Section 80-IB(10) – Housing project – Deduction u/s. 80-IB(10) – TDS – Amendment w.e.f. 01/04/2010 barring deduction where units in same project sold to related persons – Prospective in nature – Flats sold to husband and wife exceeding prescribed area in 2008 – Assessee entitled to deduction

A. Ys. 2010-11 to 2012-13

Section 80-IB(10) – Housing project –
Deduction u/s. 80-IB(10) – TDS – Amendment w.e.f. 01/04/2010 barring deduction
where units in same project sold to related persons – Prospective in nature –
Flats sold to husband and wife exceeding prescribed area in 2008 – Assessee
entitled to deduction

The assessee was in the
business of real estate development. For the A. Ys. 2011-12 and 2012-13 the
assessee claimed deduction u/s. 80-IB(10) of the Act. The Assessing Officer
disallowed the claim on the grounds that two adjacent flats were sold to
husband and wife, that the total super built-up area was 3225 sq. ft. and that
the sale of the flats was recognised on 31/03/2010, during the previous year
2009-10, relevant to the A. Y. 2010-11. He was of the view that the provisions
of section 80-IB(10) were not attracted, since two flats had been sold to
related persons thereby contravening clause (f) of section 80-IB(10).

The Commissioner (Appeals)
allowed the appeals and held, inter alia, that the flats in question
were sold on 14/04/2008 and 16/07/2008 respectively and that the amendment of
section 80-IB which was prospective w.e.f. 01/04/2010 had no application. The
Tribunal dismissed the appeal filed by the Department.

On appeal by the Revenue,
the Madras High Court upheld the decision of the Tribunal and held as under:

“The Appellate Commissioner
and the Tribunal based on their concurrent factual finding that the actual sale
of the flats in question took place on 14/01/2008 and 16/07/2008 respectively
before the amendment of section 80-IB(10) had rightly held that the amendment
was prospective w.e.f. 01/04/2010 and that the assessee was entitled to
deduction. No question of law arose.”