Partial completion of project Section 80IB

[rambarchha]

AO has disllowed the complete claim as the project was completed around 95% . The same was claimed proportionately. Would welcome judgmetns in this regard to justify the proportionate claims.

[pawansingla]

Clarification regarding deduction under section 80-IB(10) in respect of undertakings developing building and housing projects

Instruction No. 4/2009, dated 30-6-2009



Under sub-section (10) of section 80-IB an undertaking developing and building housing projects is allowed a deduction of 100 per cent 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 under section 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 under section 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, found that the condition of com­pleting the project within the specified time-limit of 4 years as started in section 80-IB(10) has not been satisfied, the deduc­tion granted to the assessee in the earlier years should be withdrawn.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.

[rambarchha]

Any positive judgements in this regard

[JB]

There does not appear any direct judgment, It appears that your query is that your project was 995% complete witin from years from the date of approval. Recently, the date of completion has been extended by way of amendment. You may chech whethere it is applicable in your case.

Completion within prescribed time limit is a mandatory condition for section 80IB. However, in respect of other mandatory condition i.e. less than 1500 Sq. feet of built up area, some tribunals have allowed proportionate deduction. On the same analogy, you can claim proportionate deduction.