TaxTMI 
TaxTMI 
2020 (9) TMI 1137
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....were correct in allowing proportionate deduction under Section 80IB in respect of the individual units measuring less than 1500 sq.ft. Contrary to the provisions of Section 80IB of the Act, when Section contemplates fulfillment of condition of less than 1500 sq.ft. in respect of entire project? (iii) Whether the appellate authorities were correct in holding that the assessee is entitled to deduction under Section 80IB(10) of the Act, admittedly when the commercial area in the project was more than 5% by holding that each residential block has to be taken into consideration for computing percentage of commercial area, when the provision contemplates fulfillment of conditions for the entire project and recorded a perverse finding (iv) Whether the appellate authorities were correct in holding that the assessee is entitled to deduction under Section 80IB of the Act, though the area of project is less than 1 acre by recording a finding that the area was measuring more than 1 acre at the time of submitting the project for approval and the same was reduced in compliance with the conditions imposed by the approval authority i.e., BMP without taking into consideration the requirement of....
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....he claim for deduction under Section 80IB(10) of the Act for Assessment Year 2007-08 was allowed and the order passed by the Assessing Officer was set aside. 4. Being aggrieved, the revenue filed an appeal before the Tribunal. The Tribunal by an order dated 07.09.2012 inter alia held that the issues involved in the appeal are covered by decisions passed by the Tribunal in the assessee's case in the Previous year and order of the Tribunal in respect of Assessment Year 2004-05 has been upheld by this court in I.T.A.No.763/2009 dated 29.02.2012. It was further held that the assessee has also satisfied the requirement with regard to size of the land i.e., one acre. In the result, the appeal preferred by the revenue was dismissed. In the aforesaid factual background, the revenue has filed this appeal. SUBMISSIONS: 5. Learned counsel for the revenue submitted that the benefit of deduction under Section 80IB(10) of the Act is extended not to an individual unit but to a housing project as a whole. It is further submitted that the housing project itself should be eligible for incentive under Section 80IB(10) of the Act and the conditions prescribed in clauses (a) to (f) of Section 80....
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....as been affirmed by Supreme Court as Special Leave Petitions have been dismissed. It is also argued that where multiple approvals are granted and each approval has to be examined separately. It is also submitted that issue with regard to usage of commercial area in the project in excess of more than 5% has also attained finality in the case of assessee itself and the Assessing Officer has not disputed the fact that the assessee had obtained separate approvals in respect of different units. It is further submitted that this court had also allowed the appeal of the assessee for Previous Assessment Year on different project on the issue of commercial use of area in a project and SLP against the order passed by this court has been dismissed. It is contended that the project includes park area, roads etc. and the Assessing Officer grossly erred in ascertaining the area of 1 acre by taking into account the built up area of the flats. In this connection, our attention has also been invited to finding recorded by the Tribunal in para 11 and it has been pointed out that the total area is 48.939 square feet, which is more than one acre and the land was surrendered after approval of the proje....
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....of rejoinder, learned counsel for the revenue has submitted that in all the decisions on which reliance has been placed by the assessee, the sanction in respect of the housing projects was granted prior to 01.04.2005. It is reiterated that the expression 'residential unit' used in Clause (c) of Section 80IB(10) of the Act has to be read as 'a residential unit in a housing project'. It is further submitted that reliance placed on decision in case of Vandana properties supra is of no assistance to the assessee as the decision in the aforesaid case was given in the peculiar facts of the case. It is further pointed out that internal roads in the project were not handed over by the assessee to the BBMP. LEGAL PRINCIPLES: 9. We have considered the submissions made by learned counsel for the parties and have perused the record. The object of Section 80IB(10) of the Act is to provide 100% deduction of the profits derived by an undertaking from developing and building housing projects. Section 80IB(10) was substituted by Finance Act No.(2) Act, 2004 with effect from 01.04.2005. Prior to the amendment, Section 80IB(10) and post amendment with effect from 01.04.2005, Section....
