DY. COMMISSIONER OF INCOME TAX, MUMBAI V. BOMBAY SLUM REDEVELOPMENT CORPORATION PRIVATE LIMITED, MUMBAI

ITA 6126/MUM/2025

AI Insights

The case involves the Bombay Slum Redevelopment Corporation Pvt. Ltd., which appealed against the disallowance of a deduction under section 80IB(10) of the Income Tax Act, 1961, amounting to Rs. 17,32,03,590. The disallowance was initially made by the Assessing Officer during reassessment proceedings, citing non-compliance and pending legal questions regarding similar deductions in another case (M/s Sonasha Enterprises) before the Supreme Court. However, the Commissioner of Income-tax (Appeals) reversed this decision, leading to the Revenue's appeal to the ITAT. The ITAT dismissed the Revenue's appeal based on the quashing of the reassessment order by the Bombay High Court, which rendered the issue academic.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 822780 (ITAT-MUMBAI)
• Duration Of Justice: 2 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-12-2025
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2015-2016
• Appeal Filed On: 29-09-2025
• Other Referred Cases: M/s Sonasha Enterprises, Aarti Projects and Constructions, Vandana Properties, Hexaware Technologies Limited v. ACIT
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RESPONDENTS; RESPONDENTS; RESPONDENTS; SOLGY JOSE T. KOTTARAM
• Assessee Lawyers: MAHAVEER JAIN AW
• Keywords: Set aside; Reassessment proceedings; Question of law; Non compliance; Maximum Marginal Rate
• Section: 147; 148; 144; 143(3); 80IB

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “B” MUMBAI BEFORE SHRI OM PRAKASH KANT (ACCOUNTANT MEMBER) AND SHRI SANDEEP SINGH KARHAIL (JUDICIAL MEMBER) ITA No. 6126/MUM/2025 Assessment Year: 2015-16 Dy. CIT, Room No. 420, Kautilya Bhawan, G Block, Bandra Kurla Complex, Mumbai-400051. Vs. Bombay Slum Redevelopment Corporation Pvt. Ltd., 707, Trade Centre, Bandra Kurla Complex, Mumbai-400051. PAN NO. AABCB 0248 H Appellant Respondent Assessee by : Mr. Mahaveer Jain a/w Mr. Bhavesh Bhatia Revenue by : Mr. Solgy Jose T. Kottaram, CIT-DR Date of Hearing : 04/12/2025 Date of pronouncement : 23/12/2025 ORDER PER OM PRAKASH KANT, AM This appeal by the Revenue is directed against order dated 05.07.2025 passed by the Ld. Commissioner of Income-tax (Appeals) – 52, Mumbai [in short ‘the Ld. CIT(A)’], raising the sole ground is reproduced as under: Whether on the facts and in the circumstances of the case, the Ld. CIT A is justified in not sustaining the disallowance made u s 801B 10 d of the Act amounting to Rs. 17,32,03,590 despite the fact that Printed from counselvise.com the Department has filed a Special Leave Petition SLP before the Hon ble Supreme Court which is pending for adjudication and thus the issue is sub 2. Briefly stated, the assessee, a limited company engaged in the real estate business, was originally assessed under section 143(3) of the Income-tax Act, 1961 (“the Act”) on 30.12.2016, determining total income at ₹8,03,24,790/ reopened under section 147 of the Act. Owing to alleged non compliance during reassessment proceedings, the Assessing Officer, vide order dated 12.02.2022 passed under section 144 read with section 147, disallowed the deduction claimed by the asses under section 80IB amounting to 3. On appeal, the Ld. CIT(A) allowed the assessee’s claim. The reopening was based solely on the premise that the allowability of deduction under section 80IB(10) in respect of sale of FSI/TDR was pending consideration before the Hon’ble Supreme Court in the case of M/s Sonasha Enterprises elaborate examination of the judicial record, noted that: (i) The issue had already been decided in favour of the assessee by the Coordinate Bench of the Tribunal in Enterprises; (ii) The said decision stood affirmed by the Hon’ble Bombay High Court, which held that no substantial question of law arose; Bombay Slum Redevelopment ITA No. 6126/MUM/2025 the Department has filed a Special Leave Petition SLP before the Hon ble Supreme Court which is pending for adjudication and thus sub judice Briefly stated, the assessee, a limited company engaged in the real estate business, was originally assessed under section 143(3) of tax Act, 1961 (“the Act”) on 30.12.2016, determining 8,03,24,790/-. Thereafter, the assessm reopened under section 147 of the Act. Owing to alleged non compliance during reassessment proceedings, the Assessing Officer, vide order dated 12.02.2022 passed under section 144 read with section 147, disallowed the deduction claimed by the asses under section 80IB amounting to ₹17,32,03,590/-. On appeal, the Ld. CIT(A) allowed the assessee’s claim. The reopening was based solely on the premise that the allowability of deduction under section 80IB(10) in respect of sale of FSI/TDR was pending consideration before the Hon’ble Supreme Court in the M/s Sonasha Enterprises (supra). The Ld. CIT(A), after an elaborate examination of the judicial record, noted that: The issue had already been decided in favour of the assessee by the Coordinate Bench of the Tribunal in said decision stood affirmed by the Hon’ble Bombay High Court, which held that no substantial question of law arose; Bombay Slum Redevelopment Corporation Pvt. Ltd. 2 ITA No. 6126/MUM/2025 the Department has filed a Special Leave Petition SLP before the Hon ble Supreme Court which is pending for adjudication and thus Briefly stated, the assessee, a limited company engaged in the real estate business, was originally assessed under section 143(3) of tax Act, 1961 (“the Act”) on 30.12.2016, determining . Thereafter, the assessment was reopened under section 147 of the Act. Owing to alleged non- compliance during reassessment proceedings, the Assessing Officer, vide order dated 12.02.2022 passed under section 144 read with section 147, disallowed the deduction claimed by the assessee On appeal, the Ld. CIT(A) allowed the assessee’s claim. The reopening was based solely on the premise that the allowability of deduction under section 80IB(10) in respect of sale of FSI/TDR was pending consideration before the Hon’ble Supreme Court in the The Ld. CIT(A), after an elaborate examination of the judicial record, noted that: The issue had already been decided in favour of the assessee by the Coordinate Bench of the Tribunal in Sonasha said decision stood affirmed by the Hon’ble Bombay High Court, which held that no substantial question of law arose; Printed from counselvise.com (iii) The deduction under section 80IB(10) could not be denied merely because an SLP was stated to be pending before the Hon’ble Supreme Court. 3.1 The Ld. CIT(A) further relied upon consistent decisions of the Tribunal, including Aarti Projects and Constructions deduction under section 80IB(10) on profits arising from sale of FSI/TDR received in lieu of development of slum rehabil projects had been upheld. On this reasoning, the disallowance was deleted. 