ACIT 21(1), MUMBAI V. ASHA K. RINGSHIA, MUMBAI

ITA 4082/MUM/2014

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 2292 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 5 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-12-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 04-06-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Retrospective amendment
• Section: 80IB; 10

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES A, MUMBAI , , , BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER, AND SHRI RAJENDRA, ACCOUNTANT MEMBER ITA NO.4082/MUM/2014 ASSESSMENT YEAR- 2009-10 THE ACIT 21(1), ROOM NO. 601, 6 TH FLOOR, C-10 PRATYAKSHAKAR BHAVAN, BANDRA KURLA COMPLEX, BANDRA(E), MUMBAI- 51 / VS. ASHA K. RINGSHIA, 3 RD FLOOR, PANDURANG SADAN, HANUMAN ROAD, MUMBAI- 57 ( / REVENUE) ( ! ' /ASSESSEE) PAN. NO. AACPR3758C / REVENUE BY SHRI MOHAMMED RIZWAN ! ' / ASSESSEE BY SHRI RAKESH JOSHI # $ % ' & / DATE OF HEARING : 03/12/2015 % ' & / DATE OF ORDER: 07/12/2015 / O R D E R PER JOGINDER SINGH, JUDICIAL MEMBER, THE REVENUE IS AGGRIEVED BY THE IMPUGNED ORDER DAT ED 19/03/2014 OF THE LD FIRST APPELLATE AUTHORITY, MUM BAI, DIRECTING THE ASSESSING OFFICER TO ALLOW DEDUCTION U/S 80IB(10) OF THE INCOME TAX ACT,1961(HEREINAFTER THE ACT) ITA NO.4082/MUM/2014 ASHA K. RINGSHIA 2 AMOUNTING TO RS. 41,30,079/- AND FURTHER ACCEPTING THE CLAIM OF THE ASSESSEE IGNORING NOTIFICATION NO.2/20 11 DATED 05/01/2011 OF THE BOARD. 2. DURING HEARING OF THIS APPEAL, LD. COUNSEL FO R THE ASSESSEE, AT THE OUTSET, CLAIMED THAT THE IMPUGNED ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION O F THE TRIBUNAL IN THE CASE OF ASSESSEE ITSELF (ITA 2901/M UM/2011) ORDER DATED 12/09/2012. THE COPY OF THE SAME WAS FURNISHED BY THE ASSESSEE. THIS FACTUAL MATRIX WAS CONSENTED TO BE CORRECT BY THE LD. DR, SHRI MOAMMAD RIZWAN. 2.1 WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IN VIEW O F THE ABOVE, WE ARE REPRODUCING HERE UNDER THE RELEVANT PORTION OF THE ORDER DT.12/09/2012 FOR READY REFERENCE:- THE PRESENT APPEAL PREFERRED BY THE REVENUE, IS DI RECTED AGAINST THE IMPUGNED ORDER DATED 31ST JANUARY 2011, PASSED BY THE LEARNED COMMISSIONER (APPEALS)XXXII, MUMBAI, FOR ASSESSMEN T YEAR 200708, ON THE FOLLOWING GROUNDS: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW, THE LEARNED CIT(A) ERRED IN ALLOWING DEDUCTION UNDE R SECTION 80IB(10) OF RS.1,47,11,573, WITHOUT APPRECIATING T HE FACT THAT THE 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 DATE OF APPROVAL OF SRA SCHEME PROJECT IS 03.07.2003 AND IS NOT COVERED BY THE ITA NO.4082/MUM/2014 ASHA K. RINGSHIA 3 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, T HE ASSESSEE IS ENGAGED IN THE BUSINESS AS BUILDER AND DEVELOPER TH ROUGH A PROPRIETORSHIP CONCERN NAMELY M/S. K.R. BUILDERS. D URING THE YEAR UNDER CONSIDERATION, THE ASSESSEE HAS DECLARED INCO ME UNDER THE HEAD INCOME FROM BUSINESS TO THE TUNE OF RS. 1,54 ,59,252, OUT OF WHICH A SUM OF RS. 1,47,11,5733, WAS CLAIMED AS DED UCTION UNDER SECTION 80IB(10) OF THE ACT. 3. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTICED THAT THE SIZE OF PLOT OF LAND ON WH ICH THE HOUSING PROJECT WAS UNDERTAKEN BY THE ASSESSEE WAS ONLY 106 4.70 SQ.MTRS. I.E., LESS THAN ONE ACRE. THE ASSESSING OFFICER REQ UIRED THE ASSESSEE TO SUBMIT SLUM REHABILITATION AUTHORITY (FOR SHORT SRA) DETAILS, COPY OF APPROVAL, I0D, ETC., IN RESPECT OF THE SAID PROJECT. THE ASSESSEE SUBMITTED THAT IT HAD APPLIED FOR APPROVAL FROM SRA THROUGH LETTER OF INTENT ON 3RD JULY 2003, AND INTI MATION OF APPROVAL WAS GIVEN ON 4TH AUGUST 2003, WITH CERTAIN CONDITION TO BE FULFILLED. ON VERIFICATION OF THESE DETAILS, THE ASSESSING 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 T HAN ONE ACRE, THEREFORE, THE ASSESSEE DOES NOT FULFILL THE BASIC CONDITION OF THE CLAIM FOR DEDUCTION UNDER SECTION 80-IB(10). IN RES PONSE 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. 1ST APRIL 2005, IN CA SE OF HOUSING PROJECT BEING CARRIED OUT IN SLUM AREAS AS PER THE GOVT. SCHEME. ITA NO.4082/MUM/2014 ASHA K. RINGSHIA 4 THE ASSESSEES PROJECT HAS BEEN APPROVED BY SRA, GO VT. OF MAHARASHTRA, WHICH PROVIDES FOR STRICT COMPLIANCE O F VARIOUS RULES AND ACTS AND WHICH AGAIN IS GUIDED BY CIRCULARS AND NOTIFICATIONS, THEREFORE, THE DEVELOPER HAS NO SAY IN ITS 3 IMPLEMENTATION AND EXECUTION. FURTHER, THE ASSESS EE HAS COMPLIED WITH ALL THE CONDITIONS PRESCRIBED IN SECTION 80IB( 10) NAMELY (I) PROJECT IS APPROVED BY BMC AS WELL AS BY SRA. (COPY OF THE APPROVED PLAN WAS SUBMITTED); (II) BUILT SIZE OF TH E RESIDENTIAL UNIT IS LESS THAN 1,000 SQUARE FT.; (III) BUILT SIZE OF THE COMMERCIAL ESTABLISHMENT DOES NOT EXCEED 5% OF THE AGGREGATE S IZE OF THE PROJECT OR TWO THOUSAND SQUARE FT, WHICHEVER IS LES S; AND (IV) PROJECT HAS BEEN COMPLETED WITHIN THE STIPULATED PE RIOD. 4. HOWEVER, TILL THE DATE OF THE COMPLETION OF ASSE SSMENT PROCEEDINGS, THE CBDT HAD NOT ISSUED ANY NOTIFICATI ON IN TERMS OF THE PROVISO TO SUBSECTION (10) OF SECTION 80-IB. TH E ASSESSEE BEFORE THE ASSESSING OFFICER PLEADED THAT SINCE ALL OTHER CONDITIONS STANDS FULFILLED, THE CLAIM FOR DEDUCTION UNDER SECTION 80 -IB(10), SHOULD BE OTHERWISE ALLOWED. 5. THE ASSESSING OFFICER, AFTER ANALYSING THE PROV ISIONS OF SECTION 80- IB(10), WHICH WAS APPLICABLE PRIOR TO 1ST APRIL 2005, AND ALSO AFTER 1ST APRIL 2005, HELD THAT THE ASSESSEE DOES N OT FULFILL THE CONDITIONS GIVEN IN THE PROVISO TO SECTION 80IB(10) , WHICH CLEARLY STATES THAT THE CLAIM HAS TO BE NOTIFIED BY THE CBD T, WHICH, IN THE PRESENT CASE, THE SCHEME ON WHICH THE ASSESSEE HAS DONE HER PROJECT HAS NOT BEEN NOTIFIED WHICH IS EVIDENT FROM THE LETTER DATED 23RD AUGUST 2007, ISSUED BY THE CBDT. ACCORDINGLY, HE DISALLOWED ITA NO.4082/MUM/2014 ASHA K. RINGSHIA 5 THE CLAIM OF RS. 1,47,11,573, MADE UNDER SECTION 80 -IB(10), VIDE ORDER DATED 24TH DECEMBER 2009. 