ADDL CIT 15(2), MUMBAI V. VELENTINE DEVELOPRS, MUMBAI

ITA 8469/MUM/2010

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 75905 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 3 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-03-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Next Hearing Date: 25-02-2014
• Assessment Year: 2007-2008
• Appeal Filed On: 06-12-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJESH RANJAN PRASAD
• Assessee Lawyers: REEPAL G TRALSHAWALA
• Section: 80IB; 10B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL 'F' BENCH, MUMBAI BEFORE SHRI D. MANMOHAN, VICE PRESIDENT AND SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER ITA NO. 6901 & 8469/MUM/2010 (ASSESSMENT YEARS: 2006-07 & 2007-08) INCOME TAX OFFICER - 19(3)(4) M/S. VELENTINE DEVELO PERS ROOM NO. 304, 3RD FLOOR PLOT NO. 421/A, 'PRARABDH' PIRAMAL CHAMBERS, LALBAUG VS. 15TH ROAD, KHAR (WEST) MUMBAI 400012 MUMBAI 400052 PAN - AAEFV3543P APPELLANT RESPONDENT APPELLANT BY: SHRI RAJESH RANJAN PRASAD RESPONDENT BY: SHRI REEPAL G. TRALSHAWALA DATE OF HEARING: 25.02.2014 DATE OF PRONOUNCEMENT: 14.03.2014 O R D E R PER D. MANMOHAN, V.P. THESE TWO APPEALS ARE DIRECTED AGAINST THE ORDERS P ASSED BY THE CIT(A)- 30, MUMBAI AND THEY PERTAIN TO ASSESSMENT YEARS 200 6-07 AND 2007-08. 2. ELIGIBILITY TO CLAIM DEDUCTION UNDER SECTION 80IB(1 0) OF THE INCOME TAX ACT, 1961 IS THE SUBJECT MATTER OF DISPUTE BEFORE U S. 3. THE FACTS OF THE CASE REVOLVE IN A NARROW COMPASS. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF DEVELOPING HOUSING PROJE CT. THE ASSESSEE FIRM HAD TAKEN FOR DEVELOPMENT A PLOT OF LAND CONSISTING OF 24,168.80 SQ.MTRS. WHICH ADMEASURES ABOUT SIX ACRES OF LAND AND ON THE SAID PLOT OF LAND THE ASSESSEE COMMENCED CONSTRUCTION OF RESIDENTIAL COMP LEXES WHICH ARE NAMED AS MEADOW PARK-I & MEADOW PARK-II. THE PROJECT IS SITUATED AT BANDIVALI, JOGESHWARI (W), MUMBAI. IT IS NOT DISPUTED THAT THE PROJECT WAS APPROVED ON 11.03.2004 AND CONSTRUCTION OF PARK-II COMMENCED ON THE SAME DAY WHEREAS PARK-I COMMENCED ITS OPERATIONS ON 26.03.20 04. IN OTHER WORDS, BOTH THE PROJECTS COMMENCED BEFORE 31 ST MARCH, 2004. ADMITTEDLY THE BUILT UP AREA OF EACH FLAT IS LESS THAN 1000 SQ.FT. AND T HE PROJECTS HAVE BEEN ITA NO. 6901&8469/MUM/2010 M/S. VELENTINE DEVELOPERS 2 COMPLETED WITHIN THE PERIOD STIPULATED IN SECTION 8 0IB OF THE ACT, I.E. COMPLETION CERTIFICATE WAS OBTAINED IN RESPECT OF P ARK-II ON 05.12.2005 WHEREAS IN RESPECT OF PARK-I COMPLETION CERTIFICATE WAS OBTAINED ON 04.01.2006. 