AKASH ENTERPRISE, THANE V. I.T.O. WARD-4(1), THANE

ITA 4489/MUM/2012

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 1304 (ITAT-MUMBAI)
• Duration Of Justice: 4 year(s) 9 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-04-2017
• Appeal Filed By: Assessee
• Bench Allotted: A
• Next Hearing Date: 22-11-2016
• Assessment Year: 2007-2008
• Appeal Filed On: 03-07-2012
• Court: TRIBUNAL
• Department Lawyers: RAJESH KUMAR YADAV
• Keywords: Question of law; Competent authority
• Section: 80IB

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.4489/MUM /2012 ASSESSMENT YEAR-2007-08 M/S AKASH ENTERPRISES, SHOP NO.27/A, BLDG. NO.1, AKASHGANGA APTS. SHRIPRASTHA COMPLEX, NALLASOPARA (W), TAL VASAI, DIST-THANE-401203 / VS. INCOME TAX OFFICER, WARD-4(1), 02 ND FLOOR QURESHI MANSION, GOKHALE ROAD, THANE PAN NO. AALFA4071C ( / ASSESSEE) ( / REVENUE) ITA NO.4929/MUM/2012 ASSESSMENT YEAR-2007-08 INCOME TAX OFFICER, WARD-4(1), 02 ND FLOOR, QURESHI MANSION, GOKHALE ROAD, THANE / VS. M/S AKASH ENTERPRISES, SHOP NO.27/A, BLDG. NO.1, AKASHGANGA APTS. SHRIPRASTHA COMPLEX, NALLASOPARA (W), TAL VASAI, DIST-THANE- 401203 PAN NO.AALFA4071C ( / REVENUE) ( / ASSESSEE) ITA NO.4489 & 4929/MUM/2012 M/S AKASH ENTERPRISES. 2 / ASSESSEE BY SHRI BHUPENDRA SHAH / REVENUE BY SHRI RAJESH KUMAR YADAV- DR / DATE OF HEARING : 20 /04/2017 /DATE OF ORDER: 27 /04/2017 / O R D E R PER JOGINDER SINGH (JUDICIAL MEMBER) THE ASSESSEE AS WELL AS REVENUE IS IN CROSS APPEAL AGAINST THE IMPUGNED ORDER DATED 07/05/2012 OF THE LD. FIRST APPELLATE AUTHORITY, THANE. 2. FIRST, WE SHALL TAKE UP THE APPEAL OF THE ASSESSEE IN ITA NO.4489/MUM/2012, WHEREIN, GROUND N O. 2 PERTAINS TO REOPENING THE ASSESSMENT U/S 147/148 OF THE ACT. DURING HEARING, THE LD. COUNSEL FOR THE AS SESSEE, SHRI BHUPENDRA SHAH, DID NOT PRESS THIS GROUND. SHR I RAJESH KUMAR YADAV, LD. DR, HAD NO OBJECTION TO THE REQUEST OF THE ASSESSEE, THEREFORE, THIS GROUND OF THE ASSESSEE IS DISMISSED AS NOT PRESSED. 3. THE ONLY GROUND REMAINED FOR CONSIDERATION IS WITH RESPECT TO DISALLOWING THE DEDUCTION OF RS.46,59,510/- U/S 80IB(10) OF THE INCOME TAX ACT, 1961 (HEREINAFTER THE ACT). THE CRUX OF THE ARGUMENT ADV ANCED ON BEHALF OF THE ASSESSEE IS THAT THE PROJECT OF TH E ASSESSEE WAS APPROVED ON 17/07/2003 AND THE ASSESSEE APPLIED FOR COMPLETION CERTIFICATE ON 06/07/2005. OUR ATTENTION WAS ITA NO.4489 & 4929/MUM/2012 M/S AKASH ENTERPRISES. 3 INVITED TO PAGE-84 OF THE PAPER BOOK. RELIANCE WAS PLACED UPON THE DECISION FROM HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS HINDUSTAN SAMUH AWAS LTD. (20 15) 62 TAXMAN.COM 175 (BOM.); 377 ITR 150 (BOM.), CIT V S SARKAR BUILDERS (2015) 57 TAXMAN.COM 313 (SUPREME COURT); 375 ITR 392(SUPREME COURT). 2.1. ON THE OTHER HAND, SHRI RAJESH KUMAR YADAV, LD. DR DEFENDED THE ADDITION MADE BY THE LD. ASSESS ING OFFICER BY PLACING RELIANCE UPON THE DECISION IN IT A NO.4929/MUM/2012. 2.2. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE FACTS , IN BRIEF, ARE THAT THE ASSESSEE IS IN THE BUSINESS AS A BUILDER AND DEVELOPER, CONSTRUCTED A PROJECT IN SHRIPRASTHA LAYOUT, VILLAGE NALLASOPARA (W), VASAI. THE ASSESSE E DEVELOPED A BUILDING NAMES AS AKASH TOWER. THE ASSE SSEE CLAIMED DEDUCTION OF RS.22,74,167/- U/S 80IB(10) OF THE ACT. THE ASSESSEE FURNISHED THE DETAILS, AS REQUIRE D BY THE ASSESSING OFFICER, LIKE SIZE OF PLOT OF LAND, APPRO VAL OF THE HOUSING PROJECT THE COMPETENT AUTHORITY, BUILDING P LAN, DATE OF COMPLETION, ETC. THE ASSESSEE CONSTRUCTED T HE HOUSING PROJECT ON SURVEY NO.90 AND 178. THE PROJEC T CONSIST OF GROUND PLUS SEVEN FLOORS, HAVING FOUR WI NGS (A,B,C & D), 33 SHOPS AND 114 FLATS. THE SANCTION/P LAN WAS APPROVED VIDE LETTER DATED 17/07/2003. THE COMMENCEMENT CERTIFICATE WAS AMENDED SUBSEQUENTLY. WE FIND THAT THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE ITA NO.4489 & 4929/MUM/2012 M/S AKASH ENTERPRISES. 4 OF HINDUSTAN SAMUH AWAS LTD. (SUPRA) VIDE ORDER DAT ED 02/02/2015 DECIDED THE ISSUE. LIKEWISE, THE HON'BLE APEX COURT IN THE CASE OF SARKAR BUILDERS (SUPRA) VIDE O RDER DATED 15/05/2015 HELD AS UNDER:- 2. NO DOUBT THE ASSESSEES/RESPONDENTS IN ALL THESE APPEALS ARE DIFFERENT AND EVEN ASSESSMENT YEARS ARE DIFFERENT. BUT THE QU ESTION OF LAW WHICH IS RAISED BY THE INCOME TAX AUTHORITIES (HEREINAFTER R EFERRED TO AS THE 'REVENUE') IS IDENTICAL. THE ASSESSEES ARE SUBJECT TO THE JURISDICTION OF THE DIFFERENT HIGH COURTS, ALL OF WHOM HAD CLAIMED THE BENEFIT OF SECTION 80IB OF THE INCOME TAX ACT ('ACT' FOR SHORT), NAMEL Y, DEDUCTION IN RESPECT OF PROFITS AND GAINS ON THE GROUND THAT THEIR CASES WERE COVERED BY SUB- SECTION (10) OF SECTION 80IB WHICH PROVIDES FOR DED UCTION OF 100% OF PROFITS IN THE CASE OF AN UNDERTAKING DEVELOPING AN D BUILDING HOUSING PROJECTS WHEN SUCH PROFITS ARE DERIVED IN THE PREVI OUS YEAR RELEVANT TO ANY ASSESSMENT YEAR FROM SUCH HOUSING PROJECTS, PROVIDE D THE CONDITIONS CONTAINED IN THE SAID SUB-SECTION ARE SATISFIED. HI GH COURTS HAVE TAKEN THE SAME VIEW HOLDING THAT THESE ASSESSEES WOULD BE ENT ITLED TO THE DEDUCTION UNDER SECTION 80IB(10) OF THE ACT. WE MAY ALSO POIN T OUT AT THIS STAGE ITSELF THAT THOUGH SECTION 80IB HAS BEEN ON THE STA TUTE BOOK FOR QUITE SOME TIME, A NEW SECTION 80IB HAD BEEN INTRODUCED BY THE FINANCE ACT, 1999 W.E.F. 01.04.2000. ALL THESE CASES ARE COVERED BY T HE SAID SECTION, AS INTRODUCED. HOWEVER, INSOFAR AS SUB-SECTION (10) IS CONCERNED, WITH WHICH WE ARE DIRECTLY CONCERNED, THERE HAVE BEEN AMENDMEN TS IN THAT PROVISION FROM TIME TO TIME. WE ARE CONCERNED WITH THE AMENDM ENT TO THE SAID SUB- SECTION CARRIED OUT BY FINANCE NO.2 ACT, 2004 W.E.F . 01.04.2005. IN ALL THESE CASES, THOUGH THE HOUSING PROJECTS WERE SANCT IONED MUCH BEFORE THE SAID AMENDMENT BUT HAVE BEEN COMPLETED AFTER 01.04. 2005 WHEN AMENDED PROVISION HAS COME INTO OPERATION. IT IS ALSO NOT I N DISPUTE THAT THE AMENDMENT IS PROSPECTIVE IN NATURE. INTERESTINGLY, WHEN THE HOUSING PROJECT WAS APPROVED BY A LOCAL AUTHORITY, WHICH IS THE REQUIREMENT UNDER SUB-SECTION (10) OF SECTION 80IB, AS ON THAT DATE, THE CONDITIONS STIPULATED IN THE SAID SUB-SECTION WERE MET BY THE ASSESSEES. HOWEVER, CONDITION IN CLAUSE (D) WHICH WAS LAID DOWN FOR THE FIRST TIME B Y THE AMENDMENT MADE EFFECTIVE FROM 01.04.2005 IS NOT FULFILLED. IN THIS SCENARIO, THE QUESTION IS AS TO WHETHER THE NEW CONDITIONS MENTIONED IN THE A MENDED PROVISION HAVE ALSO TO BE FULFILLED ONLY BECAUSE THE HOUSING PROJECTS IN QUESTION, THOUGH STARTED BEFORE 01.04.2005, WERE COMPLETED AF TER THE SAID DATE. THE QUESTION OF LAW, THAT ARISES FOR DISCUSSION THAT NE EDS TO BE ANSWERED IS THUS COMMON IN ALL THESE APPEALS AND CAN BE FORMULATED A S UNDER: 'WHETHER SECTION 80-IB(10)(D) OF THE INCOME TAX ACT , 1961 APPLIES TO A HOUSING PROJECT APPROVED BEFORE 31.03.2005 BUT COMP LETED ON OR AFTER 01.04.2005?' 3. AS POINTED OUT ABOVE, SUB-SECTION (10) STIPULATE S CERTAIN CONDITIONS WHICH ARE TO BE SATISFIED IN ORDER TO AVAIL THE BEN EFIT OF THE SAID PROVISION. ITA NO.4489 & 4929/MUM/2012 M/S AKASH ENTERPRISES. 5 FURTHER, IT IS ALSO CLEAR THAT THE BENEFIT IS AVAIL ABLE TO THOSE UNDERTAKINGS WHICH ARE DEVELOPING AND BUILDING 'HOUSING PROJECTS ' APPROVED BY A LOCAL AUTHORITY. THUS, THIS SECTION IS APPLICABLE IN RESP ECT OF HOUSING PROJECTS AND NOT COMMERCIAL PROJECTS. AT THE SAME TIME, WE A RE CONSCIOUS OF THE FACT THAT EVEN IN THE HOUSING PROJECTS, THERE WOULD BE SOME AREA FOR COMMERCIAL PURPOSES AS CERTAIN SHOPS AND COMMERCIAL ESTABLISHMENTS ARE NEEDED EVEN IN A HOUSING PROJECTS. THAT HAS BEEN JU DICIALLY RECOGNISED WHILE INTERPRETING THE PROVISION THAT EXISTED BEFOR E 01.04.2005 AND THERE WAS NO LIMIT FIXED IN SECTION 80IB(10) REGARDING TH E BUILT-UP AREA TO BE USED FOR COMMERCIAL PURPOSE IN THE SAID HOUSING PRO JECT. AS WOULD BE NOTICED LATER, THE EXTENT TO WHICH SUCH COMMERCIAL AREA COULD BE CONSTRUCTED WAS AS PER THE LOCAL LAWS UNDER WHICH L OCAL AUTHORITY GAVE THE SANCTION TO THE HOUSING PROJECT. HOWEVER, VIDE CLAU SE (D), WHICH WAS INSERTED BY THE AFORESAID AMENDMENT AND MADE EFFECT IVE FROM 01.04.2005, IT WAS STIPULATED THAT THE BUILT-UP AREA OF THE SHO PS AND OTHER COMMERCIAL ESTABLISHMENTS IN THE HOUSING PROJECTS WOULD NOT EX CEED 5% OF THE AGGREGATE BUILT-UP AREA OF THE HOUSING PROJECT OR 2 000 SQ. FEET, WHICHEVER IS LESS (THERE IS A FURTHER AMENDMENT WHEREBY 5% IS REDUCED TO 3% AND INSTEAD OF THE WORDS '2000 SQ. FEET WHICHEVER IS LE SS' THE WORDS '5000 SQ. FEET, WHICHEVER IS HIGHER' HAVE BEEN SUBSTITUTED. H OWEVER, WE ARE NOT CONCERNED WITH THIS AMENDMENT). THE QUESTION, THUS, THAT ARISES FOR CONSIDERATION I S AS TO WHETHER IN RESPECT OF THOSE HOUSING PROJECTS WHICH FINISHED ON OR AFTE R 01.04.2005, THOUGH SANCTIONED AND STARTED MUCH EARLIER, THE AFORESAID STIPULATION CONTAINED IN CLAUSE (D) ALSO HAS TO BE SATISFIED. ALL THE HIGH C OURTS HAVE HELD THAT SINCE THIS AMENDMENT IS PROSPECTIVE AND HAS COME INTO EFF ECT FROM 01.04.2005, THIS CONDITION WOULD NOT APPLY TO THOSE HOUSING PRO JECTS WHICH HAD BEEN SANCTIONED AND STARTED EARLIER EVEN IF THEY FINISHE D AFTER 01.04.2005. 