COMMISSIONER OF INCOME TAX-19 MUMBAI.versusM/S. SARKAR BUILDERS

                         [2015] 7 S.C.R. 56


A          COMMISSIONER OF INCOME TAX-19 MUMBAI.
                                 v.
       \
                     M/S. SARKAR BUILDERS
                  (Civil Appeal No. 44 76 Of 2015)
B
                           MAY15,2015
               [A. K. SIKRI AND R. F. NARIMAN, JJ.]
         Income Tax Act, 1961: s.8018(10) (as amended by
c Finance No.2 Act, 2004 w.e.f. 1.4.2005- Deduction in case
  of undertaking developing and building housing projects -
  By Clause (d) inserted by amendment and made effective
  from 1.4.2005, it was stipulated that the built up area of shop
  and other commercial establishments in the housing projects
D would not exceed 5% .'lf aggregate built up area of housing
  project or 2000 sq. feet whichever is less -Whether
  s.80/B(10)(d) applies to a housing project approved before
  31.03.2005 but completed on or after 01.04.2005 - Held:
  This amendment is prospective and has come into effect
E from 1. 4. 2005, therefore, the restriction on extent of
  commercial area in housing project imposed w.e.f. 1.4.2005
  would not apply to housing projects which had been
  sanctioned and started earlier even if they finished after
  1.4.2005.
F
            Dismissing the appeals, the Court

         HELD: 1. Prior to 01.04.2005, the developers/
  assessees who had got their projects sanctioned from
G the local authorities as 'housing projects', even with
  commercial user, though limited to the extent permitted
  under the DC Rules, were convinced that they would be
  getting the benefit of 100% deduction of their income
  from such projects under Section 8018 of the Act. Their
H projects were sanctioned much before 01.04.2005. As
                             56
 COMMISSIONER OF INCOME TAX -19 MUMBAI v. M/S.                57
             SARKAR BUILDERS

per the permissible commercial user on which"tlie project A
was sanctioned, they started the projects and the date
of commencing such projects is also before 01.04.2005.
All these assessees were made known of the provision
by which these projects are to be completed as those
dates have been specified from time to time by B
successive Finance Acts in the same provision Section
8018. In these cases, completion dates were after
01.04.2005. Once they arrange their affairs in this manner,
the Revenue cannot deny the benefit of this section
applying the principle of retroactivity even when the C
provision has no retrospectivity. [Paras 7 and 12] [75-C-
F]
        2. The basic objective behind Section 8018(10) is
to encourage developers to undertake housing projects         D
for weaker section of the society, inasmuch as to qualify
for deduction under this provision, it is an essential
condition that the residential unit be constructed on a
maximum built up area of 1000 sq.ft. where such
residential unit is situated within the cities of Delhi and   E
Mumbai or within 25 kms. from the municipal limits of
these cities and 1500 sq.ft. at any other place: It is the
cardinal principle of interpretation that a construction
resulting in unreasonably harsh and absurd results must       F
be avoided. Clause (d) makes it clear that a housing
project includes shops and commercial establishments
also. But from the day the said provision was inserted,
they wanted to limit the built up area of shops and
establishments to 5% of the aggregate built up area or        G
2000 sq.ft., whichever is less. However, the Legislature
itself felt that this much commercial space would not
meet the requirements of the residents. Therefore, in
the year 2010, the Parliament has further amended this
provision by providing that it should not exceed 3% of        H
58        SUPREME COURT REPORTS                 [2015) 7 S.C.R.

A the aggregate built up area of the housing project or 5000
  sq.ft., whichever is higher. This is a significant
  modification making complete departure from the earlier
  yardstick. On the one hand, the permissible built up area
  of the shops and other commercial shops is increased
B from 2000 sq.ft. to 5000 sq.ft. On the other hand, though
  the aggregate built up area for such shops and
  establishment is reduced from 5% to 3%, what is
  significant is that it permits the builders to have 5000 sq.ft.
  or 3% of the aggregate built up area, 'whichever is
C higher'. In contrast, the provision earlier was 5% or 2000
  sq.ft., 'whichever is less'. From this provision, therefor,
  it is clear that the housing project contemplated under
  sub-section (10) of Section 8018 includes commercial
  establishments or shops also. Now, by way of an
0
  amendment in the form of Clause (d), an attempt is made
  to restrict the size of the said shops and/or commercial
  establishments. Therefore, by necessary implication, the
  said provision has to be read prospectively and not
E retrospectively. As is clear from the amendment, this
  provision came into effect only from the day the provision
  was substituted. Therefore, it cannot be applied to those
  projects which were sanctioned and commenced prior
  to 01.04.2005 and completed by the stipulated date,
F though such stipulated date is after 01.04.2005. The
  assesees were entitled to the benefit of Section 8018(10).
  [Paras 20 and 23] [81-8-H; 82-A-E; 85-G]

      Mis. Reliance Jute and Industries Ltd. v. C.I. T, West
G     Bengal, Calcutta 1980 (1) SCR 906 - Distinguished.

      Commissioneroflncome Tax, UP v. Mis. Shah Sadiq
      and Sons 1987 (2) SCR 942 : (1987) 3 SCC 516 -
      relied on.

H     C.I. Tv. Brahma Associates 333 ITR 289; Commissioner
 COMMISSIONER OF INCOME TAX-19 MUMBAI v. M/S.                .59
             SARKAR BUILDERS

  of Income Tax I, Ahmedabad v. Gold Coin Health Food         A
  Private Limited 2008 (12) SCR 179: (2008) 9 SCC 622;
  The Karimtharuvi Tea Estate Ltd. v. The State of.Kera/a
  AIR 1966 SC 1385: 1966 SCR 93; Commissioner of
  Income Tax v. Shah Sadiq and Sons (1987) 166 ITR
  102 (SC); Commissioner of Income Tax (Central)-/,           B
  New Delhi v. Vatika Township Private Limited (2015) 1
  sec 1; (1980) 1sec139- referred to.
                                              .::;I ··t
                   Case Law Reference

333 ITR 289                referred to.            Para 5
                                                              c
2008 (12) SCR 179          referred to.            Para 7
1966 SCR 93                referred to.            Para 8
(1987) 166 ITR 102 (SC)    referred to.            Para 9     D
(2015) 1 sec 1             referred to.            Para 9
1980 (1) SCR 906           Distinguished           Para 13
1987 (2) SCR 942           relied on.              Para 22
                                                              E
      CIVILAPPELLATE JURISDICTION: Civil Appeal No.
4476 of 2015.

