Pro-rata deduction of profits and gains from business of an industrial undertaking under section 80-IB: When all conditions are not fulfilled
- The Assessee filed return declaring an income of Rs.98.15 Crs. The return was processed under Section 143(1) of the Act. However, the Assessee filed a revised return of income, in which the income returned was reduced from Rs.98.15 Crs to Rs.49.96 Crs. In the revised return, the Assessee claimed deduction under Section 80-IB(10) of the Act to the extent of Rs.61.60 Crs as against deduction of Rs.11.19 Crs which was claimed earlier.
- The case was selected for scrutiny and notice under Section 143(2) of the Act was issued. The Assessing Officer by an order dated 31.12.2009 held that Section 80-IB(10) of the Act does not permit a claim on proportionate basis, only in respect of units, which were less than 1500 square feet. It was held that the Assessee in almost every block had a housing unit, which was more than 1500 square feet and approval from Bruhat Bangalore Mahanagara Palike (BBMP) was obtained for the entire project and not for individual units.
- Hence, the Assessing Officer concluded that the Assessee had failed to satisfy the conditions, which were sine qua non for claiming deduction under Section 80-IB(10) of the Act.
- It is well settled rule of statutory interpretation that when a situation has been expressed differently, the legislation must be taken to have been tended to express a different intention. On plain reading of clause (c) of Section 80-IB(10) of the Act, it is evident that the same does not exclude the principle of proportionality in any manner.
- Therefore, following the same in the present facts of the case, the proportionate deduction was to be allowed to the Assessee as the Assessee had complied with the requirements contained in clause (c) of Section 80-IB(10) of the Act.