Ita/54/2013 Of The Commissioner Of Income Tax v. M/S Brigade Enterprises Ltd

IN THE HIGH COURT OF KARNATAKA AT BENGALURUDATED THIS THE 22 DAY OF SEPTEMBER 2020. PRESENT THE HON’BLE MR. JUSTICE ALOK ARADHE AND| THE HON’BLE MR. JUSTICE H.T.NARENDRA PRASAD ILT.A. NO.54 OF 2013 BE!]VWEE 1.THE COMMISSIONER OF INCOME-TAXC.R. BUILDING, QUEENS ROADC.R. BUILDING, QUEENS ROAD BANGALORE. 2 |THE DY. COMMISSIONER OF INCOME-TAX |CIRCLE-11(2), C.R. BUILDINGQUEENS ROAD, BANGALORE. .., APPELLANTS. (BY SRI. K.V. ARAVIND, ADV.,) AND: M/S. BRIGADE ENTERPRISES LTD.,PENT HOUSE, BRIGADE TOWERS.NO.135, BRIGADE TOWERSBANGALORE-560025. .. RESPONDENT (BY SRI. CHYTHANYA K.K. ADV.) R THIS ITA IS FILED UNDER SECTION 260-A OF I.T. ACT,1961 ARISING OUT OF ORDER DATED 07.09.2017 PASSED IN [TA|NO.1356/BANG/2010 FOR THE ASSESSMENT YEAR 2007-08,|PRAYING THAT THIS HON'BLE COURT MAY BE PLEASED TO: (1) FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW.STATED THEREIN. (1) ALLOW THE APPEAL AND SET ASIDE THE ORDER OF THEITAT, BANGALORE PASSED IN ITA NO.1356/BANG/2010 DATED|07-09-2012 CONFIRMING THE ORDER OF THE APPELLATE|COMMISSIONER AND CONFIRM THE ORDER PASSED BY THE|DEPUTY COMMISSIONER OF INCOME TAX OFFICER, CIRCLE-11(2),BANGALORE. THIS ITA COMING ON FOR FURTHER HEARING, THIS DAY, | ALOK ARADHE J.,DELIVERED THE FOLLOWING: JUDGMENT This appeal under Section 260A of the Income Tax| Act, 1961 (hereinafter referred to as the Act for short) Nas been preferred by the revenue. Tne subject matterof the appeal pertains to the Assessment year 2007-08. The appeal was admitted by a bench of this Court videorder dated 30.05.2013 on the following substantialquestions of law:| (1)Wnetner the appellate authorities were|correct in holding that the assessee firmis eligible for deduction under Section|SOIB of the [Income-Tax Act without appreciating that the assessee has not|satisfied the requirements as laid down|in clauses (a) to (d) of sub-Section (1)|of Section 8OIB of the Act? (iI)Whether the appellate authorities were|correctIn|allowing|proportionate|deduction under Section 80IB in respect|of the individual units measuring less|than1500Sq.ft.ContraryCO theprovisions of Section 80OIB of tne Act,when Section contemplates fulfillment ofcondition of less than 1500 sq.ft. in|respect of entire project?correctIn|allowing|proportionate|deduction under Section 80IB in respect|of the individual units measuring less|than1500Sq.ft.ContraryCO theprovisions of Section 80OIB of tne Act,when Section contemplates fulfillment ofcondition of less than 1500 sq.ft. in|respect of entire project? (iI)Wnetner the appellate authorities were|correct in holding that the assessee Is entitled to deduction under Section|SOIB(10) of the Act, admittedly when|the commercial area in the project was|more than 5% by holding that each|residential block has to be taken Into|consideration for computing percentage|of commercial area, wnen the provision|contemplates fulfillment of conditions for|theentireprojectandrecordedaperverse finding (iv)Whether the appellate authorities were|correct in holding tnat the assessee Is entitled to deduction under Section 8O/Bof the Act, though the area of projectis |less than 1 acre by recording a finding|that the area was measuring more than|1 acre at the time of submitting the|project for approval and the same was|reducedIn|compliancewith theconditions imposed by tne approval|authority t.e., BMP without taking into|consideration the requirement of SectionSOIB(10) of the Act, and recorded a|perverse finding?|correct in holding tnat the assessee Is entitled to deduction under Section 8O/Bof the Act, though the area of projectis |less than 1 acre by recording a finding|that the area was measuring more than|1 acre at the time of submitting the|project for approval and the same was|reducedIn|compliancewith theconditions imposed by tne approval|authority t.e., BMP without taking into|consideration the requirement of SectionSOIB(10) of the Act, and recorded a|perverse finding?| BACKGROUND FACTS: BACKGROUND FACTS: 2.|Facts leading to filing of this appeal brieflystated are that the assessee is engaged in the business|of construction, property development and real estate.