ITO WD 21(1)(1), MUMBAI V. ASHA KASHIPRASAD RINGSHIA, MUMBAI

ITA 2901/MUM/2011

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 8862 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 5 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-09-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 09-05-2012
• Assessment Year: 2007-2008
• Appeal Filed On: 12-04-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Retrospective amendment
• Section: 80IB

Judgement Text

, , , , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, MUMBAI . .. . . .. . , ,, , ! ! ! ! , ' ' ' ' # $% # $% # $% # $% , ,, , & ! & ! & ! & ! ' ' ' ' BEFORE SHRI P.M. JAGTAP, ACCOUNTANT MEMBER AND SHRI AMIT SHUKLA, JUDICIAL MEMBER . / ITA NO. 2901/MUM./2011 ( &( ) '*) / ASSESSMENT YEAR : 200708 ) INCOME TAX OFFICER WARD21(1)(1), R.NO.603 PRATYAKSHAKAR BHAVAN BANDRA KURLA COMPLEX BANDRA (E), MUMBAI 400 057 .. +, / APPELLANT ( V/S MS. ASHA KASHIPRASAD RINGSHIA PANDURANG SADAN, HANUMAN ROAD VILE PARLE (E), MUMBAI 400 057 .... -.+, / RESPONDENT !+ . / PERMANENT ACCOUNT NUMBER AACPR3758C !' 0 1 / REVENUE BY : MR. S.K. SINGH &( )2 0 1 / ASSESSEE BY : MR. RAKESH JOSHI (' 0 / DATE OF HEARING 08.08.2012 $ 34* 0 / DATE OF ORDER 12.09.2012 $ $ $ $ / ORDER # $% # $% # $% # $% , ,, , & ! & ! & ! & ! 5 5 5 5 / PER AMIT SHUKLA, J.M. THE PRESENT APPEAL PREFERRED BY THE REVENUE, IS DIR ECTED AGAINST THE IMPUGNED ORDER DATED 31 ST JANUARY 2011, PASSED BY THE LEARNED COMMISSIONER (APPEALS)XXXII, MUMBAI, FOR ASSESSMEN T YEAR 200708, ON THE FOLLOWING GROUNDS: MS. ASHA KASHIPRASAD RINGSHIA 2 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LEARNED CIT(A) ERRED IN ALLOWING DEDUCTION UNDE R SECTION 80IB(10) OF ` 1,47,11,573, WITHOUT APPRECIATING THE FACT THAT TH E PROJECT IS NOT ELIGIBLE FOR DEDUCTION UNDER SECTION 80IB(10). 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LEARNED CIT(A) ERRED IN APPRECIATING THAT THE D ATE OF APPROVAL OF SRA SCHEME PROJECT IS 03.07.2003 AND IS NOT COVERED BY THE NOTIFICATION NO.02/2011 INCOME TAX (F.NO.178/37/2 006ITA11) DT. 05.01.2011, ISSUED TO CLARIFY THE NOTIFICATION DT. 03.02.2010. 2. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT, THE ASSESSEE IS ENGAGED IN THE BUSINESS AS BUILDER AND DEVELOPER THROUGH A PRO PRIETORSHIP CONCERN NAMELY M/S. K.R. BUILDERS. DURING THE YEAR UNDER CO NSIDERATION, THE ASSESSEE HAS DECLARED INCOME UNDER THE HEAD INCOME FROM BUSINESS TO THE TUNE OF ` 1,54,59,252, OUT OF WHICH A SUM OF ` 1,47,11,5733, WAS CLAIMED AS DEDUCTION UNDER SECTION 80IB(10) OF THE ACT. 3. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AS SESSING OFFICER NOTICED THAT THE SIZE OF PLOT OF LAND ON WHICH THE HOUSING PROJECT WAS UNDERTAKEN BY THE ASSESSEE WAS ONLY 1064.70 SQ.MTRS . I.E., LESS THAN ONE ACRE. THE ASSESSING OFFICER REQUIRED THE ASSESSEE T O SUBMIT SLUM REHABILITATION AUTHORITY (FOR SHORT SRA ) DETAILS, COPY OF APPROVAL, I0D, ETC., IN RESPECT OF THE SAID PROJECT. THE ASSESSEE SUBMIT TED THAT IT HAD APPLIED FOR APPROVAL FROM SRA THROUGH LETTER OF INTENT ON 3 RD JULY 2003, AND INTIMATION OF APPROVAL WAS GIVEN ON 4 TH AUGUST 2003, WITH CERTAIN CONDITION TO BE FULFILLED. ON VERIFICATION OF THESE DETAILS, THE AS SESSING OFFICER FOUND THAT THE ASSESSEES DHARAVI PROJECT IS IN SUM AREA, WHICH IS A SLUM PROJECT AND AREA OF THE PLOT OF LAND IS LESS THAN ONE ACRE, THEREFOR E, THE ASSESSEE DOES NOT FULFILL THE BASIC CONDITION OF THE CLAIM FOR DEDUCT ION UNDER SECTION 80-IB(10). IN RESPONSE TO THE SHOW CAUSE NOTICE, THE ASSESSEE SUBMITTED THAT THIS CONDITION OF PROJECT SIZE SHOULD BE ON A PLOT OF ONE ACRE HAS BEEN REMOVED BY THE FINANCE ACT, 2004, W.E.F. 1 ST APRIL 2005, IN CASE OF HOUSING PROJECT BEING CARRIED OUT IN SLUM AREAS AS PER THE GOVT. SC HEME. THE ASSESSEES PROJECT HAS BEEN APPROVED BY SRA, GOVT. OF MAHARASH TRA, WHICH PROVIDES FOR STRICT COMPLIANCE OF VARIOUS RULES AND ACTS AND WHI CH AGAIN IS GUIDED BY CIRCULARS AND NOTIFICATIONS, THEREFORE, THE DEVELOP ER HAS NO SAY IN ITS MS. ASHA KASHIPRASAD RINGSHIA 3 IMPLEMENTATION AND EXECUTION. FURTHER, THE ASSESSEE HAS COMPLIED WITH ALL THE CONDITIONS PRESCRIBED IN SECTION 80IB(10) NAMEL Y (I) PROJECT IS APPROVED BY BMC AS WELL AS BY SRA. (COPY OF THE APP ROVED PLAN WAS SUBMITTED); (II) BUILT SIZE OF THE RESIDENTIAL UNIT IS LESS THAN 1,000 SQUARE FT.; (III) BUILT SIZE OF THE COMMERCIAL ESTABLISHMENT DO ES NOT EXCEED 5% OF THE AGGREGATE SIZE OF THE PROJECT OR TWO THOUSAND SQUAR E FT, WHICHEVER IS LESS; AND (IV) PROJECT HAS BEEN COMPLETED WITHIN THE STIP ULATED PERIOD. 4. HOWEVER, TILL THE DATE OF THE COMPLETION OF ASSESSM ENT PROCEEDINGS, THE CBDT HAD NOT ISSUED ANY NOTIFICATION IN TERMS O F THE PROVISO TO SUB- SECTION (10) OF SECTION 80-IB. THE ASSESSEE BEFORE THE ASSESSING OFFICER PLEADED THAT SINCE ALL OTHER CONDITIONS STANDS FULF ILLED, THE CLAIM FOR DEDUCTION UNDER SECTION 80-IB(10), SHOULD BE OTHERW ISE ALLOWED. 5. THE ASSESSING OFFICER, AFTER ANALYSING THE PROVISIO NS OF SECTION 80- IB(10), WHICH WAS APPLICABLE PRIOR TO 1 ST APRIL 2005, AND ALSO AFTER 1 ST APRIL 2005, HELD THAT THE ASSESSEE DOES NOT FULFILL THE C ONDITIONS GIVEN IN THE PROVISO TO SECTION 80IB(10), WHICH CLEARLY STATES THAT THE CLAIM HAS TO BE NOTIFIED BY THE CBDT, WHICH, IN THE PRESENT CASE, T HE SCHEME ON WHICH THE ASSESSEE HAS DONE HER PROJECT HAS NOT BEEN NOTIFIED WHICH IS EVIDENT FROM THE LETTER DATED 23 RD AUGUST 2007, ISSUED BY THE CBDT. ACCORDINGLY, HE DISALLOWED THE CLAIM OF ` 1,47,11,573, MADE UNDER SECTION 80-IB(10), VIDE ORDER DATED 24 TH DECEMBER 2009. 