3.2 The relevant finding of ld CIT(A) is reproduced “6. I have considered the facts of the case and the details submitted by the appellant. In this case, assessmen section 143(3) on 30.12.2016 with an assessed income of Rs. 8,03,24,790/ 147 and notice u/s 148 was issued on 30.06.2021 mentioning that the appellant had claimed a deduction of Rs. section 801B on the income from the sale of FSI (Floor Space Index). The case was re fact that the allowability of deduction u/s 801B on this issue in the case of M/s Sonasha Enterpri Court in SLP vide D.N 11467/2015, however, the matter has not reached finality. Thus, the deduction u/s 801B claimed by the appellant required to be disallowed. Accordingly, the assessment was completed and Rs. 17,32,0 Officer. Aggrieved by the order of Assessing Officer, the appellant filed appeat before the undersigned with various grounds which are dealt as under: 7. With respect to Ground No.4, the appellant has raised appeal against the disallowance of deduction of Rs. 17,32,03,590/ 80IB(10) of the Act. The AO has made disallowance u/s u/s 80IB(10) of the Act relying on the fact that identical issue is involved in case of M/s Sonasha Enterprises and the same is pending bef Supreme Court in SLP vide D.N 11467/2015. In this regard, it is Bombay Slum Redevelopment ITA No. 6126/MUM/2025 The deduction under section 80IB(10) could not be denied merely because an SLP was stated to be pending before the Hon’ble Supreme Court. The Ld. CIT(A) further relied upon consistent decisions of the Aarti Projects and Constructions (supra) deduction under section 80IB(10) on profits arising from sale of FSI/TDR received in lieu of development of slum rehabil projects had been upheld. On this reasoning, the disallowance was The relevant finding of ld CIT(A) is reproduced as under: 6. I have considered the facts of the case and the details submitted by the appellant. In this case, assessment was completed under section 143(3) on 30.12.2016 with an assessed income of Rs. 8,03,24,790/-. Subsequently, the case was reopened under section 147 and notice u/s 148 was issued on 30.06.2021 mentioning that the appellant had claimed a deduction of Rs. 17,32,03,590/ section 801B on the income from the sale of FSI (Floor Space Index). The case was re-opened by the Assessing Officer on the basis of the fact that the allowability of deduction u/s 801B on this issue in the case of M/s Sonasha Enterprises is pending before Hon'ble Supreme Court in SLP vide D.N 11467/2015, however, the matter has not reached finality. Thus, the deduction u/s 801B claimed by the appellant required to be disallowed. Accordingly, the assessment was completed and Rs. 17,32,03,590/- was disallowed by the Assessing Officer. Aggrieved by the order of Assessing Officer, the appellant filed appeat before the undersigned with various grounds which are dealt 7. With respect to Ground No.4, the appellant has raised appeal gainst the disallowance of deduction of Rs. 17,32,03,590/ 80IB(10) of the Act. The AO has made disallowance u/s u/s 80IB(10) of the Act relying on the fact that identical issue is involved in case of M/s Sonasha Enterprises and the same is pending bef Supreme Court in SLP vide D.N 11467/2015. In this regard, it is Bombay Slum Redevelopment Corporation Pvt. Ltd. 3 ITA No. 6126/MUM/2025 The deduction under section 80IB(10) could not be denied merely because an SLP was stated to be pending before the The Ld. CIT(A) further relied upon consistent decisions of the (supra), wherein deduction under section 80IB(10) on profits arising from sale of FSI/TDR received in lieu of development of slum rehabilitation projects had been upheld. On this reasoning, the disallowance was as under: 6. I have considered the facts of the case and the details submitted t was completed under section 143(3) on 30.12.2016 with an assessed income of Rs. . Subsequently, the case was reopened under section 147 and notice u/s 148 was issued on 30.06.2021 mentioning that 17,32,03,590/- under section 801B on the income from the sale of FSI (Floor Space Index). opened by the Assessing Officer on the basis of the fact that the allowability of deduction u/s 801B on this issue in the ses is pending before Hon'ble Supreme Court in SLP vide D.N 11467/2015, however, the matter has not reached finality. Thus, the deduction u/s 801B claimed by the appellant required to be disallowed. Accordingly, the assessment was was disallowed by the Assessing Officer. Aggrieved by the order of Assessing Officer, the appellant filed appeat before the undersigned with various grounds which are dealt 7. With respect to Ground No.4, the appellant has raised appeal gainst the disallowance of deduction of Rs. 17,32,03,590/- u/s 80IB(10) of the Act. The AO has made disallowance u/s u/s 80IB(10) of the Act relying on the fact that identical issue is involved in case of M/s Sonasha Enterprises and the same is pending before Hon'ble Supreme Court in SLP vide D.N 11467/2015. In this regard, it is Printed from counselvise.com worthwhile to mention here that the Hon'ble ITAT in the case of M/s Sonasha Enterprises (relied by the AO) vide ITA No.4911 & 4912/Mum/2010 for A.Y 2007 revenue has filed appeal before Honb'le ITAT. Further, the Tribunal vide its pronouncement has rejected the contention of the revenue. The relevant portion of the decision of Hon'ble ITAT is furnished as under: These appeals by the revenue are dire both dated 22.3.2010 of the CIT(A) for the AYs 2007 respectively. 2 The revenue has raised the following common grounds in these appeals: 1. On the facts and circumstances of the case and in law, the Id. CIT(A) erred in allowing the claim of deduction u/s. 801B(10) of the I.T. Act. 1961 made by the assessee even though the Assessing Officer rejected the claim of such deduction on the grounds: i) that the build up area of the 68 shops included in the housing projec of tenements exceeded 5% of the aggregate built housing project. thereby contravening the provisions of Sec. 801B(10)(d) of the Act. ii) that the assessee was a contractor and not a builder and iii) that the assessee has sold TDR and the s provisions of Sec 801B (10) of the Act did not apply being applicable lo the housing projects only. 2) On the facts and circumstances of the case and in law, the id CIT(A) erred in appreciating that the assessee has not justifi substantiated the payment to the above persons with any documentary evidence. 