| Tne assessee filed return deciaring an income of.Rs.98,15,55,940/-. The return was processed under|Section 143(1) of the Act. However, the assessee filed| a revised return of income on 30.03.2009, in which theincome returned was reduced from Rs.98,15,55,940/- toRs.49,96,89,936/-. In the revised return, the assesseeclaimed deduction under Section 80IB(10) of the Act tothe extent of Rs.61,60,49,743/- as against deduction ofRs.11,19,14,742/-, which was claimed earlier. The casewas selected for scrutiny and notice under Section143(2) of the Act was issued. The Assessing Officer byan order dated 31.17.2009 inter alia held that SectionSOIB(10) of the Act does not permit a claim onproportionate basis, only in respect of units, which wereless than 1500 square feet. It was also held that theassessee has used 60% of the total built up area forcommercialDUFDOSES|asagainst.5%,whichISpermissible in law. It was also held that the assesseecompany in almost every block had a housing unit,which was more than 1500 square feet and approvalfrom Bruhat Bangalore Mahanagara Palike (BBMP) has|been obtained for the entire project and not for individual units. It was also held that one of the housingunits did not satisfy the condition of minimum area i.e.,One acre. The Assessing Officer concluded that theassessee has failed to satisfy the conditions, which are ©sine qua nonfor claiming deduction under Section|80IB(10) of the Act. The Assessing Officer, assessedthe total income of the assessee at Rs.105,56,89,820/-and levied interest and initiated the penalty proceedingsunder Section 271(1)(c) of the Act. 3.The assessee challenged the aforesaid orderin an appeal before the Commissioner of Income Tax(Appeals). The Commissioner of Income Tax (Appeals)vide order dated 12.05.2010, inter alia held that claimof assessee under Section 80IB(10) of the Act wasallowed for previous Assessment Years viz., 2004-05,2005-06 by the Commissioner of Income Tax (Appeals)and the aforesaid orders has been upheld by the IncomeTax Appellate Tribunal (hereinafter referred to as ‘theTribunal’ for short). Accordingly, the claim for deduction under Section 80IB(10) of the Act for Assessment Year2007-08 was allowed and the order passed by theAssessing Officer was set aside. © aBeing aggrieved, the revenue filed an appealbefore the Tribunal. The Tribunal by an order dated07.09.2017 inter alia held that the issues Involved in theappeal are covered by decisions passed by the Tribunalin the assessee’s case in the Previous year and order ofthe Tribunal in respect of Assessment Year 2004-05 hasbeen upheld by this court in I.T.A.No.763/2009 dated29.02.7012. It was further held that the assessee hasalso satisfied the requirement with regard to size of theland i.e., one acre. In the result, the appeal preferredby the revenue was dismissed. In the aforesaid factualbackground, the revenue has filed this appeal. SUBMISSIONS: 5.|Learned counsel for the revenue submittedtnat the benefit of deduction under Section 8OIB(10) of aBeing aggrieved, the revenue filed an appealbefore the Tribunal. The Tribunal by an order dated07.09.2017 inter alia held that the issues Involved in theappeal are covered by decisions passed by the Tribunalin the assessee’s case in the Previous year and order ofthe Tribunal in respect of Assessment Year 2004-05 hasbeen upheld by this court in I.T.A.No.763/2009 dated29.02.7012. It was further held that the assessee hasalso satisfied the requirement with regard to size of theland i.e., one acre. In the result, the appeal preferredby the revenue was dismissed. In the aforesaid factualbackground, the revenue has filed this appeal. SUBMISSIONS: 5.|Learned counsel for the revenue submittedtnat the benefit of deduction under Section 8OIB(10) of the Act is extended not to an individual unit but to ahousing project as a whole. It is further submitted thatthe housing project itself should be eligible for incentiveunder Section 80IB(10) of the Act and the conditionsprescribed in clauses (a) to (f) of Section 80IB(10) haveto be complied with. It is contended that the expression‘residential unit’ used in clause (c) of Section 80IB(10)of the Act, has to be read as ‘residential unit comprisedin the housing project’. It is further contended thatassessee cannot claim each tower to be project by itselfand the reliance by the Commissioner of Income Tax(Appeals) and the Tribunal with regard to decisions ofprevious assessment years in the case of assessee ismisconceived as the dispute in the decisions of Previousassessment years related to built up area and therefore,the aforesaid decisions do not apply to the fact situationof the case. It is also urged that the conditionsmentioned in clauses (a) to (f) of Section 80IB(10) ofthe Act are cumulative and have to be fulfilled by the assessee In order to claim the benefit of deduction underSection 80IB(10) of the Act. It is also argued thatconditions (a) to (f) of Section 80IB(10) are in the realmof exemption provisions and have to. be_ strictlconstrued and in case of any ambiguity, the benefit hasto be given to the revenue. In support of aforesaid.Submissions, reliance has been placed on decisions in‘COMMISSIONEROF|INCOME-TAX|YS,M.K.KIRTIKAR‘,(1959)36ITTR360(SC),‘B.M,.MALANI VS. COMMISSIONER OF INCOME TAX& ANR.’, (2008) 306 ITR 0196, 'RAMNATH & CO.VS. COMMISSIONER OF INCOME-TAX’, (2020) 116TAXMANN.COM 885 (SC),and‘COMMISSIONER OFINCOME-TAX VS. VEENA DEVELOPERS’, (2016) 66TAXMANN.COM 353 (SC). — 6.