6. AGGRIEVED, THE ASSESSEE CARRIED THE MATTER IN FIRST APPEAL, WHEREIN THE ASSESSEE PRODUCED A COPY OF NOTIFICATION DATED 3 RD AUGUST 2010, ISSUED BY THE CBDT, WHEREIN BY THE SCHEME OF SRA OF THE GOVT. OF MAHARASHTRA, WAS NOTIFIED. IT WAS SUBMITTED THAT THE SAME COULD NOT BE PRODUCED BEFORE THE ASSESSING OFFICER AS THE NOTIFICATION WAS NOT ISSUE D TILL THE TIME OF COMPLETION OF THE ASSESSMENT PROCEEDINGS. AFTER GOING THROUGH THE NOTIFICATION, THE COMMISSIONER (APPEALS) NOTED THAT THE CBDT HAS NOTI FIED THE CLAIM CONTAINED IN REGULATION NO.33(10) OF D.C. RULES FOR GREATER MUMBAI, 1991, R/W PROVISION OF NOTIFICATION NO.PB-4391/4080(A)/UD -II(ROP), DATED 3 RD JUNE 1992 , IN THE FOLLOWING MANNER, SUBJECT TO THE FOLLOWING CONDITIONS:- MS. ASHA KASHIPRASAD RINGSHIA 4 (I) SLUM DEVELOPMENT FALLING IN CATEGORYVII MENTIONED IN NOTIFICATION NO.TPB4391/4080(A)/UD11(RDP) DATED 3 RD JUNE 19992, SHALL BE EXCLUDED FROM THE SCHEME; (II) SLUM DEVELOPMENT FALLING WITHIN CLAUSE 7.7 OF THE A PPENDIX IV OF REGULATION 33(10) WHICH PROVIDES FOR JOINT DEVELOPM ENT OF SLUM AND NONSLUM AREA SHALL BE EXCLUDED FROM THE SCHEME, AN D (III) ANY AMENDMENT IN THE SCHEME HEREBY NOTIFIED SHALL B E REQUIRED TO BE RENOTIFIED BY THE BOARD. 7. THE SAID NOTIFICATION DATED 3 RD AUGUST 2010, WAS TO COME INTO FORCE W.E.F. FROM THE DATE OF ITS PUBLICATION. LATER ON, THE ASSESSEE ALSO FURNISHED THE NOTIFICATION NUMBER 2 OF 2011, DATED 5 TH JANUARY 2011 , ISSUED BY THE CBDT, CLARIFYING THAT THIS NOTIFICATION SHALL BE DEEMED TO APPLY TO THE PROJECTS APPROVED BY A LOCAL AUTHORITY UNDER THE AF ORESAID SCHEME ON OR AFTER 1 ST DAY OF APRIL 2004, AND BEFORE 31 ST DAY OF MARCH 2008, THEREBY MAKING THE INCOME ARISING FROM SUCH PROJECT ELIGIBL E FOR DEDUCTION UNDER SUB SECTION (10) OF SECTION 80IB FROM THE A.Y. 2005 06 ONWARDS . 8. IN VIEW OF THIS SPECIFIC CLARIFICATION BY THE CBDT, THE COMMISSIONER (APPEALS) DIRECTED THE ASSESSING OFFICER TO ALLOW T HE DEDUCTION UNDER SECTION 80IB(10) ON THE GROUND THAT THE CONDITIONS PROVIDED IN THE PROVISO TO SECTION 80IB(10) STANDS FULFILLED. THE RELEVANT FINDINGS OF THE COMMISSIONER (APPEALS), FOR THE SAKE OF READY REFERENCE, IS REPR ODUCED HEREIN BELOW:- 3.4 THEREFORE, IN VIEW OF SPECIFIC CLARIFICATION ISSUED BY THE CBDT ON 5/1/2011, THE NOTIFICATION DATED 3.8.2010, WILL BE APPLICABLE TO ALL PROJECTS APPROVED BY A LOCAL AUTH ORITY UNDER THE AFORESAID SCHEME ON OR AFTER 1 ST DAY OF APRIL 2004, AND BEFORE 31 ST DAY OF MARCH 2008, THEREBY MAKING THE INCOME ARISI NG FROM SUCH PROJECT ELIGIBLE FOR DEDUCTION UNDER SUBSECTI ON (10) OF SECTION 80IB FROM THE A.Y. 200506 ONWARDS. THE APP ELLANT ALSO SATISFIES OTHER CONDITIONS OF THE NOTIFICATIONS, SU CH AS THE PROJECT IS APPROVED BY THE SLUM REHABILITATION AUTHORITY AN D THE SCHEME IS NOTIFIED BY THE NOTIFICATION DATED 3/8/2010 AND SUCH SCHEME DOES NOT FALL UNDER CATEGORY VII MENTIONED IN NOTIF ICATION NO.TPB4391/4080(A)/UD11(RDP) DATED 3 RD JUNE 1992, OR WITHIN CLAUSE 7.7 OF