3. The assessee is a firm engaging in the business of builder and developer. The assessee has developed the housing project under SRA scheme as sectioned by MMRDA. The ass 80IB(10) for the AYs under consideration. The Assessing Officer denied the claim of the assessee mainly on two grounds viz that the assessee is having commercial establishment in the project which is more than 5% as provided und assessee is a contractor and not a builder who has sold Transfer of Development Right (TDR) which is a moveable asset and the provisions of the section does not apply. 3.1 On appeal, the CIT(A) issued a remand order and after considering the remand report of the Assessing Officer, allowed the claim of the assessee vide the impugned order. Bombay Slum Redevelopment ITA No. 6126/MUM/2025 worthwhile to mention here that the Hon'ble ITAT in the case of M/s Sonasha Enterprises (relied by the AO) vide ITA No.4911 & 4912/Mum/2010 for A.Y 2007-08 & 2008-09 dated 31.10.20 revenue has filed appeal before Honb'le ITAT. Further, the Tribunal vide its pronouncement has rejected the contention of the revenue. The relevant portion of the decision of Hon'ble ITAT is furnished as under: These appeals by the revenue are directed against separate orders both dated 22.3.2010 of the CIT(A) for the AYs 2007- 2 The revenue has raised the following common grounds in these 1. On the facts and circumstances of the case and in law, the Id. rred in allowing the claim of deduction u/s. 801B(10) of the I.T. Act. 1961 made by the assessee even though the Assessing Officer rejected the claim of such deduction on the grounds: i) that the build up area of the 68 shops included in the housing projec of tenements exceeded 5% of the aggregate built- housing project. thereby contravening the provisions of Sec. 801B(10)(d) of the Act. ii) that the assessee was a contractor and not a builder and iii) that the assessee has sold TDR and the same being movable asset, the provisions of Sec 801B (10) of the Act did not apply being applicable lo the housing projects only. 2) On the facts and circumstances of the case and in law, the id CIT(A) erred in appreciating that the assessee has not justifi substantiated the payment to the above persons with any documentary evidence. 3. The assessee is a firm engaging in the business of builder and developer. The assessee has developed the housing project under SRA scheme as sectioned by MMRDA. The assessee claimed deduction u/s 80IB(10) for the AYs under consideration. The Assessing Officer denied the claim of the assessee mainly on two grounds viz that the assessee is having commercial establishment in the project which is more than 5% as provided under clause (d) of sec. 80IB(10) and secondly, the assessee is a contractor and not a builder who has sold Transfer of Development Right (TDR) which is a moveable asset and the provisions of the section does not apply. 3.1 On appeal, the CIT(A) issued a nd order and after considering the remand report of the Assessing Officer, allowed the claim of the assessee vide the impugned order. Bombay Slum Redevelopment Corporation Pvt. Ltd. 4 ITA No. 6126/MUM/2025 worthwhile to mention here that the Hon'ble ITAT in the case of M/s Sonasha Enterprises (relied by the AO) vide ITA No.4911 & 09 dated 31.10.2011, the revenue has filed appeal before Honb'le ITAT. Further, the Tribunal vide its pronouncement has rejected the contention of the revenue. The relevant portion of the decision of Hon'ble ITAT is furnished as under: cted against separate orders -08 and 2008-09 2 The revenue has raised the following common grounds in these 1. On the facts and circumstances of the case and in law, the Id. rred in allowing the claim of deduction u/s. 801B(10) of the I.T. Act. 1961 made by the assessee even though the Assessing Officer i) that the build up area of the 68 shops included in the housing project -up area of the housing project. thereby contravening the provisions of Sec. ii) that the assessee was a contractor and not a builder and iii) that ame being movable asset, the provisions of Sec 801B (10) of the Act did not apply being applicable lo 2) On the facts and circumstances of the case and in law, the id CIT(A) erred in appreciating that the assessee has not justified and substantiated the payment to the above persons with any 3. The assessee is a firm engaging in the business of builder and developer. The assessee has developed the housing project under SRA essee claimed deduction u/s 80IB(10) for the AYs under consideration. The Assessing Officer denied the claim of the assessee mainly on two grounds viz that the assessee is having commercial establishment in the project which is more than er clause (d) of sec. 80IB(10) and secondly, the assessee is a contractor and not a builder who has sold Transfer of Development Right (TDR) which is a moveable asset and the provisions of the section does not apply. 3.1 On appeal, the CIT(A) issued a nd order and after considering the remand report of the Assessing Officer, allowed the claim of the assessee vide the Printed from counselvise.com 4. Before us, the Id DR has submitted that the assessee has sold TDR under the SRA scheme and therefore, as per the first 80IB(10) the scheme of SRA shall be notified by the Government of India. He has submitted that the assessee has not furnished any record to show that the said scheme has been notified by the Govt of India. He has further submitted that the against the development of the project under consideration from MMRDA and the income of the assessee is not directly from the development of the project but by sale of TDR, which is not entitled for deduction u/s 80IB(10) of the Act. assessee has constructed 68 shops in the housing project which exceeds the prescribed limit of 5%. Even the commercial area in the project exceeds 10% of the total constructed aree of the project; therefore, the assessee i contended that the housing project was sanctioned after 31.3.2005; therefore, the amended provisions of sec. 80IB(10) is applicable. He has relied upon the order of the Assessing Officer. 4.1. On the other ha the housing project was approved on 11.5.2004 which is prior to 31.3.2005 and therefore, the same is governed by the un provisions of sec. 80IB(10) and clause (d) of sec. 801 B is not applicable, as further submitted that the Hon'ble High Court, in the case of Commissioner of Income 289 has upheld the order of the Tribunal on the point of prospective amendment by which the clause (d) of sec. 80IB(10) is inserted and not retrospective. He has further submitted that the assessee has not sold out the commercial establishments in the project and all the shops were built as per the instructions and requirement of which the assessee did not receive any consideration. The assessee has received TDR only in respect of the residential part of the project. Therefore, the consideration received by the assessee in the form of TDR, which was sold by the assessee is entitled for deduction u/s 8018(1). 