|On the other hand, learned counsel for theassessee did not dispute the proposition that in order toclaim deduction under Section 80IB(10) of the Act, anassessee is required to satisfy the conditions mentioned in clauses (a) to (f) of Section 80IB(10) of the Act. It issubmitted that Assessing Officer, Commissioner ofIncome Tax (Appeals) as well as Income Tax AppellateTribunal have held that issue of proportionality iscovered in the case of assessee by this court and evenhas been affirmed by the Supreme Court in the case ofassessee itself. It is also argued that if the AssessingOfficer has not taken a ground to deny the benefit to theassessee, the same cannot be urged in this appeal. It isalso pointed out that in respect of Assessment Years2004-05, 2005-06 and 2006-07, the assessee was giventhe benefit of proportionality and the aforesaid view hasbeen affirmed by Supreme Court as Special Leave.Petitions have been dismissed. It is also argued thatwhere multiple approvals are granted and each approvalhas to be examined separately. It is also submitted thatissue with regard to usage of commercial area in theproject in excess of more than 5% has also attainedfinality in the case of assessee itself and the Assessing Officer has not disputed the fact that the assessee hadobtained separate approvals in respect of different units. ©It is further submitted that this court had also allowedthe appeal of the assessee for Previous Assessment Yearon different project on the issue of commercial use ofarea in a project and SLP against the order passed by.this court has been dismissed. It is contended that theproject includes park area, roads etc. and the AssessingOfficer grossly erred in ascertaining the area of 1 acreby taking into account the built up area of the flats. Inthis connection, our attention has also been invited tofinding recorded by the Tribunal in para 11 and it hasbeen pointed out that the total area is 48.939 squarefeet, which is more than one acre and the land wasSurrendered after approval of the project. In support ofaforesaid submissions, reliance has been placed ondecisions.ofSupreme.CourtIn|‘CIT|VS,RAGHAVENDRA CONSTRUCTIONS’, (2013) 354 ITR194|(KARNATAKA),‘CIT|VS,VANDANA PROPERTIES’, (2013) 353 ITR 36 (BOMBAY), |(2008)119|TTJ269(BANGALORE ),ITA412/BANG/09, ITA 7763/2009 C/W 25/2009, ITA1355/BANG/2010, ITA 61/2012, SLP AGAINST25/2009IN.CC2309/2013,SLPAGAINST763/2009 IN CC 20865/2012, SLP AGAINST61/2012 IN CC 9188/2013, R.P.WAS DISMISSEDIN.RP(C)NO,_,49OF20135,"ACITYs,‘G.R.DEVELOPERS IN ITA 405/BANG/2010, ‘CITVS. M/S G.R. DEVELOPERS IN ITA NO.68/2011,"CIT|Ys,M/SG.R,DEVELOPERS|INDITANO.355/2009, _ PCIT VS. OCEANUS DWELLINS (P.)LTD.’, (2017) 395 ITR 376 (KARNATAKA), ‘CIT VS.SJR BUILDERS IN ITA NO.32/2012, CIT VS.ANRIYA PROJECT MANAGEMENT SERVICES (P.)LTD’, (2013) 353 ITR 12 (KARNATAKA), 'PCIT VS.SHREENATHBUILDCON-,R/TAXAPPEALNO.289/2008, ‘PCIT VS. SHREENATH BUILDCON.,SLP NO.42736/2018, (2019) 110 TAXMANN.COM 390 (SC), ‘VISWAS PROMOTERS (P.) LTD. VS.ACIT’, (2013)214 TAMAN 524 (MADRAS), ‘CIT VS.SREEVATSA REAL ESTAETS (P.) LTD.’, (2014) 222TAXMAN 105 (MADRAS), /45‘CIT VS. SG ESTATE’,2015-TIOL-1834-HC-DEL-IT,. J |Learned Senior counsel for the assesseesubmitted that clause (b) and (c) of Section 80IB(10) ofthe Act did not undergo any change even after the.amendment therefore, irrespective of the fact whetherthe housing projects were sanctioned on or after01.04.2005, the various decisions rendered with regardto Section 80IB(10) in relation to clauses (b) and (c)continued to nold tne field. It is also Submitted tnat tneLegislature has not used the word each’ residential unitin clause (c) of Section 80IB(10) of the Act, whereas, in165 provisions of the Act as well as the Income TaxRules, the expression ‘each’ has been used. It is alsosubmitted that the Legislature in its wisdom did not use the word ‘each’ despite amendment. Learned Senior.counsel for the assessee has invited our attention to theconstitution bench of the Supreme Court in ~DILIPKUMAR AND CO.’, (2018) 95 TAXMANN.COM 327 (SC),with regard to principles of interpretation of a chargingsection as well as provision relating to exemption. It isalso argued that there is no ambiguity in Section80IB(10) of the Act. 8.|By way of rejoinder, learned counsel for therevenue has submitted that in all the decisions on whichreliance has been placed by the assessee, the sanctionin respect of the housing projects was granted prior to01.04.7005.It ISreiteratedthat|theexpression‘residential unit’ used in Clause (c) of Section 80IB(10)of the Act has to be read as ‘a residential unit In ahousing project’. It is further submitted that relianceplaced on decision in case of Vandana properties suprais of no assistance to the assessee as the decision in theaforesaid case was given in the peculiar facts of the case. It is further pointed out that internal roads in theproject were not handed over by the assessee to theBBMP. LEGAL PRINCIPLES: 8.