THE APPENDIX IV OF REGULATION 33(10) WHICH PROVIDES FOR JOINT DEVELOPMENT OF SLUM AND NONSLUM AREA. THEREFORE, AFTER THE CLARIFICATORY NOTIFICATION ISS UED BY CBDT ON 5.1.2011, THE APPELLANT IS NOW ELIGIBLE FOR DEDUCTI ON UNDER MS. ASHA KASHIPRASAD RINGSHIA 5 SECTION 80IB(10) IN RESPECT OF THE PROFITS DERIVED FROM HOUSING PROJECT ON A LAND THOUGH THE SAME IS LESS THAN 1 AC RE. THEREFORE, A.O. IS DIRECTED TO ALLOW THE DEDUCTION OF ` 1,47,11,573 UNDER SECTION 80IB(10). AGGRIEVED, THE REVENUE IS IN APPEAL BEFORE THE TRIB UNAL. 9. THE LEARNED DEPARTMENTAL REPRESENTATIVE, FIRST OF A LL, SUBMITTED BEFORE US THAT THE NOTIFICATION ISSUED BY THE CBDT, WAS A FRESH EVIDENCE WHICH WAS NOT AVAILABLE BEFORE THE ASSESSING OFFICER, THEREFO RE, THE COMMISSIONER (APPEALS) SHOULD HAVE CALLED FOR THE REMAND REPORT. SECONDLY, HE SUBMITTED THAT APPROVAL WAS GIVEN BY THE SRA ON 4 TH AUGUST 2003, WHEREAS THE SUBSEQUENT NOTIFICATION OF CBDT CATEGORICALLY STATE S THAT THE BENEFIT OF THE SCHEME WOULD BE AVAILABLE ON THE PROJECTS APPROVED AFTER 1 ST APRIL 2004, AND THEREFORE, THE BENEFIT OF PROVISO , RELAXING THE CONDITIONS OF ONE ACRE WOULD NOT BE AVAILABLE TO THE ASSESSEE. ACCORDINGLY, THE DEDUCTION UNDER SECTION 80IB(10), ALLOWED BY THE COMMISSIONER (APPEALS) WAS NOT JUSTIFIED, EITHER IN LAW OR ON FACTS. HE MADE DETAIL SUBMISSION WITH REF ERENCE TO VARIOUS DOCUMENTS FILED BY THE ASSESSEE AND THE FINDINGS OF THE ASSESSING OFFICER AS WELL AS LEARNED COMMISSIONER (APPEALS). 10. ON THE OTHER HAND, THE LEARNED COUNSEL SUBMITTED TH AT THE DEPARTMENT HAS RAISED NO SUCH GROUND ABOUT THE FURNISHING OF A FRESH EVIDENCE AND MOREOVER THIS IS A GOVT. NOTIFICATION WHICH DOES NO T REQUIRE ANY INVESTIGATION OF FACTS, THEREFORE, THE LEARNED COMMISSIONER (APPE ALS) HAS RIGHTLY TAKEN INTO COGNIZANCE. FURTHER, HE SUBMITTED THAT IN VIEW OF THE AMENDED PROVISIONS BROUGHT BY THE FINANCE ACT, 2004, W.E.F. 1 ST APRIL 2005, BY WHICH PROVISO WAS INSERTED, HAS RELAXED THE CONDITION OF MINIMUM AREA OF ONE ACRE FOR THE HOUSING PROJECT IN A CASE WHERE THE HOUSING PROJECT IS CARRIED OUT IN A SLUM AREA AS PER THE GOVT. SCHEME. ONCE THIS BENEFI T HAS BEEN MADE AVAILABLE, THE ASSESSEE IS ENTITLED TO DEDUCTION FR OM ASSESSMENT YEAR 2005- 06 ONWARDS. REGARDING APPROVAL DATE OF 4 TH AUGUST 2003, BY SRA, HE SUBMITTED THAT THE SAID APPROVAL WAS GIVEN WITH LOT OF CONDITIONS TO BE FULFILLED BEFORE THE COMMENCEMENT OF THE PROJECT AN D IT WAS ONLY WHEN THE ASSESSEE HAD FULFILLED ALL THE TERMS AND CONDITIONS GIVEN IN THE INTIMATION OF MS. ASHA KASHIPRASAD RINGSHIA 6 APPROVAL DATED 4 TH AUGUST 2003, THE FINAL COMMENCEMENT CERTIFICATE WA S GIVEN ON 17 TH OCTOBER 2004. THEREFORE, FOR ALL THE PRACTICAL PUR POSES, THE DATE OF 17 TH OCTOBER 2004, SHOULD BE TAKEN AS THE DATE OF APPRO VAL. WITHOUT PREJUDICE, HE SUBMITTED THAT THE AMENDMENT IN