Venkateshwara Developers, Pune V. ITO, Ward 5(3), Pune, Pune

ITA 19/PUN/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 56605 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 11 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-12-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 07-12-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 05-01-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K AMBASTHA
• Section: 80IB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B PUNE BEFORE SHRI I.C. SUDHIR, J.M. AND SHRI D. KARUNAKARA RAO, A.M. I.T.A. NO. 19/PN/2010 : A.Y. 2006-07 VENKATESHWARA DEVELOPERS 1289 SHUKRAWAR PETH, PUNE-411 002 PAN AAEFV 1911 B .. APPELLANT VS. I.T.O WARD 5(3) PUNE .. RESPONDENT APPELLANT BY: SMT. DEEPA KHARE RESPONDENT BY: SHRI S.K. AMBASTHA DATE OF HEARING : 7-12-2011 DATE OF PRONOUNCEMENT: ___12-2011 ORDER PER D. KARUNAKARA RAO, AM THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORDE R OF THE CIT(A)-III PUNE DATED 10-9-2009 FOR A.Y. 2006-07. THE GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER: 1. THE LEARNED CIT(A) ERRED IN LAW AND FACTS IN CO NFIRMING THE DISALLOWANCE U/S 80-I(10) ON ACCOUNT OF NON-FULFILL MENT OF CONDITIONS PRESCRIBED FOR HOUSING PROJECT TO BE ELIGIBLE FOR D EDUCTION /S 80-IB(10). 2. THE LEARNED CIT(A) ERRED IN LAW AND ON FACTS IN HOLDING THAT DEDUCTION U/S 80-IB(10) WAS ALLOWABLE ONLY IN RESPE CT OF THE RESIDENTIAL UNITS ONLY AND NO COMMERCIAL UNITS WERE ENVISAGED I N THE SAID SECTION. THE LEARNED CT(A) FAILED TO APPRECIATE THAT THE COM MERCIAL AREA WAS TO BE CONSTRUCTED AS A PART OF THE RESIDENTIAL PROJECTS O NLY AND WAS MEANT PURELY FOR THE BENEFIT OF THE HOLDERS OF RESIDENTIA L UNITS. 3. THE LEARNED CIT(A) ERRED IN LAW AND ON FACTS IN NOT ALLOWING THE PROPORTIONATE DEDUCTION U/S 80-IB(10) IN RESPECT OF THE RESIDENTIAL UNITS. 2. AFTER HEARING BOTH THE PARTIES AND PERUSING THE MATERIAL ON RECORD, WE FIND THAT THE ISSUE RAISED BY THE ASSESSEE IS SQUAR ELY COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF THIS BENCH OF THE TRIBU NAL IN THE CASE OF OPEL SHELTERS PVT. LTD., AND OTHERS IN ITA NO. 219/PN/2009 AND 17/PN/2009 F OR A.Y. 2005-06 VIDE ORDER DATED 31-5-2011 WHEREIN THE TRIBUNAL HAS DECIDED THE ISSUE BY OBSERVING AS UNDER: ITA NO. 1145/PN/2010 KANUSHA STEELS A.Y. 1998-89 2 17. CONSIDERING THE ABOVE SUBMISSIONS, WE FIND THAT THERE IS NO DISPUTE ON FACTS. THE ONLY ISSUE FOR OUR ADJUDICATI ON IS AS TO WHETHER AMENDED PROVISIONS OF SECTION 80IB (10) CAM E W.E.F. 1.4.2005 IS ALSO APPLICABLE ON THE PROJECT ALREADY APPROVED AND STARTED IN EARLIER YEARS AS PER