4. AS THERE IS A COMMONALITY OF ISSUE AND THE JUDGM ENTS OF THE VARIOUS HIGH COURTS HAVE SPOKEN IN ONE VOICE WHICH ARE QUES TIONED ON IDENTICAL GROUNDS BY THE APPELLANT REVENUE, ALL THESE APPEALS WERE HEARD ANALOGOUSLY AND BY THIS JUDGMENT, WE PROPOSE TO ANS WER THE QUESTION OF LAW INVOLVED AND AS FORMULATED ABOVE IN ORDER TO GI VE QUIETUS TO THIS SURGING DEBATE. 5. BEFORE WE COME TO THE GRIP OF THE AFORESAID CENT RAL ISSUE, IT WOULD BE OF SOME RELEVANCE TO MENTION CERTAIN OTHER DISPUTES WH ICH HAD ARISEN BETWEEN THE REVENUE AND THE ASSESSEES/DEVELOPERS OF THE HOUSING PROJECTS CONCERNING INTERPRETATION OF SUB-SECTION (10) OF SE CTION 80IB. THAT DISPUTE PRIMARILY RELATED TO THE MEANING THAT IS TO BE ASSI GNED TO 'HOUSING PROJECTS' PRIOR TO 01.04.2005 BECAUSE OF THE REASON THAT THER E WAS NO CLAUSE (D) EARLIER AND THERE IS NO EXPRESS PROVISION IN THIS S UB-SECTION DEALING WITH THE CONSEQUENCE OF HAVING A COMMERCIAL ESTABLISHMEN T WITHIN A HOUSING PROJECT. ONE OF THE REQUIREMENTS CONTAINED IN SUB-S ECTION (10) IS THAT IN ORDER TO BE ENTITLED TO HAVE THE DEDUCTION UNDER TH IS PROVISION, HOUSING PROJECT IS TO BE APPROVED BY A LOCAL AUTHORITY. IT IS A MATTER OF COMMON KNOWLEDGE THAT THERE ARE MUNICIPAL ACTS OF SPECIFIC LOCAL ACTS GOVERNING THE CONSTRUCTION OF BUILDINGS, COMMERCIAL AS WELL A S RESIDENTIAL, IN EVERY ITA NO.4489 & 4929/MUM/2012 M/S AKASH ENTERPRISES. 6 STATE. FOR UNDERTAKING ANY SUCH CONSTRUCTION AUTHOR ITY, IT IS NECESSARY TO HAVE THE BUILDING PLANS SANCTIONED FROM THE LOCAL A UTHORITIES IN ACCORDANCE WITH THE PROVISIONS OF SUCH LOCAL ACTS. THERE ARE L OCAL LAWS RELATING TO THE DEVELOPMENT AND BUILDING OF 'HOUSING PROJECTS' BY T HE DEVELOPERS/BUILDERS WHICH ALSO NEED A SANCTION FROM THE LOCAL AUTHORITI ES AS PER THE LAW PREVAILING IN THAT PARTICULAR AREA WHERE THE HOUSIN G PROJECT IS DEVELOPED. SUCH LOCAL LAWS, WHILE SANCTIONING THE HOUSING PROJ ECTS, ALSO PERMIT USE OF CERTAIN AREA IN THE HOUSING PROJECTS IN A SPECIFIED MANNER FOR SHOPPING AND COMMERCIAL PURPOSES AS WELL. THE QUESTION THAT HAD ARISEN WAS - WHETHER DEDUCTION UNDER SECTION 80IB(10) WOULD BE ADMISSIBL E WHEN COMMERCIAL ESTABLISHMENT IS CONSTRUCTED IN A HOUSING PROJECT? THAT IS, WHETHER IT WOULD STILL RETAIN THE CHARACTER OF HOUSING PROJECT WITHIN THE MEANING OF THIS PROVISION. THE BOMBAY HIGH COURT IN THE CASE O F CIT V. BRAHMA ASSOCIATES [2011] 333 ITR 289/197 TAXMAN 459/9 TAXMANN.COM 289 HELD THAT SINCE THE EXPRESSION 'HOUSING PROJECT' IS NOT DEFINED UNDER THE ACT, THE INTENTION OF PARLIAMENT WAS THAT WHATEVER IS APPROV ED BY THE LOCAL AUTHORITY UNDER THE EXTENT RULES AS A HOUSING PROJE CT WOULD BE TREATED AS 'HOUSING PROJECT' FOR THE PURPOSE OF THIS SECTION, INASMUCH AS SUB-SECTION (10) ITSELF MANDATES THAT HOUSING PROJECT IS TO BE APPROVED BY A LOCAL AUTHORITY AS SUCH AN APPROVAL IS A NECESSARY CONDIT ION FOR CLAIMING THE DEDUCTION UNDER THIS PROVISION. WHEN THE LOCAL AUTH ORITY HAS APPROVED A HOUSING PROJECT, WHETHER 'RESIDENTIAL' OR 'RESIDENT IAL CUM COMMERCIAL' THE ASSESSEE IS ENTITLED TO A DEDUCTION ON THE ENTIRE P ROFIT INCLUDING THE COMMERCIAL ESTABLISHMENTS PORTION. WE WOULD ALSO LI KE TO POINT OUT THAT FOLLOWING THIS JUDGMENT OF THE BOMBAY HIGH COURT, O R INDEPENDENTLY, OTHER HIGH COURTS HAD ALSO TAKEN SIMILAR VIEW. AGAI NST THE AFORESAID JUDGMENTS, SPECIAL LEAVE PETITIONS WERE FILED BY TH E REVENUE IN THIS COURT. ALL THESE SLPS HAVE BEEN DISPOSED OF BY THIS COURT VIDE ORDER DATED 29.04.2015, WE WOULD LIKE TO REPRODUCE THE SAID ORD ER IN ENTIRETY HEREUNDER: 'ALL THESE SPECIAL LEAVE PETITIONS ARE FILED BY THE REVENUE/DEPARTMENT OF INCOME TAX AGAINST THE JUDGMENTS RENDERED BY VARIOU S HIGH COURTS DECIDING IDENTICAL ISSUE WHICH PERTAINS TO THE DEDU CTION UNDER SECTION 80IB(10) OF THE INCOME TAX ACT, AS APPLICABLE PRIOR TO 01.04.2005. WE MAY MENTION AT THE OUTSET THAT ALL THE HIGH COURTS HAVE TAKEN IDENTICAL VIEW IN ALL THESE CASES HOLDING THAT THE DEDUCTION UNDER THE AFORESAID PROVISION WOULD BE ADMISSIBLE TO A 'HOUSING PROJECT '. ALL THE ASSESSEES HAD UNDERTAKEN CONSTRUCTION PROJE CTS WHICH WERE APPROVED BY THE MUNICIPAL AUTHORITIES/LOCAL AUTHORI TIES AS HOUSING PROJECTS. ON THAT BASIS, THEY CLAIMED DEDUCTION UNDER SECTION 80IB(10) OF THE ACT. THIS PROVISION AS IT STOOD AT THAT TIME, I.E., PRIO R TO 01.04.2005 READS AS UNDER: SECTION 80IB(10) [AS IT STOOD PRIOR TO 01.04.2005] '(10) THE AMOUNT OF PROFITS IN CASE OF AN UNDERTAKI NG DEVELOPING AND BUILDING HOUSING PROJECTS APPROVED BEFORE THE 31ST DAY OF MARCH, 2005 BY A LOCAL AUTHORITY, SHALL BE HUNDRED PER CENT OF THE PROFITS DERIVED IN ANY ITA NO.4489 & 4929/MUM/2012 M/S AKASH ENTERPRISES. 7 PREVIOUS YEAR RELEVANT TO ANY ASSESSMENT YEAR FROM SUCH HOUSING PROJECT IF, ( A ) SUCH UNDERTAKING HAS COMMENCE D OR COMMENCES DEVELOPMENT AND CONSTRUCTION OF THE HOUSING PROJECT ON OR AFTER THE 1ST DAY OF OCTOBER, 1998; ( B ) THE PROJECT IS ON THE SIZE OF A PLOT OF LAND WHICH HAS A MINIMUM AREA OF ONE CRORE; AND ( C ) THE RESIDENTIAL UNIT HAS A MAXIMUM BUILT-UP A REA OF ONE THOUSAND SQUARE FEET WHERE SUCH RESIDENTIAL UNIT IS SITUATED WITHIN THE CITIES OF DELHI OR MUMBAI OR WITHIN TWENTY- FIVE KILOMETRES FROM THE MUNICIPAL LIMITS OF THESE CITIES AND ONE THOUSAND AND FIVE HUNDRED SQUA RE FEET AT ANY OTHER PLACE.' HOWEVER, THE INCOME TAX AUTHORITIES REJECTED THE CL AIM OF DEDUCTION ON THE GROUND THAT THE PROJECTS WERE NOT 'HOUSING PROJECT' INASMUCH AS SOME COMMERCIAL ACTIVITY WAS ALSO UNDERTAKEN IN THOSE PR OJECTS. THIS CONTENTION OF THE REVENUE IS NOT ACCEPTED BY THE INCOME TAX AP PELLATE TRIBUNAL AS WELL AS THE HIGH COURT IN THE IMPUGNED JUDGMENT. TH E HIGH COURT INTERPRETED THE EXPRESSION 'HOUSING PROJECT' BY GIV ING GRAMMATICAL MEANING THERETO AS HOUSING PROJECT IS NOT DEFINED U NDER THE INCOME TAX ACT INSOFAR AS THE AFORESAID PROVISION IS CONCERNED . SINCE SUB-SECTION (10) OF SECTION 80IB VERY CATEGORICALLY MENTIONED THAT S UCH A PROJECT WHICH IS UNDERTAKEN AS HOUSING PROJECT IS APPROVED BY A LOCA L AUTHORITY, ONCE THE PROJECT IS APPROVED BY THE LOCAL AUTHORITY IT IS TO BE TREATED AS THE HOUSING PROJECT. WE MAY ALSO POINT OUT THAT THE HIGH COURT HAD MADE OBSERVATIONS IN THE CONTEXT OF DEVELOPMENT CONTROL REGULATIONS ( HEREINAFTER REFERRED TO AS 'DCRS' IN SHORT) UNDER WHICH THE LOCAL AUTHORITY SANCTIONS THE HOUSING PROJECTS AND NOTED THAT IN THESE DCRS ITSELF, AN EL EMENT OF COMMERCIAL ACTIVITY IS PROVIDED BUT THE TOTAL PROJECT IS STILL TREATED AS HOUSING PROJECT. ON THE BASIS OF THIS DISCUSSION, AFTER MODIFYING SO ME OF THE DIRECTIONS GIVEN BY THE ITAT, THE CONCLUSIONS WHICH ARE ARRIVE D AT BY THE HIGH COURT ARE AS FOLLOWS: '30. IN THE RESULT, THE QUESTIONS RAISED IN THE APP EAL ARE ANSWERED THUS: ( A ) UPTO 31/3/2005 (SUBJECT TO FULFILLING OTHER CONDITI ONS), DEDUCTION UNDER SECTION 80IB(10) IS ALLOWABLE TO HOUSING PROJECTS A PPROVE D BY THE LOCAL AUTHORITY HAVING RESIDENTIAL UNITS WITH COMMERCIAL USER TO THE EXTENT PERMITTED UNDER DC RULES/REGULATIONS FRAMED BY THE RESPECTIVE LOCAL AUTHORITY. ( B ) IN SUCH A CASE, WHERE THE COMMERCIAL USER PERMITTED BY THE LOCAL AUTHORITY IS WITHIN THE LIMITS PRESCRIBED UNDER THE DC RULES/REGULATION , THE DEDUCTION UNDER SECTION 80IB(10) UPTO 31/3/2005 WOU LD BE ALLOWABLE IRRESPECTIVE OF THE FACT THAT THE PROJECT IS APPROV ED AS 'HOUSING PROJECT' OR 'RESIDENTIAL PLUS COMMERCIAL'. ( C ) IN THE ABSENCE O F ANY PROVISIONS UNDER THE INCOME TAX ACT, THE TRIB UNAL ITA NO.4489 & 4929/MUM/2012 M/S AKASH ENTERPRISES. 