|By way of rejoinder, learned counsel for therevenue has submitted that in all the decisions on whichreliance has been placed by the assessee, the sanctionin respect of the housing projects was granted prior to01.04.7005.It ISreiteratedthat|theexpression‘residential unit’ used in Clause (c) of Section 80IB(10)of the Act has to be read as ‘a residential unit In ahousing project’. It is further submitted that relianceplaced on decision in case of Vandana properties suprais of no assistance to the assessee as the decision in theaforesaid case was given in the peculiar facts of the case. It is further pointed out that internal roads in theproject were not handed over by the assessee to theBBMP. LEGAL PRINCIPLES: 9 |We have considered the submissions madeby learned counsel for the parties and have perused therecord. The object of Section 80IB(10) of the Act is toprovide 100% deduction of the profits derived by anundertaking from developing and _ building housinprojects. Section 8OIB(10) was substituted by FinanceAct No.(2) Act, 2004 with effect from 01.04.2005. PriorCO theamendment,SectionSOIB(10).andpostamendment witn effect from 01.04.2005, SectionSOIB(10) reads as under: Prior to 01.04.2005 (10) Tne amount of profitsin case of anundertaking developing and building housing>projects approved before the 31 day of.March, 2005 by a local authority, shall be hundred per cent of the profits derived in anyprevious year relevant to any Assessment.Year from such housing project if -— (a) such undertaking has commencedor |commences development and construction ofthe housing project on or after the 1 day of |October, 1998; (b) the project is on the size of a plot ofland which has a minimum area of one acre;and (c) the residential unit nas a maximum|built-up area of one thousand square feetwhere such residential unit is situated within.the cities of Deihi or Mumbai or within twenty-five kilometers from tne municipal limits ofthese cities and one thousand and fivehundred square feet at any other place.” AFTER Q1.04.20Q0 80-IB. (10) The amount of deduction in the case of|an undertaking developing and building nousing|projects approved before the 31st day of March, 2008 by a local authority snall be nundred per|cent of the profits derived in the previous year|relevant to any assessment year from such)Nousing project if,—an undertaking developing and building nousing|projects approved before the 31st day of March, 2008 by a local authority snall be nundred per|cent of the profits derived in the previous year|relevant to any assessment year from such)Nousing project if,— (a)SUCN|undertaking hasCommenced|OF|commences development and construction of theNousing project on or after the ist day ofcommences development and construction of theNousing project on or after the ist day of October,1998|and|completesSuUC) construction, — (1) in a case where a housing project nas beenapproved by the local authority before the1st day of April, 2004, on or before the 31st|day of March, 2008;approved by the local authority before the1st day of April, 2004, on or before the 31st|day of March, 2008; (il) in a case where a housing project nas been,|or, Is approved by the local authority on orafter the 1st day of April, 2004 but not later|than the 31st day of March, 2005, withinfour years from the end of the financial year|in wnicn the nousing project is approved bytne local authority; or, Is approved by the local authority on orafter the 1st day of April, 2004 but not later|than the 31st day of March, 2005, withinfour years from the end of the financial year|in wnicn the nousing project is approved bytne local authority; (1) in a case where a housing project nas beenapproved by the local authority before the1st day of April, 2004, on or before the 31st|day of March, 2008;approved by the local authority before the1st day of April, 2004, on or before the 31st|day of March, 2008; (il) in a case where a housing project nas been,|or, Is approved by the local authority on orafter the 1st day of April, 2004 but not later|than the 31st day of March, 2005, withinfour years from the end of the financial year|in wnicn the nousing project is approved bytne local authority; or, Is approved by the local authority on orafter the 1st day of April, 2004 but not later|than the 31st day of March, 2005, withinfour years from the end of the financial year|in wnicn the nousing project is approved bytne local authority; (ill) in a case wnere a housing project has beenapproved by the local authority on or aftertne 1st day of April, 2005, within five yearsfrom the end of the financial year in whicntne housing project is approved by the localautnority.approved by the local authority on or aftertne 1st day of April, 2005, within five yearsfrom the end of the financial year in whicntne housing project is approved by the localautnority. Explanation.