4. UNDERTAKINGS DEVELOPING AND BUILDING HOUSING PROJEC TS FALL IN THE ELIGIBILITY CRITERIA UNDER SECTION 80IB OF THE ACT SUBJECT TO CERTAIN CONDITIONS IN FORCE AT THE TIME WHEN THE PROJECTS WERE APPROVE D. SECTION 80IB STIPULATES THE FOLLOWING CONDITIONS IN ORDER TO CLA IM BENEFIT OF 100% DEDUCTION FROM THE PROFITS EARNED FROM UNDERTAKING, DEVELOPING AND BUILDING HOUSING PROJECTS APPROVED PRIOR TO 31.03.2 005, WHICH THE ASSESSEE HAD FULFILLED: - I. IT HAS TO COMMENCE DEVELOPMENT OF HOUSING PROJECT O N OR AFTER 1 ST OCTOBER, 1998 II. THE AREA OF THE PLOT OF LAND SHOULD NOT BE LESS THA N ONE ACRE. III. EACH RESIDENTIAL UNIT SHOULD NOT EXCEED THE MAXIMUM BUILT UP AREA OF 1000 SQ.FT. IN MUMBAI. 5. FOR THE YEARS UNDER CONSIDERATION ASSESSEE CLAIMED DEDUCTION UNDER SECTION 80IB(10) OF THE ACT ON THE GROUND THAT IT H AS FULFILLED ALL THE THREE CONDITIONS. IT DESERVES TO BE NOTICED HERE THAT SEC TION 80IB(10) WAS AMENDED W.E.F. 01.04.2005 WHEREIN THE LEGISLATURE REFERS TO UNDERTAKINGS DEVELOPING AND BUILDING HOUSING PROJECTS APPROVED BEFORE THE 3 1 ST DAY OF MARCH, 2007 WITH A FURTHER CONDITION THAT SUCH UNDERTAKING SHOU LD NOT ONLY COMMENCE DEVELOPMENT AFTER THE FIRST DAY OF OCTOBER 1998 BUT SHOULD COMPLETE SUCH CONSTRUCTION BEFORE 31 ST MARCH, 2008. THE SIZE OF THE PLOT OF LAND AND THE BUILT UP AREA FOR EACH RESIDENTIAL UNIT HAS NOT UND ERGONE ANY CHANGE BUT ONE MORE CLAUSE WAS ADDED, I.E. CLAUSE D WHEREBY THE BENEFIT TO CLAIM DEDUCTION UNDER SECTION 80IB(10) WAS LIMITED TO THO SE PROJECTS SUBJECT TO FULFILLING OF CLAUSE D W.E.F. 01.04.2005. FOR IMM EDIATE REFERENCE CLAUSE D IS REPRODUCED HEREUNDER: - THE BUILT UP AREA OF THE SHOPS AND OTHER COMMERCIA L ESTABLISHMENTS INCLUDED IN THE HOUSING PROJECT DOES NOT EXCEED 5% OF THE AGGREGATE BUILT UP AREA OF THE HOUSING PROJECT OR 2000 SQ.FT. , WHICHEVER IS LESS. ITA NO. 6901&8469/MUM/2010 M/S. VELENTINE DEVELOPERS 3 6. DURING THE COURSE OF ASSESSMENT PROCEEDINGS FOR THE YEARS UNDER CONSIDERATION THE AO NOTICED THAT THE ASSESSEE HAS CATERED SOME SPACE FOR BUILDING SHOPS AND COMMERCIAL ESTABLISHMENTS, THE T OTAL OF WHICH IS IN EXCESS OF 2000 SQ.FT. AND AS PER SUB-CLAUSE D TO SECTION 80IB(10) OF THE ACT THE ASSESSEE IS NOT ENTITLED TO THE BENEFIT OF DEDU CTION IF THE BUILT UP AREA OF THE SHOPS IS IN EXCESS OF 2000 SQ.FT. IT ALSO DESER VES TO BE NOTICED THAT ACCORDING TO THE ASSESSEE THE TOTAL BUILT UP AREA O F THE SHOPS IN THE PROJECT IS 1816 SQ.FT. BUT THE AO HAS GIVEN REASONS TO ESTA BLISH THAT THE BUILT UP AREA OF COMMERCIAL SPACE IS MORE THAN 2000 SQ.FT. A ND THE ASSESSEE HAS NOT PREFERRED AN APPEAL BEFORE US ON THIS ASPECT. 7. THE AO NOTICED THAT THE ASSESSEE CONSTRUCTED 14 SHO PS IN THE HOUSING PROJECT AND THE TOTAL AREA OF 1816 SQ.FT. REFERS TO CARPET AREA AND NOT BUILT UP AREA. BY APPLYING THE STANDARD RATIO OF 1.2 FOR CON VERTING INTO BUILT UP AREA, THE BUILT UP AREA WORKS OUT TO 2179 SQ.FT. THEREFOR E, THE AO WAS OF THE VIEW THAT THE ASSESSEE VIOLATED THE CONDITIONS PRESCRIBE D UNDER CLAUSE D OF SECTION 80IB(10) OF THE ACT, WHICH WAS INTRODUCED I N THE STATUTE BOOK W.E.F. 01.04.2005. UNDER THESE CIRCUMSTANCES THE AO WAS OF THE OPINION THAT THE ASSESSEE IS NOT ENTITLED TO DEDUCTION UNDER SECTION 80IB(10) OF THE ACT. ON THE OTHER HAND, THE CASE OF THE ASSESSEE WAS THAT T HE CONDITIONS STIPULATED IN CLAUSE D OF SECTION 80IB(10) CANNOT BE MADE AP PLICABLE TO THE PROFITS EARNED FROM THE HOUSING PROJECT APPROVED IN THE CAS E OF THE ASSESSEE SINCE THE APPROVAL WAS OBTAINED PRIOR TO THE AMENDMENT CA RRIED OUT BY THE FINANCE (NO. 2) ACT, 2004. IN OTHER WORDS, THE LAW AS ON THE DATE, WHEN THE APPROVAL OF THE HOUSING PROJECT WAS OBTAINED AND TH E PROJECT COMMENCED, SHOULD BE MADE APPLICABLE WHILE CONSIDERING A CASE AS TO WHETHER THE ASSESSEE IS ENTITLED TO DEDUCTION AS PER THE PROVIS IONS OF THE STATUTE. IT WAS FURTHER CONTENDED THAT CLAUSE D WAS INTRODUCED W. E.F. 01.04.2005 WHEREBY AN ASSESSEE DEVELOPING HOUSING PROJECT SHOULD NOT C ONSTRUCT BUILT UP AREA OF SHOPS IN EXCESS OF 2,000 SQ.FT. WHEREAS PRIOR TO TH E SAID AMENDMENT THERE WAS NO SUCH PRE-CONDITION FOR AVAILABILITY OF DEDUC TION AND THE ONLY CONDITION WAS THAT THE PROJECT OUGHT TO BE APPROVED AS HOUSING PROJECT. IN THE CASE OF THE ASSESSEE THERE IS NO DISPUTE THAT T HE PROJECT OF THE ASSESSEE ITA NO. 6901&8469/MUM/2010 M/S. VELENTINE DEVELOPERS 4 FULFILLED ALL THE CONDITIONS AS STIPULATED IN THE A CT AS ON THE DATE OF APPROVAL AND COMMENCEMENT AND IT WAS APPROVED AS A HOUSING P ROJECT. 8. THE AO WAS, HOWEVER, OF THE OPINION THAT UPON CONST RUCTION OF SHOPS AND COMMERCIAL ESTABLISHMENTS IN THE PROJECT THE AS SESSEE WOULD NOT BE ENTITLED TO CLAIM DEDUCTION UNDER SECTION 80IB(10) OF THE ACT BECAUSE EVEN PRIOR TO THE AMENDMENT TO SECTION 80IB(10) THE COND ITION PRESCRIBED WAS FOR CONSTRUCTION OF RESIDENTIAL UNITS ONLY WHICH, IN TH E INSTANT CASE, STANDS VIOLATED BY VIRTUE OF CONSTRUCTION OF 14 SHOPS. EVE N OTHERWISE BY VIRTUE OF THE AMENDED PROVISION THE AREA ALLOCATED FOR SHOPS AND COMMERCIAL ESTABLISHMENTS WAS IN EXCESS OF 2,000 SQ.FT. AND EV EN ON THAT COUNT THE ASSESSEE WOULD NOT BE ENTITLED TO THE BENEFIT UNDER SECTION 80IB(10) OF THE ACT. ASSESSMENT WAS COMPLETED ACCORDINGLY. 9. AGGRIEVED, ASSESSEE RAISED A TWO FOLD CONTENTION BE FORE THE CIT(A), I.E.; (A) SECTION 80IB(10)(D) WAS INTRODUCED INTO THE STA TUTE BOOK W.E.F. 01.04.2005 WHICH CANNOT BE MADE APPLICABLE TO THE H OUSING PROJECTS APPROVED PRIOR TO THE SAID DATE, AND (B) THE ONLY P RE-CONDITION AS PER THE PRE-AMENDED PROVISION WAS THAT THE PROJECT SHOULD B E APPROVED AS A HOUSING PROJECT AND UNLIKE THE CONDITIONS PRESCRIBE D UNDER CLAUSE D THERE IS NO SUCH RESTRICTION WITH REGARD TO THE BUILT UP AREA OF SHOPS AND HENCE, WHETHER THE BUILT UP AREA OF SHOPS IS BELOW 2,000 S Q.FT. OR ABOVE 2,000 SQ.FT. WOULD NOT MAKE ANY DIFFERENCE FOR THE PURPOSE OF MA KING A CLAIM UNDER SECTION 80IB(10) OF THE ACT. ELABORATING FURTHER IT WAS CONTENDED THAT A BENEFICIAL PROVISION SUCH AS SECTION 80IB(10) HAS T O BE READ IN A WAY THAT WOULD ADVANCE THE LEGISLATIVE OBJECT AND INTENT AND IT SHOULD NOT BE INTERPRETED IN A WAY THAT IT WOULD MAKE THE PROVISI ON REDUNDANT. IN THE INSTANT CASE THE LOCAL AUTHORITY HAS APPROVED THE P ROJECT AS HOUSING PROJECT AND THE ASSESSEE HAD DEVELOPED MORE THAN 90,000 SQ. FT. OUT OF THIS THE MAJOR PORTION IS FOR RESIDENTIAL UNITS AND ONLY A M EAGRE AREA WAS CONVERTED INTO SHOPS FOR THE CONVENIENCE OF THE PEOPLE RESIDI NG IN THE BUILDINGS. MERELY BECAUSE A SMALL PORTION IS CONVERTED INTO SHOPPING AREA IT WILL NOT CHANGE THE MAIN OBJECT AND IT CANNOT BE TREATED AS A NON-H OUSING PROJECT. IT WAS ALSO CONTENDED THAT THE PROJECT WAS APPROVED IN MAR CH, 2004 AND ITA NO. 6901&8469/MUM/2010 M/S. VELENTINE DEVELOPERS 5 CONSTRUCTION WAS ALSO COMMENCED IN MARCH, 2004 AND AS PER THE LAW, AS IT STOOD AT THE RELEVANT POINT OF TIME, THE ASSESSEE W OULD BE ENTITLED TO DEDUCTION UNDER SECTION 80IB(10) OF THE ACT SO LONG AS THE PROJECT IS APPROVED AS A HOUSING PROJECT AND THE AMENDED LAW, WHICH HAS COME INTO FORCE W.E.F. 01.04.2005, WOULD NOT BE APPLICABLE ME RELY BECAUSE THE CONSTRUCTION WAS COMPLETED DURING THE PREVIOUS YEAR RELEVANT TO A.Y. 2005- 06. APPLICABILITY OF THE CONDITIONS STIPULATED UNDE R SECTION 80IB(10) WOULD HAVE TO BE CONSIDERED AT THE POINT OF TIME WHEN THE PROJECT WAS APPROVED AND CONSTRUCTION COMMENCED AND SO LONG AS THE CONST RUCTION WAS COMPLETED WITHIN THE PERIOD STIPULATED IN THE ACT, AS IT EXISTED AT THE RELEVANT POINT OF TIME, THE SUBSEQUENT AMENDMENT WH ICH WAS PROSPECTIVE IN NATURE CANNOT TAKE AWAY THE RIGHT ACCRUED TO THE AS SESSEE TO CLAIM THE BENEFIT. IN OTHER WORDS, THE PROVISIONS OF THE ACT HAS TO BE GIVEN EFFECT TO SO AS TO ADVANCE THE OBJECT OF THE LEGISLATION AND IT SHOULD NOT BE INTERPRETED NARROWLY SO AS TO TAKE AWAY THE VESTED RIGHT ACCRUE D TO THE ASSESSEE WITH REGARD TO THE CLAIM OF DEDUCTION OF PROFIT FROM THE PROJECT. RELIANCE WAS ALSO PLACED UPON SEVERAL DECISIONS OF THE ITAT MUMBAI BE NCHES WHEREIN IT WAS HELD THAT THE AMENDED PROVISIONS WOULD NOT BE APPLI CABLE TO THE PROJECTS THAT ARE APPROVED PRIOR TO THE AMENDED LAW COMING I NTO FORCE. 