6. AGGRIEVED, THE ASSESSEE CARRIED THE MATTER IN F IRST APPEAL, WHEREIN THE ASSESSEE PRODUCED A COPY OF NOTIFICATIO N DATED 3RD AUGUST 2010, ISSUED BY THE CBDT, WHEREIN BY THE SCH EME OF SRA OF THE GOVT. OF MAHARASHTRA, WAS NOTIFIED. IT WAS SUBM ITTED THAT THE SAME COULD NOT BE PRODUCED BEFORE THE ASSESSING OFF ICER AS THE NOTIFICATION WAS NOT ISSUED TILL THE TIME OF COMPLE TION OF THE ASSESSMENT PROCEEDINGS. AFTER GOING THROUGH THE NOT IFICATION, THE COMMISSIONER (APPEALS) NOTED THAT THE CBDT HAS NOTI FIED THE CLAIM CONTAINED IN REGULATION NO.33(10) OF D.C. RUL ES FOR GREATER MUMBAI, 1991, R/W PROVISION OF NOTIFICATION NO.PB- 4391/4080(A)/UD-II(ROP), DATED 3RD JUNE 1992, IN TH E FOLLOWING MANNER, SUBJECT TO THE FOLLOWING CONDITIONS:- (I) SLUM DEVELOPMENT FALLING IN CATEGORYVII MENTI ONED 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 APPENDIX IV OF REGULATION 33(10) WHICH PROVIDES FOR JOINT DEVEL OPMENT OF SLUM AND NONSLUM AREA SHALL BE EXCLUDED FROM THE SCHEME , AND (III) ANY AMENDMENT IN THE SCHEME HEREBY NOTIFIED S HALL BE REQUIRED TO BE RENOTIFIED BY THE BOARD. 7. THE SAID NOTIFICATION DATED 3RD AUGUST 2010, WA S TO COME INTO FORCE W.E.F. FROM THE DATE OF ITS PUBLICATION. LATE R ON, THE ASSESSEE ALSO FURNISHED THE NOTIFICATION NUMBER 2 OF 2011, D ATED 5TH JANUARY ITA NO.4082/MUM/2014 ASHA K. RINGSHIA 6 2011, ISSUED BY THE CBDT, CLARIFYING THAT THIS NOT IFICATION SHALL BE DEEMED TO APPLY TO THE PROJECTS APPROVED BY A LOCAL AUTHORITY UNDER THE AFORESAID SCHEME ON OR AFTER 1ST DAY OF APRIL 2 004, AND BEFORE 31ST DAY OF MARCH 2008, THEREBY MAKING THE INCOME A RISING FROM SUCH PROJECT ELIGIBLE FOR DEDUCTION UNDER SUB SECTI ON (10) OF SECTION 80IB FROM THE A.Y. 200506 ONWARDS. 8. IN VIEW OF THIS SPECIFIC CLARIFICATION BY THE CB DT, THE COMMISSIONER (APPEALS) DIRECTED THE ASSESSING OFFIC ER TO ALLOW THE 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), FO R THE SAKE OF READY REFERENCE, IS REPRODUCED HEREIN BELOW:- 3.4 THEREFORE, IN VIEW OF SPECIFIC CLARIFICATION IS SUED 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 1ST DAY OF APRIL 2 004, AND BEFORE 31ST DAY OF MARCH 2008, THEREBY MAKING THE I NCOME ARISING FROM SUCH PROJECT ELIGIBLE FOR DEDUCTION UN DER SUB SECTION (10) OF SECTION 80IB FROM THE A.Y. 200506 ONWARDS. THE APPELLANT ALSO SATISFIES OTHER CONDITIONS OF TH E NOTIFICATIONS, SUCH AS THE PROJECT IS APPROVED BY T HE SLUM REHABILITATION AUTHORITY AND THE SCHEME IS NOTIFIED BY THE NOTIFICATION DATED 3/8/2010 AND SUCH SCHEME DOES NO T FALL UNDER CATEGORY VII MENTIONED IN NOTIFICATION NO.TPB 4391/4080(A)/UD11(RDP) DATED 3RD JUNE 1992, OR WIT HIN CLAUSE 7.7 OF THE APPENDIX IV OF REGULATION 33(10) WHICH PROVIDES FOR JOINT DEVELOPMENT OF SLUM AND NONSLUM AREA. ITA NO.4082/MUM/2014 ASHA K. RINGSHIA 7 THEREFORE, AFTER THE CLARIFICATORY NOTIFICATION ISS UED BY CBDT ON 5.1.2011, THE APPELLANT IS NOW ELIGIBLE FOR DEDU CTION UNDER 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 RS. 1,47,11,573 UNDER SECTION 80IB(10). AGGRIEVED, THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. 