The Commissioner Of Income Tax-Ii vs M/S. Brahma Associates on 22 February, 2011
3.Assessee preferred an appeal before the First Appellate Authority(FAA).After considering the
submissions of the assessee and the assessment order,he held that he intended to agree with the
arguments of the assessee made before the AO,that in a number of judicial decisions it had been
decided by various courts that the deduction to the Housing Projects u/s. 80IB(10) of the Act was
to be allowed to the housing project of an undertaking even though it contain area of commercial
establishments, that the AO had denied the deduction u/s.80IB(10) mainly on the ground that the
amended provisions of section 80IB(10)which came into effect from 01/04/2005, were applicable
to the case of the assessee even though the project commenced prior to 01.04. 2005, that the
project completed by the assessee was not eligible for the said deduction on its housing
project,that such a view was not the correct interpretation of the provisions of section 80IB
(10).FAA referred to the decision of the F Bench of Mumbai Tribunal delivered in the case of
M/s.Saroj Sales Corporation wherein following has been held
"As regards the objection of the AO that the permissible shopping area of housing project exceed
5%, the assessee was not entitled for relief u/s. 80/B (1),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 was permissible in the project.As already stated earlier that the amendments were
subsequently made while extending 1the deduction of income from housing project approved upto
31.3.2007,the denial of deduction in our view, was clearly not in accordance with law."
Relying upon the above decision,he held that the projects which were approved and commenced
prior to 01/04/2005 the amended provisions were not applicable to such projects as there was no
restriction regarding the commercial component in a housing project,that the restriction of comer-
cial area in a housing project to the extent of 5% /2000 sq. ft. whichever was lower,introduced by
way of clause (d) to section 80IB(10) was prospective and prior to that period i.e before 31/
03/2005.He further held that the issue had been settled recently by the decision of the Hon'ble
High Court of Bombay in the case of Brahma Associates(supra),wherein the Hon'ble High Court
3 ITA No. 5802/Mum/2012 M/s. Magnete Enterprises
had also decided the issue regarding the retrospective applicability of the clause (d) of the section
80IB(10)of the Act,that the above decision of the Hon'ble High Court of Bombay was applicable
to the facts of the case of the assessee,that the Housing project of the assessee was approved as
residential with shopline project by the CIDCO in January,2004.,that Hon'ble High court of
Bombay in its decision in the case of Brahma Associates(supra) had clearly decided that the
clause (d),inserted to the section 801B(10) with effect from 01/04/2005, was prospective and not
retrospective and hence could not be applied to the period prior to 01/04/2005,that the restriction
imposed by the introduction of sub-section(d) to section 801B(10) w.e,f. 1.4.2005 were therefore
not applicable to the assessee as his project having commercial area was approved as well as
commenced prior to the said date,that deduction u/s. 80IB(10) would be available to the housing
projects irrespective of the fact that project was approved as a 'housing project' or approved as
'residential with shopline',that as long as the housing project was as per the Development Control
Regulations of the local authority the assessee could not be denied the deduction u/s.80
IB(l0).Finally,he allowed the appeal filed by the assessee.