Judgment : B.P. Colabawalla, J. 1. Income Tax Appeal No.201 of 2012 is filed by the Revenue under section 260A of the Income Tax Act 1961 (hereinafter referred to as the Act) wherein the following questions of law are projected as substantial and read as under :- “(A) Whether on the facts and in the circumstances of the case and in law the Hon'ble Tribunal was right in allowing to the Assessee Company a deduction u/s 80IB(10) of the Income Tax Act for A.Y. 2006-2007 amounting to Rs.2,11,74,864/- wherein the commercial area built by the assessee exceeded the limit specified in clause (d) to section 80IB(10) of the I.T. Act 1961? (B) Whether on the facts and in the circumstances of the case and in law the Hon'ble Tribunal was right in holding that the limits on commercial area provided in clause (d) to section 80IB(10) of the Act would not be applicable even after 01.04.2005 as the projects were approved before that date even though no such exception is provided under the Income Tax Act?” 2. This appeal was admitted on the aforesaid questions by a Division Bench of this Court on 22nd February, 2013. Since we found that several Appeals on similar questions were either admitted or pending admission in this Court, we by our order dated 4th July, 2014 passed in Income Tax Appeal No.308 of 2012, directed the learned counsel for the parties to submit a list to the Registrar so that these Appeals could be listed before this Court for disposal. By the said order, we also requested the respective counsels to address us on the point as to whether the judgment of this Court in the case of CIT v/s Brahma Associates, reported in (2011) 333 ITR 289 (Bom) would cover the cases where the housing project within the meaning of section 80-IB (10) had been approved prior to 31st March, 2005 and whether the view taken in Brahma Associates (supra) would cover all such matters. This is how these Appeals are listed before us. 3. Basically, we have been called upon to interpret the provisions of section 80-IB(10)(d) from two different perspectives. Firstly, we have to examine whether the said provision applies to a housing project approved before 31st March, 2005 and completed before 1st April, 2005. This is how these Appeals are listed before us. 3. Basically, we have been called upon to interpret the provisions of section 80-IB(10)(d) from two different perspectives. Firstly, we have to examine whether the said provision applies to a housing project approved before 31st March, 2005 and completed before 1st April, 2005. Secondly, we have to examine whether the said provision applies to a housing project approved before 31st March, 2005 but completed on or after 1st April, 2005. The date 1st April, 2005 is of some significance because by Finance (No.2) Act, 2004, w.e.f. 1st April 2005, section 80-IB(10) was substantially amended and clause (d) was inserted therein, that stipulates that the built up area of the shops and other commercial establishments included in the housing project should not exceed five percent of the aggregate built up area of the housing project or two thousand square feet, whichever is less. What we are called upon to decide is whether this condition/restriction set out in clause (d) of section 80-IB(10) will apply to the two scenarios set out above. 4. The facts in Income Tax Appeal No.308 of 2012 deal with first scenario where the housing project was approved before 31st March, 2005 and completed before 1st April, 2005 but the sale of some of the units in the said project took place after 1st April, 2005 i.e. in the A.Y. 20052006. The facts in Income Tax Appeal No.201 of 2012 deal with the second scenario viz. where the housing project was approved before 31st March, 2005 but completed on or after 1st April 2005, but within the time-frame as laid down in section 80-IB(10). Since the facts in these two cases cover both the scenarios above, we shall refer to the facts of these two cases and all the other Appeals will accordingly be disposed off following the ratio of this judgment. FACTS IN INCOME TAX APPEAL NO. 308 OF 2012 5. On 19th July 2007, a search under section 132 of the Act was conducted in the Assessee's case (M/s Kanakia Spaces Pvt. Ltd.) and consequent thereto, assessment proceedings were initiated by issuance of a notice under section 153A of the Act. The Assessee filed a return under the said section on 19th March, 2008 declaring a total income of Rs. Nil after claiming a deduction of Rs.56,27,583/- under section 80-IB(10) of the Act. The Assessee filed a return under the said section on 19th March, 2008 declaring a total income of Rs. Nil after claiming a deduction of Rs.56,27,583/- under section 80-IB(10) of the Act. The assessment proceedings under section 143(3) r/w section 153A were completed on 31st December, 2009 when the Assessing Officer inter alia held that the profits derived from the sale of commercial area was not entitled to a deduction under section 80-IB(10) of the Income Tax Act, 1961. The Assessing Officer in coming to the aforesaid conclusion inter alia recorded that during the year under consideration viz. A.Y. 2005-2006, the Assessee Company was engaged in the business as builders and developers and was following the project completion method of accounting. During the said year the Assessee had completed the “Discovery Project” which was a mixed housing project, having commercial shops. During the course of the assessment proceedings, the Assessing Officer found that the Assessee had claimed a deduction under section 80-IB(10) on the profit after sale of shops and this was disallowed on the ground that the Assessee had not complied with the basic requirement that the profit derived on the sale of commercial area of the project was not entitled for a deduction. 6. Being aggrieved by the Assessment Order, the Assessee preferred an Appeal before the Commissioner of Income Tax (Appeals), who by his order dated 15th April, 2010 upheld the findings of the Assessing Officer. The CIT (Appeals) observed that the provisions of section 80-IB(10) were substantially amended by Finance (No.2) Act, 2004 with effect from 1st April, 2005 wherein it was provided that the built up area of the shops and other commercial establishments included in the housing project should not exceed 5% of the aggregate built up area or 2000 sq.ft., whichever is less. The CIT (Appeals) held that the amended provisions of section 80-IB (10) which came into effect from 1st April, 2005 were applicable for the current A.Y. viz. 20052006. Accordingly, he dismissed the Appeal filed by the Assessee. 7. Being dissatisfied, the Assessee approached the Income Tax Appellate Tribunal (hereinafter referred to as the “ITAT”). The ITAT, after noting the undisputed facts and relying upon its own judgment in the case of Saroj Sales Organisation v/s ITO, reported in 115 TTJ 485, by its order dated 30th June, 2011 reversed the order of the CIT (Appeals). 7. Being dissatisfied, the Assessee approached the Income Tax Appellate Tribunal (hereinafter referred to as the “ITAT”). The ITAT, after noting the undisputed facts and relying upon its own judgment in the case of Saroj Sales Organisation v/s ITO, reported in 115 TTJ 485, by its order dated 30th June, 2011 reversed the order of the CIT (Appeals). The undisputed facts noted by the ITAT were that the construction of the housing project known as the “Discovery Project” having an aggregate built up area of 1,27,736 sq.ft. got completed in the A.Y. 2004-2005. The Assessing Officer and CIT (Appeals) had denied the benefit of the deduction under section 80-IB(10) on the ground that the commercial area of 7,607 sq.ft. was more than 2,000 sq.ft. as set out in clause (d) of section 80-IB(10) and therefore violated the provisions thereof, which disentitled the Assessee to the deduction. After noting these facts, and after relying upon several decisions of its Coordinate Benches, the ITAT held that if housing projects were approved before 31st March 2005, the condition / restriction set out in clause (d) of section 80-IB(10) would not be applicable. Being aggrieved by this order of the ITAT, the Revenue is in Appeal before us. FACTS IN INCOME TAX APPEAL NO. 201 OF 2012 8. In this case, the Assessee (Happy Home Enterprises), for the A.Y. 2006-2007 filed a return of income on 31st October 2006 declaring its total income at Rs.45,781/-. The said case was thereafter selected for scrutiny and the Assessing Officer found that the Assessee had claimed a deduction of Rs.2,11,74,864/- under section 80-IB(10). On verification of the details filed by the Assessee it was noticed by the Assessing Officer that the housing project put up by the Assessee consisted of 12 shops admeasuring approximately 1,910 sq.ft., which was approximately 6.63 % of the total built up area of the said housing project. Since the area occupied by the said shops exceeded the 5% limit specified in clause (d) of section 80-IB(10), the deduction claimed by the Assessee was disallowed. It is not in dispute that in the facts of this case, the housing project was approved by the local authority on 19th June, 2003 (i.e. before 31st March, 2005). It is also an undisputed position that the said Project was completed after 1st April, 2005. 9. It is not in dispute that in the facts of this case, the housing project was approved by the local authority on 19th June, 2003 (i.e. before 31st March, 2005). It is also an undisputed position that the said Project was completed after 1st April, 2005. 9. Being aggrieved thereby, the Assessee preferred an Appeal to the CIT (Appeals), who by his order dated 5th November 2009, set aside the order of the Assessing Officer and held that the deduction under section 80-IB(10) was available to the Assessee. The CIT (Appeals) in allowing the appeal mainly followed the judgment of the Special Bench (Pune) of the ITAT in the case of Brahma Associates v/s Joint CIT (OSD), Circle 4, Pune, dated 6th April 2009, reported in (2009) 119 ITD 255 (Pune)(SB), wherein it was held that where housing projects were approved before 31st March 2005, the condition laid down in clause (d) of section 80-IB(10) was not applicable. Not accepting the verdict of the CIT (Appeals), the Revenue preferred an Appeal before the ITAT who also followed the view of its Special Bench, Pune and further noted that this Court in the case of Brahma Associates (supra) had upheld the said view of the special Bench. 10. Being aggrieved by this order of the ITAT, the Revenue is in Appeal before us. Despite service of this Appeal, none appeared on behalf of the Assessee. However, since an important question of law was to be decided, we had requested Mr. Mistry, the learned senior counsel appearing on behalf of the Assessee in ITXA No.308 of 2012, to address us even on the issue raised in this appeal. He was kind enough to accept our request and we are grateful for his able assistance in the matter. 11. Before dealing with the rival contentions of the parties, it would be in the fitness of things to trace the history of the provisions that we are called upon to construe in these Appeals. 12. Initially, section 80-IA was inserted in the Income Tax Act, 1961 by Finance (No.2) Act, 1991 w.e.f. 1st April, 1991 and dealt with deductions in respect of profits and gains from industrial undertakings etc. in certain cases. As the Government identified housing as a priority area and to purposefully tackle the country's housing shortage problem, it was decided to give tax incentives for the promotion of housing. in certain cases. As the Government identified housing as a priority area and to purposefully tackle the country's housing shortage problem, it was decided to give tax incentives for the promotion of housing. With this object in mind and with a view to promote investment in housing, sub-section (4F) was inserted in section 80-IA w.e.f. 1st April, 1999. Section 80-IA(4F) as it stood then, read as under :- “(4F) This section applies to an undertaking engaged in developing and building housing projects approved by a local authority subject to the condition that the size of the plot of land has a minimum area of one acre and the residential unit has a built up area not exceeding one thousand square feet; Provided that the undertaking commences development and construction of the housing project on or after the 1st day of October 1998 and completes the same before the 31st day of March 2001.” 13. As can be seen from the said provision, at that time, if an undertaking was engaged in developing and building housing projects approved by the local authority, it was entitled to a deduction as set out in section 80-IA provided that:- (i) the size of the plot of land had a minimum area of one acre; (ii) each individual residential unit had a built up area not exceeding 1000 sq.ft. and (iii) the development / construction of the said housing project commenced on or after 1st October, 1998 and completed before 31st March, 2001. Therefore, when this provision was first introduced, there were only three conditions that were required to be fulfilled by the undertaking engaged in the development / construction of housing projects approved by the local authority. There was no restriction on the quantum of commercial area that could included in the said housing project. That was to be determined by the local authority in accordance with its own rules and regulations. As long as the local authority sanctioned the project as a housing project and it complied with the three conditions as stipulated in section 80-IA(4F), the said undertaking was entitled to the deduction as set out therein. 