5. We have considered the rival contention and perused the relevant material on record. The first objection raised by the Id DR that the SRA scheme was not notified by CBDT, it has to be has not been raised by the Assessing Officer either while passing the assessment order or during the remand report. Further, we note that the assessee never sought any relaxation in the conditions under clause (a) or (b) of sec. 80 when the assessee has not claimed any benefit under the proviso, the question of the scheme of SRA, as notified or not, does not arise. Bombay Slum Redevelopment ITA No. 6126/MUM/2025 4. Before us, the Id DR has submitted that the assessee has sold TDR under the SRA scheme and therefore, as per the first 80IB(10) the scheme of SRA shall be notified by the Government of India. He has submitted that the assessee has not furnished any record to show that the said scheme has been notified by the Govt of India. He has further submitted that the assessee received TDR against the development of the project under consideration from MMRDA and the income of the assessee is not directly from the development of the project but by sale of TDR, which is not entitled for deduction u/s 80IB(10) of the Act. He has further submitted that the assessee has constructed 68 shops in the housing project which exceeds the prescribed limit of 5%. Even the commercial area in the project exceeds 10% of the total constructed aree of the project; therefore, the assessee is not entitled to the deduction. He has further contended that the housing project was sanctioned after 31.3.2005; therefore, the amended provisions of sec. 80IB(10) is applicable. He has relied upon the order of the Assessing Officer. 4.1. On the other hand, the Id AR of the assessee has submitted that the housing project was approved on 11.5.2004 which is prior to 31.3.2005 and therefore, the same is governed by the un provisions of sec. 80IB(10) and clause (d) of sec. 801 B is not applicable, as the project was approved prior to 1.4.2005. He has further submitted that the Hon'ble High Court, in the case of Commissioner of Income-tax v. Brahma Associates reported in 333 ITR 289 has upheld the order of the Tribunal on the point of prospective ent by which the clause (d) of sec. 80IB(10) is inserted and not retrospective. He has further submitted that the assessee has not sold out the commercial establishments in the project and all the shops were built as per the instructions and requirement of which the assessee did not receive any consideration. The assessee has received TDR only in respect of the residential part of the project. Therefore, the consideration received by the assessee in the form of TDR, which was sold by the assessee and accordingly, the assessee is entitled for deduction u/s 8018(1). 5. We have considered the rival contention and perused the relevant material on record. The first objection raised by the Id DR that the SRA scheme was not notified by CBDT, it has to be seen that this objection has not been raised by the Assessing Officer either while passing the assessment order or during the remand report. Further, we note that the assessee never sought any relaxation in the conditions under clause (a) or (b) of sec. 80IB(10) by virtue of first proviso therefore, when the assessee has not claimed any benefit under the proviso, the question of the scheme of SRA, as notified or not, does not arise. Bombay Slum Redevelopment Corporation Pvt. Ltd. 5 ITA No. 6126/MUM/2025 4. Before us, the Id DR has submitted that the assessee has sold TDR under the SRA scheme and therefore, as per the first proviso to sec. 80IB(10) the scheme of SRA shall be notified by the Government of India. He has submitted that the assessee has not furnished any record to show that the said scheme has been notified by the Govt of assessee received TDR against the development of the project under consideration from MMRDA and the income of the assessee is not directly from the development of the project but by sale of TDR, which is not entitled for He has further submitted that the assessee has constructed 68 shops in the housing project which exceeds the prescribed limit of 5%. Even the commercial area in the project exceeds 10% of the total constructed aree of the project; s not entitled to the deduction. He has further contended that the housing project was sanctioned after 31.3.2005; therefore, the amended provisions of sec. 80IB(10) is applicable. He nd, the Id AR of the assessee has submitted that the housing project was approved on 11.5.2004 which is prior to 31.3.2005 and therefore, the same is governed by the un-amended provisions of sec. 80IB(10) and clause (d) of sec. 801 B is not the project was approved prior to 1.4.2005. He has further submitted that the Hon'ble High Court, in the case of tax v. Brahma Associates reported in 333 ITR 289 has upheld the order of the Tribunal on the point of prospective ent by which the clause (d) of sec. 80IB(10) is inserted and not retrospective. He has further submitted that the assessee has not sold out the commercial establishments in the project and all the shops were built as per the instructions and requirement of MMRDA for which the assessee did not receive any consideration. The assessee has received TDR only in respect of the residential part of the project. Therefore, the consideration received by the assessee in the form of and accordingly, the assessee 5. We have considered the rival contention and perused the relevant material on record. The first objection raised by the Id DR that the SRA seen that this objection has not been raised by the Assessing Officer either while passing the assessment order or during the remand report. Further, we note that the assessee never sought any relaxation in the conditions under IB(10) by virtue of first proviso therefore, when the assessee has not claimed any benefit under the proviso, the question of the scheme of SRA, as notified or not, does not arise. Printed from counselvise.com Accordingly, we do not find any merit in the objection raised by the Id DR. 5.1 As regards the objection regarding the commercial mmercial e establishment is concerned, as per remand report, the Assessing Officer has accepted the fact that the project was approved vide agreement dt 11.5.2004; therefore, the preamendment of provis sec. 80IB(10) are applicable. Accordingly, in view of the decision of the jurisdictional High in the case of Brahma Associates (supra), there is no bar of commercial establishment in the housing project for availing deduction u/s 80IB(10) prior to t 1.4.2005. The Hon'ble High Court in para 33 has observed as under: \"In the absence of any provisions under the Income Tribunal was not justified in holding that up to March 31, 2005 deduction under section 80 approved by the local authority having residential building with commercial user up to 10 per cent. of the total builtup area of the plot.