June 2011
ITO v. Chheda Construction Co. (Joint Venture) ITAT ‘C’ Bench, Mumbai Before R. S. Padvekar (JM) and Rajendra Singh (AM) ITA No. 2764/Mum./2009 A.Y.: 2005-06. Decided on: 27-4-2011 Counsel for revenue/assessee: Ajit Kumar Sinha/K. Shivram
By Jagdish D. Shah | Jagdish T. Punjabi
Charted Accountants
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Section 80IB(10) — Amendment to section 80IB(10) w.e.f. A.Y. 2005-06 restricting the commercial area to 5% is not applicable to projects commenced prior to 1-4-2005.
Facts:
The assessee, a builder and land developer, had entered into an agreement to develop and construct a building project on land situated at Mira Taluka, Dist. Thane. For A.Y. 2005-06, the assessee filed a return of income in which it claimed deduction u/s.80IB(10) of the Act. The AO noted that the housing project which consisted of 94,255 sq. ft had shopping area to the extent of 7,935 sq. ft. The AO denied the deduction on the ground that in view of the amendment to section 80IB(10) w.e.f. 1-4- 2005, the assessee was not entitled to deduction u/s.80IB(10) of the Act.
Aggrieved the assessee preferred an appeal to CIT(A) who allowed the appeal.
Aggrieved by the order passed by the CIT(A) the Revenue preferred an appeal to the Tribunal.
Held:
The Tribunal noted that the assessee’s project had commenced prior to 1-4-2005. It also noted that in the case of Brahma Associates, the High Court has held that the amendment to section 80IB is prospective in operation. Since the assessee’s project had commenced in December 2003, the Tribunal held the amendment to be not applicable to the assessee’s case.
The Tribunal dismissed the appeal filed by the Revenue.