THE THEN PREVAILING LAW. THE CASE OF THE ASSESSEE REMAINED THAT THE PROJECT IN THE CA SE OF D.S. KULKARNI & ASSOCIATES STARTED IN APRIL 2001 AND COM PLETED IN NOVEMBER 2003. SIMILARLY, THE PROJECT IN THE CASE O F OPEL SHELTERS COMMENCED ON 23.2.2001 AND WAS COMPLETED B Y 21.6.2002. THE SUBMISSION OF LD. A.R. ALSO REMAINED THAT THE ISSUE RAISED IN THE PRESENT APPEALS IS FULLY COVERE D BY THE DECISION OF MUMBAI BENCH OF THE TRIBUNAL IN THE CAS E OF HIRANANDANI AKRUTI J.V. V/S. DCIT (SUPRA). THE OBJE CTION OF THE LD. D.R. IN THIS REGARD REMAINED THAT THE SPECIAL B ENCH IN THE CASE OF BRAHMA ASSOCIATES (SUPRA) HAD DECIDED THE I SSUE BY HOLDING THAT THE AMENDED PROVISION WILL APPLY FROM A.Y. 2005- 06. IT WAS ALSO CONTENDED BY THE LD. D.R. THAT CO-O RDINATE BENCH DECISION IN THE CASE OF HIRANANDANI AKRUTI J. V. (SUPRA) IS NOT BINDING ON THIS BENCH SINCE THE CO-ORDINATE BEN CH HAS NOT CONSIDERED THE DECISION OF THE SPECIAL BENCH IN THE CASE OF BRAMHA ASSOCIATES (SUPRA). WE, HAVING GONE THROUGH THESE HEAVILY RELIED UPON DECISIONS, FIND THAT THE ISSUE RAISED IN THE CASE OF BRAHMA ASSOCIATES (SUPRA) BEFORE THE SPECIA L BENCH WAS AS TO WHETHER AMENDMENT IN SECTION 80IB (10) IS RET ROSPECTIVE IN OPERATION AND IT WAS IN THAT CONTEXT, THEY HELD THAT IT WAS NOT RETROSPECTIVE . THUS, DISCUSSION ON THE ISSUE WHICH IS COVERED IN HIRANANDANI AKRUTI J.V.CASE IS AS TO WHETHER THE AMENDED PROVISION APPLIES TO THE PROJECTS STARTED O N OR AFTER 1.4.2005 OR FOR ALL THE ASSESSMENTS FROM THE A.Y.2005-06 . WE FIND THAT THE MUMBAI BENCH WHILE DECIDING THE ISSUE IN THE CASE OF HIRANANDANI AKRUTI J.V. HA S ALREADY DISCUSSED THE DECISION OF THE SPECIAL BENCH IN THE CASE OF BRAHMA ASSOCIATES. THE A.Y.INVOLVED IN THE CASE OF HIRANANDANI IS 2006-07. THE TOTAL COMMERCIAL SPACE IN THE PROJE CT IN THAT CASE WAS 117800 SQ.FT. ACCORDING TO THE A.O, AS THE PROVISIONS OF SECTION 80IB(10)(D) IS APPLICABLE W.E.F.1.4.2005, T HE LIMIT FOR HAVING COMMERCIAL SPACE IN THE HOUSING PROJECT IS 5 % OF THE TOTAL BUILT UP AREA OR 2000 SQ.FT WHICHEVER IS LESS . ACCORDINGLY, THE ASSESSEE WAS ASKED TO EXPLAIN WHY DEDUCTION CLA IMED BY IT U/S. 80IB(10) AMOUNTING TO RS. 51,06,05,521/- SHOUL D NOT BE DISALLOWED. THE TRIBUNAL AFTER DISCUSSING THE ARGUM ENTS OF THE PARTIES AND THE DECISIONS CITED BY THEM INCLUDING T HE DECISION OF SPECIAL BENCH IN THE CASE OF BRAMHA ASSOCIATES (SUP RA), HAS COME TO THE FOLLOWING CONCLUSION ON THE ISSUE : 26. THERE IS TRUTH IN THE PLEA OF HARDSHIP PUT FORT H ON BEHALF OF THE ASSESSEE. LET US ASSUME AN ASSESSEE A PPLIES AND OBTAINS APPROVAL OF A LOCAL AUTHORITY FOR BUILD ING A HOUSING PROJECT IN THE PREVIOUS YEAR RELEVANT TO AY 02-03. AS PER THE LAW AS IT STOOD IN THE PREVIOUS YEAR REL EVANT TO AY 02-03 UPTO 04-05, THERE WAS NO TIME LIMIT WITHIN WHICH THE CONSTRUCTION HAS TO BE COMPLETED OR ANY RESTRIC TION REGARDING COMMERCIAL AREA THAT CAN BE BUILT IN A HO USING PROJECT. LET US ASSUME THAT THE ASSESSEE COMPLIES W ITH ALL THE CONDITIONS FOR ALLOWING RELIEF U/S. 80-IB(10) I .E. IT IS APPROVED AS A HOUSING PROJECT BY THE LOCAL AUTHORIT Y BUT THE AREA OF COMMERCIAL SPACE AS APPROVED BY THE LOC AL ITA NO. 1145/PN/2010 KANUSHA STEELS A.Y. 1998-89 3 AUTHORITY IS MORE THAN 2000 SQ.FT. THE ASSESSEE COMMENCES THE PROJECT BUT ABLE TO COMPLETE ONLY IN THE PREVIOUS YEAR RELEVANT TO AY 05-06.AS PER THE CHANG E IN LAW FROM AY 05-06 WITH REGARD TO THE AREA OF COMMER CIAL SPACE IN A HOUSING PROJECT THE ASSESSEE WOULD LOOSE HIS ELIGIBILITY TO CLAIM DEDUCTION. IN SUCH CASES THERE IS DEFINITELY GRAVE HARDSHIP TO THE ASSESSEE. THE INTERPRETATION SOUGHT TO BE CANVASSED BY THE LEARNE D D.R WILL ALSO LEAD TO ABSURD SITUATION. LET US ASSUME A N ASSESSEE OBTAINS APPROVAL OF A HOUSING PROJECT PRIO R TO 1- 4-2005 SAY IN PREVIOUS YEAR RELEVANT TO AY 02-03. H E BUILDS COMMERCIAL SPACE IN EXCESS OF2000 SQ.FT. IN THE HOUSING PROJECT. HE FOLLOWS PERCENTAGE COMPLETION M ETHOD OF ACCOUNTING AND OFFERS PROFITS IN AY 02-03TO 04-0 5, CLAIMS EXEMPTION U/S. 80-IB(10) AND IS ALLOWED EXEM PTION. ON THE SAME PROJECT IN AY 05-06, THE ASSESSEE WOULD NOT GET THE BENEFIT OF SEC. 80-IB(10). WE THEREFORE FIN D NO GROUNDS TO TAKE A VIEW DIFFERENT FROM THE ONE TAKEN BY THE CO-ORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF SA ROJ SALES ORGANIZATION (SUPRA). 27. WE ARE OF THE VIEW THAT WE ARE NOT SUPPLYING AN Y WORDS TO THE STATUTE BUT ARE ONLY HOLDING THAT THE LAW AS IT EXISTED IN THEA.Y.04-05 WHEN THE ASSESSEE SUBMITTED ITS PROPOSAL FOR SLUM REHABILITATION AND THE PERMISSION FOR CARRYING OUT THE DEVELOPMENT WAS ACCORDED ON 17.11. 2003 AND WHEN THE ASSESSEE COMMENCED DEVELOPMENT IS TO B E APPLIED. THEREFORE THE SUBMISSIONS OF THE LEARNED D .R IN THIS REGARD CANNOT BE ACCEPTED. WE ARE OF THE VIEW THAT THE LEGISLATURE WOULD NOT HAVE INTENDED TO TAKE AWA Y A VESTED RIGHT WITHOUT CLEAR WORDS TO THAT EFFECT IN THE PROVISIONS OF SEC. 80-IB(10) AS AMENDED BY THE FINA NCE ACT, 2005, W.E.F. 1-4-2005. WE THEREFORE HOLD FOLLO WING THE DECISION IN THE CASE OF SAROJ SALES ORGANISATIO N (SUPRA) THAT THE LAW AS IT EXISTED IN THE A.Y. 04-0 5 WHEN THE ASSESSEE SUBMITTED ITS PROPOSAL FOR SLUM REHABI LITATION AND THE PERMISSION FOR CARRYING OUT THE DEVELOPMENT WAS ACCORDED ON 17.11.2003 AND WHEN THE ASSESSEE COMMENCED DEVELOPMENT IS TO BE APPLIED. SO FAR AS THE ISSUE AS TO WHAT IS HOUSING PROJECT AND AS TO WHETHER COMMERCIAL AREA CAN BE CONSTRUCTED IN A HOUSING PROJECT IS CONCERNED, THE MUMBAI BENCH OF THE TRIBUNAL IN THE CASE OF HIRANANDANI AKRUTI J. V. (SUPRA) HAS HELD AS UNDER : 28. WE HAVE ALREADY HELD THAT ON THE ISSUE ON WHAT IS A HOUSING PROJECT AND WHETHER COMMERCIAL AREA CAN BE CONSTRUCTED IN A HOUSING PROJECT AND IF SO CONSTRUC TED WHETHER THE ASSESSEE WOULD LOSE EXEMPTION UNDER THE LAW AS APPLICABLE UPTO A.Y. 04-05 HAS BEEN SETTLED BY T HE SPECIAL BENCH OF ITAT IN THE CASE OF BRAMHA ASSOCIA TES 122 TTJ 433(SB) (PUNE). THE AO HELD THE LAW AS AMEN DED BY THE FINANCE ACT, 2005 W.E.F. 1-4-2005 WHEREBY IT WAS LAID DOWN THAT THE BUILT UP AREA OF THE SHOPS AND COMMERCIAL ESTABLISHMENT INCLUDED IN THE HOUSING PR OJECT SHOULD NOT BE MORE THAN 5% OF THE TOTAL BUILT UP AR EA OF THE PROJECT OR 2000 SQ.FT. WHICHEVER IS LESS WILL A PPLY AND ITA NO. 1145/PN/2010 KANUSHA STEELS A.Y. 1998-89 4 THEREFORE HE HAD NO OCCASION TO APPLY THE TEST AS L AID DOWN BY THE SPECIAL BENCH REFERRED TO ABOVE. SINCE WE HA VE HELD THAT THE LAW AS IT EXISTED IN THE A.Y. 04-05 WHEN T HE ASSESSEE SUBMITTED ITS PROPOSAL FOR SLUM REHABILITA TION AND THE PERMISSION FOR CARRYING OUT THE DEVELOPMENT WAS ACCORDED ON 17.11.2003AND WHEN THE ASSESSEE COMMENCED DEVELOPMENT IS TO BE APPLIED, THE ASSESSE E TO CLAIM DEDUCTION U/S. 80-IB(10) OF THE ACT HAS TO PA SS THE TEST LAID DOWN BY THE SPECIAL BENCH AS ABOVE. WE TH EREFORE SET ASIDE THE ORDER THE CIT(A) AND REMAND THE ISSUE TO THE AO FOR THE LIMITED PURPOSE OF SATISFYING HIMSELF AS TO WHETHER THE ASSESSEE WOULD BE ENTITLED TO DEDUCTION ON THE PROFITS DERIVED ON DEVELOPING AND BUILDING HOUS ING PROJECTS AS PER THE RATIO LAID DOWN BY THE SPECIAL BENCH REFERRED TO ABOVE, WHILE COMPUTING TOTAL INCOME AND IF SO TO WHAT EXTENT. FOR STATISTICAL PURPOSES, THE APPEA L IS TREATED AS ALLOWED. 18. THE HONBLE BOMBAY HIGH COURT HAS BEEN PLEASED TO APPROVE THEAFORESAID DECISION OF SPECIAL BENCH IN THE CASE OF BRAHMA ASSOCIATES VIDE ORDER DATED 22.2.2011 IN ITA NO. 1194 OF 2010. THE CONCLUDING PARA NO. 30 OF THE DECISION OF THE HONBLE HIGH COURT IS BEING REPRODUCED HEREUNDER : 30. IN THE RESULT, THE QUESTIONS RAISED IN THE APP EAL ARE ANSWERED THUS : -A) UPTO 31/3/2005 (SUBJECT TO FULFILLING OTHER CONDITIONS),DEDUCTION UNDER SECTION 80IB(10) IS ALL OWABLE TO HOUSING PROJECTS APPROVED BY THE LOCAL AUTHORITY HAVING RESIDENTIAL UNITS WITH COMMERCIAL USER TO THE EXTEN T PERMITTED UNDER THE DC RULES / REGULATIONS FRAMED B Y THE RESPECTIVE LOCAL AUTHORITY. B) IN SUCH A CASE, WHERE THE COMMERCIAL USER PERMIT TED BY THE LOCAL AUTHORITY IS WITHIN THE LIMITS PRESCRIBED UNDER THE DC RULES / REGULATION, THE DEDUCTION UNDER SECTION 80IB(10) UPTO31/3/2005 WOULD BE ALLOWABLE IRRESPECT IVE OF THE FACT THAT THE PROJECT IS APPROVED AS HOUSING P ROJECT OR RESIDENTIAL PLUS COMMERCIAL. C) IN THE ABSENCE OF ANY PROVISIONS UNDER THE INCOM E TAX ACT, THE TRIBUNAL WAS NOT JUSTIFIED IN HOLDING THAT UPTO 31/3/2005DEDUCTION UNDER SECTION 80IB(10) WOULD BE ALLOWABLE TO THE PROJECTS APPROVED BY THE LOCAL AUT HORITY HAVING RESIDENTIAL BUILDING WITH COMMERCIAL USER UP TO 10% OF THE TOTAL BUILT-UP AREA OF THE PLOT. D) SINCE DEDUCTIONS UNDER SECTION 80IB(10) IS ON TH E PROFITS DERIVED FROM THE HOUSING PROJECTS APPROVED BY THE LOCAL AUTHORITY AS A WHOLE, THE TRIBUNAL WAS NOT JU STIFIED IN RESTRICTING SECTION 80IB(10) DEDUCTION ONLY TO A PA RT OF THE PROJECT. HOWEVER, IN THE PRESENT CASE, SINCE THE AS SESSEE HAS ACCEPTED THE DECISION OF THE TRIBUNAL IN ALLOWI NG SECTION 80IB(10)DEDUCTION TO A PART OF THE PROJECT, WE DO NOT DISTURB THE FINDINGS OF THE TRIBUNAL IN THAT BE HALF ITA NO. 1145/PN/2010 KANUSHA STEELS A.Y. 1998-89 5 .E) CLAUSE (D) INSERTED TO SECTION 80IB(10) WITH EF FECT FROM1/4/2005 IS PROSPECTIVE AND NOT RETROSPECTIVE A ND HENCE CANNOT BE APPLIED FOR THE PERIOD PRIOR TO 1/4 /2005. 19. WE, THUS, FIND THAT THE ISSUES RAISED IN THE PR ESENT APPEALS ARE FULLY COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF MUMBAI BENCH OF THE TRIBUNAL IN THE CAS E OF HIRANANDANI AKRUTI J.V V/S. DCIT(SUPRA). RESPECTFUL LY FOLLOWING THE SAID DECISION IN THE CASE OF HIRANAND ANI AKRUTI J.V. (SUPRA), WE DECIDE THE ISSUES IN FAVOUR OF THE ASSESSEES THAT A HOUSING PROJECT WILL ALSO CONSIST OF COMMERCIAL AREA TO A PERMISSIBLE LIMIT, AS SETTLED BY THE SPECIAL BENCH OF THE TRIBUNAL IN THE CASE OF BRAMHA ASSOCIATES (SUPRA) (NOW UPHELD BY THE HONBLE BOMBA Y HIGH COURT) AS APPLICABLE UPTO A.Y. 2004-05. AND SECONDLY, THE LAW AS IT EXISTED IN THE ASSESSMENT Y EAR WHEN THE ASSESSEE SUBMITTED ITS PROPOSAL OF THE PRO JECT AND PERMISSION FOR THE SAME WAS ACCORDED TO AND WHE N THE ASSESSEE COMMENCED THE PROJECT IS TO BE APPLIED . IN THE PRESENT CASE, UNDISPUTEDLY THE ASSESSEES HAD ST ARTED THE PROJECT IN THE YEAR 2001 WHEN SUB-CLAUSE (D) TO SECTION 80IB(10)WAS NOT IN EXISTENCE, HENCE IT CANN OT BE APPLIED ON SUCH PROJECTS AS HELD BY THE MUMBAI BENC H OF THE TRIBUNAL IN THE CASE OF HIRNANDANI AKRUTI J.V. (SUPRA). IN THIS REGARD, WE ALSO FIND STRENGTH FROM THIS PLE A OF THE LD. A.R. WHICH WAS ALSO RAISED BEFORE IN THE CASE O F HIRANANDANI AKRUTI J.V. THAT IF THE ASSESSEE HAD FO LLOWED WIP (WORK-IN-PROGRESS)METHOD, THE INCOME FROM THE PROJECT WOULD HAVE BEEN TAXABLE IN THE EARLIER YEAR S AS THE PROJECT WAS COMPLETED EARLIER TO THE AMENDMENT AND IN THAT CASE, AS PER THE OLD PROVISION THE ASSESSEE WO ULD HAVE BEEN ELIGIBLE FOR THE DEDUCTION. BUT, JUST BEC AUSE THE ASSESSEE HAS FOLLOWED THE PROJECT COMPLETION METHOD , IN THESE CASES, THE DEDUCTION IS BEING DENIED BECAUSE IT FALLS IN A.Y. 2005-06. IN OUR VIEW THE NEWLY INSERTED CLA USE (D) TO SECTION 80IB(10) WILL NOT APPLY ON THE PROJECTS APPROVED UPTO 31.3.05 SINCE IN THOSE PROJECTS ASSES SEES ARE REQUIRED TO CONSTRUCT WHAT HAS BEEN APPROVED. T HE ONLY FISSILE COMPLIANCE IS REQUIRED TO BE MET AS PE R THE HARMONIOUS INTERPRETATION OF SECTION80IB(10) AS AME NDED IS TO COMPLETE SUCH PROJECTS (APPROVED BEFORE1.4.20 04) ON OR BEFORE 31.3.2008. IN THE CASES BEFORE US THE PRO JECTS HAVE BEEN COMPLETED WELL BEFORE THIS DATE. PUTTING OF SUCH CONDITION OF TIME LIMIT IS WELL UNDERSTOOD. SINCE T HE LEGISLATURE INTENDED THE COMPLETION OF PROJECTS WIT HIN A TIME FRAME TO AVOID INCONVENIENCE TO THE BENEFICIAR IES I.E. THE BUYERS. IN THIS REGARD THE LEGISLATURE HAS CATE GORISED THE TIME LIMIT FOR THE PROJECTS APPROVED ON DIFFERE NT PERIOD BEFORE 31.3.2007 BUT REQUIREMENT REMAINED THE SAME THAT PROJECTS WOULD BE APPROVED BY THE LOCAL AUTHORITY. COMPLIANCE OF THE REQUIREMENT PROVIDED IN CLAUSE (D ) TO THE SECTION IS POSSIBLE ONLY IN THOSE PROJECTS WHIC H HAVE BEEN STARTED ON OR AFTER 1.4.2005 AS BY THEN THOSE ASSESSEES WERE ALL AWARE ABOUT THE PROVISIONS LAID DOWN IN CLAUSE (D). 20. BY APPLYING THE PRINCIPLE OF HARMONIOUS CONSTRU CTION TO INTERPRET THE PROVISIONS UNDER SUB-SECTION (10) TO SECTION ITA NO. 1145/PN/2010 KANUSHA STEELS A.Y. 1998-89 6 80IB AS AMENDED W.E.F. 1.4.2005 WE COME TO THE CONCLUSION THAT THE LEGISLATURE ALWAYS INTENDED THA T THE PROJECT MUST BE APPROVED BY THE LOCAL AUTHORITY, TH US IN THOSE APPROVED PROJECTS WHERE CONSTRUCTION HAS BEEN STARTED MUCH EARLIER THAN 1.4.2005, THE ASSESSEES A RE REQUIRED TO COMPLETE THE PLAN AS IT HAS BEEN APPROV ED. AS PUTTING SUCH ASSESSEES TO COMPLETE THE PLAN MEETING OUT CONDITION UNDER CLAUSE (D) OF THE SUBSECTION WOULD LEAD INTO ABSURDITY AND IMPOSSIBILITY FOR THE ASSESSEE A ND IN CONTRADICTION TO THE PROVISIONS U/S. 80 IB(10) AS P REVAILED AT THE TIME OF APPROVAL AND COMMENCEMENT OF THE CONSTRUCTION OF THE PROJECT WELL BEFORE 1.4.2005. B OMBAY BENCH OF THE TRIBUNAL IN THE CASE OF HIRANANDANI AK RUTI J.V (SUPRA) HAS DISCUSSED ALL THESE RELEVANT ASPECTS RA ISED BY THE DEPARTMENT. IN