1.  DY CIT Vs. M/s SHAH BUILDERS & DEVELOPERS, ITA No. 3195 & 3196/Mum/2010, Assessment Year - 2005-06 and 2006-07, Dated: 6th May  2011, ITAT – Mumbai

Whether the assessee is entitled to deduction u/s 80IB(10) for a residential cum commercial building which was approved by the local authority before the insertion of clause (d) in s. 80-IB(10) w.e.f. 1st April, 2005 which is prospective and not retrospective.

The issue is covered by the decision of Brahma Associates in which it was held that Upto 31st March, 2005, deduction u/s. 80IB(10) is allowable to housing projects approved by the local authority having residential units with commercial user to the extent permitted under the DC Rules/Regulations framed by the respective local authority irrespective of the fact that the project is approved as “housing project” or ‘residential plus commercial’. Clause (d) inserted in s. 80-IB(10) w.e.f. 1st April, 2005 is prospective and not retrospective.

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2.  M/s RAMALINGAM CHARITIES, SALEM Vs. THE COMMISSIONER OF INCOME TAX, SALEM, Tax Case (Appeal) Nos. 809 to 813 of 2010, Dated: 11th March  2011, Madras High Court

Whether assessee trust is entitled to exemption u/s 11 and 12 for the amount received as corpus fund as it is not a taxable amount though it is deposited with the sister concern in violation of section 11(5), further whether where the assessee trust is not engaged to carry on the activities solely of educational institutions, it would not be entitled to exemption u/s 10(22).

The tribunal found as a matter of fact that the assessee could not be considered as one existing solely for educational purpose. As the assessee has not fulfilled the conditions laid down under Section 11 of the Act, the question any benefit to be given under Section 11(5) and 12 does not arise. The tribunal found that the voluntary contributions received by the assessee Trust shall form part of the corpus of the Trust. These receipts could not be treated as income under Section 12 of the Act. The assessee is not entitled to any priority under Section 11(5) of the Act as it had been failed to satisfy the conditions laid down therein. It is for the assessee to canvass before the assessing authority by producing necessary materials to substantiate his claim in the context of the provisions of Section 10(22) of the Act.

The Tribunal had not adverted to in the order as to the applicability of provisions of Section 10(22) and Section 11(5) on the claim of the assessee. If any question is raised as regards the applicability of Section 10(22) or any other provisions under the Act to claim exemption, it is open to the assessee to approach the authority to consider the claim in accordance with law. The assessee has not satisfied the requirement under Section 11(5) to claim benefit under Section 12 of the Act.

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