9. THE LEARNED DEPARTMENTAL REPRESENTATIVE, FIRST O F ALL, SUBMITTED BEFORE US THAT THE NOTIFICATION ISSUED BY THE CBDT, WAS A FRESH EVIDENCE WHICH WAS NOT AVAILABLE BEFORE THE ASSESSI NG OFFICER, THEREFORE, THE COMMISSIONER (APPEALS) SHOULD HAVE C ALLED FOR THE REMAND REPORT. SECONDLY, HE SUBMITTED THAT APPROVAL WAS GIVEN BY THE SRA ON 4TH AUGUST 2003, WHEREAS THE SUBSEQUENT NOTIFICATION OF CBDT CATEGORICALLY STATES THAT THE BENEFIT OF THE S CHEME WOULD BE AVAILABLE ON THE PROJECTS APPROVED AFTER 1ST APRIL 2004, AND THEREFORE, THE BENEFIT OF PROVISO, RELAXING THE CON DITIONS 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 MA DE DETAIL SUBMISSION WITH REFERENCE TO VARIOUS DOCUMENTS FILE D BY THE ASSESSEE AND THE FINDINGS OF THE ASSESSING OFFICER AS WELL AS LEARNED COMMISSIONER (APPEALS). 10. ON THE OTHER HAND, THE LEARNED COUNSEL SUBMITTE D THAT THE DEPARTMENT HAS RAISED NO SUCH GROUND ABOUT THE FURN ISHING OF A FRESH EVIDENCE AND MOREOVER THIS IS A GOVT. NOTIFIC ATION WHICH DOES NOT REQUIRE ANY INVESTIGATION OF FACTS, THEREFORE, THE LEARNED COMMISSIONER (APPEALS) HAS RIGHTLY TAKEN INTO COGNI ZANCE. FURTHER, ITA NO.4082/MUM/2014 ASHA K. RINGSHIA 8 HE SUBMITTED THAT IN VIEW OF THE AMENDED PROVISIONS BROUGHT BY THE FINANCE ACT, 2004, W.E.F. 1ST 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 PRO JECT IS CARRIED OUT IN A SLUM AREA AS PER THE GOVT. SCHEME. ONCE TH IS BENEFIT HAS BEEN MADE AVAILABLE, THE ASSESSEE IS ENTITLED TO DE DUCTION FROM ASSESSMENT YEAR 2005- 06 ONWARDS. REGARDING APPROVA L DATE OF 4TH AUGUST 2003, BY SRA, HE SUBMITTED THAT THE SAID APP ROVAL WAS GIVEN WITH LOT OF CONDITIONS TO BE FULFILLED BEFORE THE C OMMENCEMENT OF THE PROJECT AND IT WAS ONLY WHEN THE ASSESSEE HAD FULFI LLED ALL THE TERMS AND CONDITIONS GIVEN IN THE INTIMATION OF APPROVAL DATED 4TH AUGUST 2003, THE FINAL COMMENCEMENT CERTIFICATE WAS GIVEN ON 17TH OCTOBER 2004. THEREFORE, FOR ALL THE PRACTICAL PURP OSES, THE DATE OF 17TH OCTOBER 2004, SHOULD BE TAKEN AS THE DATE OF A PPROVAL. WITHOUT PREJUDICE, HE SUBMITTED THAT THE AMENDMENT IN SECTION 80- IB(10), BROUGHT BY THE FINANCE ACT, 2004, IS CURATI VE IN NATURE AND, HENCE, THE SAME SHOULD BE GIVEN RETROSPECTIVE EFFEC T. FOR THIS PURPOSES, HE REFERRED TO THE SPEECH GIVEN BY THE FI NANCE MINISTER AT THE TIME OF INTRODUCTION OF THE PROVISO TO SECTION 80-IB. FROM THE SAID SPEECH, HE SUBMITTED THAT IT WAS NEVER INTENDE D THAT THE BENEFIT WOULD BE AVAILABLE FROM A PARTICULAR DATE SO LONG A S THE SCHEME HAS BEEN APPROVED. THE CBDT CANNOT, IN ANY MANNER, FRUSTRATE THE OBJECT AND INTENT OF THE LEGISLATION BY PROVIDING T HE TIME LIMIT OF APPROVAL. IN SUPPORT OF THIS CONTENTIONS, HE RELIED UPON THE JUDGMENT OF THE HON'BLE SUPREME COURT IN SHASHIKANT LAXMAN KALE & ANR. V/S UNION OF INDIA, [1990] 185 ITR 104 (SC), AND VARIOUS OTHER DECISIONS. HE FURTHER SUBMITTED THAT ONCE THE AMENDMENT HAS BEEN BROUGHT WITH A VIEW TO CURE THE HARDSHIP BEING FACED IN RE- DEVELOPMENT OF SLUMS UNDER THE APPROVED SCHEME OF T HE STATE OR ITA NO.4082/MUM/2014 ASHA K. RINGSHIA 9 CENTRAL GOVT., THE SAME SHOULD BE TREATED AS RETROS PECTIVE. IN SUPPORT OF THIS PLEADING OF RETROSPECTIVE EFFECT IS SUCH SITUATION, HE RELIED ON TWO SUPREME COURT JUDGMENTS NAMELY CIT V/ S ALOM EXTRUSIONS LTD. [2009], 319 ITR 306 (SC) AND ALLIED MOTORS PVT. LTD. V/S CIT, [1997] 224 ITR 677 (SC). 