      From the Judgment and Order dated 22.02.2011 of the
High Court of Bombay in ITA No. 872 of 2010. ;>u
                                                              F
                          WITH
                                              I   .,.a   "

      C.A.Nos.4477,4491,4485,4486,4479,4481,4487,
4490,4483,4482,4489,4492,4478,4484,4493,4488and
                                         1
4480 of 2015.                             r                   G

      S. Guru Krishna Kumar, Kavin Gulati, T. M. Singh,
Rekha Pandey, D. L. Chidanand, Sadhana Sandhu, Gargi
Khanna, Anil Katiyar, 8. V. Balaram Das, Rupesh Kumar, Arijit
Prasad, SubhasAcharya, Kaustugh Shukla, Anita Sahni, SWA H
60          SUPREME COURT REPORTS                   [2015] 7 S.C.R.


A Qadri for the Appellant.

         J. D. Mistry, Rakesh Dwivedi, Kiran Suri, Prag Tripathi,
  Kunal Vajani, Pranaya Goyal, Bindi Girish Dave, Kirti R.
  Mishra, Dr. Vipin Gupta, Aparva Garg, S. J. Amith, Vikas Jain,
B Salil Kapoor, Shubham Rastogi (For Kamal Mohan Gupta),
  Vinodh Kanna B., S. U. K. Sagar, Bina Madhavan, Praseena
  Elizabeth Joseph, Akanksha Mehra, Srividya K. Kaimal,
  Shrinjan Khosla, Swati Vellodi, Laksh Puri (For Lawyer S Knit
  & Co.), Rajat N., Pradeep Kumar Bakshi, Kushara Pandit,
C Syed Shahid Hussain Rizvi for the Respondent.

            The Judgment of the Court was delivered by

            A. K. SIKRI, J. 1) Leave granted.

D            2) No doubt the assessees/respondents in all these
     appeals are different and even assessment years are different.
      But the question of law which is raised by the Income Tax
     Authorities (hereinafter referred to as the 'Revenue') is
     identical. The assessees are subject to the jurisdiction of the
E    different High Courts, all of whom had claimed the benefit of
     Section 801B of the Income Tax Act ('Act' for short), namely,
     deduction in respect of profits and gains on the ground that
     their cases were covered by sub-section (10) of Section 801B
F    which provides for deduction of 100% of profits in the case of
     an undertaking developing and building housing projects when
     such profits are derived in the previous year relevant to any
     assessment year from such housing projects, provided the
     conditions contained in the said sub-section are satisfied. High
G    Courts have taken the same view holding that these assessees
     would be entitled to the deduction under Section 801B(10) of
     the Act. We may also point out at this stage itself that though
     Section 801B has been on the statute book for quite some time,
     a new Section 801B had been introduced by the Finance Act,
H    1999 w.e.f. 01.04.2000. All these cases are covered by the
  COMMISSIONER OF INCOME TAX-19 MUMBAI v. M/S.                      61
        SARKAR BUILDERS [A K. SIKRI, J.]

said Section, as introduced. However, insofar as sub-section        A
(10) is concerned, with which we are directly concerned, there
have been amendments in that provision from time to time.
We are concerned with the amendment to the said sub-section
carried out by Finance No.2Act, 2004 w.e.f. 01.04.2005. In all
these cases, though the housing projects were sanctioned            B
much before the said amendment but have been completed
after 01.04.2005 when amended provision has come into
operation. It is also not in dispute that the amendment is
prospective in nature. Interestingly, when the housing project
was approved by a local authority, which is the requirement         C
under sub-section (10) of Section 801B, as on that date, the
conditions stipulated in the said sub-section were met by the
assessees. However, condition in clause (d) which was laid
down for the first time by the amendment made effective from
                                                                    0
01.04.2005 is not fulfilled. In this scenario, the question is as
to whether the new conditions mentioned in the amended
provision have also to be fulfilled only because the housing
projects in question, though started before 01.04.2005, were
completed after the said date. The question of law, that arises     E
for discussion that needs to be answered is thus common in
all these appeals and can be formulated as under:

  "Whether Section 801B(1 O)(d) of the Income Tax Act, 1961'
  applies to a housing project approved before 31. 03 .2005
                                                                    F
  but completed on or after 01.04.2005?"

        3) As pointed out above, sub-section (10) stipulates
certain conditions which are to be satisfied in order to avail
the benefit of the said provision. Further, it is also clear that
the benefit is available fo those undertakings which are G
developing and building 'housing projects' approved by a local
authority. Thus, this Section is applicable in respect of housing
projects and not commercial projects. At the same time, we
are conscious of the fact that even in the housing projects, H
62        SUPREME COURT REPORTS                   [2015] 7 S.C.R.