14. Thereafter, by the Finance Act, 1999 entire section 80-IA was substituted by the newly introduced sections 80-IA and 80-IB which were on the lines of the existing section 80-IA but with certain modifications. 14. Thereafter, by the Finance Act, 1999 entire section 80-IA was substituted by the newly introduced sections 80-IA and 80-IB which were on the lines of the existing section 80-IA but with certain modifications. The newly inserted section 80-IB(10) w.e.f. 1st April, 2000 read as under :- “(10) The amount of profits in case of an undertaking developing and building housing projects approved by a local authority, shall be hundred per cent of the profits derived in any previous year relevant to any assessment year from such housing project if - (a) such undertaking has commenced or commences development and construction of the housing project on or after the 1st day of October 1998 and completes the same before the 31st day of March 2001; (b) the project is on the size of a plot of land which has a minimum area of one acre, and (c) the residential unit has a maximum built-up area of one thousand square feet where such residential unit is situated within the cities of Delhi or Mumbai or within twenty-five kilometers from the municipal limits of these cities and one thousand and five hundred square feet at any other place.” 15. Therefore, w.e.f. 1st April, 2000 section 80-IA(4F) was substituted with section 80-IB(10) and in substance was basically the same, with one addition. The newly inserted section 80-IB(10) stipulated that if the housing project approved by the local authority was at a distance of 25 Kms or beyond the municipal limits of the cities of Delhi or Mumbai, then the residential unit in the said housing project could have a maximum built area of 1,500 sq.ft. instead of 1,000 sq.ft. All other conditions as set out in section 80-IA(4F) were retained in section 80-IB(10). This was brought about as there were many representations that in towns other than Mumbai and Delhi the land cost was relatively less and for the same capital expenditure, investors could afford to procure dwelling units of slightly larger areas. In light of this, it was represented that the ceiling on the built up areas for dwelling units in approved housing projects be increased from 1,000 sq.ft. to 1,500 sq.ft. at all locations except Mumbai and Delhi. In light of this, it was represented that the ceiling on the built up areas for dwelling units in approved housing projects be increased from 1,000 sq.ft. to 1,500 sq.ft. at all locations except Mumbai and Delhi. Accepting the said representations, the Legislature inserted clause (c) to sub-section (10) of section 80-IB which stipulated that in a housing project approved by the local authority and situated in the cities of Delhi or Mumbai or within 25 Kms from the municipal limits of these cities, each individual residential unit could not exceed a built up area of 1,000 sq.ft., and at any other place, could not exceed the built up area of 1,500 sq.ft. 16. Thereafter, section 80-IB(10) was further amended and w.e.f. 1st April, 2001 and read as under :- “(10) The amount of profits in case of an undertaking developing and building housing projects approved before the 31st day of March 2001 by a local authority, shall be hundred per cent of the profits derived in any previous year relevant to any assessment year from such housing project if :- (a) such undertaking has commenced or commences development and construction of the housing project on or after the 1st day of October 1998 and completes the same before the 31st day of March 2003; (b) the project is on the size of a plot of land which has a minimum area of one acre; and (c) the residential unit has a maximum built-up area of one thousand square feet where such residential unit is situated within the cities of Delhi or Mumbai or within twenty-five kilometers from the municipal limits of these cities and one thousand and five hundred square feet at any other place.” 17. Therefore, now w.e.f. from 1st April, 2001 section 80-IB(10) stipulated that any housing project approved by the local authority before 31st March 2001, was entitled to a deduction of 100 per cent of the profits derived in any previous year relevant to any assessment year from such housing project provided:- (i) the construction / development of the said housing project commenced on or after 1st October, 1998 and was completed before 31st March 2003; (ii) the housing project was on a size of a plot of land which had a minimum area of one acre; and (iii) each individual residential unit had a maximum built-up area of 1,000 sq.ft., where such housing project was situated within the cities of Delhi or Mumbai or within 25 Kms from the municipal limits of these cities, and a maximum built-up area of 1,500 sq.ft. at any other place. Therefore, for the first time, a stipulation was added with reference to the date of approval, namely that approval had to accorded to the housing project by the local authority before 31st March, 2001. Before this amendment there was no date prescribed for the approval being granted by the local authority to the housing project. Prior to this amendment, as long as the development/ construction commenced on or after 1st October, 1998 and was completed before 31st March 2001, the assessee was entitled to the deduction. Also by this amendment, the date of completion was changed from 31st March, 2001 to 31st March, 2003. Everything else remained untouched. 18. Prior to this amendment, as long as the development/ construction commenced on or after 1st October, 1998 and was completed before 31st March 2001, the assessee was entitled to the deduction. Also by this amendment, the date of completion was changed from 31st March, 2001 to 31st March, 2003. Everything else remained untouched. 18. Thereafter, by Finance Act, 2003 further amendments were made to section 80-IB(10) and read as under :- “(10) The amount of profits in case of an undertaking developing and building housing projects approved before the 31st day of March 2005 by a local authority, shall be hundred per cent of the profits derived in any previous year relevant to any assessment year from such housing project if - (a) such undertaking has commenced or commences development and construction of the housing project on or after the 1st day of October 1998; (b) the project is on the size of a plot of land which has a minimum area of one acre; and (c) the residential unit has a maximum built-up area of one thousand square feet where such residential unit is situated within the cities of Delhi or Mumbai or within twenty-five kilometres from the municipal limits of these cities and one thousand and five hundred square feet at any other place.” 19. As can be seen from the aforesaid provision, now the only changes that were brought about were that w.e.f. 1st April, 2002, (i) the housing project had to be approved before 31st March, 2005 and (ii) there was no time limit prescribed for completion of the said project. Though these changes were brought about by Finance Act, 2003, the Legislature thought it fit that these changes be deemed to have been brought into effect from 1st April, 2002. All the remaining provisions of section 80-IB(10) remained unchanged. 20. Thereafter, by Finance (No.2) Act, 2004, w.e.f. 1st April, 2005 section 80-IB(10) was substituted and substantial changes were effected in the newly substituted sub-section (10) of section 80-IB. All the remaining provisions of section 80-IB(10) remained unchanged. 20. Thereafter, by Finance (No.2) Act, 2004, w.e.f. 1st April, 2005 section 80-IB(10) was substituted and substantial changes were effected in the newly substituted sub-section (10) of section 80-IB. It reads thus :- “(10) The amount of deduction in the case of an undertaking developing and building housing projects approved before the 31st day of March, 2007 by a local authority shall be hundred per cent of the profits derived in the previous year relevant to any assessment year from such housing project if,— (a) such undertaking has commenced or commences development and construction of the housing project on or after the 1st day of October, 1998 and completes such construction,— (i) in a case where a housing project has been approved by the local authority before the 1st day of April, 2004, on or before the 31st day of March, 2008; (ii) in a case where a housing project has been, or, is approved by the local authority on or after the 1st day of April, 2004, within four years from the end of the financial year in which the housing project is approved by the local authority. Explanation.— For the purposes of this clause,— (i) in a case where the approval in respect of the housing project is obtained more than once, such housing project shall be deemed to have been approved on the date on which the building plan of such housing project is first approved by the local authority; (ii) the date of completion of construction of the housing project shall be taken to be the date on which the completion certificate in respect of such housing project is issued by the local authority; (b) the project is on the size of a plot of land which has a minimum area of one acre: Provided that nothing contained in clause (a) or clause (b) shall apply to a housing project carried out in accordance with a scheme framed by the Central Government or a State Government for reconstruction or redevelopment of existing buildings in areas declared to be slum areas under any law for the time being in force and such scheme is notified by the Board in this behalf; (c) the residential unit has a maximum built-up area of one thousand square feet where such residential unit is situated within the city of Delhi or Mumbai or within twenty-five kilometres from the municipal limits of these cities and one thousand and five hundred square feet at any other place; and (d) the built-up area of the shops and other commercial establishments included in the housing project does not exceed five per cent of the aggregate built-up area of the housing project or two thousand square feet, whichever is less.” (emphasis supplied). 21. Therefore, by Finance (No.2) Act, 2004, with effect from 1st April 2005, the Legislature made substantial changes to sub-section (10) of section 80-IB. There were several new conditions that were incorporated by the newly substituted sub-section. One such condition was clause (d), which for the first time, w.e.f. 1st April, 2005, put a restriction on the quantum of commercial area that could be included in a housing project approved by the local authority, in order to entitle an assessee to claim the deduction as set out in section 80-IB(10). Clause (d) stipulated that the built up area of the shops and other commercial establishments included in the housing project could not exceed 5 % of the aggregate built up area of the housing project or 2,000 sq.ft., whichever was less. Clause (d) stipulated that the built up area of the shops and other commercial establishments included in the housing project could not exceed 5 % of the aggregate built up area of the housing project or 2,000 sq.ft., whichever was less. It is the effect of this clause (d) which we are called upon to decide in these appeals and whether it would apply to housing projects approved the local authority before 31st March, 2005. In other words, what we are called upon to decide is whether the said condition would apply to such housing projects approved by the local authority before 31st March 2005, when the aforesaid condition/restriction was not on the statute-book and was brought into effect only from 1st April, 2005. We should mention here that there have been further amendments to section 80-IB(10) in subsequent years. However, we are not dealing with the those further amendments as they do not arise for our consideration in the present Appeals. 