DCIT CIR 4, MUMBAI V. AAKASH LAND DEVELOPERS, THANE

ITA 731/MUM/2012

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 92466 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 2 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-05-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 13-04-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 03-02-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ASGHAR ZAIN V P DR
• Assessee Lawyers: AJAY R SINGH
• Keywords: Capital asset converted into stock in trade; Competent authority
• Section: 45(2); 80IB

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES E, MUMBAI , . . , , BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER, AND SHRI B.R. BASKARAN, ACCOUNTANT MEMBER ITA NO.730 TO 732/MUM/2012 ASSESSMENT YEARS: 2006-07 TO 08-09 ASST. COMMISSIONER OF INCOME TAX, CIRCLE-4, 6 TH FLOOR, ASHAR IT PARK, ROAD NO.16 Z, WIE, THANE (W)-400604 / VS. M/S AKASH LAND DEVELOPERS, SUMATI SADAN, PURANDARE WADI, BAZAR, WARD, NR. SARASWAT CO-OP BANK, VIRAR (E), ( ! / REVENUE) ( '#$ % /ASSESSEE) P.A. NO. AACFA2289B '#$ % / ASSESSEE BY SHRI AJAY R. SINGH ! / REVENUE BY SHRI ASGHAR ZAIN V.P.-DR ! ' % ( / DATE OF HEARING 16/04/2015 ' % ( / DATE OF ORDER: 01/05/2015 / O R D E R PER JOGINDER SINGH (JUDICIAL MEMBER) ALL THESE THREE APPEALS BY THE REVENUE AGAINST THE IMPUGNED ORDER ALL DATED 29/02/2012 OF THE LD. FIRS T APPELLATE AUTHORITY, MUMBAI, FOR ASSESSMENT YEARS 2 006-07 M/S AKASH LAND DEVELOPERS 2 TO 2008-09 ALLOWING DEDUCTIONS OF RS.11,80,433/- (A Y 2006- 07), RS.11,35,004/- (AY 2007-08) AND RS.24,16,765/- (AY.2008-09) U/S 80IB (10) OF THE INCOME TAX ACT, 1 961 (HEREINAFTER THE ACT) IGNORING THE FACT THAT THE AS SESSEE CONSTRUCTED RESIDENTIAL CUM COMMERCIAL COMPLEX IN V IOLATION OF THE ACT, PLACING RELIANCE UPON THE DECISION FROM HONBLE JURISDICTIONAL HIGH COURT IN CIT VS BRAHMA ASSOCIAT ES (2011) 333 ITR 289 (BOM.). 2. DURING HEARING OF THESE APPEALS, LD. DR, SHRI ASGHAR ZAIN, V.P., ADVANCED HIS ARGUMENTS WHICH ARE IDENTICAL TO THE GROUND RAISED. ON THE OTHER HAND, SHRI AJAY R. SINGH, LD. COUNSEL FOR THE ASSESSEE, DEFENDED TH E CONCLUSION, ARRIVED AT IN THE IMPUGNED ORDERS. 2.1. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IN VIEW O F THE ABOVE, WE ARE REPRODUCING HEREUNDER THE RELEVANT PO RTION FROM THE IMPUGNED ORDER:- 4.1. I HAVE PERUSED THE ORDER OF THE AO AND ALSO GO NE THROUGH THE WRITTEN SUBMISSIONS MADE BY THE APPELLA NT CAREFULLY AND I INTEND TO AGREE WITH THE ABOVE ARGU MENTS OF THE APPELLANT. IN A NUMBER OF RECENT JUDICIAL DECIS IONS, IT HAS BEEN DECIDED BY VARIOUS COURTS THAT THE DEDUCTI ON TO THE HOUSING PROJECTS U/S. 80IB(10) OF THE ACT IS TO BE ALLOWED TO THE HOUSING PROJECT OF AN UNDERTAKING EV EN THOUGH IT CONTAIN AREA OF COMMERCIAL ESTABLISHMENTS . 4.2. AS PER THE DETAILS FILED, IT CAN BE OBSERVED T HAT THE TOTAL BUILT UP AREA OF THE HOUSING PROJECT GAGAN VI HAR M/S AKASH LAND DEVELOPERS 3 COMPLEX OF THE APPELLANT IS 1,33,874 SQ. FT OUT OF WHICH THE AREA OF THE COMMERCIAL ESTABLISHMENTS IS 5286.20 SQ . FT., WHICH COMES TO 3.95% OF THE TOTAL BUILT UP AREA. TH ESE COMMERCIAL ESTABLISHMENTS IN THE RESIDENTIAL HOUSIN G PROJECT ARE IN ACCORDANCE WITH THE RULES AND REGULA TIONS PRESCRIBED BY DEVELOPMENT CONTROL REGULATIONS OF TH E LOCAL AUTHORITY, WHICH ARE PART AND PARCEL OF THE HOUSING PROJECT. EVEN THE CBDT HAS CLARIFIED THAT IF THE PROJECT IS APPROVED AS HOUSING PROJECT BY THE LOCAL AUTHORITY, IT BECOM ES ELIGIBLE FOR DEDUCTION UNDER SECTION 80IB(10). THE VIEW THAT THE BENEFICIAL DEDUCTION UNDER SECTION 80IB(10) IS ALLOWED ONLY TO THE RESIDENTIAL UNITS OF THE HOUSING PROJEC T IS NOT THE CORRECT INTERPRETATION OF THE PROVISIONS OF THE SAID SECTION. SINCE THE LOCAL AUTHORITY HAS GRANTED APPR OVAL TO THE PROJECT AS GROUP HOUSING SCHEME, IT FITS INTO T HE DEFINITION OF THE HOUSING PROJECT AS CLARIFIED BY T HE CBDT. 4.3. THE LEGAL POSITION ON THE ISSUE OF ALLOWABILI TY OF THE DEDUCTION U/S. 80IB(10)(D) ON THE COMMERCIAL COMPON ENT OF THE HOUSING PROJECT HAS GONE UNDER CONSIDERABLE CHANGE AFTER THE DECISION OF THE ITAT PUNE SPECIAL BENCH I N THE CASE OF BRAHMA ASSOCIATED VS JOINT COMMISSIONER OF INCOME TAX (2009) 122 TTJ (PUNE)(SB) 433, WHEREIN H AS BEEN HELD THAT- 'MERELY BECAUSE A PART OF THE PLOT IS USED FOR COMM ERCIAL PURPOSES, THE CHARACTER OF HOUSING PROJECT IS NOT V ITIATED AND THE AVAILABILITY OF TAX BENEFITS IS NOT CONFINE D TO ONLY SUCH HOUSING PROJECTS WHICH ARE PURELY RESIDENTIAL PROJECTS - SO FAR AS ASSESSMENT YEARS PRIOR TO A. Y . 2005-06 ARE CONCERNED, APPROVAL BY THE LOCAL AUTHOR ITY AS A HOUSING PROJECT CONSTITUTES ADMISSIBLE MATERIA L TO COME TO THE CONCLUSION THAT THE HOUSING PROJECT IS M/S AKASH LAND DEVELOPERS 4 ELIGIBLE FOR DEDUCTION U/S. 80IB(10) - WHAT WAS BRO UGHT INTO EFFECT BY INSERTION OF CL.