A there would be some area for commercial purposes as certain
  shc.ps and commercial establishments are needed even in a
  housing projects. That has been judicially recognised while
  interpreting the provision that existed before 01.04.2005 and
  there was no limit fixed in Section 8018(10) regarding the built-
8 up area to be used for commercial purpose in the said housing
  project. As would be noticed later, the extent to which such
  commercial area could be constructed was as per the local
  laws under which local authority gave the sanction to the
  housing project. However, vide clause (d),which was inserted
C by the aforesaid amendment and made effective from
  01.04.2005, it was stipulated that the built-up area of the shops
  and other commercial establishments in the housing projects
  would not exceed 5% of the aggregate built-up area of the
  housing project or 2000 sq. feet, whichever is less (there is a
0
  further amendment whereby 5% is reduced to 3% and instead
  of the words "2000 sq. feet whichever is less" the words "5000
  sq. feet, whichever is higher" have been substituted. However,
  we are not concerned with this amendment).
E          The question, thus, that arises for consideration is as
  to whether in respect of those housing projects which finished
  on or after 01.04.2005, though sanctioned and started much
  earlier, the aforesaid stipulation contained in clause (d) also
F has to be satisfied. All the High Courts have held that since
  this amendment is prospective and .has come into effect from
  01.~4.2005, this condition would not apply to those housing
  projects which had been sanctioned and started earlier even
  if they finished after01.04.2005._
G         4)As there is a commonality of issue and the judgments
  of the various High Courts have spoken in one voice which
  are questioned on identical grounds by the appellant Revenue,
  all these appeals were heard analogously and by this judgment,
H we propose to answer the question of law involved and as
  formulated above in order to give quietus to this surging debate.
    COMMISSIONER OF INCOME TAX -19 MUMBAI v. M/S.                      63
          SARKAR BUILDERS (A. K. SIKRI, J.]

          5) Before we come to the grip of the aforesaid central       A
  issue, it would be of some relevance to mention certain other
 disputes which had arisen between the Revenue and the
 assessees/developers of the housing projects concerning
  interpretation of sub-section (10) of Section BOIS. That dispute
  primarily related to the meaning that is to be assigned to           B
  'housing projects' prior to 01. 04.2005 because of the reason
 that there was no clause (d) earlier and there is no express
 provision in this sub-section deating with the consequence of
 having a commercial establishment within a housing project.
 One of the requirements contained in sub-section (10) is that         C
 in order to be entitled to have the deduction under this provision,
 housing project is to be approved by a local authority. It is a
 matter of common knowledge that there are Municipal Acts of
 specific local Acts governing the construction of buildings,
                                                                       0
 commercial as well as residential, in every State. For
 undertaking any such construction authority, it is necessary to
 have the building plans sanctioned from the local authorities
 in accordance with the provisions of such local acts. There
are local laws relating to the development and building of             E
"housing projects" by the developers/builders which also need
a sanction from the local authorities as per the law prevailing
in that particular area where the housing project is developed.
Such local laws, while sanctioning the housing projects, also
permit use of certain area in the housing projects in a specified      F
manner for shopping and commercial purposes as well. The
question that had arisen was-whether deduction under Section
801B(10) would be admissible when commercial establishment
is constructed in a housing project? That is, whether it would
still retain the character of housing project within the meaning       G
of this provision. The Bombay High Court in the case of C.I. T.
v. Brahma Associates 1 held that since the expression
'housing project' is not defined under the Act, the intention of
Parliament was that whatever is approved by the local authority
1                                                                      H
    3331TR289
64        SUPREME COURT REPORTS                     [2015] 7 S.C.R.


A under the extent rules as a housing project would be treated
  as 'housing project' for the purpose of this Section, inasmuch
  as sub-section (10) itself mandates that housing project is to
  be approved by a local authority as such an approval is a
  necessary condition for claiming the deduction under this
8 provision. When the local authority has approved a housing
  project, whether 'residential' or 'residential cum commercial'
  the assessee is entitled to a deduction on the entire profit
  including the commercial establishments portion. We would
  also like to point out that following this judgment of the Bombay
C High Court, or independently, other High Courts had also taken
  similar view. Against the aforesaid judgments, special leave
  petitions were filed by the Revenue in this Court. All these
  SLPs have been disposed of by this Court vide order dated
  29.04.2015, we would like to reproduce the said order in
0
  entirety hereunder:

       "All these special leave petitions are filed by the Revenue/
       Department of Income tax against the judgments
       rendered by various High Courts deciding identical issue
E      which pertains to the deduction under Section 8018(10)
       of the Income TaxAct, as applicable prior to 01.04.2005.
       We may mention at the outset that all the High Courts
       have taken identical view in all these cases holding that
     • the deduction under the aforesaid provision would be
F
       admissible to a "housing project".

           All the assessees had undertaken construction
      projects which were approved by the municipal
      authorities/local authorities as housing projects. On that
G     basis, they claimed deduction under Section 8018(10)
      of the Act. This provision as it stood at that time, i.e.,
      prior to 01.04.2005 reads as under: -

      Section 8018(10) fas it stood prior to 01.04.20051
H
COMMISSIONER OF INCOME TAX-19 MUMBAI v. M/S.                   65
      SARKAR BUILDERS [A. K. SIKRI, J.]

"(10) The amount of profits in case of an undertaking          A
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, -                                          B

(a) such undertaking has commenced or commences
development and construction of the housing project on
or after the 1st day of October, 1998;
                                                               c
(b) the project is on the size of a plot of land which has a
minimum area of one crore; and

(c) the residential unit has a maximum built-up area of
one thousand square feet where such residential unit is
                                                               D
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."

However, the income tax authorities rejected the claim         E
of deduction on the ground that the projects were not
"housing project" inasmuch as some commercial activity
was also undertaken in those projects. This contention
of the Revenue is not accepted by the income tax
                                                               F
Appellate Tribunal as well as the High Court in the
impugned judgment. The High Court interpreted the
expression "housing project" by giving grammatical
meaning thereto as housing project is not defined under
the Income Tax Act insofar as the aforesaid provision is       G
concerned. Since sub-section.( 10) of Section 801 B very
categorically mentioned that such a project which is
undertaken as housing project is approved by a local
authority, once the project is approved by the local
authority it is to be treated as the housing project. We       H
66       SUPREME COURT REPORTS                     [2015] 7 S.C.R.


