INCOME TAX ACT, 1961

Section 80-IB

Deduction under section 80-IB - Proportionate deduction u/s.80IB(10) in respect of project of 'Sapphire Park' - -

The issue arose for consideration as to whether proportionate deduction under section 80IB (10) in respect of project of 'Sapphire Park' would be allowed to the assessee. It was the contention of revenue that within the scheme of the provision, i.e., section 80IB (10), section is to grant deduction for the housing project as a whole whereas, per contra, it was the contention of the assessee that proportionate deduction under section 80-IB (10) should be allowed as it is well within the scheme of the provision under the Act which was also upheld by various Judicial Forums.Held: It was agreed by CIT(A) that in respect of some units, the built up area exceeds 1500 square feet on account of terrace garden as discussed in his findings. However, AO was directed to allow proportionate deduction under section 80-IB (10) in respect of 'Sapphire Park' project after excluding the units where built up area exceeds 1500 square feet on account of terrace garden. It was also the settled position of law that principle of proportionality shall not be excluded while determining allowability of deduction under section 80IB (10) (c). Thus, deduction was allowed to assessee.

Followed:Devashri Nirman LLP., Devashri Nirman Ltd. v. Asstt. CIT (2021) 124 Taxmann.com 125 ( Bom-HC) : 2020 TaxPub(DT) 5048 (Bom-HC), Rohan Homes v. Asstt. CIT [ITA No. 423/PN/2011, dt. 31-1-2013] and Ankit Enterprises v. ITO, Ward-2, (2), Pune & Dy. CIT [ITA No. 156/PN/2011, ITA No. 172/PN/2011, dt. 23-11-2012].

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2010-11 & 2011-12

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