\" Therefore, when the project was approved prior to 1.4.2005 then, there is no bar for allowing deduction u/s 801B once the residential project has been approved by the local authorities. 5.2 As regard the last contention of the revenue is that the assessee is not a builder and the income received by sale of TDR and not by sale of housing project is concerned, we find that there is no dispute about the fact that the assessee received the TDR as a consideration against the development of the project in question. We further note that the TDR was received only for residential portion of t and not for the commercial establishment. Thus, when the TDR received by the assessee was immediately sold and the sale consideration was shown as receipt from the housing project, then, there is no other element in the said receipt agai other than the income from housing project. 5.3 It is not the case of the revenue that the assessee sold the TDR after appreciation of the value and therefore, the entire amount cannot be treated as sale consideration of the housing pro has given the details of the receipts of TDR and sale of the TDR as in the same year and immediately after receiving from the MMDRA. Therefore, there is no element of any appreciation in the value in the sale consideration. In view of th case, we do not find any reason to interfere with the order of the Id CIT(A) for both the AYs. 6 In the result, the appeals filed by the revenue are dismissed. 7.1 Further, aggrieved by the order of Hon'ble ITAT, the preferred appeal before Hon'ble Bombay High Court on the same issue Bombay Slum Redevelopment ITA No. 6126/MUM/2025 Accordingly, we do not find any merit in the objection raised by the Id 5.1 As regards the objection regarding the commercial mmercial e establishment is concerned, as per remand report, the Assessing Officer has accepted the fact that the project was approved vide agreement dt 11.5.2004; therefore, the preamendment of provis sec. 80IB(10) are applicable. Accordingly, in view of the decision of the jurisdictional High in the case of Brahma Associates (supra), there is no bar of commercial establishment in the housing project for availing deduction u/s 80IB(10) prior to the insertion of clause (d) w.r.f 1.4.2005. The Hon'ble High Court in para 33 has observed as under: \"In the absence of any provisions under the Income Tribunal was not justified in holding that up to March 31, 2005 deduction under section 80- IB(10) would be allowable to projects approved by the local authority having residential building with commercial user up to 10 per cent. of the total builtup area of the plot.\" Therefore, when the project was approved prior to 1.4.2005 then, there ar for allowing deduction u/s 801B once the residential project has been approved by the local authorities. 5.2 As regard the last contention of the revenue is that the assessee is not a builder and the income received by sale of TDR and not by sale sing project is concerned, we find that there is no dispute about the fact that the assessee received the TDR as a consideration against the development of the project in question. We further note that the TDR was received only for residential portion of the housing project and not for the commercial establishment. Thus, when the TDR received by the assessee was immediately sold and the sale consideration was shown as receipt from the housing project, then, there is no other element in the said receipt against the sale of TDR other than the income from housing project. 5.3 It is not the case of the revenue that the assessee sold the TDR after appreciation of the value and therefore, the entire amount cannot be treated as sale consideration of the housing project. The assessee has given the details of the receipts of TDR and sale of the TDR as in the same year and immediately after receiving from the MMDRA. Therefore, there is no element of any appreciation in the value in the sale consideration. In view of the above facts and circumstances of the case, we do not find any reason to interfere with the order of the Id CIT(A) for both the AYs. 6 In the result, the appeals filed by the revenue are dismissed. 7.1 Further, aggrieved by the order of Hon'ble ITAT, the preferred appeal before Hon'ble Bombay High Court on the same issue Bombay Slum Redevelopment Corporation Pvt. Ltd. 6 ITA No. 6126/MUM/2025 Accordingly, we do not find any merit in the objection raised by the Id 5.1 As regards the objection regarding the commercial mmercial e establishment is concerned, as per remand report, the Assessing Officer has accepted the fact that the project was approved vide agreement dt 11.5.2004; therefore, the preamendment of provision of sec. 80IB(10) are applicable. Accordingly, in view of the decision of the jurisdictional High in the case of Brahma Associates (supra), there is no bar of commercial establishment in the housing project for availing he insertion of clause (d) w.r.f 1.4.2005. The Hon'ble High Court in para 33 has observed as under: \"In the absence of any provisions under the Income-tax Act, the Tribunal was not justified in holding that up to March 31, 2005 IB(10) would be allowable to projects approved by the local authority having residential building with commercial user up to 10 per cent. of the total builtup area of the plot.\" Therefore, when the project was approved prior to 1.4.2005 then, there ar for allowing deduction u/s 801B once the residential project 5.2 As regard the last contention of the revenue is that the assessee is not a builder and the income received by sale of TDR and not by sale sing project is concerned, we find that there is no dispute about the fact that the assessee received the TDR as a consideration against the development of the project in question. We further note that the he housing project and not for the commercial establishment. Thus, when the TDR received by the assessee was immediately sold and the sale consideration was shown as receipt from the housing project, then, nst the sale of TDR 5.3 It is not the case of the revenue that the assessee sold the TDR after appreciation of the value and therefore, the entire amount cannot ject. The assessee has given the details of the receipts of TDR and sale of the TDR as in the same year and immediately after receiving from the MMDRA. Therefore, there is no element of any appreciation in the value in the e above facts and circumstances of the case, we do not find any reason to interfere with the order of the Id CIT(A) for both the AYs. 6 In the result, the appeals filed by the 7.1 Further, aggrieved by the order of Hon'ble ITAT, the revenue has preferred appeal before Hon'ble Bombay High Court on the same issue Printed from counselvise.com which was contested before Hon'ble ITAT. However, the Hon'ble Bombay High Court vide ITA No. 1391 of 2012 dated 31.10.2014 has dismissed the appeal of the revenue on the issue 80IB(10)(d) and hence allowed the appeal of the assessee. The relevant portion of the decision of Hon'ble Bombay High Court is incorporated as under: In this case, the only argument of the learned Advocate appearing in support of this Respondent-Assessee's claim. 