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....te of completion of construction of the housing project shall be taken to be the date on which the completion certificate in respect of such housing project is issued by the local authority; (b) the project is on the size of a plot of land which has a minimum area of one acre: Provided that nothing contained in clause (a) or clause (b) shall apply to a housing project carried out in accordance with a scheme framed by the Central Government or a State Government for reconstruction or redevelopment of existing buildings in areas declared to be slum areas under any law for the time being in force and such scheme is notified by the Board in this behalf; (c) the residential unit has a maximum built-up area of one thousand square feet where such residential unit is situated within the city of Delhi or Mumbai or within twenty-five kilometres from the municipal limits of these cities and one thousand and five hundred square feet at any other place; (d) the built-up area of the shops and other commercial establishments included in the housing project does not exceed three per cent of the aggregate built-up area of the housing project or five thousand square feet, whichever is higher....
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....inancial year in which the project is approved by the local authority. 12. At this stage, we may advert to the well settled legal principles with regard to interpretation of taxing statutes. It is trite law that subject is not to be taxed without clear words for the purpose and also that every Act of Parliament must be read according to natural construction of its word. The well established rule in the familiar words of Lord Wensleydale, reaffirmed by Lord Halsbury and Lord Simonds, is that 'if the person sought to be taxed comes within the letter of the law he must be taxed, however, great the hardship may appear to the judicial mind to be. On the other hand, if the Crown seeking to recover the tax, cannot bring the subject within the letter of the law, the subject is free, however apparently within the spirit of law the case might otherwise appear to be'. In other words, if there be admissible in any statute, what is called an equitable construction, certainly, such a construction is not admissible in a taxing statute where you can simply adhere to the words of the statute. The Constitution Bench of the Supreme Court in STATE OF WEST BENGAL VS. KESORAM INDUSTRIES LTD.....
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....aforesaid well settled legal principles, we may now examine the facts of the case in hand. The pivotal issue in this appeal is whether the assessee has complied with the conditions, which are sine qua non in order to claim benefit of deduction under Section 80IB(10) of the Act viz., the requirements contained in clauses (b), (c) & (d) of Section 80IB(10) of the Act. We shall proceed to deal with the aforesaid issues ad seritum. A. Requirement of project of the size of a plot of land which has a minimum area of 1 acre: 15. From perusal of para 14 of the order passed by the Assessing Officer, we find that the Assessing Officer has himself recorded a finding that the site area as per the plan, which was approved on 30.04.2005 is 48,939 square feet, which is more than one acre i.e., 45,560 square feet. It has further been found by the Assessing Officer that the assessee company had to hand over certain land to BBMP for development. It has also been found that after handing over of the land, the project has been constructed on an area of 38,573 square feet. The Commissioner of Income Tax (Appeals) by following the decision of the Income Tax Appellate Tribunal dated 29.08.2008 in case ....
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....at though the Income Tax Appellate Tribunal has recorded a finding in favour of the assessee that assessee is entitled to benefit of principle of proportionality for the Assessment Years 2004-05 and 2005-06, yet the aforesaid finding has not attained finality and the same is pending before this court in an appeal. The Commissioner of Income Tax (Appeals) by placing reliance on the order passed by the Tribunal in respect of previous Assessment Year viz., 2004-05 has held that the assessee is entitled to benefit of deduction under Section 80IB(10) of the Act proportionately in respect of residential units having built up area less than or equal to 1,500 square feet. The aforesaid finding has been affirmed by the Tribunal vide order dated 07.09.2012 by placing reliance in case of the assessee in respect of previous Assessment Year i.e., 2005-06 as well as 2006-07. It is pertinent to note that the aforesaid view has been affirmed by a bench of this court in respect of another project of the assessee for the Assessment Year 2004-05 vide order dated 29.02.2012 passed in I.T.A.No.763/2009. It is also pertinent to note that similar view was taken in favour of the assessee in respect of Ass....