—For the purposes of this clause,—_ (i) in a case wnere the approval in respect of|tne housing project is obtained more thanonce, such nousing project snail be deemedto nave been approved on the date on whicntne building plan of sucn housing project isfirst approved by tne local authority;tne housing project is obtained more thanonce, such nousing project snail be deemedto nave been approved on the date on whicntne building plan of sucn housing project isfirst approved by tne local authority; (ii) the date of completion of construction ofthe housing project shall be taken to be thedate on which the completion certificate inrespect of such housing project is issued bytne local authority;the housing project shall be taken to be thedate on which the completion certificate inrespect of such housing project is issued bytne local authority; (b) tne project is on the size of a plot of land|which has a minimum area of one acre:which has a minimum area of one acre: Provided that notning contained inclause (a) or clause (Db) snall apply to anousing project carried out in accordancewith a scheme framed by tne CentralGovernment or a State Government for reconstruction or redevelopment of existingDuilaings in areas declared to be slum areasunder any law for the time being in forceand such scheme is notified by the Board inthis behalf; (c) the residential unit nas a maximum built-up|area of one thousand square feet where suchresidential unit is situated within the city ofDelnOrMumba!)OrWItnNIntwenty-fivekilometres from the municipal limits of these|cities and one thousand and five hundred|square feet at any other place;area of one thousand square feet where suchresidential unit is situated within the city ofDelnOrMumba!)OrWItnNIntwenty-fivekilometres from the municipal limits of these|cities and one thousand and five hundred|square feet at any other place; (d) the built-up area of the shops and other|commercial establishments included in the'nousing project qoes not exceed three percent of the aggregate built-up area of thehousing project or five thousand square feet,whicnever is nigner;commercial establishments included in the'nousing project qoes not exceed three percent of the aggregate built-up area of thehousing project or five thousand square feet,whicnever is nigner; (e) not more than one residential unit in the|Nousing project is allotted to any person not|being an individual; andNousing project is allotted to any person not|being an individual; and (d) the built-up area of the shops and other|commercial establishments included in the'nousing project qoes not exceed three percent of the aggregate built-up area of thehousing project or five thousand square feet,whicnever is nigner;commercial establishments included in the'nousing project qoes not exceed three percent of the aggregate built-up area of thehousing project or five thousand square feet,whicnever is nigner; (e) not more than one residential unit in the|Nousing project is allotted to any person not|being an individual; andNousing project is allotted to any person not|being an individual; and (f) in a case where a residential unit in the|Nousing project is allotted to a person being|an individual, no other residential unit in suchNousing project is allotted to any of tne|following persons, namely:—_Nousing project is allotted to a person being|an individual, no other residential unit in suchNousing project is allotted to any of tne|following persons, namely:—_ (1)the individual or the spouse ortheminorchildrenof|such|individual,theminorchildrenof|such|individual,(i)the Hindu unaivided family inwhich such Individual ts theKarta,which such Individual ts theKarta, (il)any person representing sucnindividual, the spouse or theminor children of such [ndividualor the Hindu undivided family inwhich such Individual ts thekarta. individual, the spouse or theminor children of such [ndividualor the Hindu undivided family inwhich such Individual ts thekarta. Explanation.—For the removal of doubts, it isnereby declared tnat nothing contained in this sub-section shall apply to any undertaking whichexecutes the housing project as a works contractawaraeda by any person (including the Central orState Government). 10. Thus, from close scrutiny of Section 801B(10).of the Act, prior to its amendment with effect from01.04.2005 as well as after its amendment with effectfrom 01.04.2005, it is evident that clauses (b) and (c)nave not been subjected to any amendment and remainthe same. Thus, the legal principles evolved by variouscourts with regard to interpretation with regard toclauses (Db) and (c) of Section 801B(10) of the Act, evenafter amendment remain the same. It is noteworthy thatin Section 80IB(10) of the Act, the Legislature has usedthe expression ‘nousing project’ except in clause (c)where the expression ‘residential unit’ has been used. 11. In order to claim the benefit of deduction.under Section 8OIB(10) of the Act, the assessee nas tosatisfy the following conditions: (a)The project has to be approved by thelocal authority before 31.03.2007.