SECTI ON 80-IB(10), BROUGHT BY THE FINANCE ACT, 2004, IS CURATIVE IN NATURE AND , HENCE, THE SAME SHOULD BE GIVEN RETROSPECTIVE EFFECT. FOR THIS PURPOSES, H E REFERRED TO THE SPEECH GIVEN BY THE FINANCE MINISTER AT THE TIME OF INTROD UCTION OF THE PROVISO TO SECTION 80-IB. FROM THE SAID SPEECH, HE SUBMITTED T HAT IT WAS NEVER INTENDED THAT THE BENEFIT WOULD BE AVAILABLE FROM A PARTICULAR DATE SO LONG AS THE SCHEME HAS BEEN APPROVED. THE CBDT CANNOT, IN A NY MANNER, FRUSTRATE THE OBJECT AND INTENT OF THE LEGISLATION BY PROVIDI NG THE TIME LIMIT OF APPROVAL. IN SUPPORT OF THIS CONTENTIONS, HE RELIED UPON THE JUDGMENT OF THE HON'BLE SUPREME COURT IN SHASHIKANT LAXMAN KALE & A NR. V/S UNION OF INDIA, [1990] 185 ITR 104 (SC), AND VARIOUS OTHER DECISION S. HE FURTHER SUBMITTED THAT ONCE THE AMENDMENT HAS BEEN BROUGHT WITH A VIE W TO CURE THE HARDSHIP BEING FACED IN RE-DEVELOPMENT OF SLUMS UNDER THE AP PROVED SCHEME OF THE STATE OR CENTRAL GOVT., THE SAME SHOULD BE TREATED AS RETROSPECTIVE. IN SUPPORT OF THIS PLEADING OF RETROSPECTIVE EFFECT IS SUCH SITUATION, HE RELIED ON TWO SUPREME COURT JUDGMENTS NAMELY CIT V/S ALOM EXT RUSIONS LTD. [2009], 319 ITR 306 (SC) AND ALLIED MOTORS PVT. LTD. V/S CI T, [1997] 224 ITR 677 (SC). 11. WE HAVE CAREFULLY CONSIDERED THE RIVAL CONTENTIONS AND HAVE PERUSED THE FINDINGS OF THE LEARNED COMMISSIONER (APPEALS) AS WELL AS THE MATERIAL AVAILABLE ON RECORD. THE ASSESSEE HAS UNDERTAKEN A PROJECT UNDER THE SCHEME OF SLUM REHABILITATION AUTHORITY (SRA) FRAME D BY THE GOVT. OF MAHARASHTRA FOR CARRYING OUT A HOUSING PROJECT IN D HARAVI, WHICH IS ONE OF THE BIGGEST SLUM AREAS. THE ASSESSEE, VIDE LETTER O F INTENT DATED 3 RD JULY 2003, HAD SOUGHT FOR AN APPROVAL UNDER REGULATION O F 2.3 OF APPENDIX-4 OF DCR NO.33(10). THE SRA HAS GIVEN THE INTIMATION OF APPROVAL ON 4 TH AUGUST 2003, WHEREIN VARIOUS TERMS AND CONDITIONS WERE REQ UIRED TO BE FULFILLED BY THE ASSESSEE BEFORE THE COMMENCEMENT OF THE PROJECT . THE ASSESSEE COMPLIED WITH ALL THE OBJECTS AND THE TERMS GIVEN I N THE INTIMATION OF MS. ASHA KASHIPRASAD RINGSHIA 7 APPROVAL VIDE LETTER DATED 12 TH APRIL 2004, TO THE EXECUTIVE ENGINEER, SRA, AND IN RESPONSE TO WHICH COMMENCEMENT CERTIFICATE W AS ISSUED ON 17 TH OCTOBER 2004. AFTER THE AMENDMENT BROUGHT IN THE ST ATUTE BY FINANCE ACT, 2004, W.E.F. 1 ST APRIL 2004, VARIOUS CONDITIONS LAID DOWN IN CLAUSE S (A) AND (B) AND PARTICULARLY IN CLAUSE (B), WHEREIN ONE OF THE CONDITIONS FOR AVAILING THE DEDUCTION UNDER SECTION 80-IB(10), WAS THAT THE PROJECT SHOULD BE ON THE PLOT OF LAND WHICH HAS A MINIMUM AREA OF ONE ACRE, HAS BEEN RELAXED BY INSERTION OF A PROVISO . THE AMENDED PROVISION OF SECTION 80IB(10) R/W PROVISO , READS AS UNDER:- SECTION 80-IB(10) 1103[(10) THE AMOUNT OF DEDUCTION IN THE CASE OF AN UNDERTAKING DEVELOPING AND BUILDING HOUSING PROJECTS