A    may also point out that the High Court had made
     observations in the context of Development Control
     Regulations (hereinafter referred to as 'DCRs' in short)
     under which the local authority sanctions the housing
     projects and noted that in these DCRs itself, an element
8    of commercial activity is provided but the total project is
     still treated as housing project. On the basis of this
     discussion, after modifying some of the directions given
     by the ITAT, the conclusions which are arrived at by the
     High Court are as follows: -
c
     "30. In the result, the questions raised in the appeal are
     answered thus:-

     a) Upto 31/3/2005 (subject to fulfilling other conditions},
D    deduction under Section 8018(10) is allowable to housing
     projects approved by the local authority having residential
     units with commercial user to the extent permitted under
     DC Rules/Regulations framed by the respective local
     authority.
E
     b) In such a case, where the commercial user permitted
     by the local authority is within the limits prescribed under
     the DC Rules/ Regulation, the deduction under Section
     8018(10) upto 31/3/2005 would be allowable irrespective
F    of the fact that the project is approved as 'housing project'
     or 'residential plus commercial'.

     c) In the absence of any provisions under the Income
     TaxAct, the Tribunal was not justified in holding that upto
G    31/3/2005 deduction under Section 8018(10) would be
     allowable to the projects approved by the local authority
     having residential building with commercial user upto
     10% of the total built-up area of the plot.

     d) Since deductions under Section 8018(10) is on the
H
COMMISSIONER OF INCOME TAX-19 MUMBAI v. M/S.                     67
      SARKAR BUILDERS [A. K. SIKRI, J.]

profits derived from the housing projects approved by            A
the local authority as a whole, the Tribunal was not justified
in restricting Section 801B(10) deduction only to a part of
the project. However, in the present case, since the
assessee has accepted the decision of the Tribunal in
                                    ·~
allowing Section 801B(10) deduction to a part of the             B
project, we do not disturb the fi~dings of the Tribunal in
that behalf.

e) Clause (d) inserted to Section 801B(10) with effect
from 1/4/2005 is prospective and not retrospective and           C
hence cannot be applied for the period prior to YJ2005."

We are in agreement with the aforesaid answers given
by the High Court to the various issues. We may only
clarify that insofar as answer at para (a) is concerned, it      o
would mean those projects which are approved by the
local authorities as housing projects with commercial
elementtherein.

There was much debate on the answer given in para (b)            E
above. It was argued by Mr. Gurukrishna Kumar, learned
senior counsel, that a project which is cleared as.
"residential plus commercial" project cannot be treated
as housing project and therefore, this direction is contrary
to the provisions of Section 80(1)(B)(10) of the Act.             F
However, reading the direction' in its entirety and
particularly the first sentence theteof, we find that
commercial user which is permitted is in the residential
units and that too, as per OCR. Examples given before
us by the learned counsel for the assessee was that such         G
commercial user to some e~ent is permitted to the
professionals like Doctors, Chartered Accountants,
Advocates, etc., in the DCRs itself. Therefore, we clarify
that direction (b) is to be read in that context where the
project is predominantly housing/residential project but          H
68         SUPREME COURT REPORTS                      [2015) 7 S.C.R.


A      the commercial activity in the residential units is permitted.
       With the aforesaid clarification, we dispose of all these
       special leave petitions."

            6) The reason for recapitulating the aforesaid events
B pertaining to the earlier litigation is that before 01.04.2005,
    the legal position was that once the project is sanctioned by
    the local authority as 'housing project', the extent of area
    sanctioned for shops and commercial establishments in the
    said housing project was immaterial and had no bearing. Thus,
C irrespective of the said of area where shops and commercial
    establishments were permitted by the local authority in a
    housing project, it was still treated as housing project and further
    that while granting 100% deductions, the area covered by
    shops and commercial establishments was also includible.
D This position has changed with the insertion of clause (d) to
    sub-section (10). As per the amendment carried out and made
    effective from 01.04.2005, even if the local authority had
    sanctioned larger area for shops and commercial
    establishment, the benefit of Section 8018(10) would not be
E admissible to these assessees/developers in case the area
    utilised for shops and commercial establishment exceeded
    5% of the aggregate built-up area of the housing project or
  . 2000 sq. feet, whichever is less.

F         7) In the aforesaid scenario, we revert bac~ to the
  question that is to be answered. We have already pointed out
  that the parties are ad idem that the amendment is prospective
  in nature and, therefore, it operates from 01.04.2005. We have
  also mentioned that in the instant appeals, all these assessees
G had got the housing projects sanctioned prior to 01.04.2005
  and the construction of the said housing project also started
  before 01.04.2005. All other conditions mentioned namely the
  date by which approval was to be given and the dates by which
H the projects were to be completed as on the date when the
     COMMISSIONER OF INCOME TAX-19 MUMBAI v. M/S.                   69
           SARKAR BUILDERS [A. K. SIKRI, J.]

project was sanctioned, are also met by the assessees.              A
 Notwithstanding this position, the argument of Mr. S.
 Gurukrishna Kumar, learned senior counsel appearing for the
 Revenue is that amendment w.e.f. 01.04.2005 is retroactive
even if not retrospective. He has, thus, endeavoured to draw
a fine distinction between the retroactive nature of amendment      B
in contrast with retrospectivity of a provision. He argued that
once the project is financed after 01. 04.2005 and on the
completion of the said project, a particular assessee has
earned the income which is shown by the assessee in a
particular assessment year, it is that assessment year which        C
would be the determinative factor and the law prevailing on
the date relevant to the assessment year will have to be applied.
On that basis, it was argued that since the assessment years
are post 01.04.2005, clause (d) of sub-section (10) of Section
                                                                    0
801B of the Act gets attracted. In support of this plea, he
referred to the judgment of this Court in Commissioner of
Income Tax I, Ahmedabad v. Gold Coin Health Food
Private Limitec:P and, particularly, the discussion contained
in paras 9 and 16 which are reproduced hereunder:                   E
     "9. In Reliance Jute and Industries Ltd. v. CIT, (1980) 1
     SCC 139, it was observed by this Court that the law to
     be applied in income tax assessments is the law in force
     in the assessment year unless otherwise provided
                                                                    F
     expressly or by necessary implication.
           xx                   xx                    xx
     16. The law is well settled that the applicable provision
     would be the law as it existed on the date of the filing of    G
     the return. It is of relevance to note that when any loss is
     returned in any return it need not necessarily be the loss
     of the previous year concerned. It may also include
     carried-forward loss which is required to be set up against
2                                                                   H
    (2008) s sec s22
70             SUPREME COURT REPORTS                     [2015] 7 S.C.R.