(D) IN S.80IB(10) VI DE FINANCE (NO.2) ACT, 2004, WAS A RESTRICTION ON USE OF BUILT UP AREA FOR COMMERCIAL PURPOSES, AND NOT A RELAXATION TO USE THE BUILT-UP AREA FOR COMMERCIAL PURPOSES - THIS INDICATES THAT THERE WAS NO SUCH LI MIT IN FORCE FOR THE EARLIER YEARS - RESTRICTION OF 5 PER CENT IS APPLICABLE ONLY WITH PROSPECTIVE EFFECT AND THERE I S NO JUSTIFICATION TO PRESUME THAT SUCH A LIMIT OR PROHI BITION WAS IN PLACE IN THE EARLIER YEARS AS WELL ON THE COMMERCIAL USE OF AREA - IT WOULD BE REASONABLE TO GRANT BENEFIT OF INCENTIVE PROVISION TO PROJECTS IN WHICH BUILT UP AREA FOR COMMERCIAL PURPOSES DOES NOT EXCEED 10 PER CENT OF TOTAL AREA - WHERE APPROXIMATELY 90 PER CEN T OR MORE OF THE TOTAL AREA IS UTILIZED FOR BUILDING DWE LLING UNITS AND OTHER CONDITIONS OF S. 80-IB(10) ARE FULF ILLED, THERE IS NO JUSTIFICATION TO DENY THE BENEFIT WHERE THE PROJECT HAS BEEN PASSED AS 'RESIDENTIAL-COMMERCIAL PROJECT' - WHERE THE TOTAL BUILT-UP COMMERCIAL AREA IS MORE THAN 10 PERCENT OF TOTAL AREA, SUCH PROJECTS NORMALLY SHOULD NOT GET BENEFIT OF DEDUCTION UNLESS THE UNDERTAKING CAN SHOW THAT THE INCOME FROM CONSTRUCT ION OF RESIDENTIAL DWELLING UNITS CAN BE WORKED OUT SEPARATELY, AND EVEN AFTER EXCLUDING THE COMMERCIAL USE OF PLOT, THE PROJECT SATISFIES ALL THE REQUIREMENTS OF S. 80- IB(10) ON STANDALONE BASIS'. 4.4. IT WAS FURTHER OBSERVED BY THE HON'BLE ITAT PU NE SPECIAL BENCH IN THE CASE OF BRAHMA ASSOCIATED VS J OINT COMMISSIONER OF INCOME TAX (SUPRA) THAT 'IT WOULD B E REASONABLE TO GRANT BENEFIT OF THE INCENTIVE PROVIS ION TO PROJECTS IN WHICH THE BUILT UP AREA FOR THE COMMERC IAL M/S AKASH LAND DEVELOPERS 5 PURPOSE DOES NOT EXCEED 10 PERCENT OF THE TOTAL ARE A- WHERE APPROXIMATELY 90 PERCENT OR MORE OF THE TOTAL AREA IS UTILIZED FOR BUILDING DWELLING UNIT AND OTHER CO NDITIONS OF 80IB(10) ARE FULFILLED, THERE IS NO JUSTIFICATION T O DENY THE BENEFIT WHERE PROJECT HAS BEEN PASSED AS 'RESIDENTI AL CUM COMMERCIAL': 4.5. IN THE LIGHT OF THE ABOVE OBSERVATIONS, THE CA SE OF THE APPELLANT FALLS WITHIN THE PARAMETERS SET BY THE AB OVE DECISION IN THE CASE OF BRAHMA ASSOCIATES VS JOINT COMMISSIONER OF INCOME TAX (SUPRA). IN THE HOUSING PROJECT OF THE APPELLANT THE COMMERCIAL COMPONENT O F THE PROJECTS COMPRISED OF SHOP AREAS IS 5286.20 SQ. FT. WHICH COMES TO 3.95% OF THE TOTAL BUILT UP AREA, WHICH IS LESS THAN 10% OF THE TOTAL BUILT UP AREA AND THEREFORE C OVERED BY THE ABOVE DECISION ITAT PUNE SPECIAL BENCH IN TH E CASE OF BRAHMA ASSOCIATED VS JOINT COMMISSIONER OF INCOM E TAX (2009) 122 TTJ (PUNE)(SB) 433. 4.6. THE ISSUE AS TO WHETHER COMMERCIAL ESTABLISHME NTS ARE. PERMITTED IN HOUSING PROJECT IS NOW SETTLED BY THE DECISION OF THE HON'BLE BOMBAY HIGH COURT IN THE CA SE OF CIT VS BRAHMA ASSOCIATES 333 ITR 289 (2011) (BORN) WHEREIN IT HAS BEEN HELD THAT THE DEDUCTION U/S. 80 1B(10) IS ADMISSIBLE IN A CASE OF HOUSING PROJECT COMPRISI NG OF COMMERCIAL AREA AS PERMITTED UNDER THE RULES OF THE LOCAL AUTHORITY. THE COMMERCIAL COMPONENT OF THE APPELLAN T'S HOUSING PROJECT IS WELL WITHIN THE PARAMETERS LAID DOWN BY THE ABOVE DECISION OF THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. BRAHMA ASSOCIATES (SUPRA) AND THERE FORE THE DEDUCTION U/S.80IB(10) CANNOT BE DENIED TO THE APPELLANT FOR THE YEAR UNDER CONSIDERATION I.E. A.Y .2006-07. M/S AKASH LAND DEVELOPERS 6 4.7. THE HON'BLE HIGH COURT OF BOMBAY IN THE CASE O F CLT VS. BRAHMA ASSOCIATES (SUPRA), WHILE DECIDING THE I SSUE OF COMMERCIAL AREA IN THE HOUSING PROJECT HAS HELD THA T 'IN THE PRESENT CASE, THOUGH THE COMMERCIAL USER IS MORE THAN 10% OF THE PLOT AREA, THE TRIBUNAL HAS AL LOWED SECTION 80IB(10) DEDUCTION IN RESPECT OF 15 RESIDEN TIAL BUILDING ON THE GROUND THAT THE PROFITS FROM THESE EXCLUSIVELY RESIDENTIAL BUILDINGS COULD BE DETERMIN ED ON STANDALONE BASIS. IN OUR OPINION THAT WOULD NOT BE PROPER, BECAUSE, SECTION 80IB(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 SECTION 80IB(10) ARE SATISFIED, THEN DEDUCTION IS ALLOWABLE ON THE ENTIRE PROJECT APPROVED BY THE LOC AL AUTHORITY AND THERE I NO QUESTION OF ALLOWING DEDUC TION TO A PART OF THE PROJECT. IN THE PRESENT CASE, THE COMMERCIAL USER IS ALLOWED IN ACCORDANCE WITH THE D C RULES AND HENCE THE ASSESSEE WAS ENTITLED TO SECTIO N 80IB(10) DEDUCTION ON THE ENTIRE PROJECT APPROVED B Y THE LOCAL AUTHORITY. ' 4.8. REGARDING THE APPLICABILITY OF THE AMENDED PRO VISIONS OF SECTION 80IB(10)(D) FOR THE PROJECTS COMMENCED B EFORE 01.04.2005, THE ITAT, MUMBAI 'F' BENCH IN THE CASE OF M/S. SAROJ SALES CORPORATION VS. ITO WD. 45(2) (3), MUMB AI, HAS HELD THAT- ' AS REGARDS THE OBJECTION OF THE AO THAT THE PERMISSIBLE SHOPPING AREA OF HOUSING PROJECT EXCEED 5%, THE ASSESSEE IS NOT ENTITLED FOR RELIEF U/S. 80 IB(10), WE ARE OF THE VIEW THAT THE HOUSING PROJECTS WHICH WERE APPROVED BEFORE 31.3.2005, THERE WAS NO STIPULATION AS TO THE SHOPPING COMPLEX AREA IS PERMISSIBLE IN THE M/S AKASH LAND DEVELOPERS 7 PROJECT. AS ALREADY STATED EARLIER THAT THE AMENDME NTS WERE SUBSEQUENTLY MADE WHILE EXTENDING THE DEDUCTIO N OF INCOME FROM HOUSING PROJECT APPROVED UPTO 31.3.2007, THE DENIAL OF DEDUCTION IN OUR VIEW, IS CLEARLY NOT IN ACCORDANCE WITH LAW.' 4.9. THE VIEW OF THE AO ALSO CANNOT BE ACCEPTED THA T THE APPELLANT HAS NOT COMPLETED THE HOUSING PROJECT ON BEFORE 31/03/2008. THE AR OF THE APPELLANT HAS VEHEMENTLY OPPOSED THE ABOVE OBSERVATIONS OF THE AO AND HAS CONTENDED THAT SUCH OCCUPATION CERTIFICATES IN RESP ECT OF ALL THE 8 BUILDINGS OF THE GAGAN VIHAR COMPLEX WERE OBT AINED AFTER THE COMPLETION OF THE BUILDINGS WHICH WAS MUC H BEFORE 31/03/2008. THEREFORE THERE IS NO VIOLATION OF THE PROVISIONS OF SECTION 80IB(10) ON THIS ACCOUNT. 4.10. THE ABOVE CONTENTION OF THE APPELLANT IS CORR ECT. THE AO HAS NOT POINTED OUT AS TO HOW THE APPELLANT HAS NOT COMPLETED THE HOUSING PROJECT ON OR BEFORE 31/03/20 08. IN THE ABSENCE OF PLACING ANY EVIDENCE ON RECORD IN TH IS REGARD, NO ADVERSE VIEW CAN BE TAKEN AND THE APPELL ANT CANNOT BE DENIED THE DEDUCTION UNDER SECTION 80IB(1 0). 4.11. IN VIEW OF THE FACTS STATED ABOVE AND THE DEC ISION OF THE HON'BLE HIGH COURT OF BOMBAY IN THE CASE OF BRA HMA ASSOCIATES & OTHERS - VS - CIT AND ITAT, MUMBAI 'F' BENCH IN THE CASE OF M/S. SAROJ SALES CORPORATION VS. ITO WD. 45(2) (3), MUMBAI, THE CLAIM OF THE APPELLANT FOR D EDUCTION U/S. 80IB(10) FOR THE YEAR UNDER CONSIDERATION I.E. A.Y. 2006-07, IN MY CONSIDERED OPINION, IS ALLOWABLE TO THE APPELLANT. ACCORDINGLY, THE AO IS DIRECTED TO ALLOW THE SAME FOR THE YEAR UNDER CONSIDERATION. 5. IN THE RESULT, THE APPEAL OF THE APPELLANT IS AL LOWED. M/S AKASH LAND DEVELOPERS 8 2.2. IF THE OBSERVATION MADE IN THE ASSESSMENT ORD ER, DENYING THE CLAIMED DEDUCTION, CONCLUSION DRAWN IN THE IMPUGNED ORDER, MATERIAL AVAILABLE ON RECORD, ASSER TIONS MADE BY THE LD. RESPECTIVE COUNSEL, IF KEPT IN JUXT APOSITION AND ANALYZED, WE FIND THAT THE ONLY ISSUE CONTAINS IN THESE APPEALS PERTAINS TO ALLOWING DEDUCTION U/S 80IB(10) OF THE ACT. THE FACTS, IN BRIEF, ARE THAT THE ASSESSEE FI RM IS ENGAGED IN BUILDING/DEVELOPMENT OF CONSTRUCTION ACTIVITIES AND ASSESSED TO TAX FOR THE LAST MANY YEARS. THE ASSES SEE FIRM COMMENCED AND COMPLETED TWO HOUSING PROJECTS NAMELY GAGAN VIHAR COMPLEX AND GANGAN SARITA COMPLEX A T NALLASOPARA (EAST). OUT OF WHICH GAGAN VIHAR COMPL EX COMPRISES OF EIGHT BUILDINGS IN WHICH TWO BUILDINGS WERE CONSISTING OF SHOPPING COMPLEX, ON THE GROUND FLOOR , DULY APPROVED AS HOUSING PROJECT BY CIDCO, THE LOCAL AUT HORITY. FOR ASSESSMENT YEAR 2006-07, THE ASSESSEE RETURNED NIL INCOME AFTER CLAIMING DEDUCTION U/S 80IB (10) OF TH E ACT AMOUNTING TO RS.19,58,236/- (RS.11,80,433/- FOR GAG AN VIHAR COMPLEX AND RS.7,77,803 IN GAGAN SARITA COMPL EX). THE ASSESSING OFFICER ALLOWED THE CLAIMED DEDUCTION ON THE PROJECT GAGAN SARITA COMPLEX AS IT WAS CONSISTING OF RESIDENTIAL UNITS AND DISALLOWED THE CLAIMED DEDUCT ION WITH RESPECT TO GAGAN VIHAR COMPLEX AMOUNTING TO RS.11,80,433/- ON THE GROUND THAT TWO OUT OF EIGHT BUILDINGS, THE SHOPPING COMPLEX IS NOT ALLOWABLE. T HIS CONCLUSION WAS DRAWN DISREGARDING THE CERTIFICATE I SSUED BY CIDCO CERTIFYING THAT THE SAID PROJECT IS HOUSING P ROJECT AND M/S AKASH LAND DEVELOPERS 9 ALSO IGNORING THE INDEPENDENT ENQUIRY MADE BY ASSES SING OFFICER FOR AY 2003-04 WHEREIN, IT WAS HELD THAT GA NGA VIHAR COMPLEX IS A HOUSING PROJECT. ON APPEAL, BEFORE TH E LD. COMMISSIONER OF INCOME TAX (APPEALS), THE FACTS WER E CONSIDERED AND ULTIMATELY, THE CLAIMED DEDUCTION WA S ALLOWED AS DISCUSSED HEREINABOVE. THE REVENUE IS A GGRIEVED AND IS IN APPEAL BEFORE THIS TRIBUNAL. 2.3. WE FIND THAT THE CLAIMED DEDUCTION WAS DENIED TO THE ASSESSEE BROADLY ON THE GROUND THAT THE CONDITI ONS ENSHRINED IN THE SECTION ARE NOT FULFILLED ON ACCOU NT OF BUILT UP AREA OF SHOPS EXCEEDED THE PRESCRIBED LIMIT AND FURTHER THE ASSESSEE DID NOT OBTAIN COMPLETION CERTIFICATE ON OR BEFORE 31/03/2008 FROM THE APPROPRIATE AUTHORITY WH O APPROVED THAT BUILDING PLAN. WE FURTHER NOTE THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS) AT PAGE-3 OF T HE IMPUGNED ORDER HAS REPRODUCED SECTION 80IB(10) OF T HE ACT, THEREFORE, WE ARE REFRAINING OURSELVES TO REPRODUCI NG THE SAME. THERE IS NO DISPUTE TO THE FACT THAT THE SAN CTION PLAN/APPROVAL WAS GRANTED TO THE ASSESSEE AS RESIDE NTIAL CUM COMMERCIAL PROJECT BY CIDCO/COMPETENT AUTHORITY . THE ENTIRE PROJECT NAMELY GAGAN VIHAR COMPLEX, CO NSISTING OF EIGHT BUILDINGS WAS APPROVED BY THE LOCAL AUTHOR ITY UNDER A SINGLE PROJECT UNDER GROUP HOUSING SCHEME. IN SU CH A SITUATION, IN OUR VIEW, THE PROJECT AS WHOLE SHOULD FULFILL THE PRE-CONDITION OF HOUSING PROJECT BEFORE QUALIFYIN G FOR THE PURPOSES OF DEDUCTION U/S 80IB (10) OF THE ACT. TH E PROVISION OF SECTION 80IB(10) OF THE ACT WAS AMENDE D WITH EFFECT FROM 01/04/2005, CLAUSE (D) WAS INTRODUCED R ELEVANT M/S AKASH LAND DEVELOPERS 10 TO ASSESSMENT YEAR 2005-06 ALLOWING FOR SHOPS AND O THER COMMERCIAL ESTABLISHMENTS NOT EXCEEDING 5% OF THE AGGREGATE BUILT UP AREA OF THE HOUSING PROJECT OR 2 000 SQ. FT. WHICHEVER IS LESS. THIS AMENDMENT/PROVISION WAS PROSPECTIVE IN NATURE, THE PROJECT WAS STARTING PRI OR TO A.Y. 2005-06 AND THUS THE AMENDED PROVISION WAS MADE EFF ECTIVE PROSPECTIVELY. THE RATIO LAID DOWN IN RELIANCE JUT E INDUSTRIES VS CIT (120 ITR 921) (SC), KARIM THARUVI TEA ESTATE LTD. 60 ITR 262 AND CIT VS ISTHEMIAN STEAM S HIP LINES 20 ITR 572, WHEREIN, IT WAS HELD THAT THE LAW IS TO APPLIED WHICH IS IN FORCE IN THE ASSESSMENT YEAR UN LESS OTHERWISE, PROVIDED EXPRESSLY OR BY NECESSARY IMPLI CATION. THE PROJECT WAS APPROVED BY THE CIDCO/LOCAL AUTHORI TY AND SINCE THE CONSTRUCTION OF THE PROJECT WAS COMPLETED DURING THE PREVIOUS YEAR RELEVANT TO AY 2003-04 AND THE AM ENDED PROVISION WAS INTRODUCED W.E.F. 01/04/2005, THEREFO RE, THE ASSESSEE IS NOT EXPECTED TO FOLLOW THE PROSPECTIVE AMENDMENT. FURTHER, THE ASSESSEE IS NOT EXPECTED T O ALTER THE CONSTRUCTED PORTION AND TO ADHERE TO THE SUBSEQ UENT AMENDMENT APPLICABLE PROSPECTIVELY. THE DECISION I N SAROJ SALES CORPORATION VS DCIT SUPPORTS OUR VIEW. THE IS SUE IS OTHERWISE, SETTLED BY HONBLE JURISDICTION HIGH COU RT IN THE CASE OF BRAHMA ASSOCIATED VS JOINT COMMISSIONER OF INCOME TAX (2009) 122 TTJ (PUNE)(SB), 433, WHEREIN IT WAS HELD AS UNDER :- 'MERELY BECAUSE A PART OF THE PLOT IS USED FOR COMMERCIAL PURPOSES, THE CHARACTER OF HOUSING PROJE CT IS NOT VITIATED AND THE AVAILABILITY OF TAX BENEFIT S IS NOT M/S AKASH LAND DEVELOPERS 11 CONFINED TO ONLY SUCH HOUSING PROJECTS WHICH ARE PU RELY RESIDENTIAL PROJECTS - SO FAR AS ASSESSMENT YEARS P RIOR TO A. Y. 2005-06 ARE CONCERNED, APPROVAL BY THE LOC AL AUTHORITY AS A HOUSING PROJECT CONSTITUTES ADMISSIB LE MATERIAL TO COME TO THE CONCLUSION THAT THE HOUSING PROJECT IS ELIGIBLE FOR DEDUCTION U/S. 80IB(10) - W HAT WAS BROUGHT INTO EFFECT BY INSERTION OF CL.(D) IN S.80IB(10) VIDE FINANCE (NO.2) ACT, 2004, WAS A RESTRICTION ON USE OF BUILT UP AREA FOR COMMERCIAL PURPOSES, AND NOT A RELAXATION TO USE THE BUILT-UP AREA FOR COMMERCIAL PURPOSES - THIS INDICATES THAT THERE WAS NO SUCH LIMIT IN FORCE FOR THE EARLIER YEARS - REST RICTION OF 5 PER CENT IS APPLICABLE ONLY WITH PROSPECTIVE E FFECT AND THERE IS NO JUSTIFICATION TO PRESUME THAT SUCH A LIMIT OR PROHIBITION WAS IN PLACE IN THE EARLIER YE ARS AS WELL ON THE COMMERCIAL USE OF AREA - IT WOULD BE REASONABLE TO GRANT BENEFIT OF INCENTIVE PROVISION TO PROJECTS IN WHICH BUILT UP AREA FOR COMMERCIAL PURP OSES DOES NOT EXCEED 10 PER CENT OF TOTAL AREA - WHERE APPROXIMATELY 90 PER CENT OR