INCOME TAX ACT, 1961

Section 80-IB

Deduction under section 80-IB - Extension of project or new project - Breach of condition of the units not exceeding specified area - Computation of

Assessee had constructed 4 residential buildings referred to as A1, A2, B1 and B2 for which commencement certificate was issued by the local authority on 19-6-1997. On the same plot of land, undertook the construction of another building. Assessee claimed deduction under section 80-IB(10). Deductions under section 80IB(10) would require the commencement of a housing project after 1-10-1998. Revenue alleged that assessee had breached the condition of each housing unit in such complex not exceeding constructed area of 1000 sq.ft. AO and CIT(A) noted that several units adjacent to each other were allotted to the members of same family and partition walls between two such flats were removed. Two residential units were thus converted into one, thereby breaching the condition of each unit not exceeding constructed area of 1000 sq.ft. Held: Entire approach of the Revenue was erroneous. At the relevant time when the housing project was constructed and residential units were sold, admittedly that was no condition in section 80IB(10) restricting allotment of more than one unit to members of the same family. Assessee, therefore, was free to allot more than one unit to members of the same family. The material on record would suggest that after such units were sold under different agreements, allottees desired that the partition wall between the two units be removed. It was not the case where assessee had, from the beginning, combined two residential units and allotted one such larger unit to one member. Thus, Tribunal was justified in allowing deduction under section 80IB(10) to assessee

REFERRED :

FAVOUR : In assessee's favour

A.Y. :

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