2. The Tribunal by the impugned order dated 8 June 2012 has held that the objection raised by the Assessing Officer that the Respondent will not be entitled to deduction u sustained. Upon scrutiny of the entire materials including the agreement, it is apparent that the Respondent termed as a mere contractor. He is a developer and claiming rights in the land/immoveable pro necessary agreements and appoint agents to carry out the construction. 3. In these circumstances, the Tribunal's order, confirming that of the Commissioner, does not raise any substantial question of law. It was not for the Assessing Officer to have sat in judgment over the satisfaction of the statutory Authorities. The documents in that behalf together with recitals were conclusive of the rights of the Assessee. 4. In these circumstances, the Appeal has no merits. disposed of. 7.2 Without prejudice to the above, reliance is placed on the decision of Hon'ble ITAT, Mumbai in the case of Aarti Projects and Constructions vide ITA No. 4190/Mum/2016 wherein, the Tribunal has allowed the appeal in favo u/s.80IB(10) of the Act. 29. From the record we also found that group concern of assessee M/s. Ackruti City Ltd. (formerly Akruti Nirman Ltd.) has undertaken various slum rehabilitation projects in various subur Slum Rehabilitation Authority gives FSI in lieu of construction of slum rehabilitation building as consideration in kind. The consideration of said FSI is offered to tax and the profit derived therefrom was claimed as deduction u/s. 801B (10) deduction in various years. The AO has accepted eligibility of revenue from sale of FSI /TDR. AO, however, denied deduction u/s.801B(10) of the Act for want of compliance of other pre 801B(10). These matters went up to Hon'ble Tribunal and in all these Bombay Slum Redevelopment ITA No. 6126/MUM/2025 which was contested before Hon'ble ITAT. However, the Hon'ble Bombay High Court vide ITA No. 1391 of 2012 dated 31.10.2014 has dismissed the appeal of the revenue on the issue of disallowance u/s 80IB(10)(d) and hence allowed the appeal of the assessee. The relevant portion of the decision of Hon'ble Bombay High Court is incorporated as under: In this case, the only argument of the learned Advocate appearing in support of this Appeal is that the Tribunal should not have allowed the Assessee's claim. 2. The Tribunal by the impugned order dated 8 June 2012 has held that the objection raised by the Assessing Officer that the Respondent will not be entitled to deduction under Section 801B(10)(d) cannot be sustained. Upon scrutiny of the entire materials including the agreement, it is apparent that the Respondent-Assessee cannot be termed as a mere contractor. He is a developer and claiming rights in the land/immoveable property, that is how he proceeded to execute necessary agreements and appoint agents to carry out the 3. In these circumstances, the Tribunal's order, confirming that of the Commissioner, does not raise any substantial question of law. It was ot for the Assessing Officer to have sat in judgment over the satisfaction of the statutory Authorities. The documents in that behalf together with recitals were conclusive of the rights of the Assessee. 4. In these circumstances, the Appeal has no merits. It is, accordingly, 7.2 Without prejudice to the above, reliance is placed on the decision of Hon'ble ITAT, Mumbai in the case of Aarti Projects and Constructions vide ITA No. 4190/Mum/2016 wherein, the Tribunal has allowed the appeal in favour of the assessee on the issue of deduction u/s.80IB(10) of the Act. 29. From the record we also found that group concern of assessee M/s. Ackruti City Ltd. (formerly Akruti Nirman Ltd.) has undertaken various slum rehabilitation projects in various subur Slum Rehabilitation Authority gives FSI in lieu of construction of slum rehabilitation building as consideration in kind. The consideration of said FSI is offered to tax and the profit derived therefrom was claimed as deduction u/s. 801B (10) of the Act. Ackruti has claimed such deduction in various years. The AO has accepted eligibility of revenue from sale of FSI /TDR. AO, however, denied deduction u/s.801B(10) of the Act for want of compliance of other pre-conditions of Section ese matters went up to Hon'ble Tribunal and in all these Bombay Slum Redevelopment Corporation Pvt. Ltd. 7 ITA No. 6126/MUM/2025 which was contested before Hon'ble ITAT. However, the Hon'ble Bombay High Court vide ITA No. 1391 of 2012 dated 31.10.2014 has of disallowance u/s 80IB(10)(d) and hence allowed the appeal of the assessee. The relevant portion of the decision of Hon'ble Bombay High Court is In this case, the only argument of the learned Advocate appearing in Appeal is that the Tribunal should not have allowed the 2. The Tribunal by the impugned order dated 8 June 2012 has held that the objection raised by the Assessing Officer that the Respondent nder Section 801B(10)(d) cannot be sustained. Upon scrutiny of the entire materials including the Assessee cannot be termed as a mere contractor. He is a developer and claiming rights in perty, that is how he proceeded to execute necessary agreements and appoint agents to carry out the 3. In these circumstances, the Tribunal's order, confirming that of the Commissioner, does not raise any substantial question of law. It was ot for the Assessing Officer to have sat in judgment over the satisfaction of the statutory Authorities. The documents in that behalf together with recitals were conclusive of the rights of the Assessee. 