8 WAS NOT JUSTIFIED IN HOLDING THAT UPTO 31/3/2005 DE DUCTION UNDER SECTION 80IB(10) WOULD BE ALLOWABLE TO THE PROJECTS APPROVE D BY THE LOCAL AUTHORITY HAVING RESIDENTIAL BUILDING WITH COMMERCI AL USER UP TO 10% OF THE TOTAL BUILT-UP AREA OF THE PLOT. ( D ) SINCE DEDUCTIONS UNDER SECTION 80IB(10) IS ON THE P ROFITS DERIVED FROM THE HOUSING PROJECTS APPROVED BY THE LOCAL AUTHORITY AS A WHOLE, THE TRIBUNAL WAS NOT JUSTIFIED IN RESTRICTING SECTION 80IB(10) D ED UCTION ONLY TO A PART OF THE PROJECT. HOWEVER, IN THE PRESENT CASE, SINCE TH E ASSESSEE HAS ACCEPTED THE DECISION OF THE TRIBUNAL IN ALLOWING SECTION 80 IB(10) DEDUCTION TO A PART OF THE PROJECT, WE DO NOT DISTURB THE FINDINGS OF THE TRIBUNAL IN THAT BEHALF. ( E ) CLAUSE (D) INSERTED TO SECTION 80IB(10) WITH EFFECT FROM 1/4/2005 IS PROSPECTIVE AND NOT RETROSPECTIVE AND HENCE CANNOT BE APPLIED FOR THE PERIOD PRIOR TO 1/4/2005.' WE ARE IN AGREEMENT WITH THE AFORESAID ANSWERS GIVE N BY THE HIGH COURT TO THE VARIOUS ISSUES. WE MAY ONLY CLARIFY THAT INS OFAR AS ANSWER AT PARA (A) IS CONCERNED, IT WOULD MEAN THOSE PROJECTS WHIC H ARE APPROVED BY THE LOCAL AUTHORITIES AS HOUSING PROJECTS WITH COMMERCI AL ELEMENT THEREIN. THERE WAS MUCH DEBATE ON THE ANSWER GIVEN IN PARA ( B) ABOVE. IT WAS ARGUED BY MR. GURUKRISHNA KUMAR, LEARNED SENIOR COU NSEL, THAT A PROJECT WHICH IS CLEARED AS 'RESIDENTIAL PLUS COMMERCIAL' P ROJECT CANNOT BE TREATED AS HOUSING PROJECT AND THEREFORE, THIS DIRE CTION IS CONTRARY TO THE PROVISIONS OF SECTION 80(I)(B)(10) OF THE ACT. HOWE VER, READING THE DIRECTION IN ITS ENTIRETY AND PARTICULARLY THE FIRS T SENTENCE THEREOF, WE FIND THAT COMMERCIAL USER WHICH IS PERMITTED IS IN THE R ESIDENTIAL UNITS AND THAT TOO, AS PER DCR. EXAMPLES GIVEN BEFORE US BY T HE LEARNED COUNSEL FOR THE ASSESSEE WAS THAT SUCH COMMERCIAL USER TO S OME EXTENT IS PERMITTED TO THE PROFESSIONALS LIKE DOCTORS, CHARTE RED ACCOUNTANTS, ADVOCATES, ETC., IN THE DCRS ITSELF. THEREFORE, WE CLARIFY THAT DIRECTION (B) IS TO BE READ IN THAT CONTEXT WHERE THE PROJECT IS PREDOMINANTLY HOUSING/RESIDENTIAL PROJECT BUT THE COMMERCIAL ACTI VITY IN THE RESIDENTIAL UNITS IS PERMITTED. WITH THE AFORESAID CLARIFICATIO N, WE DISPOSE OF ALL THESE SPECIAL LEAVE PETITIONS.' 6. THE REASON FOR RECAPITULATING THE AFORESAID EVEN TS PERTAINING TO THE EARLIER LITIGATION IS THAT BEFORE 01.04.2005, THE L EGAL POSITION WAS THAT ONCE THE PROJECT IS SANCTIONED BY THE LOCAL AUTHORI TY AS 'HOUSING PROJECT', THE EXTENT OF AREA SANCTIONED FOR SHOPS AND COMMERC IAL ESTABLISHMENTS IN THE SAID HOUSING PROJECT WAS IMMATERIAL AND HAD NO BEARING. THUS, IRRESPECTIVE OF THE SAID OF AREA WHERE SHOPS AND CO MMERCIAL ESTABLISHMENTS WERE PERMITTED BY THE LOCAL AUTHORIT Y IN A HOUSING PROJECT, IT WAS STILL TREATED AS HOUSING PROJECT AND FURTHER THAT WHILE GRANTING 100% DEDUCTIONS, THE AREA COVERED BY SHOPS AND COMM ERCIAL ESTABLISHMENTS WAS ALSO INCLUDIBLE. THIS POSITION H AS CHANGED WITH THE INSERTION OF CLAUSE (D) TO SUB-SECTION (10). AS PER THE AMENDMENT CARRIED OUT AND MADE EFFECTIVE FROM 01.04.2005, EVEN IF THE LOCAL AUTHORITY HAD ITA NO.4489 & 4929/MUM/2012 M/S AKASH ENTERPRISES. 9 SANCTIONED LARGER AREA FOR SHOPS AND COMMERCIAL EST ABLISHMENT, THE BENEFIT OF SECTION 80IB(10) WOULD NOT BE ADMISSIBLE TO THESE ASSESSEES/DEVELOPERS IN CASE THE AREA UTILISED FOR SHOPS AND COMMERCIAL ESTABLISHMENT EXCEEDED 5% OF THE AGGREGATE BUILT-UP AREA OF THE HOUSING PROJECT OR 2000 SQ. FEET, WHICHEVER IS LESS. 7. IN THE AFORESAID SCENARIO, WE REVERT BACK TO THE QUESTION THAT IS TO BE ANSWERED. WE HAVE ALREADY POINTED OUT THAT THE PART IES ARE AD IDEM THAT THE AMENDMENT IS PROSPECTIVE IN NATURE AND, THEREFO RE, IT OPERATES FROM 01.04.2005. WE HAVE ALSO MENTIONED THAT IN THE INST ANT APPEALS, ALL THESE ASSESSEES HAD GOT THE HOUSING PROJECTS SANCTIONED P RIOR TO 01.04.2005 AND THE CONSTRUCTION OF THE SAID HOUSING PROJECT ALSO S TARTED BEFORE 01.04.2005. ALL OTHER CONDITIONS MENTIONED NAMELY T HE DATE BY WHICH APPROVAL WAS TO BE GIVEN AND THE DATES BY WHICH THE PROJECTS WERE TO BE COMPLETED AS ON THE DATE WHEN THE PROJECT WAS SANCT IONED, ARE ALSO MET BY THE ASSESSEES. NOTWITHSTANDING THIS POSITION, TH E ARGUMENT OF MR. S. GURUKRISHNA KUMAR, LEARNED SENIOR COUNSEL APPEARING FOR THE REVENUE IS THAT AMENDMENT W.E.F. 01.04.2005 IS RETROACTIVE EVE N IF NOT RETROSPECTIVE. HE HAS, THUS, ENDEAVOURED TO DRAW A FINE DISTINCTIO N BETWEEN THE RETROACTIVE NATURE OF AMENDMENT IN CONTRAST WITH RE TROSPECTIVITY OF A PROVISION. HE ARGUED THAT ONCE THE PROJECT IS FINAN CED AFTER 01.04.2005 AND ON THE COMPLETION OF THE SAID PROJECT, A PARTIC ULAR ASSESSEE HAS EARNED THE INCOME WHICH IS SHOWN BY THE ASSESSEE IN A PART ICULAR ASSESSMENT YEAR, IT IS THAT ASSESSMENT YEAR WHICH WOULD BE THE DETERMINATIVE FACTOR AND THE LAW PREVAILING ON THE DATE RELEVANT TO THE ASSESSMENT YEAR WILL HAVE TO BE APPLIED. ON THAT BASIS, IT WAS ARGUED TH AT SINCE THE ASSESSMENT YEARS ARE POST 01.04.2005, CLAUSE (D) OF SUB-SECTIO N (10) OF SECTION 80IB OF THE ACT GETS ATTRACTED. IN SUPPORT OF THIS PLEA, HE REFERRED TO THE JUDGMENT OF THIS COURT IN CIT V. GOLD COIN HEALTH FOOD (P.) LTD. [2008] 304 ITR 308/172 TAXMAN 386 AND, PARTICULARLY, THE D ISCUSSION CONTAINED IN PARAS 9 AND 16 WHICH ARE REPRODUCED HEREUNDER: '9. IN RELIANCE JUTE AND INDUSTRIES LTD. V . CIT [1980] 1 SCC 139, IT WAS OBSERVED BY THIS COURT THAT THE LAW TO BE APPLIED I N INCOME TAX ASSESSMENTS IS THE LAW IN FORCE IN THE ASSESSMENT Y EAR UNLESS OTHERWISE PROVIDED EXPRESSLY OR BY NECESSARY IMPLICATION. ** ** ** 16. THE LAW IS WELL SETTLED THAT THE APPLICABLE PRO VISION WOULD BE THE LAW AS IT EXISTED ON THE DATE OF THE FILING OF THE RETU RN. IT IS OF RELEVANCE TO NOTE THAT WHEN ANY LOSS IS RETURNED IN ANY RETURN IT NEE D NOT NECESSARILY BE THE LOSS OF THE PREVIOUS YEAR CONCERNED. IT MAY ALSO IN CLUDE CARRIED-FORWARD LOSS WHICH IS REQUIRED TO BE SET UP AGAINST FUTURE INCOME UNDER SECTION 72 OF THE ACT. THEREFORE, THE APPLICABLE LAW ON THE DA TE OF FILING OF THE RETURN CANNOT BE CONFINED ONLY TO THE LOSSES OF THE PREVIO US ACCOUTING YEARS.' 8. HE ALSO REFERRED TO THE DECISION IN THE CASE OF KARIMTHARUVI TEA ESTATE LTD. V. STATE OF KERALA [1966] 60 ITR 262 (SC) WHICH IS TO THE SAME EFFECT. ITA NO.4489 & 4929/MUM/2012 M/S AKASH ENTERPRISES. 10 9. MR. J.D. MISTRY, LEARNED SENIOR COUNSEL WHO APPE ARED ON BEHALF OF THE ASSESSEES IN SOME OF THESE APPEALS EMPHATICALLY COU NTERED THE AFORESAID ARGUMENTS. IN THE FIRST INSTANCE, HE POINTED OUT TH AT THIS ARGUMENT OF RETROACTIVITY WAS NOT EVEN RAISED BY THE REVENUE IN THE HIGH COURTS OR BEFORE THE LOWER FORUM OR EVEN IN THE SPECIAL LEAVE PETITIONS FILED IN THIS COURT. HE FURTHER SUBMITTED THAT IT WAS NECESSARY T O KEEP THE OBJECTIVE OF THE AMENDMENT IN MIND WHICH WOULD CLEARLY EVINCE TH AT THE CONDITIONS IN CLAUSE (D) COULD NOT BE APPLIED IN RESPECT OF THOSE PROJECTS WHICH HAD BEEN SANCTIONED AND COMMENCED PRIOR TO 01.04.2005. HE FU RTHER ARGUED THAT VESTED RIGHTS HAD ACCRUED IN FAVOUR OF SUCH PERSONS WHICH COULD NOT BE TAKEN AWAY BY THE AMENDMENT. HE ALSO ADVANCED VARIO US REASONS, AS WOULD BE NOTED LATER, NECESSITATING THE APPROACH AS TO WHY THE PRINCIPLE OF TAX LAW THAT THE LAW IN FORCE IN THE ASSESSMENT YEA R IS TO BE APPLIED, INSISTING THAT IT WAS A CASE WHERE DEPARTURE WAS NE EDED AND SUCH A DEPARTURE IS RECOGNISED IN CERTAIN CIRCUMSTANCES, B Y THE COURTS. HE RELIED UPON THE JUDGMENTS OF THIS COURT IN CIT V. SHAH SADIQ & SONS [1987] 166 ITR 102/31 TAXMAN 498 AND CIT V. VATIKA TOWNSHIP (P.) LTD. [2014] 367 ITR 466/227 TAXMAN 121/49 TAXMANN.COM 249 (SC) SENI OR COUNSEL WHO APPEARED FOR OTHER ASSESSEES ARGUED ON THE SAME LIN ES DRAWING OUR ATTENTION TO THE REASONS WHICH ARE GIVEN BY THE HIG H COURTS IN THE IMPUGNED JUDGMENTS AND SUPPORTING THOSE REASONS. 10. WE HAVE GIVEN OUR DUE CONSIDERATION TO THE RESP ECTIVE SUBMISSIONS. 