22. It would be important to note another amendment that was brought about by Finance (No.2) Act, 2004 to sub-section (14) of section 80-IB, w.e.f. 1st April, 2005. Section 80-IB(14) was also amended by the same Finance (No.2) Act, 2004 and for the first time under clause (a) thereof, the words “built-up area” were defined. Section 80-IB(14)(a) reads thus :- “(14) For the purposes of this section,— (a) “built-up area” means the inner measurements of the residential unit at the floor level, including the projections and balconies, as increased by the thickness of the walls but does not include the common areas shared with other residential units;” 23. Prior to insertion of section 80-IB(14)(a), in many of the rules and regulations of the local authority approving the housing project, “built-up area” did not include projections and balconies. Probably, taking advantage of this fact, builders provided large balconies and projections making the residential units far bigger than as stipulated in section 80-IB(10), and yet claimed the deduction under the said provision. To plug this lacuna, clause (a) was inserted in section 80-IB(14) defining the words “built-up area” to mean the inner measurements of the residential unit at the floor level, including the projections and balconies, as increased by the thickness of the walls, but did not include the common areas shared with other residential units. To plug this lacuna, clause (a) was inserted in section 80-IB(14) defining the words “built-up area” to mean the inner measurements of the residential unit at the floor level, including the projections and balconies, as increased by the thickness of the walls, but did not include the common areas shared with other residential units. The reason we are referring to this provision is because it too was brought about for the first time w.e.f. 1st April, 2005 and the Karnataka High Court had the occasion to consider whether it would apply to housing projects approved by the local authority before 31st March, 2005. We have relied upon the reasoning of the judgment of the Karnataka High Court for coming to the findings that we have, in this judgment. 24. Having traced the history of section 80-IB(10), we now proceed to deal with the rival contentions of the parties. On behalf of the Revenue, submissions were made by learned senior counsel Mr. Vimal Gupta, and learned counsels, Mr. Abhay Ahuja and Mr. A. R. Malhotra. Though we have not independently dealt with the facts in Income Tax Appeal No.592 of 2012, in which Mr. Abhay Ahuja appears for the Revenue, since he has addressed on the issues raised herein, we are also making a reference to the submissions advanced by him. 25. Mr. Gupta, learned senior counsel appearing on behalf of the Appellant – Revenue, submitted that clause (d) of section 80-IB(10) inserted w.e.f. 1st April, 2005 and which applies from A.Y. 2005-06 onwards was actually in the nature of a relaxation and / or benefit granted to the Assessee and not a restriction as sought to be contended on behalf of the Assessees. He submitted that prior to 1st April 2005, a housing project could not include any commercial area for an assessee to claim a deduction under section 80-IB(10). With effect from 1st April 2005, clause (d) was inserted which allowed shops and other commercial establishments to be included in a housing project provided it did not exceed 5% of the aggregate built up area of the housing project or 2,000 sq.ft., whichever was less. Therefore, according to Mr. Gupta, w.e.f. 1st April 2005, the Legislature allowed a stipulated amount of commercial area that could be included in a housing project, whereas prior thereto, there was a complete absence of such a provision. Therefore, according to Mr. Gupta, w.e.f. 1st April 2005, the Legislature allowed a stipulated amount of commercial area that could be included in a housing project, whereas prior thereto, there was a complete absence of such a provision. He therefore submitted that prior to 1st April 2005, no commercial area could be included in a housing project so as to entitle the assessee to a deduction under section 80-IB(10). In view thereof, clause (d) of section 80-IB(10) was in the nature of a relaxation and / or benefit and not a restriction, was the submission of Mr. Gupta. 26. In the alternative, Mr. Gupta as well as Mr. Ahuja submitted that if it is held that clause (d) of section 80-IB(10), and which was inserted w.e.f. 1st April 2005, was not in the nature of a relaxation, but instead was a restriction imposed on the quantum of commercial area that could be included in a housing project, then from A.Y. 2005-06, effect will have to be given to the same notwithstanding the fact that the project was approved prior to 31st March, 2005. In other words, it was submitted that if the profits are brought to tax in the A.Y. 2005-06 or thereafter, then notwithstanding the fact that the housing project was approved prior to 31st March 2005, if the said project did not comply with the provisions of clause (d) of section 80-IB(10), then the profits brought to tax in A.Y. 2005-06 or thereafter will not be entitled to the deduction as contemplated under the said section. 27. As a consequence thereto, it was submitted that the conditions / restrictions laid down in section 80-IB(10) would have to be revisited and / or looked at and complied with in the assessment year in which the profits are being booked by the assessee. If the assessee's housing project did not meet all the conditions / restrictions as stipulated in the said section during that assessment year, then the assessee would not be entitled to the deduction for that assessment year, was the submission. The Revenue submitted that this is notwithstanding the fact that the project was approved at a time when that particular condition was not on the statute book at all. The assessment for one assessment year, cannot in the absence of a contrary provision, be affected by the law in force in another assessment year. The Revenue submitted that this is notwithstanding the fact that the project was approved at a time when that particular condition was not on the statute book at all. The assessment for one assessment year, cannot in the absence of a contrary provision, be affected by the law in force in another assessment year. A right claimed by the assessee under the law in force in a particular assessment year is available only in relation to a proceeding pertaining to that assessment year, was the submission. In support of this argument, the learned counsels relied upon two judgments of the Supreme Court in the case of Reliance Jute Industries Ltd. v/s CIT, reported in (1979) 120 ITR 921 and Securities and Exchange Board of India v/s Ajay Agarwal, reported in AIR 2010 SC 3466 . 28. Lastly, it was submitted that the decision of this Court in the case of Brahma Associates (supra), supports the case of the Revenue that w.e.f. 1st April 2005, the assessee would not be entitled to the deduction under section 80-IB(10) if it did not comply with clause (d) thereof. This, according to the learned counsels, was notwithstanding the fact that the housing project was approved by the local authority before 31st March, 2005. For all the aforesaid reasons it was submitted that the substantial questions of law framed by this Court and reproduced above, be answered in favour of the Revenue and against the Assessees. Mr. Malhotra adopted the arguments of Mr. Gupta and Mr. Ahuja and which we have noted above. 29. On the other hand, Mr. Mistry, the learned senior counsel appearing on behalf of the Assessee in ITXA No.308 of 2012, submitted that only those conditions could be applied to the housing projects that were on the statute-book on the date when the housing project was approved. In other words, if the housing project was approved by the local authority before 31st March 2005, then, the amended provisions of section 80-IB(10) that were brought into force w.e.f. 1st April 2005, and especially clause (d) thereof, would have no application to such a housing project. In other words, if the housing project was approved by the local authority before 31st March 2005, then, the amended provisions of section 80-IB(10) that were brought into force w.e.f. 1st April 2005, and especially clause (d) thereof, would have no application to such a housing project. He submitted that the conditions imposed by the newly substituted section 80-IB(10) were all related and/or linked to the approval and/or construction and/or completion of the said housing project and therefore, the Legislature in its wisdom, deemed it fit to bring the same into force only w.e.f. 1st April, 2005 and did not give it any retrospectivity. 30. Mr. Mistry further submitted that prior to 1st April 2005, a housing project approved by the local authority before 31st March, 2005 only required compliance of three conditions viz. (i) the development/construction of the said housing project was commenced on or after 1st October 1998; (ii) the said housing project was on a plot of land which had a minimum area of one acre and (iii) the residential unit had a maximum built-up area of 1,000 sq.ft., where such residential unit was situated within the cities of Delhi or Mumbai or within 25 kilometers of the municipal limits of these cities, and 1,500 sq.ft. at any other place. Only these three conditions were required to be complied with by an assessee whose housing project was approved before 31st March, 2005 because these were the only conditions that were on the statute-book at that time, was the submission of Mr. Mistry. It was his further submission that it is only w.e.f. 1st April, 2005 that section 80-IB(10) was substituted and substantial amendments were made therein and those amendments could not be made applicable to housing projects approved before 31st March, 2005 because the deduction available to the assessee under section 80-IB(10) was inseparably linked to the date of approval of the housing project and not to the assessment year in which the deduction was claimed. 31. The further submission of Mr. Mistry was that accepting the argument of the Revenue would lead to absurd results. For example, an assessee following the project completion method of accounting would not be entitled to the deduction under section 80-IB(10) even though the said housing project was approved and completed before 31st March, 2005 but the profits therefrom were offered to tax in A.Y. 2005-06. Mistry was that accepting the argument of the Revenue would lead to absurd results. For example, an assessee following the project completion method of accounting would not be entitled to the deduction under section 80-IB(10) even though the said housing project was approved and completed before 31st March, 2005 but the profits therefrom were offered to tax in A.Y. 2005-06. On the other hand, if the same assessee was following the work-in-progress method of accounting he would be entitled to the deduction under section 80-IB(10) upto A.Y. 2004-05 and would be disallowed the deduction from A.Y. 2005-06 onwards, merely because he followed a different method of accounting. This, according to Mr. Mistry is not only absurd but could never have been the intention of the Legislature whilst either introducing section 80-IB(10) or making substantial amendments thereto w.e.f. 1st April, 2005. 32. According to Mr. Mistry, the conditions laid down in section 80-IB(10) as amended w.e.f. 1st April, 2005 and particularly those linked with the approval / construction / completion of the housing project would necessarily apply only to those housing projects that were approved by the local authority after 1st April, 2005. One cannot expect an assessee to comply with a condition that was not a part of the statute when the housing project was approved and more so when the said condition was inextricably linked to the approval granted to the housing project by the local authority under its own rules and regulations, was the submission of Mr. Mistry. Clause (d) of sub-section (10) of section 80-IB, which is the bone of contention in the present appeals, according to Mr. Mistry, is inextricably linked with the approval and construction of the housing project and therefore an assessee cannot be called upon to comply with the said condition when the same was never in contemplation either of the assessee or the Legislature, when the approval to the housing project was accorded by the local authority. For all the aforesaid reasons it was submitted that the substantial questions of law framed by this Court and reproduced above, be answered in favour of the Assessees and against the Revenue. 33. We have considered the elaborate submissions of both the sides and carefully examined the relevant provisions. For all the aforesaid reasons it was submitted that the substantial questions of law framed by this Court and reproduced above, be answered in favour of the Assessees and against the Revenue. 33. We have considered the elaborate submissions of both the sides and carefully examined the relevant provisions. The essential question that is required to be decided is whether section 80-IB (10)(d) which was brought into force w.e.f. 1st April, 2005 would apply to projects that were approved by the local authority prior to it being brought on the statute book. Or to put it differently, the essential question is whether the said clause has to be complied with by an assessee who offers his profits to tax in A.Y. 2005-2006 or thereafter, even though his housing project was accorded approval by the local authority before 31st March, 2005. 