APPROVED B EFORE THE 31ST DAY OF MARCH, 2007, BY A LOCAL AUTHORITY SHALL BE HUNDR ED PER CENT OF THE PROFITS DERIVED IN THE PREVIOUS YEAR RELEVANT TO AN Y ASSESSMENT YEAR FROM SUCH HOUSING PROJECT IF, (A) SUCH UNDERTAKING HAS COMMENCED OR COMMENCES DEV ELOPMENT AND CONSTRUCTION OF THE HOUSING PROJECT ON OR AFTER THE 1ST DAY OF OCTOBER, 1998 AND COMPLETES SUCH CONSTRUCTION, (I) IN A CASE WHERE A HOUSING PROJECT HAS BEEN APPR OVED BY THE LOCAL AUTHORITY BEFORE THE 1ST DAY OF APRIL, 2004, ON OR BEFORE THE 31ST DAY OF MARCH, 2008; (II) IN A CASE WHERE A HOUSING PROJECT HAS BEEN, OR , IS APPROVED BY THE LOCAL AUTHORITY ON OR AFTER THE 1ST DAY OF APRIL, 2 004, WITHIN FOUR YEARS FROM THE END OF THE FINANCIAL YEAR IN WHICH THE HOU SING PROJECT IS APPROVED BY THE LOCAL AUTHORITY. EXPLANATION : FOR THE PURPOSES OF THIS CLAUSE, (I) IN A CASE WHERE THE APPROVAL IN RESPECT OF THE HOUSING PROJECT IS OBTAINED MORE THAN ONCE, SUCH HOUSING PROJECT SHALL BE DEEMED TO HAVE BEEN APPROVED ON THE DATE ON WHICH THE BUILDIN G PLAN OF SUCH HOUSING PROJECT IS FIRST APPROVED BY THE LOCAL AUTH ORITY; (II) THE DATE OF COMPLETION OF CONSTRUCTION OF THE HOUSING PROJECT SHALL BE TAKEN TO BE THE DATE ON WHICH THE COMPLETION CER TIFICATE IN RESPECT OF SUCH HOUSING PROJECT IS ISSUED BY THE LOCAL AUTH ORITY; (B) THE PROJECT IS ON THE SIZE OF A PLOT OF LAND WH ICH 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 MS. ASHA KASHIPRASAD RINGSHIA 8 OR REDEVELOPMENT OF EXISTING BUILDINGS IN AREAS DEC LARED TO BE SLUM AREAS UNDER ANY LAW FOR THE TIME BEING IN FORCE AND SUCH SCHEME IS NOTIFIED BY THE BOARD IN THIS BEHALF; 12. FROM THE PLAIN READING OF THE ABOVE, IT WOULD BE SE EN THAT THE CONDITION PRECEDENT FOR AVAILING THE DEDUCTION UNDE R SECTION 80IB(10), HAS BEEN GIVEN IN CLAUSES (A) AND (B). ON THESE CONDITI ONS, RIDER HAS BEEN PUT BY THE PROVISO WHICH STARTS WITH A KIND OF NON-OBSTANTE CLAUSE THAT NOTHING CONTAINED IN CLAUSES (A) AND (B) SHALL APPLY TO A HOUSING PROJECT WHICH HAS BEEN CARRIED OUT IN ACCORDANCE WITH THE SCHEME FRAM ED BY THE CENTRAL GOVT. OR STATE GOVT. FOR RE-CONSTRUCTION OR RE-DEVELOPMEN T IN AREAS TO BE SLUM UNDER ANY LAW AND IT FURTHER PROVIDES THAT SUCH A S CHEME SHOULD BE NOTIFIED BY THE BOARD IN THIS BEHALF. THUS, AN EXCEPTION HAS BEEN CARVED OUT BY THE PROVISO IN CASES OF HOUSING PROJECT DEVELOPMENT IN SLUM AREA UNDER A GOVT. SCHEME AND OVERRIDES THE CONDITION MENTIONED IN CLA USES (A) AND (B). THE SCHEME OF SRA CONTAINED IN REGULATION 33(10) OF DEV ELOPMENT CONTROL REGULATION FOR GREATER MUMBAI HAS BEEN NOTIFIED BY CBDT NOTIFICATION NO.67, DATED 3 RD AUGUST 2010, WHICH HAS BEEN INCORPORATED IN THE PR ECEDING PARAGRAPHS. THIS NOTIFICATION WAS FURTHER CLARIFIED BY THE CBDT IN NOTIFICATION NO.2 OF 2011 DATED 5 TH JANUARY 2011, WHEREIN IT WAS PROVIDED THAT:- IN THE NOTIFICATION OF