4. It is, accordingly, 7.2 Without prejudice to the above, reliance is placed on the decision of Hon'ble ITAT, Mumbai in the case of Aarti Projects and Constructions vide ITA No. 4190/Mum/2016 wherein, the Tribunal has allowed the ur of the assessee on the issue of deduction 29. From the record we also found that group concern of assessee M/s. Ackruti City Ltd. (formerly Akruti Nirman Ltd.) has undertaken various slum rehabilitation projects in various suburbs in Mumbai. Slum Rehabilitation Authority gives FSI in lieu of construction of slum rehabilitation building as consideration in kind. The consideration of said FSI is offered to tax and the profit derived therefrom was claimed of the Act. Ackruti has claimed such deduction in various years. The AO has accepted eligibility of revenue from sale of FSI /TDR. AO, however, denied deduction u/s.801B(10) of conditions of Section ese matters went up to Hon'ble Tribunal and in all these Printed from counselvise.com years, Hon'ble ITAT has upheld the claim of said deduction u/s. 80IB(10) of the Act. Subsequently the Dept. filed appeal before Hon'ble Bombay High Court against the orders of Tribunal raising the qu that profits derived by assessee from housing project are eligible for deduction u/s.801B(10) of I.T. Act. Hon'ble Bombay High Court has dismissed this appeal of the Dept. vide its order dated 09/01/2013 relying on its earlier decision dated 20/03/2 Properties. Thereafter, the Dept. preferred SLP before Hon'ble Supreme Court. These matters were tagged along with other matters. The Hon'ble Supreme Court has dismissed the SLP vide its order dated 30/04/2015. Thus the decision of H attained finality. 30. In view of the above discussion, we do not find any merit for decline of claim of deduction u/s.801B(10). Accordingly, AO is directed to allow the same. 8. In view of the above, it is noted that the Hon'b Hon'ble Bombay High Court has allowed the disallowance u/s 80IB(10)(d) of the Act in the case of M/s Sonasha Enterprises on the basis of which the disallowance u/s.80IB(10) of the Act was made in the case of the appellant. It is fine tha SLP before Hon'ble Supreme Court and the same is pending for adjudication. However, it is worthwhile to mention here that the Hon'ble ITAT later the Hon'ble Bombay High Court has affirmed the decision of Ld.CIT(A) in the case rejected the contention of the revenue by discussion the issue on merits. Hence, following the decision of Hon'ble Bombay High Court in the case of M/s Sonasha Enterprises and decision of Hon'ble ITAT in the case of Aarti Pr considered view that the deduction u/s 80IB (10) of the Act is rightly claimed by the appellant in its ROI for A.Y 2013 Assessing Officer is directed to delete the disallowance made u/s 80 IB of the vide order u/s 144 r.w.s 147 of the Act. Hence, the Ground No.4 raised by the appellant is hereby allowed. 9. Since, the undersigned has allowed the appeal of the appellant on quantum, the other grounds raised by the appellant become academic and hence need no separate 4. Before us, the Ld. counsel for the assessee submitted that the assessee had challenged the very initiation of reassessment proceedings by filing a writ petition before the Hon’ble Bombay High Court. It was submitted that Bombay Slum Redevelopment ITA No. 6126/MUM/2025 years, Hon'ble ITAT has upheld the claim of said deduction u/s. 80IB(10) of the Act. Subsequently the Dept. filed appeal before Hon'ble Bombay High Court against the orders of Tribunal raising the qu that profits derived by assessee from housing project are eligible for deduction u/s.801B(10) of I.T. Act. Hon'ble Bombay High Court has dismissed this appeal of the Dept. vide its order dated 09/01/2013 relying on its earlier decision dated 20/03/2012 in case of Vandana Properties. Thereafter, the Dept. preferred SLP before Hon'ble Supreme Court. These matters were tagged along with other matters. The Hon'ble Supreme Court has dismissed the SLP vide its order dated 30/04/2015. Thus the decision of Hon'ble Bombay High Court has attained finality. 30. In view of the above discussion, we do not find any merit for decline of claim of deduction u/s.801B(10). Accordingly, AO is directed to allow the same. 8. In view of the above, it is noted that the Hon'ble ITAT as well as Hon'ble Bombay High Court has allowed the disallowance u/s 80IB(10)(d) of the Act in the case of M/s Sonasha Enterprises on the basis of which the disallowance u/s.80IB(10) of the Act was made in the case of the appellant. It is fine that revenue has preferred appeal SLP before Hon'ble Supreme Court and the same is pending for adjudication. However, it is worthwhile to mention here that the Hon'ble ITAT later the Hon'ble Bombay High Court has affirmed the decision of Ld.CIT(A) in the case of M/s Sonasha Enterprises and rejected the contention of the revenue by discussion the issue on merits. Hence, following the decision of Hon'ble Bombay High Court in the case of M/s Sonasha Enterprises and decision of Hon'ble ITAT in the case of Aarti Projects and Constructions (Supra), I am of the considered view that the deduction u/s 80IB (10) of the Act is rightly claimed by the appellant in its ROI for A.Y 2013 Assessing Officer is directed to delete the disallowance made u/s 80 the vide order u/s 144 r.w.s 147 of the Act. Hence, the Ground No.4 raised by the appellant is hereby allowed. 9. Since, the undersigned has allowed the appeal of the appellant on quantum, the other grounds raised by the appellant become academic need no separate adjudication.” Before us, the Ld. counsel for the assessee submitted that the assessee had challenged the very initiation of reassessment proceedings by filing a writ petition before the Hon’ble Bombay High Court. It was submitted that the Hon’ble High Court, vide order in Bombay Slum Redevelopment Corporation Pvt. Ltd. 8 ITA No. 6126/MUM/2025 years, Hon'ble ITAT has upheld the claim of said deduction u/s. 80IB(10) of the Act. Subsequently the Dept. filed appeal before Hon'ble Bombay High Court against the orders of Tribunal raising the question that profits derived by assessee from housing project are eligible for deduction u/s.801B(10) of I.T. Act. Hon'ble Bombay High Court has dismissed this appeal of the Dept. vide its order dated 09/01/2013 012 in case of Vandana Properties. Thereafter, the Dept. preferred SLP before Hon'ble Supreme Court. These matters were tagged along with other matters. The Hon'ble Supreme Court has dismissed the SLP vide its order dated on'ble Bombay High Court has attained finality. 