|local authority before 31.03.2007.| (D)Tne project is constructed on a plot of|land having a minimum area of one|adCcreland having a minimum area of one|adCcre (c)Tne built-up area of eacn residential unit should not exceed 11,500 sq.ft.in the cities of Delhi and Mumb@]|(including areas falling within 25 Kms.|Of Municipal limits of these cities) and.1,500/- sg.ft. in otner places.unit should not exceed 11,500 sq.ft.in the cities of Delhi and Mumb@]|(including areas falling within 25 Kms.|Of Municipal limits of these cities) and.1,500/- sg.ft. in otner places. (d)The built up area of the shops andothercommercialestablishmentsincluded in the housing project should|not exceed 5% of tne total built up-area of the housing project or 2,000sg.ft. wnicnever Is less.othercommercialestablishmentsincluded in the housing project should|not exceed 5% of tne total built up-area of the housing project or 2,000sg.ft. wnicnever Is less. (e)The project has to be completed|within four years from tne end of the|financial year in whicn the project Is_approved by tne local authority.within four years from tne end of the|financial year in whicn the project Is_approved by tne local authority. 12. At this stage, we may advert to the well (d)The built up area of the shops andothercommercialestablishmentsincluded in the housing project should|not exceed 5% of tne total built up-area of the housing project or 2,000sg.ft. wnicnever Is less.othercommercialestablishmentsincluded in the housing project should|not exceed 5% of tne total built up-area of the housing project or 2,000sg.ft. wnicnever Is less. (e)The project has to be completed|within four years from tne end of the|financial year in whicn the project Is_approved by tne local authority.within four years from tne end of the|financial year in whicn the project Is_approved by tne local authority. 12. At this stage, we may advert to the well settied legal principles with regard to interpretation oftaxing statutes. It is trite law that subject is not to betaxed witnout clear words for the purpose and also tnatevery Act of Parliament must be read according tonatural construction of its word. The well established rule in the familiar words of Lord Wensleydale,reaffirmed by Lord Halsbury and Lord Simonds, is that °If the person sought to be taxed comes within the letter ofthe law he must be taxed, however, great the hardshipmay appear to the Judicial mind to be. On the otherhand, if the Crown seeking to recover the tax, cannotbring the subject within the letter of the law, the subjectis free, however apparently within the spirit of law thecase might otherwise appear to be’. In other words, ifthere be admissible in any statute, what is called aneguitable construction, certainly, such a construction Isnot admissible in a taxing statute wnere you can simplyadhere to the words of the statute.The ConstitutionBencn of the Supreme Court inSTATE OF WESTBENGAL VS. KESORAM INDUSTRIES LTD., (2004)10SCC201cited aDPaSsSdafromJUSTICEG.P.SINGH’S TREATISEon Principles of Statutory|interpretation summed up the following principles withregard to interpretation of taxing statute. | (i) in interpreting a taxing statute, equitable|considerations are entirely cut of place.|Taxing statutes cannot be interpreted on anypresumption or assumption. A taxing statute has to be interpreted in the light of what is clearly expressed; it cannot imply anything|which is not expressed; it cannot import|provisions in the statute so as to supply any|deficiency; (ii) before taxing any person it must be|Shown that he fails within the ambit of the|Charging section by clear words used In the|Section; and © (iii) if the words are ambiguous and open toCWOInterpretations,thebenefitOf|interpretation is given to the subject. There|is nothing unjust in the tax- payer escaping|if the letter of the law falls to catch him on|account of Legislature's failure to express|itself clearly. The aforesaid principles were referred to with) approval by another constitution bench decision ofSupreme Court In|"COMMISSIONER OF CUSTOMS| (IMPORT)MUMBATVS,DILTP|KUMARANDCOMPANY’, (2018) 361 ELT 577 (SC). 