11. AS POINTED OUT ABOVE, THE JUDGMENT PRONOUNCED B Y THE BOMBAY HIGH COURT IN BRAHMA ASSOCIATES CASE ( SUPRA ) HAS ALREADY BEEN UPHELD BY THIS COURT ON THE INTERPRETATION GIVEN TO THE EXPRESSION 'HOUSING PROJECT' OCCURRING IN SUB-SECTION (10) OF SECTION 80IB OF TH E ACT. INTERESTINGLY, IN THE BATCH OF APPEALS DECIDED BY T HE HIGH COURT IN THAT VERY JUDGMENT, THE ISSUE WITH WHICH WE ARE CONCERNE D WAS ALSO TAKEN UP. THE REVENUE HAD ARGUED THAT CLAUSE (D) INSERTED WIT H EFFECT FROM 01.04.2005 SHOULD BE APPLIED RETROSPECTIVELY, WHICH ARGUMENT WAS REPELLED BY THE HIGH COURT. THEREFORE, FOR BETTER U NDERSTANDING, WE WOULD LIKE TO BEGIN OUR DISCUSSION WITH THE MEANING GIVEN TO 'HOUSING PROJECT' ALONG WITH THE ISSUE OF RETROSPECTIVITY OF CLAUSE ( D), AS RAISED BY THE REVENUE, WHICH WAS DEALT WITH BY THE HIGH COURT AND REPELLED. THAT PORTION OF THE DISCUSSION CONTAINED IN THE HIGH COU RT JUDGMENT, WHICH HAS SOME BEARING ON THE ISSUE AT HAND, RUNS AS UNDER: '21. THUS, ON THE DATE ON WHICH THE LEGISLATURE INT RODUCED 100% DEDUCTION UNDER THE INCOME TAX ACT, 1961 ON THE PROFITS DERIV ED FROM HOUSING PROJECTS APPROVED BY A LOCAL AUTHORITY, IT WAS KNOW N THAT THE LOCAL AUTHORITIES COULD APPROVE THE PROJECTS AS HOUDING P ROJECTS WITH COMMERCIAL USER TO THE EXTENT PERMITTED UNDER THE DC RULES FRA MED BY THE RESPECTIVE LOCAL AUTHORITY. IN OTHER WORDS, IT WAS KNOWN THAT THE LOCAL AUTHORITIES COULD APPROVE A HOUSING PROJECT WITHOUT OR WITH COM MERCIAL USER TO THE EXTENT PERMITTED UNDER THE DEVELOPMENT CONTROL RULE S. IF THE LEGISLATURE INTENDED TO RESTRICT THE BENEFIT OF DEDUCTION ONLY TO THE PROJECTS APPROVED EXCLUSIVELY FOR RESIDENTIAL PURPOSES, THEN IT WOULD HAVE STATED SO. HOWEVER, THE LEGISLATURE HAS PROVIDED THAT SECTION 80IB(10) DEDUCTION IS ITA NO.4489 & 4929/MUM/2012 M/S AKASH ENTERPRISES. 11 AVAILABLE TO ALL THE HOUSING PROJECTS APPROVED BY A LOCAL AUTHORITY. SINCE THE LOCAL AUTHORITIES COULD APPROVE A PROJECT TO BE A HOUSING PROJECT WITH OR WITHOUT THE COMMERCIAL USER, IT IS EVIDENT THAT THE LEGISLATURE INTENDED TO ALLOW SECTION 80IB(10) DEDUCTION TO ALL THE HOUSING PROJECTS APPROVED BY A LOCAL AUTHORITY WITHOUT OR WITH COMMERCIAL USER TO THE EXTENT PERMITTED UNDER THE DC RULES. 22. IT IS NOT IN DISPUTE THAT WHERE A PROJECT IS AP PROVED AS A HOUSING PROJECT WITHOUT OR WITH COMMERCIAL USER TO THE EXTENT PERMI TTED UNDER THE RULES/REGULATIONS, THEN, DEDUCTION UNDER SECTION 80 IB(10) WOULD BE ALLOWABLE. IN OTHER WORDS, IF A PROJECT COULD BE AP PROVED AS A HOUSING PROJECT HAVING RESIDENTIAL UNITS WITH PERMISSIBLE C OMMERCIAL USER, THEN IT IS NOT OPEN TO THE INCOME TAX AUTHORITIES TO CONTEND T HAT THE EXPRESSION 'HOUSING PROJECT' IN SECTION 80IB(10) IS APPLICABLE TO PROJECTS HAVING ONLY RESIDENTIAL UNITS. 23. ONCE IT IS HELD THAT THE LOCAL AUTHORITIES COUL D APPROVE A PROJECT TO BE HOUSING PROJECT WITHOUT OR WITH THE COMMERCIAL USER TO THE EXTENT PERMITTED UNDER THE DC RULES, THEN THE PROJECT APPR OVED WITH THE PERMISSIBLE COMMERCIAL USER WOULD BE ELIGIBLE FOR S ECTION 80IB(10) DEDUCTION IRRESPECTIVE OF THE FACT THAT THE PROJECT IS APPROVED AS 'HOUSING PROJECT' OR APPROVED AS 'RESIDENTIAL PLUS COMMERCIA L'. IN OTHER WORDS, WHERE A PROJECT FULFILS THE CRITERIA FOR BEING APPROVED A S A HOUSING PROJECT, THEN DEDUCTION CANNOT BE DENIED UNDER SECTION 80IB(10) M ERELY BECAUSE THE PROJECT IS APPROVED AS 'RESIDENTIAL PLUS COMMERCIAL '. 24. THE FACT THAT THE DEDUCTION UNDER SECTION 80IB( 10) PRIOR TO 1.4.2005 WAS ALLOWABLE ON THE PROFITS DERIVED FROM THE HOUSI NG PROJECTS CONSTRUCTED DURING THE SPECIFIED PERIOD, ON A SPECIFIED SIZE OF THE PLOT WITH RESIDENTIAL UNITS OF THE SPECIFIED SIZE, IT CANNOT BE INFERRED THAT THE DEDUCTION UNDER SECTION 80IB(10) WAS ALLOWABLE TO HOUSING PROJECTS HAVING RESIDENTIAL UNITS ONLY, BECAUSE, RESTRICTION ON THE SIZE OF THE RESIDENTIAL UNIT IS WITH A VIEW TO MAKE AVAILABLE LARGE NUMBER OF AFFORDABLE H OUSES TO THE COMMON MAN AND NOT WITH A VIEW TO DENY COMMERCIAL USER IN RESIDENTIAL BUILDINGS. IN OTHER WORDS, THE RESTRICTION UNDER SECTION 80IB( 10) REGARDING THE SIZE OF THE RESIDENTIAL UNIT WOULD IN NO WAY CURTAIL THE PO WERS OF THE LOCAL AUTHORITY TO APPROVE A PROJECT WITH COMMERCIAL USER TO THE EXTENT PERMITTED UNDER THE DC RULES/REGULATIONS. THEREFORE, THE ARGU MENT OF THE REVENUE THAT THE RESTRICTION ON THE SIZE OF THE RESIDENTIAL UNIT IN SECTION 80IB(10) AS IT STOOD PRIOR TO 1.4.2005 IS SUGGESTIVE OF THE FAC T THAT THE DEDUCTION IS RESTRICTED TO HOUSING PROJECTS APPROVED FOR RESIDEN TIAL UNITS ONLY CANNOT BE ACCEPTED. 25. THE ABOVE CONCLUSION IS FURTHER FORTIFIED BY CL AUSE (D) TO SECTION 80IB(10) INSERTED WITH EFFECT FROM 1.4.2005. CLAUSE (D) TO SECTION 80IB(10) INSERTED W.E.F. 1.4.2005 PROVIDES THAT EVE N THOUGH SHOPS AND COMMERCIAL ESTABLISHMENTS ARE INCLUDED IN THE HOUSI NG PROJECT, DEDUCTION UNDER SECTION 80IB(10) WITH EFFECT FROM 1.4.2005 WO ULD BE AVAILABLE WHERE SUCH COMMERCIAL USER DOES NOT EXCEED FIVE PER CENT OF THE AGGREGATE BUILT-UP AREA OF THE HOUSING PROJECT OR TWO THOUSAN D SQUARE FEET WHICHEVER IS LOWER. BY FINANCE ACT, 2010, CLAUSE (D) IS AMEND ED TO THE EFFECT THAT THE ITA NO.4489 & 4929/MUM/2012 M/S AKASH ENTERPRISES. 12 COMMERCIAL USER SHOULD NOT EXCEED THREE PERCENT OF THE AGGREGATE BUILT-UP AREA OF THE HOUSING PROJECT OR FIVE THOUSAND SQUARE FEET WHICHEVER IS HIGHER. THE EXPRESSION 'INCLUDED' IN CLAUSE (D) MAK ES IT AMPLY CLEAR THAT COMMERCIAL USER IS AN INTEGRAL PART OF HOUSING PROJ ECT. THUS, BY INSERTING CLAUSE (D) TO SECTION 80IB(10) THE LEGISLATURE HAS MADE IT CLEAR THAT THOUGH THE HOUSING PROJECTS APPROVED BY THE LOCAL AUTHORIT IES WITH COMMERCIAL USER TO THE EXTENT PERMISSIBLE UNDER THE DC RULES/R EGULATION WERE ENTITLED TO SECTION 80IB(10) DEDUCTION, WITH EFFECT FROM 1.4 .2005 SUCH DEDUCTION WOULD BE SUBJECT TO THE RESTRICTION SET OUT IN CLAU SE (D) OF SECTION 80IB(10). THEREFORE, THE ARGUMENT OF THE REVENUE TH AT WITH EFFECT FROM 1.4.2005 THE LEGISLATURE FOR THE FIRST TIME ALLOWED SECTION 80IB(10) DEDUCTION TO HOUSING PROJECTS HAVING COMMERCIAL USE R CANNOT BE ACCEPTED. ** ** ** 29. LASTLY, THE ARGUMENT OF THE REVENUE THAT SECTIO N 80IB(10) AS AMENDED BY INSERTING CLAUSE (D) WITH EFFECT FROM 1.4.2005 S HOULD BE APPLIED RETROSPECTIVELY IS ALSO WITHOUT ANY MERIT, BECAUSE, FIRSTLY, CLAUSE (D) SPECIFICALLY INSERTED WITH EFFECT FROM 1.4.2005, AN D THEREFORE, THAT CLAUSE CANNOT BE APPLIED FOR THE PERIOD PRIOR TO 1.4.2005. SECONDLY, CLAUSE (D) SEEKS TO DENY SECTION 80IB(10) DEDUCTION TO PROJECT S HAVING COMMERCIAL USER BEYOND THE LIMIT PRESCRIBED UNDER CLAUSE (D), EVEN THOUGH SUCH COMMERCIAL USER IS APPROVED BY THE LOCAL AUTHORITY. THEREFORE, THE RESTRICTION IMPOSED UNDER THE ACT FOR THE FIRST TIM E WITH EFFECT FROM 1.4.2005 CANNOT BE APPLIED RETROSPECTIVELY. THIRDLY, IT IS N OT OPEN TO THE REVENUE TO CONTEND ON THE ONE HAND THAT SECTION 80IB(10) AS ST OOD PRIOR TO 1.4.2005 DID NOT PERMIT COMMERCIAL USER IN HOUSING PROJECTS AND ON THE OTHER HAND CONTEND THAT THE RESTRICTION ON COMMERCIAL USER INT RODUCED WITH EFFECT FROM 1.4.2005 SHOULD BE APPLIED RETROSPECTIVELY. THE ARG UMENT OF THE REVENUE IS MUTUALLY CONTRADICTORY AND HENCE LIABLE TO BE REJEC TED. THUS, IN OUR OPINION, THE TRIBUNAL WAS JUSTIFIED IN HOLDING THAT CLAUSE ( D) INSERTED TO SECTION 80IB(10) WITH EFFECT FROM 1.4.2005 IS PROSPECTIVE A ND NOT RETROSPECTIVE AND HENCE CANNOT BE APPLIED TO THE PERIOD PRIOR TO 1.4. 2005.' 12. THE ISSUES DEALT WITH FROM PARAS 21 TO 25 BY TH E HIGH COURT ALREADY STANDS APPROVED BY THIS COURT. IN PARA 29, THE HIGH COURT HAS HELD THAT CLAUSE (D) HAS PROSPECTIVE OPERATION, VIZ., WITH EF FECT FROM 01.04.2005, AND THIS LEGAL POSITION IS NOT DISPUTED BY THE REVENUE BEFORE US. WHAT FOLLOWS FROM THE ABOVE IS THAT PRIOR TO 01.04.2005, THESE D EVELOPERS/ASSESSEES WHO HAD GOT THEIR PROJECTS SANCTIONED FROM THE LOCAL AU THORITIES AS 'HOUSING PROJECTS' , EVEN WITH COMMERCIAL USER, THOUGH LIMITED TO THE EXTENT PERMITTED UNDER THE DC RULES, WERE CONVINCED THAT THEY WOULD BE GETTING THE BENEFIT OF 100% DEDUCTION OF THEIR INCOME FROM SUCH PROJECT S UNDER SECTION 80IB OF THE ACT. THEIR PROJECTS WERE SANCTIONED MUCH BEF ORE 01.04.2005. AS PER THE PERMISSIBLE COMMERCIAL USER ON WHICH THE PROJEC T WAS SANCTIONED, THEY STARTED THE PROJECTS AND THE DATE OF COMMENCING SUC H PROJECTS IS ALSO BEFORE 01.04.2005. ALL THESE ASSESSEES WERE MADE KNOWN OF THE PROVISION BY WHICH THESE PROJECTS ARE TO BE COMPLETED AS THOSE DATES H AVE BEEN SPECIFIED FROM TIME TO TIME BY SUCCESSIVE FINANCE ACTS IN THE SAME PROVISION SECTION 80IB. IN THESE CASES, COMPLETION DATES WERE AFTER 01.04.2 005. ONCE THEY ARRANGE ITA NO.4489 & 4929/MUM/2012 M/S AKASH ENTERPRISES. 