34. As can be seen from the history of section 80-IA(4F) and then section 80-IB(10), prior to 1st April 2005, an assessee, developing and building a housing project approved by the local authority before 31st March, 2005 was entitled to a deduction of 100 % of the profits derived from such housing project in any previous year relevant to any assessment year, provided (i) the development and construction of the said project had commenced on or after 1st October 1998; (ii) the project was on the size of a plot of land which had a minimum area of one acre and (iii) the residential unit had a maximum area of 1,000 sq.ft. where such residential unit was situated within the cities of Delhi or Mumbai or within 25 Kms from the municipal limits of these cities, and 1,500 sq.ft. at any other place. Before 1st April 2005, there was no condition and / or restriction on the quantum of the commercial area that could be included in a housing project. That had to be determined on the basis of the rules and regulations of the local authority approving the said housing project. 35. However, the provisions of section 80-IB(10) were substantially amended by way of Finance (No.2) Act, 2004 w.e.f. 1st April, 2005. As can be noted from the amended provisions, there were several conditions that were imposed in the newly substituted section 80-IB(10) that were absent in the said section prior to its amendment. 35. However, the provisions of section 80-IB(10) were substantially amended by way of Finance (No.2) Act, 2004 w.e.f. 1st April, 2005. As can be noted from the amended provisions, there were several conditions that were imposed in the newly substituted section 80-IB(10) that were absent in the said section prior to its amendment. One such condition inserted w.e.f. 1st April, 2005 was clause (d) that put a restriction on the quantum of commercial area that could be included in a housing project in order to entitle the assessee to claim the deduction as set out in the said section. It is pertinent to note that in the appeals before us, it is an admitted fact that the housing projects were approved prior to 31st March, 2005. In ITXA No.308 of 2012, in fact, the project was even completed prior to 31st March, 2005 and only the profits were offered to tax in A.Y. 2005-06. We do not think that the Legislature intended to give any retrospectivity to clause (d) of section 80-IB(10). This more so because it is clearly a condition that relates to and/or is linked with the approval and construction of the housing project. At the time when the housing project is approved by the local authority, it decides, subject to its own rules and regulations, what quantum of commercial area is to be included in the said project. It is on this basis that building plans are approved by the local authority and construction is commenced and completed. It is very difficult, if not impossible to change the building plans and / or alter construction midway, in order to comply with clause (d) of section 80-IB(10). It would be highly unfair to require an Assessee to comply with section 80-IB(10)(d) who has got his housing project approved by the local authority, before 31st March, 2005 and has either completed the same before the said date or even shortly thereafter, merely because the Assessee has offered its profits to tax in A.Y. 2005-2006 or thereafter. Requiring the Assessee to comply with the condition set out in clause (d) of sub-section (10) of section 80-IB merely because he has offered his profits to tax in A.Y. 2005-06 or thereafter, even though his housing project was approved before 31st March 2005, would be requiring the Assessee to virtually do a humanly impossible task. Requiring the Assessee to comply with the condition set out in clause (d) of sub-section (10) of section 80-IB merely because he has offered his profits to tax in A.Y. 2005-06 or thereafter, even though his housing project was approved before 31st March 2005, would be requiring the Assessee to virtually do a humanly impossible task. This, in our opinion, could never have been the intention of the Legislature. In fact, to our mind, it would run counter to the very object for which these provisions were introduced, namely to tackle the shortage of housing in the country and encourage investment therein by private players. It is therefore clear that clause (d) of sub-section (10) of section 80-IB cannot have any application to housing projects that are approved before 31st March, 2005. The said clause (d) being inextricably linked to the date of approval of the housing project, it will have to be held that the said clause operates only prospectively i.e. for housing projects approved after 1st April, 2005. This is notwithstanding the fact that the profits were offered to tax by the Assessee for the A.Y. 2005-06 or thereafter. 36. There is yet another reason for coming to the aforesaid conclusion. Take a scenario where an Assessee following the project completion method of accounting, has completed the housing project approved by the local authority complying with all the conditions as set out in section 80-IB(10) as it stood prior to 1st April, 2005. If we were to accept the argument of the Revenue, then in that event, despite having completed the entire construction prior to 1st April, 2005 and complying with all the conditions of section 80-IB(10) as it stood then, the Assessee would be disentitled to the entire deduction claimed in respect of such housing project merely because he offered his profits to tax in the A.Y. 2005-06. In contrast, if the same Assessee had followed the work-in-progress method of accounting, he would have been entitled to the deduction under section 80-IB(10) upto the A.Y. 2004-05, and denied the same from A.Y. 2005-06 and thereafter. It could never have been the intention of the Legislature that the deduction under section 80-IB (10) available to a particular Assessee would be determined on the basis of the accounting method followed. This, to our mind and as rightly submitted by Mr. Mistry would lead to startling results. It could never have been the intention of the Legislature that the deduction under section 80-IB (10) available to a particular Assessee would be determined on the basis of the accounting method followed. This, to our mind and as rightly submitted by Mr. Mistry would lead to startling results. We therefore have no hesitation in holding that section 80-IB(10)(d) is prospective in nature and can have no application to a housing project that is approved before 31st March, 2005. As the deduction sought to be claimed under section 80-IB(10) is inseparably linked with the date of approval of the housing project, it would make no difference if the construction of the said project was completed on or after 1st April, 2005 or that the profits were offered to tax after 1st April, 2005 i.e. in A.Y. 2005-06 or thereafter. We therefore find no substance in the argument of the Revenue that notwithstanding the fact that the housing project was approved prior to 31st March 2005, if the construction was completed on or after 1st April, 2005 or if the profits are brought to tax in the A.Y. 2005-06 or thereafter, the said housing project would have to comply with the provisions of clause (d) of section 80-IB(10). To our mind, we do not think that the condition/restriction laid down in clause (d) of section 80-IB(10) has to be revisited and / or looked at and complied with in the assessment year in which the profits are offered to tax by the Assessee. When the Assessee claims a deduction under section 80-IB(10), the Assessee is required to comply with such a condition only if it is on the statute-book on the date of the approval of the housing project and it has nothing to do with the year in which the profits are brought to tax by the Assessee. We have come to this conclusion only because we find that clause (d) of section 80-IB(10) is inextricably linked to the date of the approval of the housing project and the subsequent development/construction of the same, and has nothing to do with the profits derived therefrom. We may hasten to add that if a particular condition is not inseperably linked to the date of approval of the housing project, different considerations would arise. We may hasten to add that if a particular condition is not inseperably linked to the date of approval of the housing project, different considerations would arise. However, we are not called upon to decide any such condition and hence we are not laying down any general proposition of law, save and except that clause (d) of section 80-IB(10) being a condition linked to the date of the approval of the housing project, would not apply to any housing project that was approved prior to 31st March, 2005 irrespective of the fact that the profits of the said housing project are brought to tax after the said provision was brought into force. 37. On the issue of retrospectivity of clause (d) of section 80-IB(10) we are supported in our view by a judgment of this Court in the case of Brahma Associates (supra). Though the facts in Brahma Associate's case were slightly different, inasmuch as the assessment year in question was A.Y. 2003-04, this Court held as under :- “32. Lastly, the argument of the Revenue that section 80-IB(10) as amended by inserting clause (d) with effect from April 1, 2005 should be applied retrospectively is also without any merit, because, firstly, clause (d) is specifically inserted with effect from April 1, 2005 and, therefore, that clause cannot be applied for the period prior to April 1, 2005. Secondly, clause (d) seeks to deny section 80-IB(10) deduction to projects having commercial user beyond the limit prescribed under clause (d), even though such commercial user is approved by the local authority. Therefore, the restriction imposed under the act for the first time with effect from April 1, 2005 cannot be applied retrospectively. Thirdly, it is not open to the Revenue to contend on the one hand that section 80-IB(10) as it stood prior to April 1, 2005 did not permit commercial user in housing projects and on the other hand contend that the restriction on commercial user introduced with effect from April 1, 2005 should be applied retrospectively. The argument of the Revenue is mutually contradictory and hence liable to be rejected. Thus, in our opinion, the Tribunal was justified in holding that clause (d) inserted to section 80-IB(10) with effect from April 1, 2005 is prospective and not retrospective and hence cannot be applied to the period prior to April 1, 2005. 33. The argument of the Revenue is mutually contradictory and hence liable to be rejected. Thus, in our opinion, the Tribunal was justified in holding that clause (d) inserted to section 80-IB(10) with effect from April 1, 2005 is prospective and not retrospective and hence cannot be applied to the period prior to April 1, 2005. 33. In the result, the questions raised in the appeal are answered thus : (a) …....... (b) …....... (c) …....... (d) …....... (e) Clause (d) inserted to section 80-IB(10) with effect from April 1, 2005 is prospective and not retrospective and hence cannot be applied for the period prior to April 1, 2005.” (emphasis supplied) 38. In fact, this judgment also concludes the argument of the Revenue that clause (d) of section 80-IB(10) inserted with effect from 1st April, 2005 is actually in the nature of a relaxation and / or benefit granted to the Assessee and not a restriction as sought to be contended on behalf of the Assessees. On this very point, this Court negated the aforesaid contention and held as under :- “24. Thus, on the date on which the Legislature introduced 100 per cent deduction under the Income Tax Act 1961 on the profits derived from housing projects approved by a local authority, it was known that local authorities could approve projects as housing projects with commercial user to the extent permitted under the DC Rules framed by the respective local authority. In other words, it was known that local authorities could approve a housing project without or with commercial user to the extent permitted under the Development Control Rules. If the Legislature intended to restrict the benefit of deduction only to projects approved exclusively for residential purposes, then it would have stated so. However, the Legislature has provided that section 80-IB (10) deduction is available to all housing projects approved by a local authority. Since local authorities could approve a project to be a housing project with or without the commercial user, it is evident that the Legislature intended to allow section 80-IB(10) deduction to all housing projects approved by a local authority without or with commercial user to the extent permitted under the Development Control Rules. 25. Since local authorities could approve a project to be a housing project with or without the commercial user, it is evident that the Legislature intended to allow section 80-IB(10) deduction to all housing projects approved by a local authority without or with commercial user to the extent permitted under the Development Control Rules. 