Itxa/97/2017 Of The Pr. Commissioner Of Income Tax-5 v. M/S Sai Samarth Constructions

Priya Soparkar IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO.97 OF 2017 The Pr.Commissioner of Income Tax-5 V/s. M/s Sai Samarth Constructions --- Mr.Tejveer Singh for the Appellant.--- … Appellant … Respondent CORAM : AKIL KURESHI AND SARANG V.KOTWAL, JJ. DATE : APRIL 8, 2019. P.C.:- 1.Revenue has filed this appeal against the judgment of theIncome Tax Appellate Tribunal. Following questions are presentedfor our consideration:- “I.Whether on the facts and in the circumstancesof the case and in law, the ITAT was correct inholding that the assessee is eligible to claimdeduction under Section 80IB(10) on the entireproject irrespective of the fact that the project wascompleted on 30.03.2012 i.e. not before clause (e)and (f) inserted vide Finance Act, 2009?II.Whether on the facts and in the circumstancesof the case and in law, the ITAT was justified inaffirming the view of the CIT (A) in allowing pro-rata deduction in respect of eligible units of thehousing project, when no such provision for allowing pro-rata deduction is existing in the Act?” 2.The respondent-assessee is in the business of Housing Development. In the return of income filed for the assessment year2010-11, the assessee had claimed exemption of the incomefrom such business in terms of Section 80IB of the Income TaxAct, 1961 (“the Act” for short). The Assessing Officer was of theopinion that the assessee had breached certain conditions of thesaid section and therefore, deduction was denied. 3.The assessee carried the matter in appeal. The CIT (Appeals)allowed the appeal in part. He held that there was breach ofconditions of the Section, however, the disallowance can only beproportionate to the units with respect to which such breach wascommitted. 4.The decision of CIT (Appeals) gave rise to two appealsbefore the Tribunal. One filed by the assessee and another by therevenue. The Tribunal allowed the assessee's appeal holdingthat the conditions of which the revenue was alleging breach of, Priya Soparkar 316 itxa 97-17-o were inserted in the legislation after the allotments were made.In view of the matter, the Tribunal held that the revenue'sappeal against the proportionate disallowance would becomeinfructuous. The Tribunal, therefore, allowed the assessee's appealand dismissed the revenue's appeal. Against this judgment therevenue had filed the present appeal. Firstly, in our opinion therevenue should have filed two appeals when the Tribunal wasdeciding two separate appeals before itself, may be by commonjudgment. Be that as it may, we find that the Tribunal has cometo a factual finding that the assessee had already made allotmentsof certain residential units in favour of the same person/familylong before the condition of non-allotment of more than one unitwas inserted by the legislature in the said section. That being theposition, we do not find that the Tribunal had committed anyerror in holding that the disallowance cannot be made. Throughseries of judgments this Court has held that such conditionwhich was inserted by the Parliament with prospective effectcannot be applied to deny the benefit of deduction pointing outthat in allotment which was made earlier, there was breach ofthis condition. Under the circumstances, the question of proportionate disallowance would become irrelevant. 5.In the result, appeal is dismissed. (SARANG V.KOTWAL,J.) (AKIL KURESHI,J.) ….