11. WE HAVE CAREFULLY CONSIDERED THE RIVAL CONTENT IONS AND HAVE PERUSED THE FINDINGS OF THE LEARNED COMMISSIONER (A PPEALS) AS WELL AS THE MATERIAL AVAILABLE ON RECORD. THE ASSESSEE H AS UNDERTAKEN A PROJECT UNDER THE SCHEME OF SLUM REHABILITATION AUT HORITY (SRA) FRAMED BY THE GOVT. OF MAHARASHTRA FOR CARRYING OUT A HOUSING PROJECT IN DHARAVI, WHICH IS ONE OF THE BIGGEST SLU M AREAS. THE ASSESSEE, VIDE LETTER OF INTENT DATED 3RD JULY 2003 , HAD SOUGHT FOR AN APPROVAL UNDER REGULATION OF 2.3 OF APPENDIX-4 OF D CR NO.33(10). THE SRA HAS GIVEN THE INTIMATION OF APPROVAL ON 4TH AUGUST 2003, WHEREIN VARIOUS TERMS AND CONDITIONS WERE REQUIRED TO BE FULFILLED BY THE ASSESSEE BEFORE THE COMMENCEMENT OF THE PROJ ECT. THE ASSESSEE COMPLIED WITH ALL THE OBJECTS AND THE TERM S GIVEN IN THE INTIMATION OF APPROVAL VIDE LETTER DATED 12TH APRIL 2004, TO THE EXECUTIVE ENGINEER, SRA, AND IN RESPONSE TO WHICH C OMMENCEMENT CERTIFICATE WAS ISSUED ON 17TH OCTOBER 2004. AFTER THE AMENDMENT BROUGHT IN THE STATUTE BY FINANCE ACT, 2004, W.E.F. 1ST APRIL 2004, VARIOUS CONDITIONS LAID DOWN IN CLAUSES (A) AND (B) AND PARTICULARLY IN CLAUSE (B), WHEREIN ONE OF THE CONDITIONS FOR AV AILING THE DEDUCTION UNDER SECTION 80-IB(10), WAS THAT THE PRO JECT 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 PROV ISION OF SECTION 80IB(10) R/W PROVISO, READS AS UNDER:- ITA NO.4082/MUM/2014 ASHA K. RINGSHIA 10 SECTION 80-IB(10) 1103[(10) THE AMOUNT OF DEDUCTIO N IN THE CASE OF AN UNDERTAKING DEVELOPING AND BUILDI NG HOUSING PROJECTS APPROVED BEFORE THE 31ST DAY OF MA RCH, 2007, BY A LOCAL AUTHORITY SHALL BE HUNDRED PER CEN T 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 DEVELOPMENT AND CONSTRUCTION OF THE HOUSING PROJECT ON OR AFTER THE 1ST DAY OF OCTOBER, 1998 AND COMPLETES SU CH CONSTRUCTION, (I) IN A CASE WHERE A HOUSING PROJECT HAS BEEN APPR OVED BY THE LOCAL AUTHORITY BEFORE THE 1ST DAY OF APRIL, 20 04, 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, 2004, WITHIN FOUR YEARS FROM THE END OF THE FINANCIAL YEAR IN WHICH THE HOUSING PROJECT IS APPROVED BY TH E 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 BUILDING PLAN OF SUCH HOUSING PROJECT IS FIRST APPROVED BY THE LOCAL AUTHORITY; ITA NO.4082/MUM/2014 ASHA K. RINGSHIA 11 (II) (II) THE DATE OF COMPLETION OF CONSTRUCTION OF THE HOUSING PROJECT SHALL BE TAKEN TO BE THE DATE ON WHICH THE COMPLETION CERTIFICATE IN RESPECT OF SUCH HOUSING PROJECT IS ISSUED BY THE LOCAL AUTHORITY; (III) (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 ACCORDANC E WITH A SCHEME FRAMED BY THE CENTRAL GOVERNMENT OR A STATE GOVERNMENT FOR RECONSTRUCTION OR REDEVELOPMENT OF EXISTING BUILDINGS IN AREAS DECLARED TO BE SLUM AREAS UNDER ANY LAW FOR THE TIME BEING IN FORCE AND SUCH SCHEME IS NOTIFIED BY THE BOARD IN THIS BEHALF; 12. FROM THE PLAIN READING OF THE ABOVE , IT WOULD BE SEEN THAT THE CONDITION PRECEDENT FOR AVAILING THE DEDUCTION UNDER SECTION 80IB(10), HAS BEEN GIVEN IN CLAUSES (A) AND (B). ON THESE CONDITIONS, 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 FRAMED BY THE CENTRAL GO VT. OR STATE GOVT. FOR RE-CONSTRUCTION OR RE-DEVELOPMENT IN AREA S 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 