the words 'ordinarily available'. 2.6. On examining the scheme of sub-section (1) of Section 80IB of the Act, its historical turn around by amendments from time to time and keeping in view of the real purpose behind such a provision, we are of the view that in the peculiar scenario as projected in this provision, the aforesaid cardinal principle of tax law is not to be applied as, by necessary implication, application thereof stands excluded. For the purpose of discussing this particular issue, it is required to be noted that with effect from 01/04/2001, Section 80IB(10) stipulated that any housing project approved by the local authority before 31/03/2001 was entitled to a deduction of 100 per cent of the profits derived in any previous year relevant to any assessment year from such housing project, provided - (i) the construction/development of the said housing project commenced on or after 1/10/1998 and was completed befor....
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....ought it fit that these changes be deemed to have been brought into effect from 01/04/2002. All the remaining provisions of Section 80IB(10) remained unchanged. 2.8. Thereafter, significant amendment, with which we are directly concerned, was carried out by Finance (No.2) Act, 2004 with effect from 01/04/2005. The Legislature made substantial changes in sub-section (10). Several new conditions were incorporated for the first time, including the condition mentioned in clause (d). This condition/restriction was not on the statute book earlier when all these projects were sanctioned. Another important amendment was made by this Act to sub-section (14) of Section 80IB with effect from 01/04/2005 and for the first time under clause (a) thereof the words 'built-up area' were defined. Section 80IB(14)(a) reads as under: "(14) For the purposes of this section - (a) "built-up area" means the inner measurements of the residential unit at the floor level, including the projections and balconies, as increased by the thickness of the walls but does not include the common areas shared with other residential units;" Prior to insertion of Section 80IB(14)(a), in man....
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.... that a construction resulting in unreasonably harsh and absurd results must be avoided. Clause (f) and (d) makes it clear that a housing project includes shops and commercial establishments also. But from the day the said provision was inserted, they wanted to limit the built up area of shops and establishments to 5% of the aggregate built up area or 2000 sq.ft., whichever is less. However, the Legislature itself felt that this much commercial space would not meet the requirements of the residents. Therefore, in the year 2010, the Parliament has further amended this provision by providing that it should not exceed 3% of the aggregate built up area of the housing project or 5000 sq.ft., whichever is higher. This is a significant modification making complete departure from the earlier yardstick. On the one hand, the permissible built up area of the shops and other commercial shops is increased from 2000 sq.ft. to 5000 sq.ft. On the other hand, though the aggregate built up area for such shops and establishment is reduced from 5% to 3%, what is significant is that it permits the builders to have 5000 sq.ft. or 3% of the aggregate built up area, 'whichever is higher'. In contr....
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....bmitted by Mr. Mistry, would lead to startling results. We therefore have no hesitation in holding that section 80-IB(10) is prospective in nature and can have no application to a housing project that is approved before 31st March, 2005. As the deduction sought to be claimed under section 80-IB(10) is inseparably linked with the date of approval of the housing project, it would make no difference if the construction of the said project was completed on or after 1st April, 2005 or that the profits were offered to tax after 1st April, 005 i.e. in A.Y. 2005-06 or thereafter. We therefore find no substance in the argument of the Revenue that notwithstanding the fact that the housing project was approved prior to 31st March 2005, if the construction was completed on or after 1st April, 2005 or if the profits are brought to tax in the A.Y. 2005-06 or thereafter, the said housing project would have to comply with the provisions of clause (d of section 80- IB(10). To our mind, we do not think that the condition/restriction laid down in clause (d) of section 80- IB(10) has to be revisited and/or looked at and complied with in the assessment year in which the profits are offered to tax by th....
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....been challenged. The stand of the assessee is that the assessee voluntarily offered the profit derived from commercial portion/shops, on the basis of decision of the Tribunal from the Calcutta Benches. It was explained that before the Ld. Commissioner of Income Tax (Appeal), the assessee moved additional claim, however, which was denied by the First Appellate Authority. Our attention was invited to the finding of the Ld. Commissioner of Income Tax (Appeal). It was explained that the project of the assessee was approved as a single project, which includes residential as well as commercial and there is wrong finding by the Ld. Commissioner of Income Tax (Appeal) that the project was approved by way of separate sanction plans. The crux of the argument is that there are decisions in favour of the assessee on the sale of commercial area also, therefore, the deduction u/s 80IB(10) of the Act has to be allowed in full. On the other hand, the ld. DR, defended the denial of claimed deduction by claiming that there is a confusion in the area mentioned in the sanction plan, completion certificate and the order of the Ld. Assessing Officer by inviting our attention to the relevant pages. 3.....
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....sessed tax, which includes interest also, was reduced substantially. It was contended that the penalty is not leviable. On the other hand, the ld. DR, defended the penalty order. 4.1. We have considered the rival submissions and perused the material available on record. The facts, in brief, are that the claimed relief u/s 80IB(10) of the Act and the assessment was made by the ld. Assessing Officer at an income of Rs. 10,07,55,450/-, against the declared income of Rs. 1,30,87,087/-, thus, addition of Rs. 8,76.68,359/- was made, while denying the claimed deduction u/s 80IB(10) of the Act. The appeal of the assessee was dismissed by the Ld. Commissioner of Income Tax (Appeal) on technical ground as the due tax was not paid. The assessee carried the matter in appeal before the Tribunal, where, the matter was restored to the Ld. Commissioner of Income Tax (Appeal). Meanwhile, the ld. Assessing Officer pressed for demand. The Assessing Officer treated the assessee in default u/s 221(1) of the Act for outstanding tax to the tune of Rs. 4,32,50,133/- and accordingly levied the penalty at the rate of 10% which comes to Rs. 43,25,013/-. It is noted that the major dispute was on account of....
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....ing of appeals, in exercise of the statutory right, a refusal to condoned the delay can result in a meritorious matter being thrown out at the threshold, which may lead to miscarriage of justice. The judiciary is respected not on account of its power to legalize in justice on technical grounds but because it is capable of removing injustice and is expected to do so. 5.2. The Hon'ble Apex Court in a celebrated decision in Collector, Land Acquisition vs Mst. Katiji & Ors. 167 ITR 471 opined that when technical consideration and substantial justice are pitted against each other, the courts are expected to further the cause of substantial justice. This is for the reason that an opposing party, in a dispute, cannot have a vested right in injustice being done because of a nondeliberate delay. Therefore, it follows that while considering matters relating to the condonation of delay, judicious and liberal approach is to be adopted. If sufficient cause is found to exist, which is bona-fide one, and not due to negligence of the assessee, the delay needs to condoned in such cases. The expression 'sufficient cause' is adequately elastic to enable the courts to apply law in a meaningful mann....