13.It is equally well settled legal proposition thatexemption is available on complying with certainconditions, those conditions have to be strictly compliedwith. [See:"EAGLE FLASK INDUSTRIES LTD., VS.COMMISSIONER OF CENTRAL EXCISE’, (2004) 7SCC 377 AND ‘STATE OF JHARKHAND VS. ANBAYCEMENTS’, (2005) 1 SCC 368, ‘STATE OF BIHARVS. KALYANPUR CEMENTS LTD.', (2010) 3 SCC 2/74and ‘DEPUTY COMMISSIONER OF INCOME TAX,CIRCLE 11(1), BANGALORE VS. ACE MULTI AXESSYSTEMS LTD.', AIR 2017 SC 5660|. Tne constitutionbench of the Supreme Court inDILIP KUMAR ANDCOMPANY SUPRAhas held that incentive provision is.Subjected to strict interpretation and until the stage offinding out the eligibility to claim deduction, the ambitand scope of the provision for the purpose of itsapplicability cannot be expanded or widened, but once, eligibility is decided in favour of a person claiming suchdeduction, it could be construed liberally with regard toother requirements, wnich may be formal or directory innature. The aforesaid decision was referred to withapproval by the Supreme Court in Ramnath & Co. Supra. ANALYSIS: eligibility is decided in favour of a person claiming suchdeduction, it could be construed liberally with regard toother requirements, wnich may be formal or directory innature. The aforesaid decision was referred to withapproval by the Supreme Court in Ramnath & Co. Supra. ANALYSIS: 14. In the backdrop of aforesaid well settled legalprinciples, we may now examine the facts of the case inhand. The pivotal issue in this appeal is whether theassessee has complied with the conditions, which aresine qua non in order to claim benefit of deductionunder Section 80IB(10) of the Act viz., the requirementscontained in clauses (b), (c) & (d) of Section 80IB(10)of the Act. We shall proceed to deal with the aforesaidIssues|ad seritum A. Requirement of project of the size of a plot ofland which has a minimum area of 1 acre: 15. From perusal of para 14 of the order passedby the Assessing Officer, we find that the AssessingOfficer has himself recorded a finding that the site areaas per the plan, which was approved on 30.04.2005 is48,939 square feet, which is more than one acre l.ée.,45,560 square feet. It has further been found by theAssessing Officer that the assessee company had toNand over certain land to BBMP for development. It has.also been found that after handing over of the land, theproject Nas been constructed on an area of 38,573)Square feet. The Commissioner of Income Tax (Appeals)by following the decision of the Income Tax AppellateTribunal dated 29.08.7008 In case of assessee itself forthe Assessment Year 2004-05 has reversed the findingrecorded by the Assessing Officer in this regard. TheTribunal by an order dated 07.09.2012 has held that asper the approved plan, the total area of the land is 48,939 square feet, which is more than one acre and.part of the land was handed over to the BBMP by the.assessee for public purposes. It was further held thatthe land area, which was_ ultimately sold to thepurcnasers of various flats was only 38,573 square feet.The Tribunal by placing reliance on decision of MumbaiBench of the Tribunal in M/s Veedhi Builders vs. ITO inITA No.1212/2009 for Assessment Year 2005-06 heldtnat size of the plot nas to be taken as a whole and thearea surrendered for the public purpose viz., for roadsand gardens cannot be excluded. It is pertinent to notetnat Central Board of Direct Taxes (CBDT) has issued aletter dated 04.05.7001 to Maharashtra Chamber of.Housing Industry and has clarified that any project,which has been approved by the local authority as ahousing project should be considered adequate for thepurpose of Section 10(23G) and Section 80IB(10) of theAct. The aforesaid Circular was interpreted by BombayHigh Court in COMMISSIONER OF INCOME TAX VS. VANDANA PROPERTIES supra and it was held that thehousing project must be on a vacant plot of land havingminimum area of one acre and in such a case, the|assessee is entitled to benefit of deduction underSection 80IB(10) of the Act. Similar view was taken byHigh court of Madras in.‘COMMISSIONER OF INCOME| TAXTFHIRUCHIRAPALLIVS,R.SETHURAMAN*’,2015-TIOL-1912-HC-MAD-ITas|well.as|In|“COMMISSIONER OF INCOME TAX, CHENNAI VS.M/S VOORA PROPERTY DEVELOPERS PVT. LTD.’,TAXCASE(APPEAL)NO.56/2015DATED09.03.2015.We respectfully concur with the viewtaken by the Bombay as well as Chennai High Courts. Inthe instant case, the housing project of the assesseewas approved in respect of an area of 48,939 square.feet, which is more than one acre i.e., 43,500 squarefeet, therefore, we hold that the assessee has compliedwith requirement contained in Clause (b) of Section80IB(10) of the Act. B. REQUIREMENT OF RESIDENTIAL UNIT HAVINGA_MAXIMUM BUILT UP AREA OF 1,500 SQUAREFEFT: TAXTFHIRUCHIRAPALLIVS,R.SETHURAMAN*’,2015-TIOL-1912-HC-MAD-ITas|well.as|In|“COMMISSIONER OF INCOME TAX, CHENNAI VS.M/S VOORA PROPERTY DEVELOPERS PVT. LTD.’,TAXCASE(APPEAL)NO.56/2015DATED09.03.2015.We respectfully concur with the viewtaken by the Bombay as well as Chennai High Courts. Inthe instant case, the housing project of the assesseewas approved in respect of an area of 48,939 square.feet, which is more than one acre i.e., 43,500 squarefeet, therefore, we hold that the assessee has compliedwith requirement contained in Clause (b) of Section80IB(10) of the Act. B. REQUIREMENT OF RESIDENTIAL UNIT HAVINGA_MAXIMUM BUILT UP AREA OF 1,500 SQUAREFEFT: 16. The Assessing Officer has held that 32% ofthe units of the assessee are having an area of morethan 1,500 square feet. It was further held that thoughthe Income Tax Appellate Tribunal has