A          future income under Section 72 of the Act. Therefore,
           the applicable law on the date of filing of the return cannot
           be confined only to the losses of the previous accouting
           years."                                     ·

B             8) He also referred to the decision in the case of The
     Karimtharuvi Tea Estate Ltd. v. The State of Kera/a3 which
     is to the same effect.

             9) Mr. J.D. Mistry, learned senior counsel who appeared
c    on behalf of the assessees in some of these appeals
     emphatically countered the aforesaid arguments. In the first
     instance, he pointed out that this argument of retroactivity was
     not even raised by the Revenue in the High Courts or before
     the lower forum or even in the special leave petitions filed in
D    this Court. He further submitted that it was necessary to keep
     the objective of the amendment in mind which would clearly
     evince that the conditions in clause (d) could not be applied in
     respect of those projects which had been sanctioned and
     commenced prior to 01. 04.2005. He further argued that vested
E    rights had accrued in favour of such persons which could not
     be taken away by the am~ndment. He also advanced various
     reasons, as would be noted later, necessitating the approach
     as to why the principle of tax law that the law in force in the
     Assessment Year is to be applied, insisting that it was a case
F    where departure was needed and such a departure is
     recognised in certain circumstances, by the courts. He relied
     upon the judgments of this Court in Commissioner of Income
     Tax v. Shah Sadiq and Sons4 and Commissioner of
     Income Tax (Central)-/, New Delhi v. Vatika Township
G    Private Limited°. Senior counsel who appeared for other
     assessees argued on the same lines drawing our attention to
     the reasons which are given by the High Courts in the impugned
     3
         AIR 1966 SC 1385 :: 60 ITR 262
H    4
         (1987) 166 ITR 102 (SC)
     5 (2015) 1sec1
 COMMISSIONER OF INCOMETAX-19 MUMBAI v. M/S.                   71
       SARKAR BUILDERS (A.~. SIKRI, J.]

judgments and supporting those reasons.                        A

      10) We have given our due consideration to the
respective submissions.

        11) As pointed out above, the judgment pronounced
                                                                8
by the Bombay High Court in Brahma Associates case has
already been upheld by this Court on the interpretation given
to the expression 'housing project' occurring in sub-section
(10) of Section 8018 of the Act. Interestingly, in the batch of
appeals decided by the High Court in that very judgment, the   c
issue with which we are concerned was also taken up. The
Revenue had argued that clause (d) inserted with effect from
01. 04.2005 should be applied retrospectively, which argument
was repelled by the High Court. Therefore, for better
understanding, we would like to begin our discussion with the D
meaning given to 'housing project' along with the issue of
retrospectivity of clause (d), as raised by the Revenue, which
was dealt with by the High Court and repelled. That portion of
the discussion contained in the High Court judgment, which
has some bearing on the issue at hand, runs as under:           E

  "21. Thus, on the date on which the legislature introduced
  100% deduction under the Income Tax Act, 1961 on the
  profits derived from housing projects approved by a local
  authority, it was known that the local authorities could      F
  approve the projects as houding 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 the local authorities could approve a housing
  project without or with commercial user to the extent        G
  permitted under the Development Control Rules. If the
  legislature intended to restrict the benefit of deduction
  only to the projects approved exclusively for residential,
  purposes, then it would have stated so. However, the
  legislature has provided that Section 8018(10) deduction      H
72       SUPREME COURT REPORTS                     [2015] 7 S.C.R.


A    is available to all the housing projects approved by a local
     authority. Since the 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 8018(10) deduction to all the housing
8    project.s approved by a local authority without or with
     commercial user to the extent permitted under the DC
     Rules.

     22. It is not in dispute that where a project is approved
c    as a housing project without or with commercial user to
     the extent permitted under the Rules/Regulations, then,
     deduction under Section 8018(10) would be allowable.
     In other words, if a project could be approved as a housing
     project having residenti~I units with permissible
D    commercial user, then it is not open to the income tax
     authorities to contend that the expression 'housing
     project' in Section 8018(10) is applicable to projects
     having only residential units.

E    23. Once it is held that the local authorities could approve
     a project to be housing project without or with the
     commercial user to the extent permitted under the DC
     Rules, then the project approved with the permissible
     commercial user would be eligible for Section 80l8(10)
F    deduction irrespective of the fact that the project is
     approved as 'housing project' or approved as 'residential
     plus commercial'. In other words, where a project fulfills
     the criteria for being approved as a housing project, then
     deduction cannot be denied under Section 8018(10)
G    merely because the project is approved as 'residential
     plus commercial'.
     24. The fact that the deduction under Section 801B(10)
     prior to 1.4.2005 was allowable on the profits derived
H    from the housing projects constructed during the specified
COMMISSIONER OF INCOME TAX-19 MUMBAI v. MIS.                     73
      SARKAR BUILDERS [A. K. SIKRI, J.]

period, on a specified size of the plot with residential         A
units of the specified size, it cannot be inferred that the
deduction under Section 8018(10) was allowable to
housing projects having residential units only, because,
restriction on the size ofthe residential unit is with a view
to make available large number of affordable houses to           B
the common man and not with a view to deny commercial
user in residential buildings. In other words, the restriction
under Section 8018(10) regarding the size of the
residential unit would in no way curtail the powers of the
local authority to approve a project with commercial user        c
to the extent permitted under the DC Rules/Regulations.
Therefore, the argument of the Revenue that the restriction
on the size of the residential unit in Section 80IB(10) as
it stood prior to 1.4.2005 is suggestive.of the fact that
                                                                 D
the deduction is restricted to housing projects approved
for residential units only cannot be accepted.

  25. The above conclusion is further fortified by Clause
· (d) to Section 8018(10) inserted with effect from 1.4.2005.
 Clause (d) to Section 8018(10) inserted w.e.f. 1.4.2005         E
  provides that even though shops and commercial
  establishments are included in the housing project,
 deduction under Section 8018(10) with effect from
  1.4.2005 would be available where such commercial user
                                                                 F
 does not exceed five per cent of the aggregate built-up
 area of the housing project or two thousand square feet
 whichever is lower. By Finance Act, 2010, clause (d) is
 amended to the effect that the commercial user should
 not exceed three percent of the aggregate built-up area         G
 of the housing project or five thousand square feet
 whichever is higher. The expression 'included' in clause
 (d) makes it amply clear that commercial user is an
 integral part of housing project. Thus, by inserting· clause
 (d) to Section 8018(10) the legislature has made it clear       H
74       SUPREME COURT REPORTS                     [2015] 7 S.C.R.


A    that though the housing projects approved by the local
     authorities with commercial user to the extent permissible
     under the DC Rules/Regulation were entitled to Section
     8018(10) deduction, with effect from 1.4.2005 such
     deduction would be subject to the restriction set out in
8    clause (d) of Section 8018(10). Therefore, the argument
     of the revenue that with effect from 1.4.2005 the
     legislature for the first time allowed Section 8018(10)
     deduction to housing projects having commercial user
     cannot be accepted.
c
          xx                     xx                    xx

      29. Lastly, the argument of the revenue that Section
      8018(10) as amended by inserting clause (d) with effect
D     from 1.4.2005 should be applied retrospectively is also
      without any merit, because, firstly, clause (d) specifically
      inserted with effect from 1.4.2005, and therefore, that
      clause cannot be applied forthe period prior to 1.4.2005.
      Secondly, clause (d) seeks to deny Section 8018(10)
E     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 1.4.2005 cannot be applied
F     retrospectively. Thirdly, it is not open to the revenue to
     contend on the one hand that Section 8018(10) as stood
      prior to 1.4.2005 did not permit commercial user in
     housing projects and on the other hand contend that the
     restriction on commercial user introduced with effect from
G     1.4.2005 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
     8018(10) with effect from 1.4.2005 is prospective and
H
   COMMISSIONER OF INCOME TAX-19 MUMBAI v. MIS.               75
         SARKAR BUILDERS [A. K. SIKRI, J.]

   not retrospective and hence cannot be applied to the        A
   period prior to 1.4.2005."

             12) The issues dealt with from paras 21 to 25 by the
   High Court already stands approved by this Court. In para 29,
  the High Court has held that clause (d) has prospective B
  operation, viz., with effect from 01.04.2005, and.this legal
  position is not disputed by the Revenue before us. What follows
  from the above is that prior to 01. 04.2005, these developers/
  assessees who had got their projects sanctioned from the local
  authorities as 'housing projects', even with commercial user, C
  though limited to the extent permitted under the DC Rules, were
  convinced that they would be getting the benefit of 100%
 deduction of their income from such projects under Section
  801 B of the Act. Their projects were sanctioned much before
 01.04.2005. As per the permissible commercial user on which D
 the project was sanctioned, they started the projects and the
 date of commencing such projects is also before 01.04.2005.
All these assessees were made known of the provision by
which these projects are to be completed as those dates have
 been specified from time to time by successive Finance Acts E
 in the same provision Section 80IB. In these cases, completion
dates were after 01.04.2005. Once they arrange their affairs
in this manner, the Revenue cannot deny the benefit of this
section applying the principle of retroactivity even when the F
provision has no retrospectivity. Take for example, a case
where under the extant DC Rules, for shops and commercial
activity construction permitted was, say, 10% and the project
was also sanctioned allowing a particular assessee to construct
10% of the area for commercial purposes. The said developer G
started with its project much prior to 01.04.2005 with the
aforesaid permissible use and the construction was at a very
advanced stage as on 01.04.2005. Can it be ar9ued by that
Revenue that he is to demolish the extra coverage meant for
commercial purpose and bring the same within the limits H
76        SUPREME COURT REPORTS                   [2015) 7 S.C.R.


A prescribed by the new provision if he wanted to avail the benefit
  of deduction under Section 8018( 10) of the Act, only because
  of the reason that the project was not complete as on
  01.04.2005? As in such a case he filed his return for an
  assessment year after 01.04.2005 and for the purpose of
B assessment of the said return, law prevailing as on that date
  would be applicable? Answer has to be in the negative on the
  principle that with the aforesaid planning as per the law
  prevailing prior to 01.04.2005, these assessees acted and
  acquired vested right thereby which cannot be taken away. It
C is ludicrous or. the part of the Revenue authorities to expect
  the assessees to do something which is almost impossible

           13) In Mis. Reliance Jute and Industries Ltd. v. C./. T.,
  West Bengal, Calcutta6 , this Court had, no doubt, pointed
D out the cardinal principle of tax law that the law to be applied
  has to be the law in force in the assessment year. However,
  this is qualified by the exception when it is provided otherwise
  expressly or by necessary implication, as is clear from the
  following observations:
E
       "6. The assessee claims a vested right under Section
       24(2)(iii), as it stood before its amendment in 1957, to
       have the unabsorbed loss of 1950-51 carried forward
       from year to year until the loss is completely absorbed.
F      The claim is based on a misconception of the
       fundamental basis underlying every income tax
       assessment. It is a cardinal principle of the tax law that
       the law to be applied i.s that in force in the assessment
       year unless otherwise provided expressly or by
G      necessary implication..."

            14)     In the same paragraph, the Court also remarked
  that 'a right claimed by an assessee under the law in force in a
  particular assessment year is ordinarily available only in
H 6 (1980) 1 sec 13959
  COMMISSIONER OF INCOME TAX -19 MUMBAI v. M/S.                   77
        SARKAR BUILDERS [AK. SIKRI, J.]

relation to a proceeding pertaining to that year'. Thus, it clearly A
follows that though normally the law which is in force in the
assessment year would prevail, but this is not an absoluta
principle as the Court itself carved out i:lxceptions thereto by
making it clear that such exception can be either express or
implied by necessary implication. Even the principle which is B
mentioned is qualified with the words 'ordinarily available'.