MORE OF THE TOTAL AREA IS UTILIZED FOR BUILDING DWELLING UNITS AND OTHER COND ITIONS OF S. 80-IB(10) ARE FULFILLED, THERE IS NO JUSTIFIC ATION TO DENY THE BENEFIT WHERE THE PROJECT HAS BEEN PASSED AS 'RESIDENTIAL-COMMERCIAL PROJECT' - WHERE THE TOTAL BUILT- UP COMMERCIAL AREA IS MORE THAN 10 PERCENT OF TOTAL AREA, SUCH PROJECTS NORMALLY SHOULD NOT GET BENEFIT OF DEDUCTION UNLESS THE UNDERTAKING CAN SHOW THAT THE INCOME FROM CONSTRUCTION OF RESIDENTIAL DWELLING UN ITS CAN BE WORKED OUT SEPARATELY, AND EVEN AFTER EXCLUD ING THE COMMERCIAL USE OF PLOT, THE PROJECT SATISFIES A LL THE REQUIREMENTS OF S. 80-IB(10) ON STANDALONE BASIS'. M/S AKASH LAND DEVELOPERS 12 2.4. IF THE TOTALITY OF FACTS AVAILABLE ON RECORD IS KEPT IN JUXTAPOSITION WITH THE ORDER OF THE HONBLE JURISDI CTIONAL HIGH COURT IN BRAHMA ASSOCIATED VS JCIT (SUPRA), WE FIND THAT THE CASES OF THE ASSESSEE FALLS WITHIN THE PAR AMETERS SET OUT BY HONBLE HIGH COURT. OUR VIEW IS FURTHER FOR TIFIED BY THE DECISION OF THE SPECIAL BENCH IN BRAHMA ASSOCIA TED VS JCIT (2009) 122 TTJ (PUNE)(SB) 433. THE HONBLE HI GH COURT HELD THAT IN A CASE OF A HOUSING PROJECT WHIC H INCLUDES COMMERCIAL AREA, PERMITTED UNDER THE RULES OF A LOC AL AUTHORITY. SINCE, THE HOUSING PROJECT/COMMERCIAL A REA IS WITHIN THE PARAMETERS LAID DOWN BY THE HONBLE JURISDICTIONAL HIGH COURT, THEREFORE, WE FIND NO IN FIRMITY IN THE CONCLUSION DRAWN BY THE LD. COMMISSIONER OF INC OME TAX (APPEALS). SINCE THE FACTS/ISSUE ARE IDENTICAL IN ALL THE APPEALS, THEREFORE, OUR ABOVE CONCLUSION WILL BE AP PLICABLE TO THE APPEALS UNDER CONSIDERATION. IN VIEW OF THE CLE AR FACTS AND THE JUDICIAL PRONOUNCEMENTS DISCUSSED HEREINABO VE, RESPECTFULLY, THE DECISION FROM HONBLE JURISDICTIO NAL HIGH COURT, THE STAND OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) IS AFFIRMED. FINALLY, ALL THE APPEALS OF THE REVENUE ARE DISMISS ED. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LD. REPRESENTATIVE OF BOTH SIDES AT THE CONCLUSION OF HEARING ON 01/05/2015. SD/- SD/- ( B.R.BASKARAN ) (JOGINDER SINGH) '# / ACCOUNTANT MEMBER $# / JUDICIAL MEMBER MUMBAI; ) DATED : 01/05/2015 F{X~{T? P.S/. . . M/S AKASH LAND DEVELOPERS 13 %$&'()(*& / COPY OF THE ORDER FORWARDED TO : 1. *+,- / THE APPELLANT 2. ./,- / THE RESPONDENT. 3. 0% ( *+ ) / THE CIT, MUMBAI. P4. 0% / CIT(A)- , MUMBAI 5. 2!3 .%' , *+( *' 4 , / DR, ITAT, MUMBAI 6. 5# 6 / GUARD FILE. / BY ORDER, /2+% .% //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI