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R.D. Estates & Resources Ltd, Kolkata vs Department Of Income Tax on 11 May, 2016 cites

The Cit-Ii, Pune vs M/S Brahma Associates on 3 July, 2014

• Certain other disputes which had arisen between the revenue and the assessees/developers of the housing projects concerning interpretation of sub-section (10) of section 80-IB primarily related to the meaning that is to be assigned to 'housing projects' prior to 1-4-2005 because of the reason that there was no clause (d) earlier and there is no express provision in this sub-section dealing with the consequence of having a commercial establishment within a housing project. One of the requirements contained in sub-section (10) is that in order to be entitled to have the deduction under this provision, housing project is to be approved by a local authority. It is a matter of common knowledge that there are Municipal Acts of specific Local Acts governing the construction of buildings, commercial as well as residential, in every State. For undertaking any such construction authority, it is necessary to have the building plans sanctioned from the local authorities in accordance with the provisions of such local acts. There are local laws relating to the development and building of 'housing projects' by the developers/builders which also need a sanction from the local authorities as per the law prevailing in that particular area where the housing project is developed. Such local laws, while sanctioning the housing projects, also permit use of certain area in the housing projects in a specified manner for shopping and commercial purposes as well. The question that had arisen was - whether deduction under section 80-IB(10) would be admissible when commercial establishment is constructed in a housing project? That is, whether it would still retain the character of housing project within the meaning of this provision. The Bombay High Court in the case of CIT v. Brahma Associates [2011] 333 ITR 289/197 Taxman 459/9 taxmann.com 289 held that since the expression 'housing project' is not defined under the Act, the intention of Parliament was that whatever is approved by the local authority under the extent rules as a housing project would be treated as 'housing project' for the purpose of this section, inasmuch as sub-section (10) itself mandates that housing project is to be approved by a local authority as such an approval is a necessary condition for claiming the deduction under this provision. When the local authority has ITA Nos.1343,1344/Kol/2012 & CO Nos. 95,96/Kol/2012 C-AM 8 M/s. R.D Estates & Resources Ltd approved a housing project, whether 'residential' or 'residential cum commercial' the assessee is entitled to a deduction on the entire profit including the commercial establishments portion. [Para 5] • Before 1-4-2005, the legal position was that once the project is sanctioned by the local authority as 'housing project', the extent of area sanctioned for shops and commercial establishments in the said housing project was immaterial and had no bearing. Thus, irrespective of the said area where shops and commercial establishments were permitted by the local authority in a housing project, it was still treated as housing project and further that while granting 100 per cent deductions, the area covered by shops and commercial establishments was also includible. This position has changed with the insertion of clause (d) to sub-section (10). As per the amendment carried out and made effective from 1-4-2005, even if the local authority had sanctioned larger area for shops and commercial establishment, the benefit of section 80-IB(10) would not be admissible to these asses sees/developers in case the area utilised for shops and commercial establishment exceeded 5 per cent of the aggregate built-up area of the housing project or 2000 sq. feet, whichever is less. [Para 6] • As already pointed out, the parties are ad idem that the amendment is prospective in nature and, therefore, it operates from 1-4-2005. It has also been mentioned that in the instant appeals, all these assessees had got the housing projects sanctioned prior to 1-4-2005 and the construction of the said housing project also started before 1-4-2005. All other conditions mentioned namely the date by which approval was to be given and the dates by which the projects were to be completed as on the date when the project was sanctioned, are also met by the assessees.
Supreme Court - Daily Orders Cites 0 - Cited by 26 - Full Document

C.I.T Mumbai vs M/S Sarkar Builders on 15 May, 2015

6. We have heard the Learned AR and perused the materials available on record. The facts stated hereinabove remain undisputed and hence the same are not reiterated for the sake of brevity. We find that the issue under appeal is covered by the decision of the Hon'ble Supreme Court in the case of CIT vs Sarkar Builders reported in (2015) 375 ITR 392 (SC), wherein it was held that :-
Supreme Court of India Cites 23 - Cited by 74 - A K Sikri - Full Document
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