         15) On examining the scheme of sub-section (1) of
 Section 801B of the Act, its historical turn around by
 amendments from time to time and keeping in view of the real C
 purpose behind such a provision, we are of the view that in the
 peculiar scenario as projected in this provision, the aforesaid
 cardinal principle of tax law is not to be applied as, by
 necessary implication, application thereof stands excluded.
We have already narrated the essence of this provision. For D
the purpose of discussing this particular issue, it is required to
be noted that with effect from 01.04.2001, Section 801B(10)
stipulated that any housing project approved by the local
authority before 31.03.2001 was entitled to a deduction of 100
per cent of the profits derived in any previous year relevant to E
any assessment year from such housing project, provided - (i) ·
the construction/development of the said housing project
commenced on or after 1.10.1998 and was completed before
31.03.2003; (ii) the housing project was on a si:re of a plot of F
land which had a minimum area of one acre; and (iii) each
individual residential unit had a maximum built-up area of 1000
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 1500 sq.ft. at G
any other place. Therefore, for the first time, a stipulation was
added with reference to the date of approval, namely, that
approval had to be accorded to the housing project by the local
authority before 31.03.2001. Before this amendment there
was no date prescribed for the approval being granted by the H
78        SUPREME COURT REPORTS                    [2015] 7 S.C.R.


A local authority to the housing project. Prior to this amendment,
  as long as the developmenUconstruction commenced on or
  after 1.10.1998 and was completed before 31.03.2001, the
  assessee was entitled to the deduction. Also by this
  amendment, the date of completion was changed from
B 31.03.2001 to 31.03.2003. Everything else remained
  untouched. Thereafter, by Finance Act, 2003, further
  amendments were made to Section 8018(10), which read as
  under:

C     "(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
D     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;
E
      (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
F
      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."
G        16) As can be seen from the aforesaid provision, now
  the only changes that were.brought about were that with effect
  from 1.4.2002: (i) the housing project had to be approved
  before 31.03.2005; and (ii) there was no time limit prescribed
H for completion of the said project. Though these changes were
  COMMISSIONER OF INCOME TAX -19 MUMBAI v. M/S.                     79
        SARKAR BUILDERS [A. K. SIKRI, J.]

brought about by the Finance Act, 2003, the Legislature thQ~ght A
it fit that these changes be deemed to have been brought into
effect.from 1.4.2002. All the remaining provisions of Section
801B(10) remained unchanged .
                                   .r. -.
        17) Thereafter, significant amendment, with which we B
are directly concerned, was carrie9_put by Finance (No.2) Act,
2004 with effectfrom 1.4.2005. This amendment has already
been noted above. The Legislature made substantial changes
in sub-section (10). Several new conditions were incorporated
for the first time, including the condition mentioned in clause C
(d). This condition/restriction was not on the statute book
earlier when all these projects were sanctioned. Another
important amendment was made by this Act to sub-section
(14) of Section 801B with effect from 1.4.2005 and for the first
time under clause (a) thereof the words 'built-up area' were D
defined. Section 801B(14)(a) reads as under:

   "(14) For the purposes of this section-

   (a) "built-up area" means the inner measurements of the          E
   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;"
                                                                    F
                                                             .
        18) Prior to insertion of Section 801B(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 G
residential units far bigger than as stipulated in Section
801B(10), and yet claimed th'eC)aeduction under the said
provision. To plug this lacuna, clause (a) was inserted in
Section 801B(14) defining the words "built-up area" to mean
the inner measurements of the residential unit at the floor level, H
80          SUPREME COURT REPORTS                    [2015) 7 S.C.R.


A 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.

           19) Can it be said that in order to avail the benefit in the
B assessment years after 1.4.2005, balconies should be
  removed though these were permitted earlier? Holding so
  would lead to absurd results as one cannot expect an assessee
  to comply with a condition that was not a part of the statute
  when the housing project was approved. We, thus, find that
C the only way to resolve the issue would be to hold that clause
  (d) is to be treated as inextricably linked with the approval and
  construction of the housing project and an assessee cannot
  be called upon to comply with the said condition when it was
  not in contemplation either of the assessee or even the
D Legislature, when the housing project was accorded approval
  by the local authorities.

            20) Having regard to the above, let us take note of the
     special features which appear in these cases:
E
     (a)   In the present case, the approval of the housing project,
            its scope, definition and conditions, all are decided and
            dependent by the provisions of the relevant DC Rules.
            In contrast, the judgment in Mis. Reliance Jute and
F           Industries Ltd. was concerned with income tax only.

  (b) , The position of law and the rights accrued prior to
        enactment of Finance Act, 2004 have to be taken into
        account, particularly when the positiun becomes
G       irreversible.

     (c)   The provisions of Section 8018(10) mention not only a
            particular date before which such a housing project is
            to be approved by the local authority, even a date by
            which the housing project is to be completed, is fixed.
H
            These dates have a specific purpose which gives time
      COMMISSIONER OF INCOME TAX-19 MUMBAI v. M/S.                    81
            SARKAR BUILDERS [A. K. SIKRI, J.]

          to the developers to arrange their affairs in such a A
          manner that the housing project is started and finished
          within those stipulated dates. This planning, in the
          context of facts in these appeals, had to be much before
          01.04.2005.
                                                                     B
(d)       The basic objective behi!ld Section 801B(10) is to
         encourage developers to undertake housing projects
         for weaker section of the society, inasmuch as to qualify
         for deduction under this provision, it is an essential
         condition that the residential unit be constructed on a c
         maximum built up area of 1000 sq.ft. where such
         residential unit is situated within the cities of Delhi and
         Mumbai or within 25 kms. from the municipal limits of
         these cities and 1500 sq.ft. at any other place.
                                                                     D
(e)        It is the cardinal principle of interpretation that a
         construction resulting in unreasonably harsh and absurd
         results must be avoided.