EXCE PTION HAS BEEN CARVED OUT BY THE PROVISO IN CASES OF HOUSING PROJE CT DEVELOPMENT IN SLUM AREA UNDER A GOVT. SCHEME AND OVERRIDES THE CO NDITION MENTIONED IN CLAUSES (A) AND (B). THE SCHEME OF SRA CONTAINED IN REGULATION 33(10) OF DEVELOPMENT CONTROL REGULATION FOR GREATER ITA NO.4082/MUM/2014 ASHA K. RINGSHIA 12 MUMBAI HAS BEEN NOTIFIED BY CBDT NOTIFICATION NO.67 , DATED 3RD AUGUST 2010, WHICH HAS BEEN INCORPORATED IN THE PRE CEDING PARAGRAPHS. THIS NOTIFICATION WAS FURTHER CLARIFIED BY THE CBDT IN NOTIFICATION NO.2 OF 2011 DATED 5TH JANUARY 2011, W HEREIN IT WAS PROVIDED THAT:- IN THE NOTIFICATION OF THE GOVT OF INDIA IN THE MI NISTRY OF FINANCE, DEPARTMENT OF REVENUE, (CENTRAL BOARD OF D IRECT TAXES) NUMBER S.O. 1898(E), DATED THE 3RD AUGUST, 2 010 (2010) 233 CTR (ST.) 56 2010) 43 DTR (ST.) 8] PUBLI SHED IN THE GAZETTE OF INDIA, EXTRAORDINARY, PART II, S ECTION 3, SUBSECTION (II), DATED THE 3RD AUGUST, 2010, IN PA RAGRAPH 2 FOR THIS NOTIFICATION SHALL COME INTO FORCE WITH E FFECT FROM THE DATE OF ITS PUBLICATION, READ THIS NOTIFICATI ON SHALL BE DEEMED TO APPLY TO PROJECTS APPROVED BY A LOCAL AUT HORITY UNDER THE AFORESAID SCHEME ON OR AFTER THE 1ST DAY OF APRIL, 2004, AND BEFORE 31ST DAY OF MARCH, 2008, THEREBY M AKING THE INCOMES ARISING FROM SUCH PROJECTS ELIGIBLE FOR DEDUCTION UNDER SUB SECTION (10) OF SECTION 80IB FROM THE ASS ESSMENT YEAR 20506 ONWARDS. 13. THE PROVISO INSERTED W.E.F 1ST APRIL 2005, THUS RELAXES THE CONDITIONS GIVEN IN CLAUSES (A) AND (B) OF SECTION 80-IB TO REMOVE THE PROBLEM OF REHABILITATION AND DEVELOPMENT OF SL UM AREA. THE INTENTION OF THE LEGISLATURE IN BRINGING SUCH AN AM ENDMENT CAN ALSO BE GAZED FROM THE SPEECH OF THE FINANCE MINISTER A T THE TIME OF INTRODUCTION OF THE BILL, WHICH READS AS UNDER;- 110. A SMALL PROBLEM HAS PLAGUED THE RECONSTRUCTIO N AND DEVELOPMENT OF EXISTING BUILDINGS UNDER APPROVED PL ANS IN THE ITA NO.4082/MUM/2014 ASHA K. RINGSHIA 13 CITY OF MUMBAI. PERHAPS THE PROBLEM IS THERE IN SOM E OTHER CITIES TOO. I, THEREFORE, PROPOSE TO RELAX THE COND ITION OF MINIMUM PLOT SIZE OF ONE ACRE IN THE CASE OF HOUSIN G PROJECTS, AS LONG AS THE PROJECTS ARE IMPLEMENTED IN ACCORDAN CE WITH A SCHEME FOR RECONSTRUCTION OR DEVELOPMENT APPROVED B Y THE CENTRAL OR STATE GOVERNMENT. 14. THUS, RIGOURS OF THE CONDITIONS ENUMERATED IN C LAUSES (A) AND (B) OF SECTION 80-IB, HAS BEEN RELAXED BY THE LEGIS LATURE TO ACHIEVE CERTAIN SOCIO ECONOMIC OBJECT AND, THEREFORE, PROV ISO TO SECTION 80-IB SHOULD BE GIVEN A LIBERAL INTERPRETATION SO A S TO NOT TO DEFEAT A GENUINE CLAIM FOR DEDUCTION BY A DEVELOPER WHO UN DERTAKES TO DEVELOP A HOUSING PROJECT IN A SLUM AREA UNDER THE SCHEME APPROVED BY THE CENTRAL OR STATE GOVT. THE CBDT WHI CH HAD ISSUED THE NOTIFICATION AFTER MORE THAN FIVE YEARS OF THE AMENDMENT, HAS PUT A TIME LIMIT OF THOSE HOUSING PROJECTS WHICH HA S BEEN APPROVED BY THE LOCAL AUTHORITY ON/OR AFTER 1ST APRIL 2004. SUCH A TIME LIMIT CAN DEFEAT THE BASIC PURPOSE OF THE PROVISO FOR WHI CH 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 AP PLICABLE, THEREFORE, SUCH A TIME LIMIT CANNOT BE IMPOSED BY W AY OF SUBORDINATE LEGISLATION. SUCH NOTIFICATION CAN ONLY CLARIFY THE STATUTORY PROVISIONS AND NOT OVER-RIDE THEM OR REST RICT THE OPERATION OF THE MAIN ENACTMENT. THEREFORE, IN OUR CONSIDERED OPINION, THE TIME LIMIT OF APPROVAL ON/OR AFTER 1ST APRIL 2004, WILL NOT BE APPLICABLE IN THE CASE OF THE PROVISO TO SECTION 80 IB(10). 