S. 80-IB(10) – Limit on extent of commercial area applies only to projects approved after 01.04.2005

CA Sandeep Kanoi

We observe that on similar facts in the assessee’s own case for the same project, the Tribunal by its order dated 29.7.2011 relating to assessment years 2005-06 and 2006-07, the assessment years which also falls after the amendment made by insertion of Clause (d) to section 80IB(10) of the Act, applicable from 1.4.2005 has held that the assessee is eligible for deduction u/s 80IB(10) of the Act in respect of the housing project. As there is no change in facts and circumstances in the assessment years under consideration viz assessment years 2007-08 and 2008-09,

The above decision of ITAT squarely apply to these assessment years as well. Not only this, the similar issue had also come before the Hon’ble Gujarat High Court in the case of  Manan Corporation V/s ACIT reported in 214 Taxmann 373 (Guj) while considering the appeal for assessment year 2006-07 wherein it was held by Their Lordships that the condition of limiting commercial establishment/shops to 2000 sq.ft, which has come into force w.e.f. 1.4.2005 would be applicable for the project approved on or after 1.4.2005 and where the approval of the project was prior to 31.3.2005, the amended provision would have no application for those projects. We observe that the Hon’ble Gujarat High Court also placed heavily reliance on the decision of the Hon’ble Bombay High Court in the case of Brahma & Associates (supra). In view of above, the issue is covered not only in the assessee’s own case for the assessment years 2005-06 and 2006-07 but also by the decision of the Hon’ble Gujarat High Court in the case of Manan Corporation (supra). Hence, we uphold the orders of ld. CIT(A) that the assessee is entitled for deduction u/s 80IB(10) of the Act for both the assessment years under consideration. Accordingly, the grounds of appeal taken by department for the assessment year 2007-08 and Grounds No.1 and 2 of the appeal for assessment year 2008-09 are rejected.

 INCOME TAX APPELLATE TRIBUNAL, MUMBAI

BEFORE S/SHRI B.R.MITTAL,(JM) AND N.K.BILLAIYA (AM)

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