30. In view of the above discussion, we do not find any merit for decline of claim of deduction u/s.801B(10). Accordingly, le ITAT as well as Hon'ble Bombay High Court has allowed the disallowance u/s 80IB(10)(d) of the Act in the case of M/s Sonasha Enterprises on the basis of which the disallowance u/s.80IB(10) of the Act was made in t revenue has preferred appeal SLP before Hon'ble Supreme Court and the same is pending for adjudication. However, it is worthwhile to mention here that the Hon'ble ITAT later the Hon'ble Bombay High Court has affirmed the of M/s Sonasha Enterprises and rejected the contention of the revenue by discussion the issue on merits. Hence, following the decision of Hon'ble Bombay High Court in the case of M/s Sonasha Enterprises and decision of Hon'ble ITAT in ojects and Constructions (Supra), I am of the considered view that the deduction u/s 80IB (10) of the Act is rightly claimed by the appellant in its ROI for A.Y 2013-14. Hence, the Assessing Officer is directed to delete the disallowance made u/s 80 the vide order u/s 144 r.w.s 147 of the Act. Hence, the Ground 9. Since, the undersigned has allowed the appeal of the appellant on quantum, the other grounds raised by the appellant become academic Before us, the Ld. counsel for the assessee submitted that the assessee had challenged the very initiation of reassessment proceedings by filing a writ petition before the Hon’ble Bombay High the Hon’ble High Court, vide order in Printed from counselvise.com Writ Petition No. 2611 of 2024, has quashed the notice issued under section 148 as well as all consequential proceedings, including the reassessment order. Consequently, it was contended that the present appeal filed academic. 5. We have heard the rival submissions and perused the material on record. It is an admitted position that the Hon’ble Bombay High Court, while following its earlier judgment in Technologies Limited v. AC issued to the assessee. The operative portion of the High Court’s order reads as under: “1. We are informed by counsel for Petitioner/s that these Petitions will be covered by the judgment in Hexaware Technologies L Circle 15(1)(2) Mumbai and Ors.' Counsel for Respondent/s concur. 2. Therefore, the notices and orders impugned in these petitions are quashed and set aside. In case any re passed, the same consequential demand notice or penalty notice will also stand quashed and 5.1 The legal consequence of the above order is unambiguous. Once the very foundation of the reassessment proceedings stands invalidated by the jurisdictional High Court, the reassessment order passed pursuant thereto ceases to exist in the eye of law. Any appeal arising out of such reassessment order does not survive for adjudication on merits. Bombay Slum Redevelopment ITA No. 6126/MUM/2025 Writ Petition No. 2611 of 2024, has quashed the notice issued under section 148 as well as all consequential proceedings, including the reassessment order. Consequently, it was contended that the present appeal filed by the Revenue has become purely We have heard the rival submissions and perused the material on record. It is an admitted position that the Hon’ble Bombay High Court, while following its earlier judgment in Technologies Limited v. ACIT, has quashed the reassessment notice issued to the assessee. The operative portion of the High Court’s order reads as under: 1. We are informed by counsel for Petitioner/s that these Petitions will be covered by the judgment in Hexaware Technologies Limited v. Assistant Commissioner of Income Tax Circle 15(1)(2) Mumbai and Ors.' Counsel for Respondent/s 2. Therefore, the notices and orders impugned in these petitions are quashed and set aside. In case any re-assessment order is passed, the same also will stand quashed. So also, consequential demand notice or penalty notice will also stand and set aside.” The legal consequence of the above order is unambiguous. Once the very foundation of the reassessment proceedings stands d by the jurisdictional High Court, the reassessment order passed pursuant thereto ceases to exist in the eye of law. Any appeal arising out of such reassessment order does not survive for adjudication on merits. Bombay Slum Redevelopment Corporation Pvt. Ltd. 9 ITA No. 6126/MUM/2025 Writ Petition No. 2611 of 2024, has quashed the notice issued under section 148 as well as all consequential proceedings, including the reassessment order. Consequently, it was contended by the Revenue has become purely We have heard the rival submissions and perused the material on record. It is an admitted position that the Hon’ble Bombay High Court, while following its earlier judgment in Hexaware , has quashed the reassessment notice issued to the assessee. The operative portion of the High Court’s 1. We are informed by counsel for Petitioner/s that these Petitions will be covered by the judgment in Hexaware imited v. Assistant Commissioner of Income Tax Circle 15(1)(2) Mumbai and Ors.' Counsel for Respondent/s 2. Therefore, the notices and orders impugned in these petitions assessment order is also will stand quashed. So also, consequential demand notice or penalty notice will also stand The legal consequence of the above order is unambiguous. Once the very foundation of the reassessment proceedings stands d by the jurisdictional High Court, the reassessment order passed pursuant thereto ceases to exist in the eye of law. Any appeal arising out of such reassessment order does not survive for Printed from counselvise.com 5.2 In this view of the matter, the grounds which seek to challenge the deletion of disallowance made in the reassessment order, are rendered merely academic. It is well settled that appellate authorities do not decide academic or infructuous issues. In view of the binding or Court quashing the reassessment proceedings, we hold that no adjudication on merits is called for in the present appeal. 6. In the result, the appeal of the Revenue is dismissed. Order pronounced in the open Court on Sd/- (SANDEEP SINGH KARHAIL JUDICIAL MEMBER Mumbai; Dated: 23/12/2025 Rahul Sharma, Sr. P.S. Copy of the Order forwarded to 1. The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file. //True Copy// Bombay Slum Redevelopment ITA No. 6126/MUM/2025 In this view of the matter, the grounds raised by the Revenue, which seek to challenge the deletion of disallowance made in the reassessment order, are rendered merely academic. It is well settled that appellate authorities do not decide academic or infructuous issues. In view of the binding order of the Hon’ble Bombay High Court quashing the reassessment proceedings, we hold that no adjudication on merits is called for in the present appeal. In the result, the appeal of the Revenue is dismissed. ounced in the open Court on 23/12/2025. Sd/ SANDEEP SINGH KARHAIL) (OM PRAKASH KANT JUDICIAL MEMBER ACCOUNTANT MEMBER Copy of the Order forwarded to : BY ORDER, (Assistant Registrar) ITAT, Mumbai Bombay Slum Redevelopment Corporation Pvt. Ltd. 10 ITA No. 6126/MUM/2025 raised by the Revenue, which seek to challenge the deletion of disallowance made in the reassessment order, are rendered merely academic. It is well settled that appellate authorities do not decide academic or infructuous der of the Hon’ble Bombay High Court quashing the reassessment proceedings, we hold that no adjudication on merits is called for in the present appeal. In the result, the appeal of the Revenue is dismissed. /12/2025. Sd/- OM PRAKASH KANT) ACCOUNTANT MEMBER BY ORDER, (Assistant Registrar) ITAT, Mumbai Printed from counselvise.com "