The Tax Publishers2020 TaxPub(DT) 5313 (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 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 or equal to 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 justified in allowing proportionate claim to assessee-company under section 80-IB(10) without appreciating the fact that the assessee built 12 pent houses exceeding 1,500 square feet as a part and parcel of the residential project, thus, violating the basic condition of affordable housing project. 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 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 or equal to 1500 square feet.

REFERRED : CIT v. M/s. Brigade Enterprises Ltd. 2020 TaxPub(DT) 3885 (Karn-HC).

FAVOUR : In assessee's favour

A.Y. : 2006-07



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