15. MOREOVER, IN THE INSTANT CASE, THE APPROVAL WHI CH WAS GIVEN ON 4TH AUGUST 2003, WAS LOADED WITH LOT OF TERMS AND C ONDITIONS TO BE ITA NO.4082/MUM/2014 ASHA K. RINGSHIA 14 FULFILLED BEFORE THE COMMENCEMENT. IT WAS ONLY AFTE R SUCH TERMS AND CONDITIONS WERE FULFILLED, THE ASSESSEE WAS GIVEN T HE COMMENCEMENT CERTIFICATE ISSUED AFTER 1 ST APRIL 2004, I.E., ON 17TH 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 CONDITIONS ARE FULFILLED. IN THI S CASE, ONE CAN SAY THAT THE DATE OF COMMENCEMENT I.E., 17TH OCTOBER 20 04, CAN BE TAKEN AS THE DATE OF APPROVAL AS IT WAS FROM THIS D ATE THE APPROVAL GIVEN BY THE SRA BECOMES OPERATIVE. THUS, THE CONTE NTIONS OF THE LEARNED DEPARTMENTAL REPRESENTATIVE CANNOT BE SUSTA INED. 16. IN GROUND NO.2, THE REVENUE HAS CHALLENGED THA T THE DATE OF APPROVAL OF SRA SCHEME PROJECT IS 3RD JULY 2003, AN D IS NOT COVERED BY THE NOTIFICATION NO.2 OF 2011, WHICH WAS ISSUED TO CLARIFY THE EARLIER NOTIFICATION DATED 3RD AUGUST 2 010. SUCH A GROUND TAKEN BY THE DEPARTMENT IS WHOLLY MISCONCEIV ED AS THERE IS NO SUCH SCHEME DATED 3RD JULY 2003. THE SAID DATE O F 3RD JULY 2003, IS WHEN THE ASSESSEE HAS APPLIED BEFORE THE S RA 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 CBDT. THUS, THERE IS NO MERIT IN GROUND NO.2, TAKEN BY TH E REVENUE. 17. IN VIEW OF OUR ABOVE FINDINGS, WE DO NOT FIND A NY REASON TO DEVIATE FROM THE ULTIMATE FINDINGS GIVEN BY THE COM MISSIONER (APPEALS) AND, CONSEQUENTLY, THE SAME IS HEREBY CON FIRMED BY HOLDING THAT THE ASSESSEE IS ELIGIBLE FOR DEDUCTION UNDER SECTION 80- IB(10), FOR RS.1,47,11,573, IN RESPECT OF ITS DEVEL OPMENT PROJECT CARRIED OUT IN DHARAVI SLUM AREA, WHICH WAS A SCHEM E FRAMED BY ITA NO.4082/MUM/2014 ASHA K. RINGSHIA 15 MAHARASHTRA GOVT. AND DULY NOTIFIED BY THE CBDT. AC CORDINGLY, THE GROUNDS RAISED BY THE REVENUE ARE TREATED TO BE DIS MISSED. 2.2 IF THE OBSERVATION MADE IN THE ASSESSMENT ORDER, LEADING TO ADDITION MADE TO THE TOTAL INCOME, CONCLUSION DRAWN IN THE IMPUGNED ORDER, MATERIAL AVAILABLE ON RECORD, ASSER TIONS MADE BY THE LD. RESPECTIVE COUNSEL, IF KEPT IN JUXTAPOSITIO N AND ANALYZED, WE FIND THAT THE TRIBUNAL IN THE CASE OF ASSESSEE F OR ASSESSMENT YEAR 2007-08, VIDE AFORESAID ORDER DATED 12/09/2012 , IDENTICALLY, DELIBERATED UPON THE ISSUE AND FINALLY HELD THAT TH E ASSESSEE IS ELIGIBLE FOR DEDUCTION U/S 80IB(10) OF THE ACT. NO CONTRARY FACTS WERE BROUGHT TO OUR NOTICE BY EITHER SIDE IN RESPEC T OF DEVELOPMENT PROJECT CARRIED OUT IN DHARAVI SLUM AREA. FOLLOWIN G THE AFORESAID DECISION OF THE TRIBUNAL WHEREIN, THE CIRCULAR OF T HE BOARD REGULATION NO. 33(10) OF DC RULES FOR GREATER MUMBA I, 1991, READ WITH PROVISION OF NOTIFICATION NO. PB-4391/4080(A)/ UD-II(ROP)DT. 03/06/1992 ALONG WITH CONDITIONS THEREIN, NOTIFICAT ION NO. 2 OF 2011, DATED 05/01/2011, ISSUED BY CBDT, DECISION FR OM HONBLE APEX COURT IN CIT VS. ALOM EXTRUSION LTD.