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Revenue by: Dr. Darsi Suman Ratham-DR Assessee by: Shri Rakesh Joshi-AR’s सुनवाई क" तारीख / Date of Hearing: 30.05.2016 घोषणा क" तारीख / Date of Pronouncement: 30.05.2016 आयकर आयकर अिधिनयम अिधिनयम,1961 क" क" धारा धारा 254(1)केकेकेके अ"तग"त अ"तग"त आदेश आदेश आयकर आयकर अिधिनयम अिधिनयम क" क" धारा धारा अ"तग"त अ"तग"त आदेश आदेश Order u/s.254(1)of the Income-tax Act,1961(Act) लेखा सद"य लेखा सद"य राजे"" राजे"" केकेकेके अनुसार अनुसार PER RAJENDRA, AM- लेखा लेखा सद"य सद"य राजे"" राजे"" अनुसार अनुसार Challenging the order dt.06.8.2014 of CIT(A)-4,Mumbai, the Assessing Officer (AO) has filed the present appeal. Assessee–company, engaged in the business of redevelopment of slum and such other properties, filed its return of income 29.9.2010, declaring total income at Rs.69.86 Lakhs.The assessment order u/s.143(3) of the Act, was passed on 13.3.2013, determining the total income of the assessee at Rs.4.63 crores.
The effective Ground of appeal is about allowing deduction u/s. 80IB(10) of the Act Rs.3.90 crores .
3.During the course of hearing before us the Authorized Representative (AR) stated that similar ground of appeal were raised by the department before the Tribunal for the AY 2009
10. (ITA No.997/M/2013), that vide its order dated 5.8.14 the Tribunal had dismissed the appeal of the AO. The Departmental 6645/M/14-Omega Investment Representative (DR) stated that because of the proviso to clause (a) and (b) of section 80IB(10) the assessee was not entitled to claim the deduction.
4.We have heard the rival submissions and perused the material before us. We find that the AO had raised the following grounds of appeal for the AY 2009-10 (supra). “1. Whether on the facts and in the circumstances of the case and in law, the Ld CIT (A) justified in allowing deduction under section 80IB (10) of the Income Tax Act of Rs. 1,03,79,815/- in respect of profit derived from development of residential building by holding that assessee is covered by proviso to clause (a) and (b) of section 80IB (10) without appreciating the fact that the project was approved by the Slum Rehabilitation Authority on 7.10.2002 which did not fall within the period of approval as per Board’s Notification No.2 of 2011.
2. Whether on the facts and in the circumstances of the case and in law the Ld CIT (A) was justified in holding that revised project and plan of the assessee was approved clause (a) and clause (b) of section 80IB (10) of the Act and as such rigors of clause (a) and clause (b) would not be applicable to the project of the assessee without appreciating the fact that as per Explanation 1 to clause (a) of section 80IB(10) of the Act where approval in respect of the housing project had been obtained more than once, such project shall be deemed to have been approved on the date on which the building was approved by the local authority for the first time.”
The Tribunal had adjudicated the issue as under: “3. During the proceedings before us, at the outset, Shri Rakesh Joshi, Ld Counsel for the assessee brought our attention to the above mentioned grounds and mentioned that the only issue raised before the Tribunal relates to the allowability of deduction u/s 80IB (10) when the project in question is cleared after approval of the Slum Rehabilitation Authority. It is the claim of the assessee that the due dates for completion of project provided under subsection-10 of section 80IB are not applicable to the project like this in view of the immunity provided under proviso to clause (a) & (b) of the said sub-section 10. It was demonstrated before us that the CIT (A) examined the said provisions read with the notification issued by the CBDT in this regard and allowed the claim of the assessee.
On the other hand, Ld DR relied on the orders of the Revenue Authorities.
We have heard both the parties and perused the orders of the Revenue Authorities as well as the relevant material placed before us. After hearing both the parties and on perusal of the CIT (A)’s order, we find the CIT (A) has given the finding categorically by holding that the project in question is a Slump Rehabilitation Project and the time limit provided in the statute will not be applicable to the assessee in view of the proviso to section 80IB(10). The contents of para 6.1 of the impugned order are relevant and the same reads as under:
6.1. Therefore, from the proviso below clause (b) of sub-section 80IB(10), it is clear that if any project is declared within the scheme framed by Central Government or Statement from Slum Rehabilitation / redevelopment, then regors of clause (a) and clause (b) will not 6645/M/14-Omega Investment apply to such projects. There is no denial of the fact that the project of the assessee has been approved as Slum Rehabilitation Project by Slum Rehabilitation Authority of Maharahtra State and the approval has been given on 4.6.2004, therefore, it is clearly covered by the proviso below clause (b) of subsection 80IB(10), whereas, any other restriction for date of start and completion put by any notification or instruction etc cannot override the act of Parliament. Hence, considering any such notification and holding such project out of the applicability of the proviso below clause (b) of sub-section 80IB(10) by the AO is not correct. The assessee has correctly relied on the decision of the Hon’ble ITAT in the case of Asha Kashiprasad Ringshia (supra), which is directly on the same issue and relevant portion as reproduced by the assessee in its submissions is again reproduced below. “Thus, rigors of the conditions enumerated in clauses (a) and (b) of section 80IB, has been relaxed by the relaxed by the legislature to achieve certain socio-economic object and, therefore, proviso to section 80IB should be given a liberal interpretation so as to not to defeat a genuine claim for deduction by a developer who undertakes to develop a housing project in a slum area under the scheme approved by the Central or State Govt. The CBDT which had issued the notification after more than five years of the amendment, has put a time limit of those housing projects which has been approved by the local authority on / or after 1 st April, 2004. Such a time limit can defeat the basic purpose of the proviso for which it was enacted as in the said proviso, the limit provided in clause (a) of section 80IB(10) has 3 not been specifically made applicable, therefore, such a time limit cannot be imposed by way of subordinate legislation. Such notification can only clarify the statutory provisions and not override them or restrict the operation of the main enactment. Therefore, in our considered opinion, the time limit of approval on / or after 1 st April, 2004 will not be applicable in the case of the proviso to section 80IB(10).
Considering the above, we are of the opinion that the CIT (A) has rightly adjudicated the issue under consideration and we find no infirmity in the order of the CIT (A). Therefore, the order of the CIT (A) is fair and reasonable and it does not call for any interference. Accordingly, grounds raised by the Revenue are dismissed.”
Respectfully following the above order of the Tribunal the effective Ground of appeal is decided against the AO.