The Tax Publishers2020 TaxPub(DT) 4300 (Karn-HC)

INCOME TAX ACT, 1961

Section 80-IB

Clause (c) of section 80-IB(10) does not exclude the principle of proportionality in any manner, therefore, the Tribunal was right in law in holding that assessee-company would be entitled to claim deduction under section 80-IB on proportionate basis in respect of profits derived from sale of residential units, wherein the built up area was below 1500 square feet.

Deduction under section 80-IB - Allowability - Proportionate deduction in respect of residential units having built-up area of less than 1500 square feet -

Issue under consideration was whether Tribunal was right in law in holding that assessee-company would be entitled to claim deduction under section 80-IB on proportionate basis in respect of profits derived from sale of residential units, wherein the built up area was below 1500 square feet, without appreciating the fact that the deduction under section 80-IB(10) is project based rather than unit and there is no concept of proportionate deduction under section 80-IB(10). Held: On plain reading of clause (c) of section 80-IB(10), it becomes evident that same does not exclude the principle of proportionality in any manner, therefore, the Tribunal was right in law in holding that assessee-company would be entitled to claim deduction under section 80-IB on proportionate basis in respect of profits derived from sale of residential units, wherein the built-up area was below 1500 square feet.

REFERRED : CIT v. M/s. Brigade Enterprises Ltd. [I.T.A. NO. 54 OF 2013, dt. 22-9-2020].

FAVOUR : In assessee's favour

A.Y. :



IN THE KARNATAKA HIGH COURT

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