THE GOVT OF INDIA IN THE MIN ISTRY OF FINANCE, DEPARTMENT OF REVENUE, (CENTRAL BOARD OF DIRECT TAX ES) NUMBER S.O. 1898(E), DATED THE 3 RD AUGUST, 2010 (2010) 233 CTR (ST.) 56 2010) 43 DTR (ST.) 8] PUBLISHED IN THE GAZETTE OF INDIA, EXTRAORDINARY, PART II, SECTION 3, SUBSECTION (II), DATED THE 3 RD AUGUST, 2010, IN PARAGRAPH 2 FOR THIS NOTIFICATION SHALL COME INTO FORCE WITH EFFECT FROM THE DATE OF ITS PUBLICATION, READ THIS NOTIFICATION SHALL BE DEEMED TO APPLY TO PROJECTS APPROVED BY A LOCAL AUTHORITY UNDER THE AF ORESAID SCHEME ON OR AFTER THE 1 ST DAY OF APRIL, 2004, AND BEFORE 31 ST DAY OF MARCH, 2008, THEREBY MAKING THE INCOMES ARISING FROM SUCH PROJEC TS ELIGIBLE FOR DEDUCTION UNDER SUB SECTION (10) OF SECTION 80IB FR OM THE ASSESSMENT YEAR 20506 ONWARDS . 13. THE PROVISO INSERTED W.E.F 1 ST APRIL 2005, THUS RELAXES THE CONDITIONS GIVEN IN CLAUSES (A) AND (B) OF SECTION 80-IB TO RE MOVE THE PROBLEM OF REHABILITATION AND DEVELOPMENT OF SLUM AREA. THE IN TENTION OF THE LEGISLATURE IN BRINGING SUCH AN AMENDMENT CAN ALSO BE GAZED FRO M THE SPEECH OF THE MS. ASHA KASHIPRASAD RINGSHIA 9 FINANCE MINISTER AT THE TIME OF INTRODUCTION OF THE BILL, WHICH READS AS UNDER;- 110. A SMALL PROBLEM HAS PLAGUED THE RECONSTRUCTION AND DEVELOPMENT OF EXISTING BUILDINGS UNDER APPROVED PL ANS IN THE CITY OF MUMBAI. PERHAPS THE PROBLEM IS THERE IN SOME OTHER CITIES TOO. I, THEREFORE, PROPOSE TO RELAX THE CONDITION OF MINIMU M PLOT SIZE OF ONE ACRE IN THE CASE OF HOUSING PROJECTS, AS LONG AS TH E PROJECTS ARE IMPLEMENTED IN ACCORDANCE WITH A SCHEME FOR RECONST RUCTION OR DEVELOPMENT APPROVED BY THE CENTRAL OR STATE GOVERN MENT. 14. THUS, RIGOURS OF THE CONDITIONS ENUMERATED IN CLAUS ES (A) AND (B) OF SECTION 80-IB, HAS BEEN RELAXED BY THE LEGISLATURE TO ACHIEVE CERTAIN SOCIO ECONOMIC OBJECT AND, THEREFORE, PROVISO TO SECTION 80-IB SHOULD BE GIVEN A LIBERAL INTERPRETATION SO AS TO NOT TO DEFEAT A GEN UINE CLAIM FOR DEDUCTION BY A DEVELOPER WHO UNDERTAKES TO DEVELOP A HOUSING PRO JECT IN A SLUM AREA UNDER THE SCHEME APPROVED BY THE CENTRAL OR STATE G OVT. THE CBDT WHICH HAD ISSUED THE NOTIFICATION AFTER MORE THAN FIVE YE ARS OF THE AMENDMENT, HAS PUT A TIME LIMIT OF THOSE HOUSING PROJECTS WHICH HA S BEEN APPROVED BY THE LOCAL AUTHORITY ON/OR AFTER 1 ST APRIL 2004. SUCH A TIME LIMIT CAN DEFEAT THE BASIC PURPOSE OF THE PROVISO FOR WHICH IT WAS ENACTED AS IN THE SAID PROVISO , THE TIME LIMIT PROVIDED IN CLAUSE (A) OF SECTION 80 -IB(10) HAS NOT BEEN SPECIFICALLY MADE APPLICABLE, THEREFORE, SUCH A TIM E LIMIT CANNOT BE IMPOSED BY WAY OF SUBORDINATE LEGISLATION. SUCH NOTIFICATIO N CAN ONLY CLARIFY THE STATUTORY PROVISIONS AND NOT OVER-RIDE THEM OR REST RICT THE OPERATION OF THE MAIN ENACTMENT. THEREFORE, IN OUR CONSIDERED OPINIO N, THE TIME LIMIT OF APPROVAL ON/OR AFTER 1 ST APRIL 2004, WILL NOT BE APPLICABLE IN THE CASE OF THE PROVISO TO SECTION 80IB(10). 