THE CASE OF HIRANANDANI AKRUTI J .V V/S. DCIT, IT HAS BEEN HELD THAT THE LAW AS EXISTED WHEN THE ASSESSEE SUBMITTED ITS PROPOSAL AND PERMISSION FOR CARRYING OUT THE DEVELOPMENT WAS ACCORDED AND WHEN THE ASSESSEE COMMENCED DEVELOPMENT IS TO BE APPLIED. IN THE PRESENT CASES, AS PER PAGE NOS.17 AND 20 OF THE PAP ER BOOK IN THE CASE OF OPEL SHELTER THE PROJECT WAS COMMENCED ON 23.2.2001 AND EVEN COMPLETED ON 14.5.2004,SIMILARLY AS PER THE CONTENTS OF PAGE NO. 2 OF THE ASSESSMENT ORDER AND PAGE NO. 41 OF THE PAPER BOOK IN THE CASE OF D.S. KULKARNI AND ASSOCIATES, THE PROJECT W AS COMMENCED ON 12.4.2001 AND COMPLETED IN THE MONTH O F NOVEMBER 2003. THUS, THE ASSESSEES WERE SUPPOSED TO COMPLETE THE PROJECTS AS PER THE LAW AS EXISTED IN THE A.Y. 2001-02IN THE CASE OF OPEL SHELTERS AND IN THE A.Y. 2002- 03 IN THE CASE OF D.S. KULKARNI AND ASSOCIATES. WE THUS FOLLOWING THE DECISION IN THE CASE OF HIRANANDANI A KRUTI JV V/S. DCIT (SUPRA) HOLD THAT AMENDED PROVISIONS UNDER SECTION 80 IB(10) W.E.F. 1.4.2005 ARE NOT APPLICABLE IN THE PRESENT CASE, HENCE ASSESSEES ARE ELIGIBLE FOR THE CLAIMED DEDUCTION U/S. 80 IB ( 10) OF THE ACT. WE ACCORDINGLY DIRECT THE A.O TO ALLOW THE CLA IMED DEDUCTION TO THE ASSESSEES. 3. THE PRESENT APPEAL RELATES TO THE AY 1998-99 AND THE ASSESSEES PROJECT IN QUESTION HAS BEEN UNDISPUTEDLY APPROVED MUCH PRI OR TO THE INSTANT AY AND MUCH PRIOR TO 1.4.2005, THE DATE OF IMPUGNED AMENDM ENT TO SECTION 80-IB(10) OF THE ACT. THUS, IT IS CASE OF APPLYING THE AMENDE D PROVISIONS OF SECTION 80- IB(10) OF THE ACT TO THE PROJECT WHICH WAS APPROVED ANTERIOR IN TIME. FROM THE ABOVE EXTRACTS, IT IS OBVIOUS THAT THE SAID AMENDED PROVISIONS SHOULD NOT BE APPLIED TO THE PROJECTS CLEARED PRIOR TO THE AMENDM ENT. CONSEQUENTLY, ON THE ABOVE LOGIC ALONE, THE GRIEVANCE OF THE ASSESSEE DE SERVES TO BE ALLOWED WITHOUT GOING INTO THE MERITS OF OTHER ARGUMENTS RAISED IN THE GROUNDS. FURTHER, IT IS BINDING ON OUR PART TO FOLLOW THE COORDINATE BENCH DECISION AS WELL AS THE CITED JURISDICTIONAL HIGH COURT JUDGMENT. CONSEQUENTLY, WE VACATE THE ORDER OF THE CIT(A) ON THIS ISSUE. ITA NO. 1145/PN/2010 KANUSHA STEELS A.Y. 1998-89 7 4. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED . DECISION IS PRONOUNCED IN THE OPEN COURT ON 16-12- 2011. SD/- SD/- (I.C. SUDHIR) (D. KARUNAKARA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER PUNE DATED THE 16 TH DECEMBER 2011. ANKAM COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE 2. DEPARTMENT 3. CIT(A)-I PUNE 4. CIT-I PUNE 5. THE D.R, PUNE BENCH B TRUE COPY BY ORDER SENIOR PRIVATE SECRETARY ITAT, PUNE BENCH, PUNE