CBDT clarification regarding deduction u/s.80IB(10) in respect of undertakings developing housing projects : Instruction No. 4/2009, dated 30-6-2009 (reproduced)

U/ss.(10) of S. 80-IB an undertaking developing and
building housing projects is allowed a deduction of 100% of its profits
derived from such projects if it commenced the project on or after 1-10-1998
and completes the construction within four years from the financial year in
which the housing project is approved by the local authority.

2. Clarifications have been sought by various CCsIT on the
issue whether the deduction u/s.80-IB(10) would be available on a year-to-year
basis where an assessee is showing profit on partial completion or if it would
be available only in the year of completion of the project u/s.80-IB(10).

3. The above issue has been considered by the Board and it
is clarified as under :

(a) The deduction can be claimed on a year-to-year basis
where the assessee is showing profit from partial completion of the project
in every year.

(b) In case it is late, and it is found that the
condition of completing the project within the specified time limit of 4
years as started in S. 80-IB(10) has not been satisfied, the deduction
granted to the assessee in the earlier years should be withdrawn.

 

4. The above Instruction will override earlier
clarification on this issue contained in Member (R)’s D.O. letter No.
58/Misc./2008/CIT(IT&CT), dated 29-4-2008 and Member (IT)’s D.O. letter No.
279/Misc./46/08-ITJ, dated 2-5-2008.

5. This may kindly be brought to the notice of the all
Assessing Officers in your charge.

F.No.178/32/2009-ITA.I (Raman Chopra)

Director (ITA-I)