25. It is not in dispute that where a project is approved as a housing project without or with commercial user to the extent permitted under the rules / Regulations, then, deduction under section 80-IB(10) would be allowable. In other words, if a project could be approved as a housing project having residential units with permissible commercial user, then it is not open to the income tax authorities to contend that the expression “housing project” in section 80-IB(10) is applicable to projects having only residential units. Judgment : B.P. Colabawalla, J. 1. Income Tax Appeal No.201 of 2012 is filed by the Revenue under section 260A of the Income Tax Act 1961 (hereinafter referred to as the Act) wherein the following questions of law are projected as substantial and read as under :- “(A) Whether on the facts and in the circumstances of the case and in law the Hon'ble Tribunal was right in allowing to the Assessee Company a deduction u/s 80IB(10) of the Income Tax Act for A.Y. 2006-2007 amounting to Rs.2,11,74,864/- wherein the commercial area built by the assessee exceeded the limit specified in clause (d) to section 80IB(10) of the I.T. Act 1961? (B) Whether on the facts and in the circumstances of the case and in law the Hon'ble Tribunal was right in holding that the limits on commercial area provided in clause (d) to section 80IB(10) of the Act would not be applicable even after 01.04.2005 as the projects were approved before that date even though no such exception is provided under the Income Tax Act?” 2. This appeal was admitted on the aforesaid questions by a Division Bench of this Court on 22nd February, 2013. Since we found that several Appeals on similar questions were either admitted or pending admission in this Court, we by our order dated 4th July, 2014 passed in Income Tax Appeal No.308 of 2012, directed the learned counsel for the parties to submit a list to the Registrar so that these Appeals could be listed before this Court for disposal. Since we found that several Appeals on similar questions were either admitted or pending admission in this Court, we by our order dated 4th July, 2014 passed in Income Tax Appeal No.308 of 2012, directed the learned counsel for the parties to submit a list to the Registrar so that these Appeals could be listed before this Court for disposal. By the said order, we also requested the respective counsels to address us on the point as to whether the judgment of this Court in the case of CIT v/s Brahma Associates, reported in (2011) 333 ITR 289 (Bom) would cover the cases where the housing project within the meaning of section 80-IB (10) had been approved prior to 31st March, 2005 and whether the view taken in Brahma Associates (supra) would cover all such matters. This is how these Appeals are listed before us. 3. Basically, we have been called upon to interpret the provisions of section 80-IB(10)(d) from two different perspectives. Firstly, we have to examine whether the said provision applies to a housing project approved before 31st March, 2005 and completed before 1st April, 2005. Secondly, we have to examine whether the said provision applies to a housing project approved before 31st March, 2005 but completed on or after 1st April, 2005. The date 1st April, 2005 is of some significance because by Finance (No.2) Act, 2004, w.e.f. 1st April 2005, section 80-IB(10) was substantially amended and clause (d) was inserted therein, that stipulates that the built up area of the shops and other commercial establishments included in the housing project should not exceed five percent of the aggregate built up area of the housing project or two thousand square feet, whichever is less. What we are called upon to decide is whether this condition/restriction set out in clause (d) of section 80-IB(10) will apply to the two scenarios set out above. 4. The facts in Income Tax Appeal No.308 of 2012 deal with first scenario where the housing project was approved before 31st March, 2005 and completed before 1st April, 2005 but the sale of some of the units in the said project took place after 1st April, 2005 i.e. in the A.Y. 20052006. The facts in Income Tax Appeal No.201 of 2012 deal with the second scenario viz. The facts in Income Tax Appeal No.201 of 2012 deal with the second scenario viz. where the housing project was approved before 31st March, 2005 but completed on or after 1st April 2005, but within the time-frame as laid down in section 80-IB(10). Since the facts in these two cases cover both the scenarios above, we shall refer to the facts of these two cases and all the other Appeals will accordingly be disposed off following the ratio of this judgment. FACTS IN INCOME TAX APPEAL NO. 308 OF 2012 5. On 19th July 2007, a search under section 132 of the Act was conducted in the Assessee's case (M/s Kanakia Spaces Pvt. Ltd.) and consequent thereto, assessment proceedings were initiated by issuance of a notice under section 153A of the Act. The Assessee filed a return under the said section on 19th March, 2008 declaring a total income of Rs. Nil after claiming a deduction of Rs.56,27,583/- under section 80-IB(10) of the Act. The assessment proceedings under section 143(3) r/w section 153A were completed on 31st December, 2009 when the Assessing Officer inter alia held that the profits derived from the sale of commercial area was not entitled to a deduction under section 80-IB(10) of the Income Tax Act, 1961. The Assessing Officer in coming to the aforesaid conclusion inter alia recorded that during the year under consideration viz. A.Y. 2005-2006, the Assessee Company was engaged in the business as builders and developers and was following the project completion method of accounting. During the said year the Assessee had completed the “Discovery Project” which was a mixed housing project, having commercial shops. During the course of the assessment proceedings, the Assessing Officer found that the Assessee had claimed a deduction under section 80-IB(10) on the profit after sale of shops and this was disallowed on the ground that the Assessee had not complied with the basic requirement that the profit derived on the sale of commercial area of the project was not entitled for a deduction. 6. Being aggrieved by the Assessment Order, the Assessee preferred an Appeal before the Commissioner of Income Tax (Appeals), who by his order dated 15th April, 2010 upheld the findings of the Assessing Officer. 6. Being aggrieved by the Assessment Order, the Assessee preferred an Appeal before the Commissioner of Income Tax (Appeals), who by his order dated 15th April, 2010 upheld the findings of the Assessing Officer. The CIT (Appeals) observed that the provisions of section 80-IB(10) were substantially amended by Finance (No.2) Act, 2004 with effect from 1st April, 2005 wherein it was provided that the built up area of the shops and other commercial establishments included in the housing project should not exceed 5% of the aggregate built up area or 2000 sq.ft., whichever is less. The CIT (Appeals) held that the amended provisions of section 80-IB (10) which came into effect from 1st April, 2005 were applicable for the current A.Y. viz. 20052006. Accordingly, he dismissed the Appeal filed by the Assessee. 7. Being dissatisfied, the Assessee approached the Income Tax Appellate Tribunal (hereinafter referred to as the “ITAT”). The ITAT, after noting the undisputed facts and relying upon its own judgment in the case of Saroj Sales Organisation v/s ITO, reported in 115 TTJ 485, by its order dated 30th June, 2011 reversed the order of the CIT (Appeals). The undisputed facts noted by the ITAT were that the construction of the housing project known as the “Discovery Project” having an aggregate built up area of 1,27,736 sq.ft. got completed in the A.Y. 2004-2005. The Assessing Officer and CIT (Appeals) had denied the benefit of the deduction under section 80-IB(10) on the ground that the commercial area of 7,607 sq.ft. was more than 2,000 sq.ft. as set out in clause (d) of section 80-IB(10) and therefore violated the provisions thereof, which disentitled the Assessee to the deduction. After noting these facts, and after relying upon several decisions of its Coordinate Benches, the ITAT held that if housing projects were approved before 31st March 2005, the condition / restriction set out in clause (d) of section 80-IB(10) would not be applicable. Being aggrieved by this order of the ITAT, the Revenue is in Appeal before us. FACTS IN INCOME TAX APPEAL NO. 201 OF 2012 8. In this case, the Assessee (Happy Home Enterprises), for the A.Y. 2006-2007 filed a return of income on 31st October 2006 declaring its total income at Rs.45,781/-. The said case was thereafter selected for scrutiny and the Assessing Officer found that the Assessee had claimed a deduction of Rs.2,11,74,864/- under section 80-IB(10). 201 OF 2012 8. In this case, the Assessee (Happy Home Enterprises), for the A.Y. 2006-2007 filed a return of income on 31st October 2006 declaring its total income at Rs.45,781/-. The said case was thereafter selected for scrutiny and the Assessing Officer found that the Assessee had claimed a deduction of Rs.2,11,74,864/- under section 80-IB(10). On verification of the details filed by the Assessee it was noticed by the Assessing Officer that the housing project put up by the Assessee consisted of 12 shops admeasuring approximately 1,910 sq.ft., which was approximately 6.63 % of the total built up area of the said housing project. Since the area occupied by the said shops exceeded the 5% limit specified in clause (d) of section 80-IB(10), the deduction claimed by the Assessee was disallowed. It is not in dispute that in the facts of this case, the housing project was approved by the local authority on 19th June, 2003 (i.e. before 31st March, 2005). It is also an undisputed position that the said Project was completed after 1st April, 2005. 9. Being aggrieved thereby, the Assessee preferred an Appeal to the CIT (Appeals), who by his order dated 5th November 2009, set aside the order of the Assessing Officer and held that the deduction under section 80-IB(10) was available to the Assessee. The CIT (Appeals) in allowing the appeal mainly followed the judgment of the Special Bench (Pune) of the ITAT in the case of Brahma Associates v/s Joint CIT (OSD), Circle 4, Pune, dated 6th April 2009, reported in (2009) 119 ITD 255 (Pune)(SB), wherein it was held that where housing projects were approved before 31st March 2005, the condition laid down in clause (d) of section 80-IB(10) was not applicable. Not accepting the verdict of the CIT (Appeals), the Revenue preferred an Appeal before the ITAT who also followed the view of its Special Bench, Pune and further noted that this Court in the case of Brahma Associates (supra) had upheld the said view of the special Bench. 10. Being aggrieved by this order of the ITAT, the Revenue is in Appeal before us. Despite service of this Appeal, none appeared on behalf of the Assessee. However, since an important question of law was to be decided, we had requested Mr. 10. Being aggrieved by this order of the ITAT, the Revenue is in Appeal before us. Despite service of this Appeal, none appeared on behalf of the Assessee. However, since an important question of law was to be decided, we had requested Mr. Mistry, the learned senior counsel appearing on behalf of the Assessee in ITXA No.308 of 2012, to address us even on the issue raised in this appeal. He was kind enough to accept our request and we are grateful for his able assistance in the matter. 11. Before dealing with the rival contentions of the parties, it would be in the fitness of things to trace the history of the provisions that we are called upon to construe in these Appeals. 12. Initially, section 80-IA was inserted in the Income Tax Act, 1961 by Finance (No.2) Act, 1991 w.e.f. 1st April, 1991 and dealt with deductions in respect of profits and gains from industrial undertakings etc. in certain cases. As the Government identified housing as a priority area and to purposefully tackle the country's housing shortage problem, it was decided to give tax incentives for the promotion of housing. With this object in mind and with a view to promote investment in housing, sub-section (4F) was inserted in section 80-IA w.e.f. 1st April, 1999. Section 80-IA(4F) as it stood then, read as under :- “(4F) This section applies to an undertaking engaged in developing and building housing projects approved by a local authority subject to the condition that the size of the plot of land has a minimum area of one acre and the residential unit has a built up area not exceeding one thousand square feet; Provided that the undertaking commences development and construction of the housing project on or after the 1st day of October 1998 and completes the same before the 31st day of March 2001.” 13. As can be seen from the said provision, at that time, if an undertaking was engaged in developing and building housing projects approved by the local authority, it was entitled to a deduction as set out in section 80-IA provided that:- (i) the size of the plot of land had a minimum area of one acre; (ii) each individual residential unit had a built up area not exceeding 1000 sq.ft. and (iii) the development / construction of the said housing project commenced on or after 1st October, 1998 and completed before 31st March, 2001. Therefore, when this provision was first introduced, there were only three conditions that were required to be fulfilled by the undertaking engaged in the development / construction of housing projects approved by the local authority. There was no restriction on the quantum of commercial area that could included in the said housing project. That was to be determined by the local authority in accordance with its own rules and regulations. As long as the local authority sanctioned the project as a housing project and it complied with the three conditions as stipulated in section 80-IA(4F), the said undertaking was entitled to the deduction as set out therein. 