(f)       Clause (d) makes it clear that a housing project includes   E
         shops and commercial establishments also. But from
        the day the said provision was inserted, they wanted to
         limit the built up area of shops and establishments to
         5% of the aggregate built up area or 2000 sq.ft.,
        whichever is less. However, the Legislature itself felt       F
        that this much commercial space would not meet the
        requirements of the residents. Therefore, in the year
        2010, the Parliament has further amended this provision
        by providing that it should not exceed 3% of the
        aggregate built up area of the housing project or 5000        G
        sq.ft., whichever is higher. This is a significant
                                 .......1 .. J~

        modification making complete departure from the earlier
        yardstick. On the one hl:lnd. the permissible built up
        area of the shops and other commercial shops is
        increased from 2000 sq.ft. to 5000 sq.ft. On the other        H
82            SUPREME COURT REPORTS                    [2015] 7 S.C.R.


A             hand, though the aggregate built up area for such shops
              and establishment is reduced from 5% to 3%, what is
              significant is that it permits the builders to have 5000
              sq.ft. or 3% of the aggregate built up area, 'whichever
              is higher'.. In contrast, the provision earlier was 5% or
B             2000 sq.ft., 'whichever is less'.
                                  -
     (g)       From this provision, therefor, it is clear that the housing
              project contemplated under sub-section (10) of Section
              8018 includes commercial establishments or shops also.
c             Now, by way of an amendment in the form of Clause
              (d), an attempt is made to restrict the size of the said
              shops and/or commercial establishments. Therefore,
              by necessary implication, the said provision has to be
              read prospectively and not retrospectively. As is clear
D             from the amendment, this provision came into effect only
              from the day the provision was substituted. Therefore,
              it cannot be applied to those projects which were
              sanctioned and commenced prior to 01.04.2005 and
              completed by the stipulated date, though such stipulated
E             date is after 01.04.2005.

          21) These aspects are dealt with by various High Courts
  elaborately and convincingly in their judgments. It is not
  necessary to go into the detailed reasoning given by these
F High Courts. However, we would like to extract the following
  discussion from the judgmentaated 25.07.2014 of the Bombay
  High__ ~ourt in ITA Nos. 201 ard 308 of 2012, where this very
  aspect is answered in the following manner:

G          "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
H          set out in section 80-18(10) as it stood prior to 1stApril,
COMMISSIONER OF INCOME TAX-19 MUMBAI v. M/S.                   83
      SARKAR BUILDERS [A. K. SIKRI, J.]

 2005. If we were to accept the argument of the Revenue,       A
 then in that event, despite having completed the entire
 construction prior to 1stApril, 2095 and complying with
 all the conditions of section 80-IB(10) as it stood then,
 the Assessee would be disentitl~d1o the entire deduction
 claimed in respect of such housing project merely             B
 because he offered his profits to tax in theA.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-       c
 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
                                                               D
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) is
prospective in nature and can have no application to a
housing project that is approved before 31st March,            E
2005. As the deduction sought to be claimed under
section 80-18(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      F
were offered to tax after 1stApri, 2005 i.e. inA.Y. 2005-
06 or thereafter. We therefore find no substance in the
argument of the Revenue that notwithstanding the fact
thatthe housing project was approved prior to 31st March
2005, if the construction was completed on or after 1st        G
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 provisiqlJS of clause (d of section
80-18( 10). To our mind, we do notthink that the condition/
restriction laid down in clause (d) of section 80-18(10)       H
84             SUPREME COURT REPORTS                   [2015] 7 S.C.R.


A         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 80-18(10), the Assessee is
          required to comply with such a condition only if it is on
8         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 80-18( 10) is inextricably finked to the date
c         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 inseparably
          finked to the date of approval of the housing project,
D
          different considerations would arise. However, we are
          not called upon to decide any such condition and hence
          we are not faying down any general proposition of law,
          save and except that clause (d) of section 80-18(10),
E         being a condition linked to the date of the approval of the
           housing project, WO'.Jfd not apply to any housing project
          that was approved prior to 31st March, 200!.> irrespective
          of the fact that the profits of the said housing project are
           brought to tax after the said provision was brought into
F          force."
           22) At this juncture, we would like to quote the following
     passage from Commissioner of Income Tax, U.P. v. Mis.
     Shah Sadiq and Sons7 :
G          "14. Under the Income Tax Act of 1922, the assessee
           was entitled to carryforward the losses of the speculation
           business and set off such losses against profits made
           from that business in future years. The right of carrying
H    7
         (1987) 3   sec 516
  COMMISSIONER OF INCOME TAX -19 MUMBAI v. MIS.                     85
        SARKAR BUILDERS [A. K. SIKRI, J.]

   forward and set off accrued to the assesee under the Act         A
   of 1922. A right which had accrued and had become
   vested continued to be capable of being enforced
   notwithstanding the repeal of the statute under which that
   right accrued unless the repealing statute took away such
   right expressly or by necessary implication. This is the         B
   effect of Section 6 of the General Clauses Act, 1897.

    15. In this case the 'savings' provision in the repealing
    statute is not exhaustive of the rights which are saved or
    which survive the repeal of the statute under which such        c
    rights had accrued. In other words, whatever rights are
    expressly saved by the 'savings' provision stand saved.
    But, that does not mean that rights which are not saved
    by the 'savings' provision are extinguished or stand ipso
   facto terminated by the mere fact that a new statute             D
    repealing the old statute is enacted. Rights which have
   accrued are saved unless they are taken away expressly.
   This is the principle behind Section 6(c) of the General
   Clauses Act, 1897. The right to carry forward losses
   which had accrued under the repealed Income Tax Act of           E
    1922 is not saved expressly by Section 297 of the Income
   Tax Act, 1961. But, it is not necessary to save a right
   expressly in order to keep it alive after the repeal of the
   old Act of 192.2. Section 6(2) saves accrued rights unless
                                                                    F·
   they are taken away by the repealing statute. We do not
   find any such taking away of the rights by Section 297
   either expressly or by implication."

        23) The aforesaid discussion persuades us to conclude
that the judgments of the High Courts, which are impugned in G
these appeals, take correct view that the assesees were
entitled to the benefit of Section 801B(10). As a result, these
appeals fail and are hereby dismissed.

Devika Gujral                                  Appeals dismissed.   H