S. 80IB(10) : Housing projects-Slum Rehabilitation Authority (SRA) Projects-CBDT circular-Notification- Claim u/s.80IB (10) would be allowable even the approval was granted before 01/04/2004 and commencement certificate after 01-4-2004-Circulars and notifications cannot override the provisions of the Act.-Notification No. 1/2011 dated 5-1-2011 restricting the eligibility of section 80IB(10) to SRA project on or after 1-4-2004 and before 31-3-2008 is inconsistent to the proviso to clauses (a) and (b). [S. 80IB(10)(a), 80IB(10) (b), 119, 254(1)]
The scheme for Slum development has been prepared by the Maharashtra Government (SRA). The assessee undertook a project under the scheme of Slum Rehabilitation Authority (SRA) framed by the government of Maharashtra for carrying out a housing project. The claim of deduction has been declined by the revenue authorities on the ground that the project was approved before 01.04.2004, whereas the amendment to section 80IB(10) (a & b), vide finance (2) Act 2004 relaxed the condition imposed by section 80IB(10)(b) by introducing the proviso to section 80IB(10)(a )&80IB(10((b). The CIT(A) and Tribunal affirmed the view of the AO. The Assessee filed an appeal against the order passed by this Tribunal before the Hon’ble Bombay High court. Hon’ble Bombay High Court, set aside the order to Tribunal . Tribunal held that the rigours of section 80IB(10) were relaxed by introduction of proviso by finance Act, 2004, wherein it was provided that the condition stipulated in clauses (a) & (b) shall not be applicable to SRA Project under. Further with regards to the condition/requirement of section 80IB(10)(b) in respect of the project size of the plot of 1 acre is concerned, the a proviso has been added to sub clause (b) to section 80IB (10) as per amendment by finance Act (2) 2024 w.e.f. 01.04.2005, wherein the condition of 1 acre has been relaxed in the cases of Delhi or Mumbai on the condition that the relaxation was subject to the approval by local authority under slum rehabilitation scheme and notified by the CBDT. Therefore, the settled legal position that the circulars or directions cannot be permitted to curtail the substantive provisions of the Act. The circular cannot therefore curtail the benefit conferred on assessee or be contradictory to the Act. Deduction is allowed . Followed Ramesh Gunshi Dedhia v. ITO (2014) 148 ITD 356 (Mum)(Trib.) (ITA No. 4389/MUM/2014 & ITA No. 4390/MUM/2014, dt. 25/02/2025 ) (AY. 2006-07, 2007-08)
Bhavya Construction Co. v. ACIT (Mum.)(Trib.) www.itatonline.org.
[Coram : Hon’ble Ms. Padmavathy S, AM & Hon’ble Shri Sunil Kumar Singh, JM]