14. Thereafter, by the Finance Act, 1999 entire section 80-IA was substituted by the newly introduced sections 80-IA and 80-IB which were on the lines of the existing section 80-IA but with certain modifications. The newly inserted section 80-IB(10) w.e.f. 1st April, 2000 read as under :- “(10) The amount of profits in case of an undertaking developing and building housing projects approved by a local authority, shall be hundred per cent of the profits derived in any previous year relevant to any assessment year from such housing project if - (a) such undertaking has commenced or commences development and construction of the housing project on or after the 1st day of October 1998 and completes the same before the 31st day of March 2001; (b) the project is on the size of a plot of land which has a minimum area of one acre, and (c) the residential unit has a maximum built-up area of one thousand square feet where such residential unit is situated within the cities of Delhi or Mumbai or within twenty-five kilometers from the municipal limits of these cities and one thousand and five hundred square feet at any other place.” 15. Therefore, w.e.f. 1st April, 2000 section 80-IA(4F) was substituted with section 80-IB(10) and in substance was basically the same, with one addition. Therefore, w.e.f. 1st April, 2000 section 80-IA(4F) was substituted with section 80-IB(10) and in substance was basically the same, with one addition. The newly inserted section 80-IB(10) stipulated that if the housing project approved by the local authority was at a distance of 25 Kms or beyond the municipal limits of the cities of Delhi or Mumbai, then the residential unit in the said housing project could have a maximum built area of 1,500 sq.ft. instead of 1,000 sq.ft. All other conditions as set out in section 80-IA(4F) were retained in section 80-IB(10). This was brought about as there were many representations that in towns other than Mumbai and Delhi the land cost was relatively less and for the same capital expenditure, investors could afford to procure dwelling units of slightly larger areas. In light of this, it was represented that the ceiling on the built up areas for dwelling units in approved housing projects be increased from 1,000 sq.ft. to 1,500 sq.ft. at all locations except Mumbai and Delhi. Accepting the said representations, the Legislature inserted clause (c) to sub-section (10) of section 80-IB which stipulated that in a housing project approved by the local authority and situated in the cities of Delhi or Mumbai or within 25 Kms from the municipal limits of these cities, each individual residential unit could not exceed a built up area of 1,000 sq.ft., and at any other place, could not exceed the built up area of 1,500 sq.ft. 16. 16. Thereafter, section 80-IB(10) was further amended and w.e.f. 1st April, 2001 and read as under :- “(10) The amount of profits in case of an undertaking developing and building housing projects approved before the 31st day of March 2001 by a local authority, shall be hundred per cent of the profits derived in any previous year relevant to any assessment year from such housing project if :- (a) such undertaking has commenced or commences development and construction of the housing project on or after the 1st day of October 1998 and completes the same before the 31st day of March 2003; (b) the project is on the size of a plot of land which has a minimum area of one acre; and (c) the residential unit has a maximum built-up area of one thousand square feet where such residential unit is situated within the cities of Delhi or Mumbai or within twenty-five kilometers from the municipal limits of these cities and one thousand and five hundred square feet at any other place.” 17. Therefore, now w.e.f. from 1st April, 2001 section 80-IB(10) stipulated that any housing project approved by the local authority before 31st March 2001, was entitled to a deduction of 100 per cent of the profits derived in any previous year relevant to any assessment year from such housing project provided:- (i) the construction / development of the said housing project commenced on or after 1st October, 1998 and was completed before 31st March 2003; (ii) the housing project was on a size of a plot of land which had a minimum area of one acre; and (iii) each individual residential unit had a maximum built-up area of 1,000 sq.ft., where such housing project was situated within the cities of Delhi or Mumbai or within 25 Kms from the municipal limits of these cities, and a maximum built-up area of 1,500 sq.ft. at any other place. Therefore, for the first time, a stipulation was added with reference to the date of approval, namely that approval had to accorded to the housing project by the local authority before 31st March, 2001. Before this amendment there was no date prescribed for the approval being granted by the local authority to the housing project. at any other place. Therefore, for the first time, a stipulation was added with reference to the date of approval, namely that approval had to accorded to the housing project by the local authority before 31st March, 2001. Before this amendment there was no date prescribed for the approval being granted by the local authority to the housing project. Prior to this amendment, as long as the development/ construction commenced on or after 1st October, 1998 and was completed before 31st March 2001, the assessee was entitled to the deduction. Also by this amendment, the date of completion was changed from 31st March, 2001 to 31st March, 2003. Everything else remained untouched. 18. Thereafter, by Finance Act, 2003 further amendments were made to section 80-IB(10) and read as under :- “(10) The amount of profits in case of an undertaking developing and building housing projects approved before the 31st day of March 2005 by a local authority, shall be hundred per cent of the profits derived in any previous year relevant to any assessment year from such housing project if - (a) such undertaking has commenced or commences development and construction of the housing project on or after the 1st day of October 1998; (b) the project is on the size of a plot of land which has a minimum area of one acre; and (c) the residential unit has a maximum built-up area of one thousand square feet where such residential unit is situated within the cities of Delhi or Mumbai or within twenty-five kilometres from the municipal limits of these cities and one thousand and five hundred square feet at any other place.” 19. As can be seen from the aforesaid provision, now the only changes that were brought about were that w.e.f. 1st April, 2002, (i) the housing project had to be approved before 31st March, 2005 and (ii) there was no time limit prescribed for completion of the said project. Though these changes were brought about by Finance Act, 2003, the Legislature thought it fit that these changes be deemed to have been brought into effect from 1st April, 2002. All the remaining provisions of section 80-IB(10) remained unchanged. 20. Thereafter, by Finance (No.2) Act, 2004, w.e.f. 1st April, 2005 section 80-IB(10) was substituted and substantial changes were effected in the newly substituted sub-section (10) of section 80-IB. All the remaining provisions of section 80-IB(10) remained unchanged. 20. Thereafter, by Finance (No.2) Act, 2004, w.e.f. 1st April, 2005 section 80-IB(10) was substituted and substantial changes were effected in the newly substituted sub-section (10) of section 80-IB. It reads thus :- “(10) The amount of deduction in the case of an undertaking developing and building housing projects approved before the 31st day of March, 2007 by a local authority shall be hundred per cent of the profits derived in the previous year relevant to any assessment year from such housing project if,— (a) such undertaking has commenced or commences development and construction of the housing project on or after the 1st day of October, 1998 and completes such construction,— (i) in a case where a housing project has been approved by the local authority before the 1st day of April, 2004, on or before the 31st day of March, 2008; (ii) in a case where a housing project has been, or, is approved by the local authority on or after the 1st day of April, 2004, within four years from the end of the financial year in which the housing project is approved by the local authority. Explanation.— For the purposes of this clause,— (i) in a case where the approval in respect of the housing project is obtained more than once, such housing project shall be deemed to have been approved on the date on which the building plan of such housing project is first approved by the local authority; (ii) the date of completion of construction of the housing project shall be taken to be the date on which the completion certificate in respect of such housing project is issued by the local authority; (b) the project is on the size of a plot of land which has a minimum area of one acre: Provided that nothing contained in clause (a) or clause (b) shall apply to a housing project carried out in accordance with a scheme framed by the Central Government or a State Government for reconstruction or redevelopment of existing buildings in areas declared to be slum areas under any law for the time being in force and such scheme is notified by the Board in this behalf; (c) the residential unit has a maximum built-up area of one thousand square feet where such residential unit is situated within the city of Delhi or Mumbai or within twenty-five kilometres from the municipal limits of these cities and one thousand and five hundred square feet at any other place; and (d) the built-up area of the shops and other commercial establishments included in the housing project does not exceed five per cent of the aggregate built-up area of the housing project or two thousand square feet, whichever is less.” (emphasis supplied). 21. Therefore, by Finance (No.2) Act, 2004, with effect from 1st April 2005, the Legislature made substantial changes to sub-section (10) of section 80-IB. There were several new conditions that were incorporated by the newly substituted sub-section. One such condition was clause (d), which for the first time, w.e.f. 1st April, 2005, put a restriction on the quantum of commercial area that could be included in a housing project approved by the local authority, in order to entitle an assessee to claim the deduction as set out in section 80-IB(10). Clause (d) stipulated that the built up area of the shops and other commercial establishments included in the housing project could not exceed 5 % of the aggregate built up area of the housing project or 2,000 sq.ft., whichever was less. Clause (d) stipulated that the built up area of the shops and other commercial establishments included in the housing project could not exceed 5 % of the aggregate built up area of the housing project or 2,000 sq.ft., whichever was less. It is the effect of this clause (d) which we are called upon to decide in these appeals and whether it would apply to housing projects approved the local authority before 31st March, 2005. In other words, what we are called upon to decide is whether the said condition would apply to such housing projects approved by the local authority before 31st March 2005, when the aforesaid condition/restriction was not on the statute-book and was brought into effect only from 1st April, 2005. We should mention here that there have been further amendments to section 80-IB(10) in subsequent years. However, we are not dealing with the those further amendments as they do not arise for our consideration in the present Appeals. 22. It would be important to note another amendment that was brought about by Finance (No.2) Act, 2004 to sub-section (14) of section 80-IB, w.e.f. 1st April, 2005. Section 80-IB(14) was also amended by the same Finance (No.2) Act, 2004 and for the first time under clause (a) thereof, the words “built-up area” were defined. Section 80-IB(14)(a) reads thus :- “(14) For the purposes of this section,— (a) “built-up area” means the inner measurements of the residential unit at the floor level, including the projections and balconies, as increased by the thickness of the walls but does not include the common areas shared with other residential units;” 23. Prior to insertion of section 80-IB(14)(a), in many of the rules and regulations of the local authority approving the housing project, “built-up area” did not include projections and balconies. Probably, taking advantage of this fact, builders provided large balconies and projections making the residential units far bigger than as stipulated in section 80-IB(10), and yet claimed the deduction under the said provision. To plug this lacuna, clause (a) was inserted in section 80-IB(14) defining the words “built-up area” to mean the inner measurements of the residential unit at the floor level, including the projections and balconies, as increased by the thickness of the walls, but did not include the common areas shared with other residential units. To plug this lacuna, clause (a) was inserted in section 80-IB(14) defining the words “built-up area” to mean the inner measurements of the residential unit at the floor level, including the projections and balconies, as increased by the thickness of the walls, but did not include the common areas shared with other residential units. The reason we are referring to this provision is because it too was brought about for the first time w.e.f. 1st April, 2005 and the Karnataka High Court had the occasion to consider whether it would apply to housing projects approved by the local authority before 31st March, 2005. We have relied upon the reasoning of the judgment of the Karnataka High Court for coming to the findings that we have, in this judgment. 24. Having traced the history of section 80-IB(10), we now proceed to deal with the rival contentions of the parties. On behalf of the Revenue, submissions were made by learned senior counsel Mr. Vimal Gupta, and learned counsels, Mr. Abhay Ahuja and Mr. A. R. Malhotra. Though we have not independently dealt with the facts in Income Tax Appeal No.592 of 2012, in which Mr. Abhay Ahuja appears for the Revenue, since he has addressed on the issues raised herein, we are also making a reference to the submissions advanced by him. 25. Mr. Gupta, learned senior counsel appearing on behalf of the Appellant – Revenue, submitted that clause (d) of section 80-IB(10) inserted w.e.f. 1st April, 2005 and which applies from A.Y. 2005-06 onwards was actually in the nature of a relaxation and / or benefit granted to the Assessee and not a restriction as sought to be contended on behalf of the Assessees. He submitted that prior to 1st April 2005, a housing project could not include any commercial area for an assessee to claim a deduction under section 80-IB(10). With effect from 1st April 2005, clause (d) was inserted which allowed shops and other commercial establishments to be included in a housing project provided it did not exceed 5% of the aggregate built up area of the housing project or 2,000 sq.ft., whichever was less. Therefore, according to Mr. Gupta, w.e.f. 1st April 2005, the Legislature allowed a stipulated amount of commercial area that could be included in a housing project, whereas prior thereto, there was a complete absence of such a provision. Therefore, according to Mr. Gupta, w.e.f. 1st April 2005, the Legislature allowed a stipulated amount of commercial area that could be included in a housing project, whereas prior thereto, there was a complete absence of such a provision. He therefore submitted that prior to 1st April 2005, no commercial area could be included in a housing project so as to entitle the assessee to a deduction under section 80-IB(10). In view thereof, clause (d) of section 80-IB(10) was in the nature of a relaxation and / or benefit and not a restriction, was the submission of Mr. Gupta. 26. In the alternative, Mr. Gupta as well as Mr. Ahuja submitted that if it is held that clause (d) of section 80-IB(10), and which was inserted w.e.f. 1st April 2005, was not in the nature of a relaxation, but instead was a restriction imposed on the quantum of commercial area that could be included in a housing project, then from A.Y. 2005-06, effect will have to be given to the same notwithstanding the fact that the project was approved prior to 31st March, 2005. In other words, it was submitted that if the profits are brought to tax in the A.Y. 2005-06 or thereafter, then notwithstanding the fact that the housing project was approved prior to 31st March 2005, if the said project did not comply with the provisions of clause (d) of section 80-IB(10), then the profits brought to tax in A.Y. 2005-06 or thereafter will not be entitled to the deduction as contemplated under the said section. 27. As a consequence thereto, it was submitted that the conditions / restrictions laid down in section 80-IB(10) would have to be revisited and / or looked at and complied with in the assessment year in which the profits are being booked by the assessee. If the assessee's housing project did not meet all the conditions / restrictions as stipulated in the said section during that assessment year, then the assessee would not be entitled to the deduction for that assessment year, was the submission. The Revenue submitted that this is notwithstanding the fact that the project was approved at a time when that particular condition was not on the statute book at all. The assessment for one assessment year, cannot in the absence of a contrary provision, be affected by the law in force in another assessment year. The Revenue submitted that this is notwithstanding the fact that the project was approved at a time when that particular condition was not on the statute book at all. The assessment for one assessment year, cannot in the absence of a contrary provision, be affected by the law in force in another assessment year. A right claimed by the assessee under the law in force in a particular assessment year is available only in relation to a proceeding pertaining to that assessment year, was the submission. In support of this argument, the learned counsels relied upon two judgments of the Supreme Court in the case of Reliance Jute Industries Ltd. v/s CIT, reported in (1979) 120 ITR 921 and Securities and Exchange Board of India v/s Ajay Agarwal, reported in AIR 2010 SC 3466 . 28. Lastly, it was submitted that the decision of this Court in the case of Brahma Associates (supra), supports the case of the Revenue that w.e.f. 1st April 2005, the assessee would not be entitled to the deduction under section 80-IB(10) if it did not comply with clause (d) thereof. This, according to the learned counsels, was notwithstanding the fact that the housing project was approved by the local authority before 31st March, 2005. For all the aforesaid reasons it was submitted that the substantial questions of law framed by this Court and reproduced above, be answered in favour of the Revenue and against the Assessees. Mr. Malhotra adopted the arguments of Mr. Gupta and Mr. Ahuja and which we have noted above. 29. On the other hand, Mr. Mistry, the learned senior counsel appearing on behalf of the Assessee in ITXA No.308 of 2012, submitted that only those conditions could be applied to the housing projects that were on the statute-book on the date when the housing project was approved. In other words, if the housing project was approved by the local authority before 31st March 2005, then, the amended provisions of section 80-IB(10) that were brought into force w.e.f. 1st April 2005, and especially clause (d) thereof, would have no application to such a housing project. In other words, if the housing project was approved by the local authority before 31st March 2005, then, the amended provisions of section 80-IB(10) that were brought into force w.e.f. 1st April 2005, and especially clause (d) thereof, would have no application to such a housing project. He submitted that the conditions imposed by the newly substituted section 80-IB(10) were all related and/or linked to the approval and/or construction and/or completion of the said housing project and therefore, the Legislature in its wisdom, deemed it fit to bring the same into force only w.e.f. 1st April, 2005 and did not give it any retrospectivity. 30. Mr. Mistry further submitted that prior to 1st April 2005, a housing project approved by the local authority before 31st March, 2005 only required compliance of three conditions viz. (i) the development/construction of the said housing project was commenced on or after 1st October 1998; (ii) the said housing project was on a plot of land which had a minimum area of one acre and (iii) the residential unit had a maximum built-up area of 1,000 sq.ft., where such residential unit was situated within the cities of Delhi or Mumbai or within 25 kilometers of the municipal limits of these cities, and 1,500 sq.ft. at any other place. Only these three conditions were required to be complied with by an assessee whose housing project was approved before 31st March, 2005 because these were the only conditions that were on the statute-book at that time, was the submission of Mr. Mistry. It was his further submission that it is only w.e.f. 1st April, 2005 that section 80-IB(10) was substituted and substantial amendments were made therein and those amendments could not be made applicable to housing projects approved before 31st March, 2005 because the deduction available to the assessee under section 80-IB(10) was inseparably linked to the date of approval of the housing project and not to the assessment year in which the deduction was claimed. 31. The further submission of Mr. Mistry was that accepting the argument of the Revenue would lead to absurd results. For example, an assessee following the project completion method of accounting would not be entitled to the deduction under section 80-IB(10) even though the said housing project was approved and completed before 31st March, 2005 but the profits therefrom were offered to tax in A.Y. 2005-06. Mistry was that accepting the argument of the Revenue would lead to absurd results. For example, an assessee following the project completion method of accounting would not be entitled to the deduction under section 80-IB(10) even though the said housing project was approved and completed before 31st March, 2005 but the profits therefrom were offered to tax in A.Y. 2005-06. On the other hand, if the same assessee was following the work-in-progress method of accounting he would be entitled to the deduction under section 80-IB(10) upto A.Y. 2004-05 and would be disallowed the deduction from A.Y. 2005-06 onwards, merely because he followed a different method of accounting. This, according to Mr. Mistry is not only absurd but could never have been the intention of the Legislature whilst either introducing section 80-IB(10) or making substantial amendments thereto w.e.f. 1st April, 2005. 32. According to Mr. Mistry, the conditions laid down in section 80-IB(10) as amended w.e.f. 1st April, 2005 and particularly those linked with the approval / construction / completion of the housing project would necessarily apply only to those housing projects that were approved by the local authority after 1st April, 2005. One cannot expect an assessee to comply with a condition that was not a part of the statute when the housing project was approved and more so when the said condition was inextricably linked to the approval granted to the housing project by the local authority under its own rules and regulations, was the submission of Mr. Mistry. Clause (d) of sub-section (10) of section 80-IB, which is the bone of contention in the present appeals, according to Mr. Mistry, is inextricably linked with the approval and construction of the housing project and therefore an assessee cannot be called upon to comply with the said condition when the same was never in contemplation either of the assessee or the Legislature, when the approval to the housing project was accorded by the local authority. For all the aforesaid reasons it was submitted that the substantial questions of law framed by this Court and reproduced above, be answered in favour of the Assessees and against the Revenue. 33. We have considered the elaborate submissions of both the sides and carefully examined the relevant provisions. For all the aforesaid reasons it was submitted that the substantial questions of law framed by this Court and reproduced above, be answered in favour of the Assessees and against the Revenue. 33. We have considered the elaborate submissions of both the sides and carefully examined the relevant provisions. The essential question that is required to be decided is whether section 80-IB (10)(d) which was brought into force w.e.f. 1st April, 2005 would apply to projects that were approved by the local authority prior to it being brought on the statute book. Or to put it differently, the essential question is whether the said clause has to be complied with by an assessee who offers his profits to tax in A.Y. 2005-2006 or thereafter, even though his housing project was accorded approval by the local authority before 31st March, 2005. 