AI Drafter 
TaxTMI 
TaxTMI 
2024 (11) TMI 1151
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....ority. 3. That the Id. CIT(A) has erred in law and on facts in confirming the denial of deduction under section 80IB(10) for the reason that the area of commercial complex built on the project was in excess of the limits in the amended section 80IB(10). 4. That the Id. CIT(A) has not correctly interpreted the provisions of section 80IB(10) which stood prior to 1.4.2005 and after their amendment from 1.4.2005 in the correct perspective and thereby confirming the denial of deduction to the appellant whose project was approved prior to 31.3.2004. 5. That the order passed by ld. CIT(A) is without proper opportunity and bad in law. 6. That the order passed by ld. CIT(A) is against the merits, circumstances and legal aspects of the case. 7. That the appellant craves leave to add, alter, amend or withdraw any or all the grounds of appeal on or before the date of hearing." 3. The assessee is joint venture (AOP) constituted vide agreement dated 17.01.2002 to carry out the business of development and construction of residential and commercial units. The assessee filed its return of income for A.Y.2007-08 on 29.10.2007 and for A.Y.2008-09 on 25.....
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....sel has submitted that when the assessee had complied with the conditions as per un-amended provisions of section 80IB(10) then the subsequent amendment cannot imposed a fresh condition for claiming the deduction u/s 80IB(10) of the Act. He has clarified that initially the project was approved for 29.7 acre on 14th September 2000 and revised plan were approved on 23rd August 2004 for 57.35 acres. In support of his contention he has relied upon following decisions: a. CIT vs Sarkar Builders 277 CTR 301 (SC) b. P. CIT vs Sahara State, Gorakhpur dated 19th August 2019 in ITANo.13 of 2016 (Allahabad High Court) c. CM/s ACE Multi Axes System Ltd vs The DCIT dated 28th July 2014 in ITA No.477/2013 (Karnataka High Court) d. CIT vs Bramha Associates - 333 ITR 289 (Bombay) 3.2 Placing reliance on the above judgment the Ld. AR has submitted that the Hon'ble High Court as well as Hon'ble Supreme Court has held that the insertion of clause (d) in section 80IB(10) w.e.f 01.04.2005 is applicable prospectively and not retrospectively and therefore, cannot be applied to the projects commenced and sanctioned before 01.04.2005. Thus, Ld. AR has contended that w....
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....r the said amendment the assessee got more than three years to complete project. Ld. DR has further submitted that when the intent of the legislature is clear from the language of the provisions the same cannot be given different a meaning. He has relied upon the orders of the CIT(A) and submitted that the CIT(A) has dealt with all the contentions of the assessee while passing the impugned orders. 5. We have considered rival submissions as well as relevant material on record. There is no dispute regarding approval of the project in the case as on 14th September 2000 for total area 29.97 acres. The assessee has also claimed that development and construction activities of the housing project commenced w.e.f 31.01.2001. The thrust of the whole argument of the Ld. AR of the assessee is on the point that subsequent amendment vide Finance Act 2004 w.e.f 01.04.2005 in the provisions of section 80IB (10) cannot impose new condition for allowing deduction in respect of the project which was approved and commenced prior to 01.04.2005. 5.1 In support of his contention he has relied upon series of decisions including the judgment of Hon'ble Supreme Court in case of CIT vs. Sarkar Builder....
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..... at any other place. (e) It is the cardinal principle of interpretation that a construction resulting in unreasonably harsh and absurd results must be avoided. (f) Clause (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 500....
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.... particular Assessee would be determined on the basis of the accounting method followed. This, to our mind and as rightly submitted 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 Apri, 2005 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) h....
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....gs' provision stand saved. But, that does not mean that rights which are not saved by the 'savings' provision are extinguished or stand ipso facto terminated by the mere fact that a new statute repealing the old statute is enacted. Rights which have accrued are saved unless they are taken away expressly. This is the principle behind Section 6(c) of the General Clauses Act, 1897. The right to carry forward losses which had accrued under the repealed Income Tax Act of 1922 is not saved expressly by Section 297 of the Income Tax Act, 1961. But, it is not necessary to save a right expressly in order to keep it alive after the repeal of the old Act of 1922. Section 6(2) saves accrued rights unless they are taken away by the repealing statute. We do not find any such taking away of the rights by Section 297 either expressly or by implication." 23) The aforesaid discussion persuades us to conclude that the judgments of the High Courts, which are impugned in these appeals, take correct view that the assessees were entitled to the benefit of Section 80IB(10). As a result, these appeals fail and are hereby dismissed. 5.2 The Hon'ble Supreme Court has analyzed the amen....
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....h residential unit is situated within the cities 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." 5.3 The deadline for completion of project was extended from 31.03.2001 to 31.03.2003 by amendment vide Finance Act 2000. Thus, as on the date of approval as well as on the date of commencement of the project the conditions as per section 80IB(10) are that such undertaking has commenced or commences development and construction of housing project on or after 1st day of October 1998 and completes the same before 31st day of March 2003. The condition as contemplated in clause (a) are obviously not satisfied in the case of the assessee because the project was not completed within stipulated deadline. The assessee is claiming the benefit of section 80IB(10) on the basis of the subsequent amendment brought in this section by Finance Act 2003 w.e.f. 01.04.2002 then the assessee cannot take a plea that the conditions of completion of project on or before 31.03.2008 as inserted by Finance Act 2004 w.e.f. 01.04.2005 cannot be applied in the case of the assessee because on the princ....