13 THEIR AFFAIRS IN THIS MANNER, THE REVENUE CANNOT DE NY THE BENEFIT OF THIS SECTION APPLYING THE PRINCIPLE OF RETROACTIVITY EVE N WHEN THE PROVISION HAS NO RETROSPECTIVITY. TAKE FOR EXAMPLE, A CASE WHERE UNDER THE EXTANT DC RULES, FOR SHOPS AND COMMERCIAL ACTIVITY CONSTRUCTI ON PERMITTED WAS, SAY, 10% AND THE PROJECT WAS ALSO SANCTIONED ALLOWING A PARTICULAR ASSESSEE TO CONSTRUCT 10% OF THE AREA FOR COMMERCIAL PURPOSES. THE SAID DEVELOPER STARTED WITH ITS PROJECT MUCH PRIOR TO 01.04.2005 W ITH THE AFORESAID PERMISSIBLE USE AND THE CONSTRUCTION WAS AT A VERY ADVANCED STAGE AS ON 01.04.2005. CAN IT BE ARGUED BY THAT REVENUE THAT H E IS TO DEMOLISH THE EXTRA COVERAGE MEANT FOR COMMERCIAL PURPOSE AND BRI NG THE SAME WITHIN THE LIMITS PRESCRIBED BY THE NEW PROVISION IF HE WANTED TO AVAIL THE BENEFIT OF DEDUCTION UNDER SECTION 80IB(10) OF THE ACT, ONLY B ECAUSE OF THE REASON THAT THE PROJECT WAS NOT COMPLETE AS ON 01.04.2005? AS IN SUCH A CASE HE FILED HIS RETURN FOR AN ASSESSMENT YEAR AFTER 01.04 .2005 AND FOR THE PURPOSE OF ASSESSMENT OF THE SAID RETURN, LAW PREVAILING AS ON THAT DATE WOULD BE APPLICABLE? ANSWER HAS TO BE IN THE NEGATIVE ON THE PRINCIPLE THAT WITH THE AFORESAID PLANNING AS PER THE LAW PREVAILING PRIOR TO 01.04.2005, THESE ASSESSEES ACTED AND ACQUIRED VESTED RIGHT THEREBY W HICH CANNOT BE TAKEN AWAY. IT IS LUDICROUS ON THE PART OF THE REVENUE AU THORITIES TO EXPECT THE ASSESSEES TO DO SOMETHING WHICH IS ALMOST IMPOSSIBL E 13. IN RELIANCE JUTE & INDUSTRIES LTD. V. CIT [1980] 1 SCC 139, THIS COURT HAD, NO DOUBT, POINTED OUT THE CARDINAL PRINCIPLE O F TAX LAW THAT THE LAW TO BE APPLIED HAS TO BE THE LAW IN FORCE IN THE ASSESSMEN T YEAR. HOWEVER, THIS IS QUALIFIED BY THE EXCEPTION WHEN IT IS PROVIDED OTHE RWISE EXPRESSLY OR BY NECESSARY IMPLICATION , AS IS CLEAR FROM THE FOLLOWING OBSERVATIONS: '6. THE ASSESSEE CLAIMS A VESTED RIGHT UNDER SECTIO N 24(2)(III), AS IT STOOD BEFORE ITS AMENDMENT IN 1957, TO HAVE THE UNABSORBE D LOSS OF 1950-51 CARRIED FORWARD FROM YEAR TO YEAR UNTIL THE LOSS IS COMPLETELY ABSORBED. THE CLAIM IS BASED ON A MISCONCEPTION OF THE FUNDAMENTA L BASIS UNDERLYING EVERY INCOME TAX ASSESSMENT. IT IS A CARDINAL PRINC IPLE OF THE TAX LAW THAT THE LAW TO BE APPLIED IS THAT IN FORCE IN THE ASSESSMEN T YEAR UNLESS OTHERWISE PROVIDED EXPRESSLY OR BY NECESSARY IMPLICATION... ' 14. IN THE SAME PARAGRAPH, THE COURT ALSO REMARKED THAT 'A RIGHT CLAIMED BY AN ASSESSEE UNDER THE LAW IN FORCE IN A PARTICULAR ASSESSMENT YEAR IS ORDINARILY AVAILABLE ONLY IN RELATION TO A PROCEEDI NG PERTAINING TO THAT YEAR'. THUS, IT CLEARLY FOLLOWS THAT THOUGH NORMALLY THE L AW WHICH IS IN FORCE IN THE ASSESSMENT YEAR WOULD PREVAIL, BUT THIS IS NOT AN A BSOLUTE PRINCIPLE AS THE COURT ITSELF CARVED OUT EXCEPTIONS THERETO BY MAKIN G IT CLEAR THAT SUCH EXCEPTION CAN BE EITHER EXPRESS OR IMPLIED BY NECES SARY IMPLICATION. EVEN THE PRINCIPLE WHICH IS MENTIONED IS QUALIFIED WITH THE WORDS 'ORDINARILY AVAILABLE' . 15. ON EXAMINING THE SCHEME OF SUB-SECTION (1) OF S ECTION 80IB OF THE ACT, ITS HISTORICAL TURN AROUND BY AMENDMENTS FROM TIME TO TIME AND KEEPING IN VIEW OF THE REAL PURPOSE BEHIND SUCH A PROVISION, W E ARE OF THE VIEW THAT IN THE PECULIAR SCENARIO AS PROJECTED IN THIS PROVISIO N, THE AFORESAID CARDINAL PRINCIPLE OF TAX LAW IS NOT TO BE APPLIED AS, BY NE CESSARY IMPLICATION, APPLICATION THEREOF STANDS EXCLUDED. WE HAVE ALREAD Y NARRATED THE ESSENCE ITA NO.4489 & 4929/MUM/2012 M/S AKASH ENTERPRISES. 14 OF THIS PROVISION. FOR THE PURPOSE OF DISCUSSING TH IS PARTICULAR ISSUE, IT IS REQUIRED TO BE NOTED THAT WITH EFFECT FROM 01.04.20 01, SECTION 80IB(10) STIPULATED THAT ANY HOUSING PROJECT APPROVED BY THE LOCAL AUTHORITY BEFORE 31.03.2001 WAS ENTITLED TO A DEDUCTION OF 100 PER C ENT OF THE PROFITS DERIVED IN ANY PREVIOUS YEAR RELEVANT TO ANY ASSESSMENT YEA R FROM SUCH HOUSING PROJECT, PROVIDED - (I) THE CONSTRUCTION/DEVELOPMEN T OF THE SAID HOUSING PROJECT COMMENCED ON OR AFTER 1.10.1998 AND WAS COM PLETED BEFORE 31.03.2003; (II) THE HOUSING PROJECT WAS ON A SIZE OF A PLOT OF LAND WHICH HAD A MINIMUM AREA OF ONE ACRE; AND (III) EACH INDI VIDUAL RESIDENTIAL UNIT HAD A MAXIMUM BUILT-UP AREA OF 1000 SQ.FT., WHERE S UCH HOUSING PROJECT WAS SITUATED WITHIN THE CITIES OF DELHI OR MUMBAI OR WI THIN 25 KMS. FROM THE MUNICIPAL LIMITS OF THESE CITIES, AND A MAXIMUM BUI LT-UP AREA OF 1500 SQ.FT. AT ANY OTHER PLACE. THEREFORE, FOR THE FIRST TIME, A STIPULATION WAS ADDED WITH REFERENCE TO THE DATE OF APPROVAL, NAMELY, THAT APP ROVAL HAD TO BE ACCORDED TO THE HOUSING PROJECT BY THE LOCAL AUTHORITY BEFOR E 31.03.2001. BEFORE THIS AMENDMENT THERE WAS NO DATE PRESCRIBED FOR THE APPR OVAL BEING GRANTED BY THE LOCAL AUTHORITY TO THE HOUSING PROJECT. PRIOR T O THIS AMENDMENT, AS LONG AS THE DEVELOPMENT/CONSTRUCTION COMMENCED ON OR AFT ER 1.10.1998 AND WAS COMPLETED BEFORE 31.03.2001, THE ASSESSEE WAS ENTIT LED TO THE DEDUCTION. ALSO BY THIS AMENDMENT, THE DATE OF COMPLETION WAS CHANGED FROM 31.03.2001 TO 31.03.2003. EVERYTHING ELSE REMAINED UNTOUCHED. THEREAFTER, BY FINANCE ACT, 2003, FURTHER AMENDMENTS WERE MADE TO SECTION 80IB(10), WHICH READ AS UNDER: '(10) THE AMOUNT OF PROFITS IN CASE OF AN UNDERTAKI NG DEVELOPING AND, BUILDING HOUSING PROJECTS APPROVED BEFORE THE 31ST DAY OF MARCH 2005 BY A LOCAL AUTHORITY, SHALL BE HUNDRED PER CENT OF THE P ROFITS DERIVED IN ANY PREVIOUS YEAR RELEVANT TO ANY ASSESSMENT YEAR FROM SUCH HOUSING PROJECT IF ( A ) SUCH UNDERTAKING HAS COMMENCED OR COMMENCES DEVELOP MENT AND CONSTRUCTION OF THE HOUSING PROJECT ON OR AFTER THE 1ST DAY OF OCTOBER 1998; ( B ) THE PROJECT IS O N THE SIZE OF A PLOT OF LAND WHICH HAS A MINIMUM AR EA OF ONE ACRE; AND ( C ) THE RESIDENTIAL UNIT HAS A MAXIMUM BUILT- UP AREA OF ONE THOUSAND SQUARE FEET WHERE SUCH RESIDENTIAL UNIT IS SITUATED WITHIN THE CITIES OF DELHI OR MUMBAI OR WITHIN TWENTY-FIVE KI LOMETRES FROM THE MUNICIPAL LIMITS OF THESE CITIES AND ONE THOUSAND AND FIVE HUNDRED SQUA RE FEET AT ANY OTHER PLACE.' 16. AS CAN BE SEEN FROM THE AFORESAID PROVISION, NO W THE ONLY CHANGES THAT WERE BROUGHT ABOUT WERE THAT WITH EFFECT FROM 1.4.2 002: (I) THE HOUSING PROJECT HAD TO BE APPROVED BEFORE 31.03.2005; AND ( II) THERE WAS NO TIME LIMIT PRESCRIBED FOR COMPLETION OF THE SAID PROJECT . THOUGH THESE CHANGES WERE BROUGHT ABOUT BY THE FINANCE ACT, 2003, THE LE GISLATURE THOUGHT IT FIT THAT THESE CHANGES BE DEEMED TO HAVE BEEN BROUGHT I NTO EFFECT FROM 1.4.2002. ALL THE REMAINING PROVISIONS OF SECTION 8 0IB(10) REMAINED UNCHANGED. ITA NO.4489 & 4929/MUM/2012 M/S AKASH ENTERPRISES. 15 17. THEREAFTER, SIGNIFICANT AMENDMENT, WITH WHICH W E ARE DIRECTLY CONCERNED, WAS CARRIED OUT BY FINANCE (NO.2) ACT, 2 004 WITH EFFECT FROM 1.4.2005. THIS AMENDMENT HAS ALREADY BEEN NOTED ABO VE. THE LEGISLATURE MADE SUBSTANTIAL CHANGES IN SUB-SECTION (10). SEVER AL NEW CONDITIONS WERE INCORPORATED FOR THE FIRST TIME, INCLUDING THE COND ITION MENTIONED IN CLAUSE (D). THIS CONDITION/RESTRICTION WAS NOT ON THE STAT UTE BOOK EARLIER WHEN ALL THESE PROJECTS WERE SANCTIONED. ANOTHER IMPORTANT A MENDMENT WAS MADE BY THIS ACT TO SUB-SECTION (14) OF SECTION 80IB WIT H EFFECT FROM 1.4.2005 AND FOR THE FIRST TIME UNDER CLAUSE (A) THEREOF THE WORDS 'BUILT-UP AREA' WERE DEFINED. SECTION 80IB(14)(A) READS AS UNDER: '(14) FOR THE PURPOSES OF THIS SECTION ( A ) 'BUILT- UP AREA' MEANS THE INNER MEASUREMENTS OF THE RESIDE NTIAL UNIT AT THE FLOOR LEVEL, INCLUDING THE PROJECTIONS AND BALCONIE S, AS INCREASED BY THE T HICKNESS OF THE WALLS BUT DOES NOT INCLUDE THE COMM ON AREAS SHARED WITH OTHER RESIDENTIAL UNITS;' 18. PRIOR TO INSERTION OF SECTION 80IB(14)(A), IN M ANY OF THE RULES AND REGULATIONS OF THE LOCAL AUTHORITY APPROVING THE HO USING PROJECT 'BUILT- UP AREA' DID NOT INCLUDE PROJECTIONS AND BALCONIES. PROBABLY, TAKING ADVANTAGE OF THIS FACT, BUILDERS PROVIDED LARGE BAL CONIES AND PROJECTIONS MAKING THE RESIDENTIAL UNITS FAR BIGGER THAN AS STI PULATED IN SECTION 80IB(10), AND YET CLAIMED THE DEDUCTION UNDER THE S AID PROVISION. TO PLUG THIS LACUNA, CLAUSE (A) WAS INSERTED IN SECTIO N 80IB(14) DEFINING THE WORDS 'BUILT-UP AREA' TO MEAN THE INNER MEASURE MENTS OF THE RESIDENTIAL UNIT AT THE FLOOR LEVEL, INCLUDING THE PROJECTIONS AND BALCONIES, AS INCREASED BY THE THICKNESS OF THE WAL LS, BUT DID NOT INCLUDE THE COMMON AREAS SHARED WITH OTHER RESIDENTIAL UNIT S. 19. CAN IT BE SAID THAT IN ORDER TO AVAIL THE BENEF IT IN THE ASSESSMENT YEARS AFTER 1.4.2005, BALCONIES SHOULD BE REMOVED T HOUGH THESE WERE PERMITTED EARLIER? HOLDING SO WOULD LEAD TO ABSURD RESULTS AS ONE CANNOT EXPECT AN ASSESSEE TO COMPLY WITH A CONDITION THAT WAS NOT A PART OF THE STATUTE WHEN THE HOUSING PROJECT WAS APPROVED. WE, THUS, FIND THAT THE ONLY WAY TO RESOLVE THE ISSUE WOULD BE TO HOLD THAT CLAUSE (D) IS TO BE TREATED AS INEXTRICABLY LINKED WITH THE APPROVAL AN D CONSTRUCTION OF THE HOUSING PROJECT AND AN ASSESSEE CANNOT BE CALLED UP ON TO COMPLY WITH THE SAID CONDITION WHEN IT WAS NOT IN CONTEMPLATION EITHER OF THE ASSESSEE OR EVEN THE LEGISLATURE, WHEN THE HOUSING PROJECT WAS ACCORDED APPROVAL BY THE LOCAL AUTHORITIES. 