15. MOREOVER, IN THE INSTANT CASE, THE APPROVAL WHICH W AS GIVEN ON 4 TH AUGUST 2003, WAS LOADED WITH LOT OF TERMS AND CONDI TIONS TO BE FULFILLED BEFORE THE COMMENCEMENT. IT WAS ONLY AFTER SUCH TER MS AND CONDITIONS WERE FULFILLED, THE ASSESSEE WAS GIVEN THE COMMENCEMENT CERTIFICATE ISSUED AFTER 1 ST APRIL 2004, I.E., ON 17 TH OCTOBER 2004 TO START THE PROJECT. IN SUCH A CASE OR SITUATION, IT CANNOT BE HELD THAT THE ASSESSEES PROJECT IS NOT LIABLE FOR DEDUCTION UNDER SECTION 80-IB, ONCE ALL OTHER CONDI TIONS ARE FULFILLED. IN THIS MS. ASHA KASHIPRASAD RINGSHIA 10 CASE, ONE CAN SAY THAT THE DATE OF COMMENCEMENT I.E ., 17 TH OCTOBER 2004, CAN BE TAKEN AS THE DATE OF APPROVAL AS IT WAS FROM THIS DATE THE APPROVAL GIVEN BY THE SRA BECOMES OPERATIVE. THUS, THE CONTE NTIONS OF THE LEARNED DEPARTMENTAL REPRESENTATIVE CANNOT BE SUSTAINED. 16. IN GROUND NO.2, THE REVENUE HAS CHALLENGED THAT THE DATE OF APPROVAL OF SRA SCHEME PROJECT IS 3 RD JULY 2003, AND IS NOT COVERED BY THE NOTIFICATION NO.2 OF 2011, WHICH WAS ISSUED TO CLAR IFY THE EARLIER NOTIFICATION DATED 3 RD AUGUST 2010. SUCH A GROUND TAKEN BY THE DEPARTMENT IS WHOLLY MISCONCEIVED AS THERE IS NO SUCH SCHEME DATED 3 RD JULY 2003. THE SAID DATE OF 3 RD JULY 2003, IS WHEN THE ASSESSEE HAS APPLIED BEFORE THE SRA FOR ITS APPROVAL OF THE PROJECT. THE SCHEME IN WHICH THE AP PROVAL HAS BEEN GRANTED IS DCR NO.33 (10), WHICH HAS BEEN NOTIFIED BY THE C BDT. THUS, THERE IS NO MERIT IN GROUND NO.2, TAKEN BY THE REVENUE. 17. IN VIEW OF OUR ABOVE FINDINGS, WE DO NOT FIND ANY R EASON TO DEVIATE FROM THE ULTIMATE FINDINGS GIVEN BY THE COMMISSIONE R (APPEALS) AND, CONSEQUENTLY, THE SAME IS HEREBY CONFIRMED BY HOLDI NG THAT THE ASSESSEE IS ELIGIBLE FOR DEDUCTION UNDER SECTION 80-IB(10), FOR ` 1,47,11,573, IN RESPECT OF ITS DEVELOPMENT PROJECT CARRIED OUT IN DHARAVI S LUM AREA, WHICH WAS A SCHEME FRAMED BY MAHARASHTRA GOVT. AND DULY NOTIFIE D BY THE CBDT. ACCORDINGLY, THE GROUNDS RAISED BY THE REVENUE ARE TREATED TO BE DISMISSED. 18. 2 6 !' 0 2 0 78 9 18. IN THE RESULT, REVENUES APPEAL IS DISMISSED. $ 0 4* : ; (6 12 TH SEPTEMBER 2012 4 0 9 ORDER PRONOUNCED IN THE OPEN COURT ON 12 TH SEPTEMBER 2012 SD/- . .. . . .. . ! ! ! ! P.M. JAGTAP ACCOUNTANT MEMBER SD/- # # # # $% $% $% $% & ! & ! & ! & ! AMIT SHUKLA JUDICIAL MEMBER MUMBAI, ; ;; ; ( (( ( DATED: 12 TH SEPTEMBER 2012 MS. ASHA KASHIPRASAD RINGSHIA 11 $ 0 -&#< =<* / COPY OF THE ORDER FORWARDED TO : (1) &( )2 / THE ASSESSEE; (2) !' / THE REVENUE; (3) > () / THE CIT(A); (4) > / THE CIT, MUMBAI CITY CONCERNED; (5) <'A -&&( , , / THE DR, ITAT, MUMBAI; (6) B) C / GUARD FILE. .< -& / TRUE COPY $( / BY ORDER - . DE / PRADEEP J. CHOWDHURY '2F &( D' / SR. PRIVATE SECRETARY G / 7 / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI