Case Law Details
RELEVANT PARAGRAPH
4. Adverting to the mandate of the statute we find that section 80IA of the Act was restructured into two new distinct sections namely, 80IA and 80IB. The amended provisions extended the benefits to certain sectors. Under section 80IA of the Act profits of approved housing projects where development and construction commenced after 1-10-1998 and completed before 31-3-2001 were fully deductible. The condition necessary for claiming the benefit was that the approved housing project should be on a minimum area of one acre and should have dwelling units with maximum built up area of 1000 sft. Consequent upon the insertion of section 80IB the scope of deduction was extended in a manner that in areas other than those falling in within 25 kms. from the municipal limits of Delhi and Mumbai the housing projects having built up area of dwelling units up to a maximum of 1500 sft. each instead of 1000 sft. each were made eligible for the benefit. For enabling the benefit of section 80IB it has become a condition precedent that housing projects in places other than Delhi and Mumbai should-not exceed the built up area of 1500 sft. It was argued on behalf of the assessee that each block of residential units covered by a plan has to be considered as a separate project and deduction is to be allowed on that basis.
5. For enabling the benefit of section 80IB it is necessary that profits must be derived in the previous year from housing project The eligibility conditions include inter alia that the built up area should not exceed 1500 sft. In the context of cities other than Delhi and Mumbai. This restriction is applicable on the entire project. If some of the residential units of the project comprised area exceeding the prescribed limit, the benefit as per the language of the section cannot be extended to the project.
6. If the language of the statute is plain, the obvious meaning is to be applied. The Hon’ble Supreme Court in the case of Padmasundara Rao(decd.) and Others vs. State of Tamil Nadu and Others, 255 ITR 147(S.C.) has held that the court cannot read anything into a statutory provision which is plain and unambiguous. A statute is the edict of the Legislature. The language employed in a statue is the determinative factor of legislative intent. The first and primary rule of construction is that the intention of the legislation must be found in the words used by the Legislature itself. The same view is expressed in the case of Britannia Industries Ltd. vs. CIT, 278 ITR 546 (SC). In this case the Hon’ble apex court has held that when the language of a statute is clear and unambiguous, the courts are to interpret the same in its literal sense and not to give a meaning which would cause violence to the provisions of the statute.
7. The term ‘project’ is nomen generalissinum. It is a term of most general meaning. It connotes a proposal for undertaking or a scheme for something to be done. The assessee did formulate four such schemes, namely, Agrini, Vajra, Porkudam Phase-I and Phase II. These four schemes as such were approved by the local authority. A project cannot be approved in piecemeal. Approval is accorded to the entire project Blocks of residential units are parts of a project and not project by itself. As such a block of residential unit cannot be construed to be a separate project It is therefore evident that the assessee did not comply with the conditions precedent for availing the benefit of section 80IB(10). We, therefore, reverse the order of the Commissioner (Appeals) and restore the order of the Assessing Officer on this count.
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