Dy. CIT Vs. Ms/. Shah Builders & Developers (ITAT Mumbai) – Uto 31st March, 2005, deduction u/s. 80/B(10) is allowable to housing projects approved by the local authority having residential units with commercial user to the extent permitted under the DC Rules/Regulations framed by the respective local 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 u/s. 80/B(10) would be allowable to the projects approved by the local authority having residential building with commercial user upto 10% ofthe total built-up area ofthe plot; cl (d) inserted in s. 80-/B(10) w.e.f. 1st April, 2005 is prospective and not retrospective.
IN THE INCOME TAX APPELLATE TRIBUNAL
MUMBAI BENCH ‘J’ MUMBAI
ITA No. 3195 & 3196/Mum/2010
Assessment year-2005-06 & 2006-07
The Dy. CIT Vs. Ms/. Shah Builders & Developers,
O R D E R
PER ASHA VIJAYARAGHAVAN (JM)
These two appeals preferred by the Revenue are directed against the orders passed by the ld. CIT(A)-26 for the Assessment Years 2005-06 & 2006-07.
2. The assessee is engaged in the business of Civil Construction and developing and building Housing -Cum- Commercial project as a regular course of activities and derives income there from. During the financial year 2003-04 Appellant had undertaken for developing and building a project viz. Shah Arcade in Navi Mumbai. This project was approved by the City & Industrial Development Corporation (CIDCO) of Maharashtra vide CIDCO/BP/ATPO/322 dated 26.3.2004. This project of commercial-cum-residential building was approved on Plot No. 4 & 5 in Sector 6 at Kharghar, Navi Mumbai. There were 2 allotment of commercial-cum-residential plots, one is of allotment No. CIDCO/MM-II/CLT/KHR/35 dated 27.08.2003/28.08.2003 and second one is CIDCO/MM-ll/CLT/KHR/36 dated 27.08.2003/28.08.2003. The Appellant has computed profit © 8% on the cost of construction i.e. WIP of Rs. 11,84,75,650/- in respect of the project Shah Arcade on estimation basis and has shown estimated profit of Rs 94,78,052/- While filing the Return of Income Appellant had claimed deduction u/s 801B (10 at Rs 86,63,749/- after excluding the profit attributable to commercial area of the project. The Ld. AO in assessment order appealed against has disallowed appellant’s claim of deduction on the ground that the commercial area of the project exceeds 5% of aggregate built-up area and even more than 2000 sq.ft. against the amendment provision of section 801B (10) by the Finance Act (2) 2004 w. e. f. 01.04.2005.
