Query on Sec 80IB(10) of the IT Act, 1961

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CMA Dipankar Bandyopadhyay (Querist)
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06 November 2008 Case: An Housing Project consisting of majority of flats within 1000 sft / 1500 sft and some exceeding 1000 sft / 1500 sft, which fulfills all other conditions as stated u/s 80IB(10) of the Income Tax Act, 1961. The cost incurred and profit earned for the flats within 1000 sft / 1500 sft and for flats exceeding 1000 sft / 1500 sft are clearly identified. Form No. 10CCB for flats within 1000 sft / 1500 sft has been certified by Chartered Accountants for tax exemption u/s 80IB(10) on profits earned from sale of flats of 1000 sft / 1500 sft.

Q1. Is tax exemption for this case allowable by the IT Department? If yes, is it on the actual profit or proportinate profit for the flats within 1000 sft / 1500 sft?

Q2. Is there any Departmental Clarification or Juducial Pronouncement regarding allowability or disallowability of profit for the flats within 1000 sft / 1500 sft, in this case?

Please help.

CA.ViVeK M ACA

CA.ViVeK M ACA (Expert)
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13 November 2008 Excemption shall be limited to the profit from 1000sqft/1500sqft.Excemption shall not available for the profit of the house project exceeding the floor area exceeding the specified limit as it is one of the specified condition for claiming excemption.Excemption shall be on actual profit and not proportionate basis.Profit from 1000sqft and 1500sqft is allowable as a deduction and those exceeding the limit shall be dis allowed.

CA.ViVeK M ACA

CA.ViVeK M ACA (Expert)
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