recorded afinding in favour of the assessee that assessee isentitled to benefit of principle of proportionality for theAssessment Years 2004-05 and 2005-06, yet theaforesaid finding has not attained finality and the sameis pending before this court in an appeal. TheCommissioner of Income Tax (Appeals) by _ placinreliance on the order passed by the Tribunal in respectof previous Assessment Year viz., 2004-05 has held thatthe assessee is entitled to benefit of deduction underSection 801IB(10) of the Act proportionately in respect ofresidential units having built up area less than or equalto 1,500 square feet. The aforesaid finding has been| affirmed by the Tribunal vide order dated 07.09.2012 byplacing reliance in case of the assessee in respect ofprevious Assessment Year i.e., 2005-06 as well as 2006-07. It is pertinent to note that the aforesaid view hasbeen affirmed by a bench of this court in respect ofanother project of the assessee for the Assessment Year2004-05 vide order dated 29.02.2012 passed inI.T.A.No.763/2009. It is also pertinent to note thatsimilar view was taken in favour of the assessee Inrespect of Assessment Year 2005-06 and 2006-07 and.the SLP against the order passed by this court has beendismissed vide orders dated 04.01.7013 and 14.03.7014respectively. The aforesaid issue has therefore, attainedfinality. It is also pertinent to mention here that clause(c) of Section 80IB(10) of the Act, the Legislature hasused the expression ‘residential unit’ and has specificallyomitted to use the expression ‘each’. It is also pertinentto mention here that in several Sections like Section 5A,6(5), 10(10), 35D(1), 44AD(3), 8OHHB, 801(5), 153C, 153D, 158DA, 293A(3), 296 and 298(4) of the Act as|well as under Rules 2BA, 20(4), 22(3), 62(3), 74(2),74(6) and 104 of the Rules, the Legislature hasexpressly used the word ‘each’. It is well settled rule ofstatutory interpretation that when a situation has beenexpressed differently, the legislation must be taken tohave been tended to express a different intention. [SEE:“COMMISSIONER OF INCOME TAX, NEW DELHI VS.EAST WEST IMPORT AND EXPORT (P) LTD’ 1989(1) SCC 760|. On plain reading of clause (c) ofSection 801B(10) of the Act, it is evident that the samedoes not exclude the principle of proportionality in anymanner. Therefore, we hold that the Commissioner ofIncome Tax (Appeals) as well as the Tribunal haverightly found that the assessee has complied with therequirement contained in clause (c) of Section 80IB(10)of the Act. | C. REQUIREMENT OF COMMERCTAL AREA IN APROJECT NOT EXCEEDING 529% OF THE BUILT AREA: C. REQUIREMENT OF COMMERCTAL AREA IN APROJECT NOT EXCEEDING 529% OF THE BUILT AREA: 17. Tne Assessing Officer in para 11 of its orderhas recorded the submission of the assessee that inrespect of each pDiock, it has taken separate approval.The Tribunal vide order dated 07.09.2012 inter alia heldthat individual residential block has to be considered asseparate project and the commercial space which isseparate part of the project should not be considered. Itwas further held that similar view was taken by theTribunal in case of the assessee for Assessment Year2004-05, which nas been upheld by this court inI.T.A.No.763/2009 and 25/2009 vide order dated29.02.2012 and therefore, the assessee was heldentitled to deduction under Section 80IB(10) of the Act.It is pertinent to mention here that the assessee hadpreferred a Special Leave Petition, which was dismissedby the Supreme Court. We therefore, hold that theassessee has complied with the requirement of clause (b) of Section 80IB(10) of the Act. 18. The!SupremeCourtIn|RADHASOAMTISATSANG Vs. COMMISSIONER OF INCOME-TAX’(1992) 60 TAXMAN 248 (SC)has held that even.though principles ofres Judicatado not apply to income.tax proceedings, but where a fundamental aspectpermeating through the different Assessment Years hasbeen found as the fact one way or the other and the.parties have allowed the position to be sustained by notchallenging the order, it would not be at all appropriateto allow the position to be changed in subsequent year. —For this reason also, in the facts of the case, a differentview cannot be taken. On literal construction of theprovision of Section 801B(10) of the Act it is evident thatthe aforesaid provisions do not suffer from anyambiguity, therefore, the decisions rendered by theSupreme Court in tne case of DILIP KUMAR andRAMNATH & CO. supra have no application to theobtaining factual matrix of the case. For the aforementioned reasons, it is held that the|assessee has complied with the requirements containedin clauses (a), (Db), (c) & (d) of Section 80IB(10) of theAct. The substantial questions of law framed by a benchof this court are answered against the revenue and infavour of the assessee. In the result, we do not find any merit in this)appeal. The same fails and is hereby dismissed. Sd/-JUDGE.Sd/-—JUDGE. SS|