34. As can be seen from the history of section 80-IA(4F) and then section 80-IB(10), prior to 1st April 2005, an assessee, developing and building a housing project approved by the local authority before 31st March, 2005 was entitled to a deduction of 100 % of the profits derived from such housing project in any previous year relevant to any assessment year, provided (i) the development and construction of the said project had commenced on or after 1st October 1998; (ii) the project was on the size of a plot of land which had a minimum area of one acre and (iii) the residential unit had a maximum area of 1,000 sq.ft. where such residential unit was situated within the cities of Delhi or Mumbai or within 25 Kms from the municipal limits of these cities, and 1,500 sq.ft. at any other place. Before 1st April 2005, there was no condition and / or restriction on the quantum of the commercial area that could be included in a housing project. That had to be determined on the basis of the rules and regulations of the local authority approving the said housing project. 35. However, the provisions of section 80-IB(10) were substantially amended by way of Finance (No.2) Act, 2004 w.e.f. 1st April, 2005. As can be noted from the amended provisions, there were several conditions that were imposed in the newly substituted section 80-IB(10) that were absent in the said section prior to its amendment. 35. However, the provisions of section 80-IB(10) were substantially amended by way of Finance (No.2) Act, 2004 w.e.f. 1st April, 2005. As can be noted from the amended provisions, there were several conditions that were imposed in the newly substituted section 80-IB(10) that were absent in the said section prior to its amendment. One such condition inserted w.e.f. 1st April, 2005 was clause (d) that put a restriction on the quantum of commercial area that could be included in a housing project in order to entitle the assessee to claim the deduction as set out in the said section. It is pertinent to note that in the appeals before us, it is an admitted fact that the housing projects were approved prior to 31st March, 2005. In ITXA No.308 of 2012, in fact, the project was even completed prior to 31st March, 2005 and only the profits were offered to tax in A.Y. 2005-06. We do not think that the Legislature intended to give any retrospectivity to clause (d) of section 80-IB(10). This more so because it is clearly a condition that relates to and/or is linked with the approval and construction of the housing project. At the time when the housing project is approved by the local authority, it decides, subject to its own rules and regulations, what quantum of commercial area is to be included in the said project. It is on this basis that building plans are approved by the local authority and construction is commenced and completed. It is very difficult, if not impossible to change the building plans and / or alter construction midway, in order to comply with clause (d) of section 80-IB(10). It would be highly unfair to require an Assessee to comply with section 80-IB(10)(d) who has got his housing project approved by the local authority, before 31st March, 2005 and has either completed the same before the said date or even shortly thereafter, merely because the Assessee has offered its profits to tax in A.Y. 2005-2006 or thereafter. Requiring the Assessee to comply with the condition set out in clause (d) of sub-section (10) of section 80-IB merely because he has offered his profits to tax in A.Y. 2005-06 or thereafter, even though his housing project was approved before 31st March 2005, would be requiring the Assessee to virtually do a humanly impossible task. Requiring the Assessee to comply with the condition set out in clause (d) of sub-section (10) of section 80-IB merely because he has offered his profits to tax in A.Y. 2005-06 or thereafter, even though his housing project was approved before 31st March 2005, would be requiring the Assessee to virtually do a humanly impossible task. This, in our opinion, could never have been the intention of the Legislature. In fact, to our mind, it would run counter to the very object for which these provisions were introduced, namely to tackle the shortage of housing in the country and encourage investment therein by private players. It is therefore clear that clause (d) of sub-section (10) of section 80-IB cannot have any application to housing projects that are approved before 31st March, 2005. The said clause (d) being inextricably linked to the date of approval of the housing project, it will have to be held that the said clause operates only prospectively i.e. for housing projects approved after 1st April, 2005. This is notwithstanding the fact that the profits were offered to tax by the Assessee for the A.Y. 2005-06 or thereafter. 36. There is yet another reason for coming to the aforesaid conclusion. Take a scenario where an Assessee following the project completion method of accounting, has completed the housing project approved by the local authority complying with all the conditions as set out in section 80-IB(10) as it stood prior to 1st April, 2005. If we were to accept the argument of the Revenue, then in that event, despite having completed the entire construction prior to 1st April, 2005 and complying with all the conditions of section 80-IB(10) as it stood then, the Assessee would be disentitled to the entire deduction claimed in respect of such housing project merely because he offered his profits to tax in the A.Y. 2005-06. In contrast, if the same Assessee had followed the work-in-progress method of accounting, he would have been entitled to the deduction under section 80-IB(10) upto the A.Y. 2004-05, and denied the same from A.Y. 2005-06 and thereafter. It could never have been the intention of the Legislature that the deduction under section 80-IB (10) available to a particular Assessee would be determined on the basis of the accounting method followed. This, to our mind and as rightly submitted by Mr. Mistry would lead to startling results. It could never have been the intention of the Legislature that the deduction under section 80-IB (10) available to a particular Assessee would be determined on the basis of the accounting method followed. This, to our mind and as rightly submitted by Mr. Mistry would lead to startling results. We therefore have no hesitation in holding that section 80-IB(10)(d) is prospective in nature and can have no application to a housing project that is approved before 31st March, 2005. As the deduction sought to be claimed under section 80-IB(10) is inseparably linked with the date of approval of the housing project, it would make no difference if the construction of the said project was completed on or after 1st April, 2005 or that the profits were offered to tax after 1st April, 2005 i.e. in A.Y. 2005-06 or thereafter. We therefore find no substance in the argument of the Revenue that notwithstanding the fact that the housing project was approved prior to 31st March 2005, if the construction was completed on or after 1st April, 2005 or if the profits are brought to tax in the A.Y. 2005-06 or thereafter, the said housing project would have to comply with the provisions of clause (d) of section 80-IB(10). To our mind, we do not think that the condition/restriction laid down in clause (d) of section 80-IB(10) has to be revisited and / or looked at and complied with in the assessment year in which the profits are offered to tax by the Assessee. When the Assessee claims a deduction under section 80-IB(10), the Assessee is required to comply with such a condition only if it is on the statute-book on the date of the approval of the housing project and it has nothing to do with the year in which the profits are brought to tax by the Assessee. We have come to this conclusion only because we find that clause (d) of section 80-IB(10) is inextricably linked to the date of the approval of the housing project and the subsequent development/construction of the same, and has nothing to do with the profits derived therefrom. We may hasten to add that if a particular condition is not inseperably linked to the date of approval of the housing project, different considerations would arise. We may hasten to add that if a particular condition is not inseperably linked to the date of approval of the housing project, different considerations would arise. However, we are not called upon to decide any such condition and hence we are not laying down any general proposition of law, save and except that clause (d) of section 80-IB(10) being a condition linked to the date of the approval of the housing project, would not apply to any housing project that was approved prior to 31st March, 2005 irrespective of the fact that the profits of the said housing project are brought to tax after the said provision was brought into force. 37. On the issue of retrospectivity of clause (d) of section 80-IB(10) we are supported in our view by a judgment of this Court in the case of Brahma Associates (supra). Though the facts in Brahma Associate's case were slightly different, inasmuch as the assessment year in question was A.Y. 2003-04, this Court held as under :- “32. Lastly, the argument of the Revenue that section 80-IB(10) as amended by inserting clause (d) with effect from April 1, 2005 should be applied retrospectively is also without any merit, because, firstly, clause (d) is specifically inserted with effect from April 1, 2005 and, therefore, that clause cannot be applied for the period prior to April 1, 2005. Secondly, clause (d) seeks to deny section 80-IB(10) deduction to projects having commercial user beyond the limit prescribed under clause (d), even though such commercial user is approved by the local authority. Therefore, the restriction imposed under the act for the first time with effect from April 1, 2005 cannot be applied retrospectively. Thirdly, it is not open to the Revenue to contend on the one hand that section 80-IB(10) as it stood prior to April 1, 2005 did not permit commercial user in housing projects and on the other hand contend that the restriction on commercial user introduced with effect from April 1, 2005 should be applied retrospectively. The argument of the Revenue is mutually contradictory and hence liable to be rejected. Thus, in our opinion, the Tribunal was justified in holding that clause (d) inserted to section 80-IB(10) with effect from April 1, 2005 is prospective and not retrospective and hence cannot be applied to the period prior to April 1, 2005. 33. The argument of the Revenue is mutually contradictory and hence liable to be rejected. Thus, in our opinion, the Tribunal was justified in holding that clause (d) inserted to section 80-IB(10) with effect from April 1, 2005 is prospective and not retrospective and hence cannot be applied to the period prior to April 1, 2005. 33. In the result, the questions raised in the appeal are answered thus : (a) …....... (b) …....... (c) …....... (d) …....... (e) Clause (d) inserted to section 80-IB(10) with effect from April 1, 2005 is prospective and not retrospective and hence cannot be applied for the period prior to April 1, 2005.” (emphasis supplied) 38. In fact, this judgment also concludes the argument of the Revenue that clause (d) of section 80-IB(10) inserted with effect from 1st April, 2005 is actually in the nature of a relaxation and / or benefit granted to the Assessee and not a restriction as sought to be contended on behalf of the Assessees. On this very point, this Court negated the aforesaid contention and held as under :- “24. Thus, on the date on which the Legislature introduced 100 per cent deduction under the Income Tax Act 1961 on the profits derived from housing projects approved by a local authority, it was known that local authorities could approve projects as housing projects with commercial user to the extent permitted under the DC Rules framed by the respective local authority. In other words, it was known that local authorities could approve a housing project without or with commercial user to the extent permitted under the Development Control Rules. If the Legislature intended to restrict the benefit of deduction only to projects approved exclusively for residential purposes, then it would have stated so. However, the Legislature has provided that section 80-IB (10) deduction is available to all housing projects approved by a local authority. Since local authorities could approve a project to be a housing project with or without the commercial user, it is evident that the Legislature intended to allow section 80-IB(10) deduction to all housing projects approved by a local authority without or with commercial user to the extent permitted under the Development Control Rules. 25. Since local authorities could approve a project to be a housing project with or without the commercial user, it is evident that the Legislature intended to allow section 80-IB(10) deduction to all housing projects approved by a local authority without or with commercial user to the extent permitted under the Development Control Rules. 25. It is not in dispute that where a project is approved as a housing project without or with commercial user to the extent permitted under the rules / Regulations, then, deduction under section 80-IB(10) would be allowable. In other words, if a project could be approved as a housing project having residential units with permissible commercial user, then it is not open to the income tax authorities to contend that the expression “housing project” in section 80-IB(10) is applicable to projects having only residential units.