10. THE LEARNED CIT(A) CONSIDERED THE DETAILED SUBMISSI ONS MADE ON BEHALF OF THE ASSESSEE. IN THE LIGHT OF THE DECISIO N OF THE ITAT PUNE SPECIAL BENCH IN THE CASE OF BRAHMA ASSOCIATES 30 SOT 155 H E WAS OF THE OPINION THAT WHEN A HOUSING PROJECT IS APPROVED, THE LAW AS ON THE DATE OF APPROVAL SHOULD BE TAKEN INTO CONSIDERATION IN WHICH EVENT T HE AMENDED PROVISION, WHICH HAS COME INTO EFFECT FROM 01.04.2005, CANNOT BE MADE APPLICABLE. IN OTHER WORDS, SO LONG AS THE BUILT UP AREA OF SHOPS IS LESS THAN 10% OF THE TOTAL BUILT UP AREA THE ASSESSEE CANNOT BE DENIED T HE BENEFIT UNDER SECTION 80IB OF THE ACT. HE ALSO REFERRED TO SEVERAL OTHER DECISIONS OF THE ITAT MUMBAI BENCHES IN HOLDING THAT THE PROJECT UNDERTAK EN BY THE ASSESSEE WAS APPROVED AS A HOUSING PROJECT BY THE LOCAL AU THORITY IN MARCH, 2004 AND THE CONSTRUCTION ALSO HAVING BEEN COMMENCED IN 2004 THE PRE-AMENDED PROVISIONS ARE APPLICABLE IN WHICH EVENT THE ASSESS EE IS ENTITLED TO CLAIM ITA NO. 6901&8469/MUM/2010 M/S. VELENTINE DEVELOPERS 6 DEDUCTION UNDER SECTION 80IB(10) OF THE ACT AND DIR ECTED THE AO ACCORDINGLY. 11. AGGRIEVED, REVENUE IS IN APPEAL BEFORE US. THE LEAR NED D.R. (CIT-D.R.) HAS NOT DISPUTED THE FACTUAL MATRIX OF THE CASE. AD MITTEDLY, THE EXTENT OF LAND WHICH WAS TAKEN UP FOR DEVELOPMENT ADMEASURES ABOUT SIX ACRES AND THE PROJECT WAS APPROVED AS HOUSING PROJECT BY THE LOCAL AUTHORITY AND PARK- I AND PARK-II PROJECTS WERE COMMENCED PRIOR TO 31.0 3.2004. THE CIT-D.RS EMPHASISE WAS MAINLY ON THE AMENDED PROVISIONS WHER EBY THE ASSESSEE WOULD LOOSE THE BENEFIT OF DEDUCTION IF THE BUILT U P AREA UTILISED FOR SHOPS, ETC. EXCEEDS 2,000 SQ.FT. HE ADVERTED OUR ATTENTION TO CLAUSE D OF SECTION 80IB(10) OF THE ACT WHICH CAME INTO EFFECT FROM 01. 04.2005. IN HIS OPINION, THE ASSESSEE HAVING OBTAINED COMPLETION CERTIFICATE ON 05.12.2005 IN RESPECT OF PARK-II AND ON 04.01.2006 IN RESPECT PAR K-I, THE AMENDED PROVISIONS WILL COME INTO PLAY AND, THEREFORE, THE ASSESSEE IS NOT ENTITLED TO DEDUCTION UNDER SECTION 80IB(10) OF THE ACT. HE ADV ERTED OUR ATTENTION TO INSTRUCTION NO. 4 OF 2009 DATED 30.06.2009 ISSUED B Y CBDT TO SUBMIT THAT DEDUCTION UNDER SECTION 80IB(10) WOULD BE AVAILABLE ON AN YEAR TO YEAR BASIS IN WHICH EVENT THE LAW APPLICABLE IN THE YEAR IN WHICH DEDUCTION IS CLAIMED SHOULD BE MADE APPLICABLE TO THE ASSESSEE. IT DESERVES TO BE NOTICED HERE THAT THE INSTRUCTION REFERRED TO BY THE CIT-D. R. WAS ISSUED TO CLARIFY THAT AN ASSESSEE CAN CLAIM THE BENEFIT OF DEDUCTION ON YEAR TO YEAR BASIS DEPENDING ON THE METHOD FOLLOWED BY THE ASSESSEE SU BJECT TO THE CONDITION THAT COMPLETION OF THE PROJECT SHOULD BE WITHIN THE TIME LIMIT SPECIFIED UNDER SECTION 80IB(10) OF THE ACT AND IF THE CONSTRUCTION IS NOT COMPLETED BEFORE THE SPECIFIED DATE DEDUCTION GRANTED IN THE EARLIER YEARS SHOULD BE WITHDRAWN. IN THE CASE OF THE ASSESSEE HERE, EVEN A S PER THE PRE-AMENDED PROVISIONS THE PROJECT WAS COMPLETED WITHIN THE TIM E LIMIT STIPULATED UNDER SECTION 80IB(10) OF THE ACT. THE CIT-D.R. ALSO REFE RRED TO CIRCULAR NO. 5 OF THE CBDT DATED 15.07.2005 TO HIGHLIGHT THAT EXTENSI ON OF TIME LIMIT FOR OBTAINING APPROVAL OF HOUSING PROJECT UNDER THE SAI D PROVISION WOULD APPLY IN RELATION TO A.Y. 2005-06 AND SUBSEQUENT YEARS. I N THE INSTANT CASE THE ASSESSEE HAS COMPLETED THE PROJECTS IN THE PREVIOUS YEAR RELEVANT TO A.Y. 2006-07; IN THE OPINION OF THE LEARNED CIT-D.R., TH E AMENDED PROVISIONS ARE ITA NO. 6901&8469/MUM/2010 M/S. VELENTINE DEVELOPERS 7 APPLICABLE. HE ALSO FILED DETAILED SUBMISSIONS ALON GWITH CERTAIN CASE LAW TO SUBMIT THAT IT IS A CARDINAL PRINCIPLE OF TAX LAW T HAT THE LAW TO BE APPLIED IS THAT WHICH IS IN FORCE IN THE ASSESSMENT YEAR AND T HERE IS NO ROOM FOR EQUITY. HE ALSO RELIED UPON A SUBSEQUENT DECISION O F THE ITAT I BENCH, MUMBAI IN THE CASE OF EVEREST HOME CONSTRUCTION (I) P. LTD. 139 ITD 01 WHEREIN THE BENCH HAD TAKEN A VIEW, BASED UPON THE RATIO LAID DOWN BY THE HON'BLE SUPREME COURT IN THE CASE OF RELIANCE JUTE & INDUSTRIES LTD. 120 ITR 921, THAT IN THE YEAR OF COMPLETION IF THE AMEN DED LAW PROVIDES FOR A CONDITION THAT COMMERCIAL BUILT UP AREA SHOULD NOT BE MORE THAN 2,000 SQ.FT., IN THE EVENT OF EXCEEDING THE LIMIT THE ASS ESSEE WOULD NOT BE ENTITLED TO CLAIM DEDUCTION UNDER SECTION 80IB(10) OF THE AC T. HE HAS ALSO REFERRED TO THE DECISION OF THE HON'BLE KARNATAKA HIGH COURT IN THE CASE OF DSL SOFTWARE LTD. 351 ITR 385 WHEREIN THE COURT, WHILE CONSIDERING THE PROVISIONS OF SECTION 10B OF THE ACT, OBSERVED THAT THE PROVISION AS IT STOOD AT THE TIME WHEN THE ASSESSEE IS ENTITLED TO CLAIM DEDUCTION IS APPLICABLE; IF DURING THE ELIGIBILITY PERIOD TAX HOLIDAY PERIOD IS EXTENDED THE ASSESSEE CAN CLAIM BENEFIT AS PER THE AMENDED PROVISIONS. IN THE OPINION OF THE CIT-D.R. THE UNDERLYING RATIO SQUARELY APPLIES TO THE CASE O N HAND WHICH AMPLY MAKES IT CLEAR THAT THE AMENDED PROVISIONS CAN BE MADE AP PLICABLE IN THE YEARS IN WHICH THE CLAIM IS MADE. HE HAS ALSO REFERRED TO TH E DECISION OF THE INDORE BENCH OF THE ITAT WHEREIN SIMILAR VIEW WAS TAKEN. I N THE LIGHT OF THESE DECISIONS THE LEARNED CIT-D.R. WAS OF THE VIEW THAT THE LAW CORRECTLY LAID DOWN IN A LATER DECISION SHOULD BE PREFERRED TO THA T OF THE EARLIER DECISIONS OF THE TRIBUNAL OR HIGH COURT. HE HAS ALSO REFERRED TO THE DECISION OF THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. THANE ELEC TRICITY SUPPLY LTD. 206 ITR 727 IN SUPPORT OF HIS CONTENTION THAT THE EXPRE SSION TWO VIEWS MEANS TWO LOGICAL VIEWS AND MERELY BECAUSE ONE VIEW, WHIC H IS BASED ON IMPROPER REASONING, IS ALREADY TAKEN BY A BENCH OR A HIGH CO URT IT CANNOT BE STRICTLY TREATED AS ONE PERMISSIBLE VIEW AND IN SUCH CASES A PPELLATE FORUM IS ENTITLED TO APPLY THE LATTER DECISION WHICH ESPOUSES THE LAW IN THE CORRECT PERSPECTIVE. HE THUS STRONGLY SUPPORTED THE ORDER PASSED BY THE AO. 12. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ISSUE STANDS SQUARELY COVERED BY THE DECISION OF THE HON'BLE BOM BAY HIGH COURT IN THE ITA NO. 6901&8469/MUM/2010 M/S. VELENTINE DEVELOPERS 8 CASE OF BRAHMA ASSOCIATES WHEREIN THE DECISION OF T HE ITAT PUNE SPECIAL BENCH WAS UPHELD. ADVERTING OUR ATTENTION TO THE DE CISION OF THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF BRAHMA ASSOCIATES 333 ITR 289 THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE HON'BLE JURISDICTIONAL HIGH COURT HAS SPECIFICALLY REFERRED TO THE PROVISI ONS OF SECTION 80IB OF THE ACT AND IT HAS ALSO TAKEN INTO CONSIDERATION CLAUSE D INSERTED IN SECTION 80IB(10) W.E.F. 01.04.2005 AND UPON ANALYSING THE M ATTER THE HON'BLE COURT CONCLUDED THAT THE AMENDED PROVISION IS PROSPECTIVE IN NATURE AND IT CANNOT BE APPLIED TO A CASE WHERE THE PROJECT WAS APPROVED AND CONSTRUCTION COMMENCED PRIOR TO INTRODUCTION OF CLAUSE D. HE, THEREFORE, SUBMITTED THAT THE DECISION OF THE HON'BLE JURISDICTIONAL HIGH COU RT HAS TO BE FOLLOWED IN PREFERENCE TO THE DECISION OF ANY OTHER HIGH COURT. AT ANY RATE, EVEN AFTER THE DECISION OF THE ITAT MUMBAI BENCH IN THE CASE O F EVEREST HOME CONSTRUCTION (I) P. LTD., THE ITAT MUMBAI BENCH HAD AN OCCASION TO CONSIDER THIS VERY ISSUE IN THE LIGHT OF THE DECISI ON OF THE HON'BLE GUJARAT HIGH COURT IN THE CASE OF MANAN CORPORATION VS. ACI T 356 ITR 44 WHEREIN THIS VERY ISSUE HAD COME UP BEFORE THE HON'BLE COUR T AND THE HON'BLE COURT IN TURN OBSERVED THAT THE AMENDED PROVISIONS ARE NO T APPLICABLE IN THE CASE OF AN ASSESSEE WHOSE PROJECT WAS APPROVED AND COMME NCED PRIOR TO THE INTRODUCTION OF CLAUSE D. IN FACT THE ITAT MUMBAI BENCH IN THE CASE OF ITO VS. YASH DEVELOPERS (ITA NO. 3644/MUM/2012 DATED 31 .02.2014 WHEREIN ONE OF US IS A PARTY) HAS RECONSIDERED THE MATTER T O HOLD THAT THE AMENDED PROVISIONS ARE NOT APPLICABLE TO A PROJECT APPROVED PRIOR TO 31.03.2004 AND IN TURN FOLLOWED THE DECISION OF THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF BRAHMA ASSOCIATES. THE LEARNED COUNSEL FOR THE A SSESSEE HAS ALSO REFERRED TO THE DECISIONS OF THE ITAT PUNE BENCH AS WELL AS THE DECISIONS OF ITAT AHMEDABAD BENCH, WHICH WERE RENDERED SUBSEQUENT TO THE DECISION OF THE ITAT MUMBAI BENCH IN THE CASE OF EVEREST HOME CONST RUCTION (I) P. LTD. TO SUBMIT THAT THE HON'BLE GUJARAT HIGH COURT AND HON' BLE BOMBAY HIGH COURT HAVE TAKEN A UNIFORM VIEW THAT THE AMENDED PR OVISION AND CONDITION OF BUILT UP AREA IN RESPECT OF SPACE UTILISED FOR C ONSTRUCTION OF SHOP IS PROSPECTIVE IN NATURE AND NOT APPLICABLE TO THE PRO JECTS APPROVED PRIOR TO 01.04.2005. HE, THEREFORE, SUBMITTED THAT IN THE AB SENCE OF ANY CONTRARY ITA NO. 6901&8469/MUM/2010 M/S. VELENTINE DEVELOPERS 9 DECISION ON SECTION 80IB OF ANY HIGH COURT, THE DEC ISION OF THE HON'BLE BOMBAY HIGH COURT HAS TO BE FOLLOWED AND THUS HE JU STIFIED THE VIEW TAKEN BY THE LEARNED CIT(A). 13. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE RECORD. IT IS NOT IN DISPUTE THAT THE HON'BLE BOMBA Y HIGH COURT IN THE CASE OF BRAHMA ASSOCIATES (SUPRA) HAD CONSIDERED THIS VE RY ISSUE AND ARRIVED AT A CONCLUSION THAT CLAUSE D TO SECTION 80IB(10) IS P ROSPECTIVE IN NATURE AND CANNOT BE MADE APPLICABLE TO THE PROJECTS APPROVED PRIOR TO 01.04.2005. THOUGH THERE WAS DEVIATION FROM THE EARLIER JUDGEME NT BY CERTAIN BENCHES OF THE TRIBUNAL, BUT SUBSEQUENT TO THE DECISION OF THE HON'BLE GUJARAT HIGH COURT IN THE CASE OF MANAN CORPORATION (SUPRA) THE STAND TAKEN EARLIER BY SOME OF THE BENCHES WAS NOT FOLLOWED AND ALL THE BE NCHES OF THE TRIBUNAL HAVE UNIFORMLY AND CONSISTENTLY FOLLOWED THE DECISI ON OF THE HON'BLE BOMBAY HIGH COURT AS WELL AS HON'BLE GUJARAT HIGH COURT TO HOLD THAT THE CONDITION OF BUILT UP AREA PROVIDED IN CLAUSE D IS PROSPECT IVE IN NATURE AND IT IS NOT APPLICABLE TO PROJECTS APPROVED PRIOR TO 01.04.2005 . SUCH BEING THE CASE, BY RESPECTFULLY FOLLOWING THE DECISION OF THE HON'BLE BOMBAY HIGH COURT AS WELL AS THE DECISION OF THE HON'BLE GUJARAT HIGH COURT, WE UPHOLD THE ORDER OF THE LEARNED CIT(A), PARTICULARLY IN VIEW OF THE FAC T THAT THERE IS NO DIRECT DECISION ON THE ISSUE WHEREIN A CONTRARY VIEW WAS T AKEN BY ANY OTHER HIGH COURT APART FROM THE FACT THAT THE HON'BLE JURISDIC TIONAL HIGH COURTS DECISION IS BINDING UPON THE ITAT MUMBAI BENCHES. W E, THEREFORE, UPHOLD THE ORDER PASSED BY THE LEARNED CIT(A). 14. IN THE RESULT, THE APPEALS FILED BY THE REVENUE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 14 TH MARCH, 2014. SD/- SD/- (N.K. BILLAIYA) (D. MANMOHAN) ACCOUNTANT MEMBER VICE PRESIDENT MUMBAI, DATED: 14 TH MARCH, 2014 ITA NO. 6901&8469/MUM/2010 M/S. VELENTINE DEVELOPERS 10 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 30, MUMBAI 4. THE CIT 19, MUMBAI CITY 5. THE DR, F BENCH, ITAT, MUMBAI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI N.P.