20. HAVING REGARD TO THE ABOVE, LET US TAKE NOTE OF THE SPECIAL FEATURES WHICH APPEAR IN THESE CASES: ( A ) IN THE PRESENT CASE, THE APPROVAL OF THE HOUSING PR OJECT, ITS SCOPE, DEFINITION AND CONDITIONS, ALL ARE DECIDED AND DEPENDENT BY THE PR OVISIONS OF THE RELEVANT DC RULES. IN CONTRAST, THE JUDGMENT IN RELIANCE JUTE INDUSTRIES LTD. ( SUPRA ) WAS CONCERNED WITH INCOME TAX ONLY. ( B ) THE POSITION OF LAW AND THE RIGHTS ACCRUED PRIOR TO ENACTMEN T OF FINANCE ITA NO.4489 & 4929/MUM/2012 M/S AKASH ENTERPRISES. 16 ACT, 2004 HAVE TO BE TAKEN INTO ACCOUNT, PARTICULAR LY WHEN THE POSITION BECOMES IRREVERSIBLE. ( C ) THE PROVISIONS OF SECTION 80IB(10) MENTION NOT ONLY A PARTICULAR DATE BEFORE WHICH SUCH A HOUSING PROJECT IS TO BE APPROV ED BY THE LOCAL AUTHO RITY, EVEN A DATE BY WHICH THE HOUSING PROJECT IS T O BE COMPLETED, IS FIXED. THESE DATES HAVE A SPECIFIC PURPOSE WHICH GI VES TIME TO THE DEVELOPERS TO ARRANGE THEIR AFFAIRS IN SUCH A MANNE R THAT THE HOUSING PROJECT IS STARTED AND FINISHED WITHIN THOSE STIP ULATED DATES. THIS PLANNING, IN THE CONTEXT OF FACTS IN THESE APPEALS, HAD TO BE MUCH BEFORE 01.04.2005. ( D ) THE BASIC OBJECTIVE BEHIND SECTION 80IB(10) IS TO E NCOURAGE DEVELOPERS TO UNDERTAKE HOUSING PROJECTS FOR WEAKER SECTION OF TH E SOCIETY, INASMUCH AS TO QUALIFY FOR DEDUCTION UNDER THIS PROVISION, IT I S AN ESSENTIAL CONDITION THAT THE RESIDENTIAL UNIT BE CONSTRUCTED ON A MAXIM UM BUILT UP AREA OF 1000 SQ.FT. WHERE SUCH RESIDENTIAL UNIT IS SITUATED WITHIN THE CITIES OF DELHI AND MUMBAI OR WITHIN 25 KM S. FROM THE MUNICIPAL LIMITS OF THESE CITIES AND 1500 SQ.FT. AT ANY OTHER PLACE. ( E ) IT IS THE CARDINAL PRINCIPLE OF INTERPRETATION THAT A CONSTRUCTION RESULTING IN UNREASONABLY HARSH AND ABSURD RESULTS MUST BE AVOID ED. ( F ) CLAUSE (D) MAKES IT CLEAR THAT A HOUSING PROJECT INCLUDES SHOPS AND COMMERCIAL ESTABLISHMENTS ALSO. BUT FROM THE DAY TH E SAID PROVISION WAS INSERTED, THEY WANTED TO LIMIT THE BUILT UP AREA OF SHOPS AND ESTABLISHMENTS TO 5% OF THE AGGREGATE BUILT UP AREA OR 2000 SQ.FT. , WHICHEVER IS LESS. HOWEVER, THE LEGISLATURE ITSELF FELT THAT THIS MUCH COMMERCIAL SPACE WOULD NOT MEET THE REQUIREMENTS OF THE RESIDENTS. T HEREFORE, IN THE YEAR 2010, THE PARLIAMENT HAS FURTHER AMENDED THIS PROVI SION BY PROVIDING THAT IT SHOULD NOT EXCEED 3% OF THE AG GREGATE BUILT UP AREA OF THE HOUSING PROJECT OR 5000 SQ.FT., WHICHEVER IS HIGHER. THIS I S A SIGNIFICANT MODIFICATION MAKING COMPLETE DEPARTURE FROM THE EAR LIER YARDSTICK. ON THE ONE HAND, THE PERMISSIBLE BUILT UP AREA OF THE SHOP S AND OTHER COMMERCIAL SHOP S IS INCREASED FROM 2000 SQ.FT. TO 5000 SQ.FT. ON T HE OTHER HAND, THOUGH THE AGGREGATE BUILT UP AREA FOR SUCH SHOPS A ND ESTABLISHMENT IS REDUCED FROM 5% TO 3%, WHAT IS SIGNIFICANT IS THAT IT PERMITS THE BUILDERS TO HAVE 5000 SQ.FT. OR 3% OF THE AGGREGATE BUILT UP AREA, 'WHICHEVER IS HIGHER' . IN CONTRAST, THE PROVISION EARLIER WAS 5% OR 2000 SQ.FT., 'WHICHEVER IS LESS' . ( G ) FROM THIS PROVISION, THEREFOR, IT IS CLEAR THAT THE HOUSING PROJECT CONTEMPLATED UNDER SUB-SECTION (10) OF SECTION 80IB INCLUDES COMM ERCIAL ESTABLISHMENTS OR SHOPS ALSO. NOW, BY WAY OF AN AME NDMENT IN THE FORM OF CLAUSE (D), AN ATTEMPT IS MADE TO RESTRICT THE S IZE OF THE SAID SHOPS AND/OR COMMERCIAL ESTABLISHMENTS. THEREFORE, BY NEC ESSARY IMPLICATION, THE SAID PROVISION HAS TO BE READ P ROSPECTIVELY AND NOT RETROSPECTIVELY. AS IS CLEAR FROM THE AMENDMENT, THIS PROVISION CAME IN TO EFFECT ONLY FROM THE DAY THE PROVISION WAS SUBSTITUTED. THEREFORE, IT CA NNOT BE APPLIED TO THOSE PROJECTS WHICH WERE SANCTIONED AND COMMENCED PRIOR TO 01.04.2005 AND COMPLETED BY THE STIPULATED DATE, THOUGH SUCH STIPU LATED DATE IS AFTER ITA NO.4489 & 4929/MUM/2012 M/S AKASH ENTERPRISES. 17 01.04.2005. 21. THESE ASPECTS ARE DEALT WITH BY VARIOUS HIGH CO URTS ELABORATELY AND CONVINCINGLY IN THEIR JUDGMENTS. IT IS NOT NECESSAR Y TO GO INTO THE DETAILED REASONING GIVEN BY THESE HIGH COURTS. HOWEVER, WE W OULD LIKE TO EXTRACT THE FOLLOWING DISCUSSION FROM THE JUDGMENT DATED 25.07. 2014 OF THE BOMBAY HIGH COURT IN ITA NOS. 201 AND 308 OF 2012, WHERE T HIS VERY ASPECT IS ANSWERED IN THE FOLLOWING MANNER: '36. THERE IS YET ANOTHER REASON FOR COMING TO THE AFORESAID CONCLUSION. TAKE A SCENARIO WHERE AN ASSESSEE, FOLLOWING THE PROJECT COMPLETION METHOD OF ACCOUNTING, HAS COMPLETED THE HOUSING PROJECT APPRO VED BY THE LOCAL AUTHORITY COMPLYING WITH ALL THE CONDITIONS AS SET OUT IN SEC TION 80-IB(10) AS IT STOOD PRIOR TO 1ST APRIL, 2005. IF WE WERE TO ACCEPT THE ARGUMENT OF THE REVENUE, THEN IN THAT EVENT, DESPITE HAVING COMPLETED THE EN TIRE CONSTRUCTION PRIOR TO 1ST APRIL, 2005 AND COMPLYING WITH ALL THE CONDITIO NS OF SECTION 80-IB(10) AS IT STOOD THEN, THE ASSESSEE WOULD BE DISENTITLED TO THE ENTIRE DEDUCTION CLAIMED IN RESPECT OF SUCH HOUSING PROJECT MERELY B ECAUSE HE OFFERED HIS PROFITS TO TAX IN THE A.Y. 2005-06. IN CONTRAST, IF THE SAME ASSESSEE HAD FOLLOWED THE WORK-IN-PROGRESS METHOD OF ACCOUNTING, HE WOULD HAVE BEEN ENTITLED TO THE DEDUCTION UNDER SECTION 80-IB(10) U PTO THE A.Y. 2004-05, AND DENIED THE SAME FROM A.Y. 2005-06 AND THEREAFTER. I T COULD NEVER HAVE BEEN THE INTENTION OF THE LEGISLATURE THAT THE DEDUCTION UNDER SECTION 80-IB(10) AVAILABLE TO A PARTICULAR ASSESSEE WOULD BE DETERMI NED ON THE BASIS OF THE ACCOUNTING METHOD FOLLOWED. THIS, TO OUR MIND AND A S RIGHTLY SUBMITTED BY MR. MISTRY, WOULD LEAD TO STARTLING RESULTS. WE THE REFORE HAVE NO HESITATION IN HOLDING THAT SECTION 80-IB(10) IS PROSPECTIVE IN NA TURE AND CAN HAVE NO APPLICATION TO A HOUSING PROJECT THAT IS APPROVED B EFORE 31ST MARCH, 2005. AS THE DEDUCTION SOUGHT TO BE CLAIMED UNDER SECTION 80 -IB(10) IS INSEPARABLY LINKED WITH THE DATE OF APPROVAL OF THE HOUSING PRO JECT, IT WOULD MAKE NO DIFFERENCE IF THE CONSTRUCTION OF THE SAID PROJECT WAS COMPLETED ON OR AFTER 1ST APRIL, 2005 OR THAT THE PROFITS WERE OFFERED TO TAX AFTER 1ST APRIL, 2005 I.E. IN A.Y. 2005-06 OR THEREAFTER. WE THEREFORE FIND NO SU BSTANCE IN THE ARGUMENT OF THE REVENUE THAT NOTWITHSTANDING THE FACT THAT THE HOUSING PROJECT WAS APPROVED PRIOR TO 31ST MARCH 2005, IF THE CONSTRUCT ION WAS COMPLETED ON OR AFTER 1ST APRIL, 2005 OR IF THE PROFITS ARE BROUGHT TO TAX IN THE A.Y. 2005-06 OR THEREAFTER, THE SAID HOUSING PROJECT WOULD HAVE TO COMPLY WITH THE PROVISIONS OF CLAUSE (D OF SECTION 80-IB(10). TO OUR MIND, WE DO NOT THINK THAT THE CONDITION/RESTRICTION LAID DOWN IN CLAUSE (D) OF SE CTION 80-IB(10) HAS TO BE REVISITED AND/OR LOOKED AT AND COMPLIED WITH IN THE ASSESSMENT YEAR IN WHICH THE PROFITS ARE OFFERED TO TAX BY THE ASSESSEE. WHE N THE ASSESSEE CLAIMS A DEDUCTION UNDER SECTION 80-IB(10), THE ASSESSEE IS REQUIRED TO COMPLY WITH SUCH A CONDITION ONLY IF IT IS ON THE STATUTE-BOOK ON THE DATE OF THE APPROVAL OF THE HOUSING PROJECT AND IT HAS NOTHING TO DO WITH T HE YEAR IN WHICH THE PROFITS ARE BROUGHT TO TAX BY THE ASSESSEE. WE HAVE COME TO THIS CONCLUSION ONLY BECAUSE WE FIND THAT CLAUSE (D) OF SECTION 80-IB(10 ) IS INEXTRICABLY LINKED TO THE DATE OF THE APPROVAL OF THE HOUSING PROJECT AND THE SUBSEQUENT DEVELOPMENT/CONSTRUCTION OF THE SAME, AND HAS NOTHI NG TO DO WITH THE PROFITS DERIVED THEREFROM. WE MAY HASTEN TO ADD THAT IF A P ARTICULAR CONDITION IS NOT INSEPARABLY LINKED TO THE DATE OF APPROVAL OF THE H OUSING PROJECT, DIFFERENT ITA NO.4489 & 4929/MUM/2012 M/S AKASH ENTERPRISES. 18 CONSIDERATIONS WOULD ARISE. HOWEVER, WE ARE NOT CAL LED UPON TO DECIDE ANY SUCH CONDITION AND HENCE WE ARE NOT LAYING DOWN ANY GENERAL PROPOSITION OF LAW, SAVE AND EXCEPT THAT CLAUSE (D) OF SECTION 80- IB(10), BEING A CONDITION LINKED TO THE DATE OF THE APPROVAL OF THE HOUSING P ROJECT, WOULD NOT APPLY TO ANY HOUSING PROJECT THAT WAS APPROVED PRIOR TO 31ST MARCH, 2005 IRRESPECTIVE OF THE FACT THAT THE PROFITS OF THE SAID HOUSING PR OJECT ARE BROUGHT TO TAX AFTER THE SAID PROVISION WAS BROUGHT INTO FORCE.' 22. AT THIS JUNCTURE, WE WOULD LIKE TO QUOTE THE FO LLOWING PASSAGE FROM SHAH SADIQ & SONS ( SUPRA ): '14. UNDER THE INCOME TAX ACT OF 1922, THE ASSESSEE WAS ENTITLED TO CARRY FORWARD THE LOSSES OF THE SPECULATION BUSINESS AND SET OFF SUCH LOSSES AGAINST PROFITS MADE FROM THAT BUSINESS IN FUTURE YEARS. TH E RIGHT OF CARRYING FORWARD AND SET OFF ACCRUED TO THE ASSESEE UNDER THE ACT OF 1922. A RIGHT WHICH HAD ACCRUED AND HAD BECOME VESTED CONTINUED TO BE CAPAB LE OF BEING ENFORCED NOTWITHSTANDING THE REPEAL OF THE STATUTE UNDER WHI CH THAT RIGHT ACCRUED UNLESS THE REPEALING STATUTE TOOK AWAY SUCH RIGHT EXPRESSL Y OR BY NECESSARY IMPLICATION. THIS IS THE EFFECT OF SECTION 6 OF THE GENERAL CLAUSES ACT, 1897. 15. IN THIS CASE THE 'SAVINGS' PROVISION IN THE REP EALING STATUTE IS NOT EXHAUSTIVE OF THE RIGHTS WHICH ARE SAVED OR WHICH S URVIVE THE REPEAL OF THE STATUTE UNDER WHICH SUCH RIGHTS HAD ACCRUED. IN OTH ER WORDS, WHATEVER RIGHTS ARE EXPRESSLY SAVED BY THE 'SAVINGS' PROVISION STAN D SAVED. BUT, THAT DOES NOT MEAN THAT RIGHTS WHICH ARE NOT SAVED BY THE 'SAVING S' PROVISION ARE EXTINGUISHED OR STAND IPSO FACTO TERMINATED BY THE MERE FACT THAT A NEW STATUTE REPEALING THE OLD STATUTE IS ENACTED. RIGHTS WHICH HAVE ACCRUED ARE SAVED UNLESS THEY ARE TAKEN AWAY EXPRESSLY. THIS IS THE P RINCIPLE BEHIND SECTION 6(C) OF THE GENERAL CLAUSES ACT, 1897. THE RIGHT TO CARR Y FORWARD LOSSES WHICH HAD ACCRUED UNDER THE REPEALED INCOME TAX ACT OF 1922 I S NOT SAVED EXPRESSLY BY SECTION 297 OF THE INCOME TAX ACT, 1961. BUT, IT IS NOT NECESSARY TO SAVE A RIGHT EXPRESSLY IN ORDER TO KEEP IT ALIVE AFTER THE REPEAL OF THE OLD ACT OF 1922. SECTION 6(2) SAVES ACCRUED RIGHTS UNLESS THEY ARE T AKEN AWAY BY THE REPEALING STATUTE. WE DO NOT FIND ANY SUCH TAKING AWAY OF THE RIGHTS BY SECTION 297 EITHER EXPRESSLY OR BY IMPLICATION.' 23. THE AFORESAID DISCUSSION PERSUADES US TO CONCLU DE THAT THE JUDGMENTS OF THE HIGH COURTS, WHICH ARE IMPUGNED IN THESE APPEAL S, TAKE CORRECT VIEW THAT THE ASSESEES WERE ENTITLED TO THE BENEFIT OF SECTIO N 80IB(10). AS A RESULT, THESE APPEALS FAIL AND ARE HEREBY DISMISSED. 2.3. IN THE AFORESAID ORDER, WE FIND THAT THE HON' BLE APEX COURT ENLIGHTENED US BY MAKING AN ELABORATE DISCUSSION ALONG WITH THE AMENDMENT MADE IN SECTION 80IB(10) INTRODUCING COMMERCIAL SPACE RESTRICTION B Y WAY OF CLAUSE (D) TO THE HOUSING PROJECT WAS HELD TO BE PROSPECTIVE IN NATURE AND NOT RETROSPECTIVE. IT WAS FURTHER ITA NO.4489 & 4929/MUM/2012 M/S AKASH ENTERPRISES. 19 HELD THAT THE ASSESSEE CANNOT BE CALLED UPON TO COM PLY WITH THE CONDITIONS, WHEN THE HOUSING PROJECT WAS ACCORDED APPROVAL BY THE LOCAL AUTHORITIES. THE HON 'BLE COURT FURTHER HELD THAT THE AMENDED PROVISION COULD NOT BE APPLIED TO THOSE PROJECTS WHICH WERE SANCTIONED AND COMMENCED PRIOR TO 01/04/2005 AND COMPLETED WITHIN THE STIPULATED DATE. THE COMPETENT AUTHORITY (CIDC O), IN THE PRESENT APPEAL APPROVED PLAN NO. CIDCO/VVSR/CC/ BP-3145/W/886 ON 17/07/2003. AS PER THE CERTIFICATE OF THE ARCHITECT DATED 03/01/2006, THE STRUCTURAL WORK WAS EXECUTED IN ACCORDANCE WITH THE APPROVAL. THE HON'B LE JURISDICTIONAL HIGH COURT IN BRAHMA ASSOCIATED (201 1) 333 ITR 289 (BOM.) DECIDED THE ISSUE, WHICH HAS BEEN FO LLOWED BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS). TH E HON'BLE HIGH COURT IN BRAHMA ASSOCIATES HELD AS UND ER:- THE EXPRESSION HOUSING PROJECT IS NOT DEFINED UN DER THE ACT. HOWEVER, S. 80-IB(10) REFERS TO THE HOUSING PROJECTS WHICH A RE APPROVED BY THE LOCAL AUTHORITIES. THEREFORE, FOR THE PURPOSES OF S . 80-IB(10) WHICH PROJECT SHOULD BE TREATED AS A HOUSING PROJECT IS L EFT TO THE LOCAL AUTHORITIES. THE EXPRESSION HOUSING PROJECT IS NO T DEFINED EVEN UNDER THE DC RULES/REGULATIONS FRAMED BY THE LOCAL AUTHOR ITIES. THEREFORE, WHICH PROJECT WOULD QUALIFY TO BE CALLED AS A HOUSI NG PROJECT HAS TO BE GATHERED FROM THE RULES/REGULATIONS FRAMED BY THE L OCAL AUTHORITY. THUS, ON THE DATE ON WHICH THE LEGISLATURE INTRODUCED 100 PER CENT DEDUCTION UNDER THE IT ACT, 1961 ON THE PROFITS DERIVED FROM HOUSING PROJECTS APPROVED BY A LOCAL AUTHORITY, IT WAS KNOWN THAT TH E LOCAL AUTHORITIES COULD APPROVE THE PROJECTS AS HOUSING PROJECTS WITH COMMERCIAL USER TO THE EXTENT PERMITTED UNDER THE DC RULES FRAMED BY T HE RESPECTIVE LOCAL AUTHORITY. IN OTHER WORDS, IT WAS KNOWN THAT THE LO CAL AUTHORITIES COULD APPROVE A HOUSING PROJECT WITHOUT OR WITH COMMERCIA L USER TO THE EXTENT PERMITTED UNDER THE DC RULES. IF THE LEGISLATURE IN TENDED TO RESTRICT THE BENEFIT OF DEDUCTION ONLY TO THE PROJECTS APPROVED EXCLUSIVELY FOR RESIDENTIAL PURPOSES, THEN IT WOULD HAVE STATED SO. HOWEVER, THE LEGISLATURE HAS PROVIDED THAT S. 80-IB(10) DEDUCTIO N IS AVAILABLE TO ALL THE HOUSING PROJECTS APPROVED BY A LOCAL AUTHORITY. SINCE THE LOCAL AUTHORITIES COULD APPROVE A PROJECT TO BE A HOUSING PROJECT WITH OR WITHOUT THE COMMERCIAL USER, IT IS EVIDENT THAT THE LEGISLATURE INTENDED TO ALLOW S. 80-IB(10) DEDUCTION TO ALL THE HOUSING PROJECTS APPROVED BY A LOCAL AUTHORITY WITHOUT OR WITH COMMERCIAL USER TO THE EXTENT PERMITTED ITA NO.4489 & 4929/MUM/2012 M/S AKASH ENTERPRISES. 20 UNDER THE DC RULES. IT IS NOT IN DISPUTE THAT WHERE A PROJECT IS APPROVED AS A HOUSING PROJECT WITHOUT OR WITH COMMERCIAL USE R TO THE EXTENT PERMITTED UNDER THE RULES/REGULATIONS, THEN, DEDUCT ION UNDER S. 80- IB(10) WOULD BE ALLOWABLE. IN OTHER WORDS, IF A PRO JECT COULD BE APPROVED AS A HOUSING PROJECT HAVING RESIDENTIAL UN ITS WITH PERMISSIBLE COMMERCIAL USER, THEN IT IS NOT OPEN TO THE IT AUTH ORITIES TO CONTEND THAT THE EXPRESSION HOUSING PROJECT IS APPLICABLE TO P ROJECTS HAVING ONLY RESIDENTIAL UNITS. ONCE IT IS HELD THAT THE LOCAL A UTHORITIES COULD APPROVE A PROJECT TO BE HOUSING PROJECT WITHOUT OR WITH THE COMMERCIAL USER TO THE EXTENT PERMITTED UNDER THE DC RULES, THEN THE P ROJECT APPROVED WITH THE PERMISSIBLE COMMERCIAL USER WOULD BE ELIGI BLE FOR S. 80-IB(10) DEDUCTION IRRESPECTIVE OF THE FACT THAT THE PROJECT IS APPROVED AS HOUSING PROJECT OR APPROVED AS RESIDENTIAL PLUS COMMERCIAL. THE FACT THAT THE DEDUCTION UNDER S. 80-IB(10) PRIOR TO 1ST APRIL, 2005 WAS ALLOWABLE ON THE PROFITS DERIVED FROM THE HOUSING P ROJECTS CONSTRUCTED DURING THE SPECIFIED PERIOD, ON A SPECIFIED SIZE OF THE PLOT WITH RESIDENTIAL UNITS OF THE SPECIFIED SIZE, IT CANNOT BE INFERRED THAT THE DEDUCTION UNDER S. 80-IB(10) WAS ALLOWABLE TO HOUSI NG PROJECTS HAVING RESIDENTIAL UNITS ONLY, BECAUSE, RESTRICTION ON THE SIZE OF THE RESIDENTIAL UNIT IS WITH A VIEW TO MAKE AVAILABLE LARGE NUMBER OF AFFORDABLE HOUSES TO THE COMMON MAN AND NOT WITH A VIEW TO DENY COMME RCIAL USER IN RESIDENTIAL BUILDINGS. THEREFORE, THE ARGUMENT OF T HE REVENUE THAT THE RESTRICTION ON THE SIZE OF THE RESIDENTIAL UNIT IN S. 80-IB(10) AS IT STOOD PRIOR TO 1ST APRIL, 2005 IS SUGGESTIVE OF THE FACT THAT THE DEDUCTION IS RESTRICTED TO HOUSING PROJECTS APPROVED FOR RESIDEN TIAL UNITS ONLY CANNOT BE ACCEPTED. THE ABOVE CONCLUSION IS FURTHER FORTIF IED BY CL. (D) TO S. 80- IB(10) INSERTED W.E.F. 1ST APRIL, 2005. CLAUSE (D) TO S. 80-IB(10) INSERTED W.E.F. 1ST APRIL, 2005 PROVIDES THAT EVEN THOUGH SHOPS AND COMMERCIAL ESTABLISHMENTS ARE INCLUDED IN THE HOUSI NG PROJECT, DEDUCTION UNDER S. 80-IB(10) W.E.F. 1ST APRIL, 2005 WOULD BE ALLOWABLE WHERE SUCH COMMERCIAL USER DOES NOT EXCEED FIVE PER CENT OF THE AGGREGATE BUILT-UP AREA OF THE HOUSING PROJECT OR T WO THOUSAND SQUARE FEET WHICHEVER IS LOWER. BY FINANCE ACT, 2010, CL. (D) IS AMENDED TO THE EFFECT THAT THE COMMERCIAL USER SHOULD NOT EXCEED T HREE PER CENT OF THE AGGREGATE BUILT-UP AREA OF THE HOUSING PROJECT OR F IVE THOUSAND SQUARE FEET WHICHEVER IS HIGHER. THE EXPRESSION INCLUDED IN CL. (D) MAKES IT AMPLY CLEAR THAT COMMERCIAL USER IS AN INTEGRAL PAR T OF A HOUSING PROJECT. THUS, BY INSERTING CL. (D) TO S. 80-IB(10) THE LEGISLATURE HAS MADE IT CLEAR THAT THOUGH THE HOUSING PROJECTS APPR OVED BY THE LOCAL AUTHORITIES WITH COMMERCIAL USER TO THE EXTENT PERM ISSIBLE UNDER THE DC RULES/REGULATIONS WERE ENTITLED TO S. 80-IB(10) DED UCTION, W.E.F. 1ST APRIL, 2005 SUCH DEDUCTION WOULD BE SUBJECT TO THE RESTRICTION SET OUT IN CL. (D) OF S. 80-IB(10). THEREFORE, THE ARGUMENT OF THE REVENUE THAT W.E.F. 1ST APRIL, 2005 THE LEGISLATURE FOR THE FIRS T TIME ALLOWED S. 80- IB(10) DEDUCTION TO HOUSING PROJECTS HAVING COMMERC IAL USER CANNOT BE ACCEPTED. (PARAS 16, 17 & 21 TO 25) THE ALTERNATIVE ARGUMENT OF THE REVENUE THAT THE PR OJECTS WITH CONVENIENT SHOPPING COULD BE CONSIDERED AS HOUSING PROJECTS UNDER S. 80-IB(10) UPTO 1ST APRIL, 2005 IS ALSO WITHOUT ANY MERIT, BECAUSE, SO LONG AS THE DC RULES PERMIT CONVENIENT SHOPPING AS ALSO OTHER COMMERCIAL USER IN A HOUSING PROJECT, IT WOULD NOT BE OPEN TO THE IT AUTHORITIES TO CONTEND THAT THE PROJECTS WITH CONVE NIENT SHOPPING ALONE ITA NO.4489 & 4929/MUM/2012 M/S AKASH ENTERPRISES. 21 COULD BE CONSIDERED AS HOUSING PROJECTS. IN THE PRE SENT CASE, IT IS NOT IN DISPUTE THAT THE PROJECT IS APPROVED FOR RESIDENTIA L AND COMMERCIAL BUILDINGS AS PER THE DC RULES, PUNE. THE FACT THAT THE RESIDENTIAL BUILDINGS UNDER THE DC RULES CAN HAVE COMMERCIAL US ER UPTO 50 PER CENT OF THE BUILT-UP AREA OF THE PLOT CANNOT BE A GROUND TO HOLD THAT THE PROJECT IS NOT A HOUSING PROJECT. IT IS FOR THE LEG ISLATURE TO IMPOSE RESTRICTIONS ON COMMERCIAL USER IN A PROJECT FOR TH E PURPOSES OF AVAILING S. 80-IB(10) DEDUCTION AND THAT HAS BEEN DONE BY IN SERTING CL. (D) TO S. 80-IB(10) W.E.F. 1ST APRIL, 2005. THEREFORE, THE DE CISION OF THE TRIBUNAL IN HOLDING THAT A PROJECT WITH RESIDENTIAL AND COMM ERCIAL USER TO THE EXTENT PERMITTED UNDER DC RULES WOULD BE A HOUSING PROJECT AND HENCE ELIGIBLE FOR DEDUCTION UNDER S. 80-IB(10) UPTO 31ST MARCH, 2005 CANNOT BE FAULTED. ONCE THE BASIC ARGUMENT OF THE REVENUE THAT THE HOUSING PROJECTS WITH COMMERCIAL USER ARE NOT ENTITLED TO S . 80-IB(10) DEDUCTION IS REJECTED, THEN IN THE ABSENCE OF ANY RESTRICTION IMPOSED UNDER THE ACT, IT WAS NOT OPEN TO THE TRIBUNAL TO HOLD THAT T HE PROJECTS APPROVED BY THE LOCAL AUTHORITIES HAVING RESIDENTIAL BUILDIN GS WITH COMMERCIAL USER UPTO 10 PER CENT OF THE PLOT AREA WOULD ALONE BE EN TITLED TO DEDUCTION UNDER S. 80-IB(10). AS NOTED EARLIER, RESTRICTION R EGARDING COMMERCIAL USER HAS BEEN IMPOSED FOR THE FIRST TIME BY INTRODU CING CL. (D) TO S. 80- IB(10) W.E.F. 1ST APRIL, 2005. THEREFORE, IT WAS NO T OPEN TO THE TRIBUNAL TO HOLD THAT PRIOR TO 1ST APRIL, 2005, PROJECTS HAV ING COMMERCIAL USER UPTO 10 PER CENT OF THE PLOT AREA ALONE WOULD BE EL IGIBLE FOR S. 80-IB(10) DEDUCTION. (PARAS 26 & 27) IN THE PRESENT CASE, THOUGH THE COMMERCIAL USER IS MORE THAN 10 PER CENT OF THE PLOT AREA, THE TRIBUNAL HAS ALLOWED S. 80-IB(10) DEDUCTION IN RESPECT OF 15 RESIDENTIAL BUILDINGS ON THE GROUND T HAT THE PROFITS FROM THESE EXCLUSIVELY RESIDENTIAL BUILDINGS COULD BE DE TERMINED ON STANDALONE BASIS. THAT WOULD NOT BE PROPER, BECAUSE , S. 80-IB(10) ALLOWS DEDUCTION TO THE ENTIRE PROJECT APPROVED BY THE LOCAL AUTHORITY AND NOT TO A PART OF THE PROJECT. IF THE CONDITIONS SET OUT IN S. 80-IB(10) ARE SATISFIED, THEN DEDUCTION IS ALLOWABLE ON THE E NTIRE PROJECT APPROVED BY THE LOCAL AUTHORITY AND THERE IS NO QUESTION OF ALLOWING DEDUCTION TO A PART OF THE PROJECT. IN THE PRESENT CASE, THE COMME RCIAL USER IS ALLOWED IN ACCORDANCE WITH THE DC RULES AND HENCE THE ASSES SEE WAS ENTITLED TO S. 80-IB(10) DEDUCTION ON THE ENTIRE PROJECT APPROV ED BY THE LOCAL AUTHORITY. HOWEVER, THE ASSESSEE HAS NOT CHALLENGED THE DECISION OF THE TRIBUNAL IN RESTRICTING THE DEDUCTION TO A PART OF THE PROJECT. THEREFORE, WHILE HOLDING THAT IN LAW, THE ASSESSEE WAS ENTITLE D TO S. 80-IB(10) DEDUCTION ON THE PROFITS OF THE ENTIRE PROJECT, IN THE FACTS OF THE PRESENT CASE, SINCE THE ASSESSEE HAS NOT CHALLENGED THE DEC ISION OF THE TRIBUNAL, THE DECISION OF THE TRIBUNAL IN RESTRICTING THE S. 80-IB(10) DEDUCTION ONLY IN RESPECT OF THE PROFITS DERIVED FROM 15 RESIDENTI AL BUILDINGS IS NOT DISTURBED. (PARA 28) LASTLY, THE ARGUMENT OF THE REVENUE THAT S. 80-IB(1 0) AS AMENDED BY INSERTING CL. (D) W.E.F. 1ST APRIL, 2005 SHOULD BE APPLIED RETROSPECTIVELY IS ALSO WITHOUT ANY MERIT, BECAUSE, FIRSTLY, CL. (D ) IS SPECIFICALLY INSERTED W.E.F. 1ST APRIL, 2005 AND, THEREFORE, THAT CLAUSE CANNOT BE APPLIED FOR THE PERIOD PRIOR TO 1ST APRIL, 2005. SECONDLY, CL. (D) SEEKS TO DENY S. 80- ITA NO.4489 & 4929/MUM/2012 M/S AKASH ENTERPRISES. 22 IB(10) DEDUCTION TO PROJECTS HAVING COMMERCIAL USER BEYOND THE LIMIT PRESCRIBED UNDER CL. (D), EVEN THOUGH SUCH COMMERCI AL USER IS APPROVED BY THE LOCAL AUTHORITY. THEREFORE, THE RESTRICTION IMPOSED UNDER THE ACT FOR THE FIRST TIME W.E.F. 1ST APRIL, 2005 CANNOT BE APPLIED RESTROSPECTIVELY. THIRDLY, IT IS NOT OPEN TO THE RE VENUE TO CONTEND ON THE ONE HAND THAT S. 80-IB(10) AS IT STOOD PRIOR TO 1ST APRIL, 2005 DID NOT PERMIT COMMERCIAL USER IN HOUSING PROJECTS AND ON T HE OTHER HAND CONTEND THAT THE RESTRICTION ON COMMERCIAL USER INT RODUCED W.E.F. 1ST APRIL, 2005 SHOULD BE APPLIED RESTROSPECTIVELY. THE ARGUMENT OF THE REVENUE IS MUTUALLY CONTRADICTORY AND HENCE LIABLE TO BE REJECTED. THUS, THE TRIBUNAL WAS JUSTIFIED IN HOLDING THAT CL. (D) INSERTED TO S. 80-IB(10) W.E.F. 1ST APRIL, 2005 IS PROSPECTIVE AND NOT RETRO SPECTIVE AND HENCE CANNOT BE APPLIED TO THE PERIOD PRIOR TO 1ST APRIL, 2005.BRAHMA ASSOCIATES VS. JT. CIT (2009) 122 TTJ (PUNE)(SB) 43 3 : (2009) 22 DTR (PUNE)(SB)(TRIB) 1 AFFIRMED (PARTLY). (PARA 29) 2.4. IN THE AFORESAID CASE, THE HON'BLE JURISDICTI ONAL HIGH COURT CONCLUDED THAT UPTO 31ST MARCH, 2005, DEDUCTION UNDER S. 80-IB(10) IS ALLOWABLE TO HOUSIN G PROJECTS APPROVED BY THE LOCAL AUTHORITY HAVING RES IDENTIAL UNITS WITH COMMERCIAL USER TO THE EXTENT PERMITTED UNDER THE DC RULES/REGULATIONS FRAMED BY THE RESPECTIVE L OCAL AUTHORITY IRRESPECTIVE OF THE FACT THAT THE PROJECT IS APPROVED AS HOUSING PROJECT OR RESIDENTIAL PLUS COMMERCIAL; TRIBUNAL WAS NOT JUSTIFIED IN HOLDING THAT UPTO 31ST MARCH, 2005, DEDUCTION UNDER S. 80-IB(10) WOULD BE ALLOWABLE TO THE PROJECTS APPROVED BY THE LOCAL AUTHORITY HAVING RESIDENTIAL BUILDING WITH COMMERCI AL USER UPTO 10 PER CENT OF THE TOTAL BUILT-UP AREA OF THE PLOT; CL. (D) INSERTED IN S. 80-IB(10) W.E.F. 1ST APRIL, 2005 IS PROSPECTIVE AND NOT RETROSPECTIVE. THE PROJECT OF THE PRESENT ASSESSEE COMMENCED ON 17/07/2003. THE ASSESSEE APPLIED FOR COMPLETION CERTIFICATE ON 06/0 7/2005 AS IS EVIDENT FROM CLAIM OF THE ASSESSEE MENTIONED IN ITA NO.4489 & 4929/MUM/2012 M/S AKASH ENTERPRISES. 23 PARA-2.3 OF THE IMPUGNED ORDER. AS PER THE REVENUE, THE COMPLETION CERTIFICATE WAS NOT ISSUED TO THE ASSESS EE. THERE IS NO ALLEGATION BY THE REVENUE THAT THE PROJ ECT WAS NOT COMPLETED, AS CLAIMED BY THE ASSESSEE, BUT MERE LY SAYS THAT OCCUPANCY CERTIFICATE WAS NOT ISSUED TO T HE ASSESSEE. BEFORE US, THE LD. COUNSEL FOR THE ASSE SSEE INVITED OUR ATTENTION TO THE OCCUPATION CERTIFICATE DATED 22/12/2009 (PAGE-84 TO 86 OF THE PAPER BOOK), WHERE IN, THERE IS MENTION OF THE GRANT OF OCCUPANCY CERTIFIC ATE. IN SUCH A SITUATION, ONE FACT IS OOZING OUT THAT THE P ROJECT WAS COMPLETED WITHIN THE STIPULATED PERIOD, APPLIED WITHIN TIME BY THE ASSESSEE AND IF THERE IS A DELAY IN ISS UING THE SAME BY THE COMPETENT AUTHORITY, THE ASSESSEE CANNO T BE PENALYZED. EVEN IN THE ASSESSMENT ORDER/IMPUGNED OR DER, THERE IS NO MENTION THAT THE PROJECT WAS NOT COMPLE TED. THE ASSESSEE CANNOT BE EXPECTED TO FULFIL THE CONDI TIONS WHICH ARE BEYOND HIS CONTROL. THE ASSESSEE APPLIED FOR COMPLETION CERTIFICATE ON 03/10/2007, ADDRESSED TO THE EXECUTIVE ENGINEER (CIDCO) (VVSR) FOR THE CONCERNED PROJECT, IT CAN BE INFERRED THAT THE ASSESSEE COMPL ETED THE PROJECT WITHIN TIME, AGAINST THE SANCTION PLAN, THE REFORE, FOLLOWING THE RATIO LAID DOWN IN THE CASES DECIDED BY HON'BLE JURISDICTIONAL HIGH COURT/HON'BLE APEX COUR T AND THE RATIO LAID DOWN IN THE CASE OF CHD DEVELOPERS B Y DELHI BENCH OF THE TRIBUNAL IN ITA NO.4694/DEL/10 FOR A.Y . 2007-08, WHICH WAS LATER ON AFFIRMED BY HON'BLE DE LHI HIGH COURT (ITA NO.298 OF 2013) ORDER DATED 22/01/2 014, ITA NO.4489 & 4929/MUM/2012 M/S AKASH ENTERPRISES. 24 WE DIRECT THE ASSESSING OFFICER TO GRANT THE CLAIME D DEDUCTION TO THE ASSESSEE. 3. SO FAR AS, THE APPEAL OF THE REVENUE (ITA NO.4929/MUM/2012) IS CONCERNED, WE FIND NO INFIRMI TY IN THE CONCLUSION DRAWN BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS), THUS, THE APPEAL OF THE REVEN UE IS DISMISSED. FINALLY, THE APPEAL OF THE ASSESSEE IS ALLOWED AND THIS ORDER WAS PRONOUNCED IN THE OPEN IN THE PRESENCE OF LD. REPRESENTATIVES FROM BOTH SIDES AT THE CONCLUSION OF THE HEARING ON 20/04/2017. SD/- SD/ - (RAJENDRA) (JOGINDER SINGH) / ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI; ! DATED : 27/04/2017 F{X~{T? P.S/. .. # $%& '(%) / COPY OF THE ORDER FORWARDED TO : 1. '& *+ / THE APPELLANT (RESPECTIVE ASSESSEE) 2. #,*+ / THE RESPONDENT. 3. - ( '& ) / THE CIT, MUMBAI. 4. - / CIT(A)- , MUMBAI, 5. %01 # 2 , '& '24 , / DR, ITAT, MUMBAI 6. 15 6 / GUARD FILE. / BY ORDER, ,%& # //TRUE COPY// &/ & (DY./ASSTT. REGISTRAR) '& '24, / ITAT, MUMBAI