(2009) 319 ITR 306 (SC) AND ALLIED MOTORS P. LTD. VS. CIT (1997) 224 ITR 66 7 (SC), WERE CONSIDERED, THUS, WE FIND NO INFIRMITY, ON THIS IS SUE, IN THE ORDER OF THE LD.CIT(A). IT IS AFFIRMED. 3. THE NEXT GROUND RAISED BY THE REVENUE PERTAINS T O DELETING THE DISALLOWANCE TO RENT EXPENSES OF RS. 4,20,000/-, IG NORING THAT THE ASSESSEE PAID RENT TO CLOSE RELATIVES AND DID NOT P RODUCED THE DETAILS OF THE PREMISES TAKEN ON RENT, PURPOSE OF U TILIZATION OF THE PREMISES FOR BUSINESS PURPOSES AND GENUINENESS OF T HE TRANSACTION. ITA NO.4082/MUM/2014 ASHA K. RINGSHIA 16 3.1 DURING HEARING, LD. DR, ADVANCED ARGUMENTS WHI CH IS IDENTICAL TO THE GROUND RAISED. ON THE OTHER HAND T HE LD. COUNSEL FOR ASSESSEE DEFENDED THE CONCLUSION ARRIVED AT IN THE IMPUGNED ORDER. 3.2. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IF THE OBSERVATION MA DE IN THE ASSESSMENT ORDER, LEADING TO ADDITION MADE TO THE T OTAL INCOME, CONCLUSION DRAWN IN THE IMPUGNED ORDER, MATERIAL AV AILABLE ON RECORD, ASSERTIONS MADE BY THE LD. RESPECTIVE COUNS EL, IF KEPT IN JUXTAPOSITION AND ANALYZED. WE NOTE THAT BEFORE THE LD. CIT (A) AS WELL AS BEFORE THE EARLIER BENCH OF THIS TRIBUNAL, THE ASSESSEE TOOK THE PLEA THAT , EVEN IF, THE SAID EXPENSES ARE DISA LLOWED, THE ASSESSEE IS ELIGIBLE FOR DEDUCTION U/S 80 IB(10) ON ENHANCED INCOME FOR THE PROJECT AS THE SAID EXPENSES WORKED LAID AGAINST THE INCOME FROM THE ELIGIBLE PROJECT BY PLACING RELIANC E UPON THE DECISION IN LIBERTY INDIA LTD. (317ITR 218(SC) WHER EIN, THE HONBLE APEX COURT HELD THAT THE DEVICES ADOPTED TO REDUCED ON INFLATE THE PROFITS OF ELIGIBLE BUSINESS HAS TO BE REJECTED WHI LE CALCULATING DEDUCTION U/S 80IB. 3.3 WE FIND THAT, AS MENTIONED IN PARA 4.3 OF THE IMPUGNED ORDER, THAT DURING ASSESSMENT PROCEEDING THE DETAIL S OF PAYMENT OF RENT OF RS. 1,20,00/- IS TO SHRI. AMIT RINGSHIA AND SHRI. ADITYA RINGSHIA, WITH RESPECT TO ANDHERI OFFICE PREMISES A ND RS. 1,80,000/- TO SHRI. K.G. RINGSHIA (HUF) FOR OUR OFF ICE PREMISES IN VILE-PARLE WERE FILED BY THE ASSESSEE. THE PAYMENT OF RENT WAS DULY AUTHENTICATED BY RELEVANT DOCUMENTS. NO CONTRARY DE CISION OR FACTS WERE BROUGHT TO OUR NOTICE BY EITHER SIDE AND MORE ITA NO.4082/MUM/2014 ASHA K. RINGSHIA 17 SPECIFICALLY THE REVENUE. THUS, WE FIND ON INFIRMIT Y IN THE CONCLUSION DRAWN BY THE LD. CIT (A). IT IS AFFIRME D FINALLY APPEAL OF THE REVENUE IS DISMISSED. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LD. REPRESENTATIVES FROM BOTH SIDES AT THE CONCLUSION OF THE HEARING ON 03/12/2015. SD/- SD/- ( RAJENDRA ) (JOGINDER SINGH) '# / ACCOUNTANT MEMBER $# / JUDICIAL MEMBER # $ MUMBAI; ' DATED : 07/12/2015 CT|T %$&'()(*& / COPY OF THE ORDER FORWARDED TO : 1. ()*+ / THE APPELLANT 2. ,-*+ / THE RESPONDENT. 3. . . # /' ( () ) / THE CIT, MUMBAI. 4. . . # /' / CIT(A)- , MUMBAI 5. 12 ,' , . ()& ( 3 , # $ / DR, ITAT, MUMBAI 6. 4 5$ / GUARD FILE. / BY ORDER, -1)' ,' //TRUE COPY// / (DY./ASSTT. REGISTRAR) , # $ / ITAT, MUMBAI.