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Case Law Details

Case Name : PCIT Vs Kumar Builders Consortium (Bombay High Court)
Appeal Number : Income Tax Appeal No. 82 of 2018
Date of Judgement/Order : 18/07/2022
Related Assessment Year : 2011-12
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PCIT Vs Kumar Builders Consortium (Bombay High Court)

Revenue argued that Section 80IB(10), does not at all envisage a pro rata deduction, in respect of eligible fats. In other words, it is suggested that even if a single flat in a housing project is found to exceed the permissible maximum built-up area of 1500 sq.ft., the assessee would lose its right to claim the benefit of deduction in respect of the entire housing project under Section 80IB(10).

In our opinion, a plain reading of the said section does not support that interpretation at all. Learned Counsel for the appellant would have been perfectly justified, had the legislature in its wisdom, in clause ‘c’ used the words “each residential unit has a maximum built-up area ….”. This would then clearly indicate that the intention was to ensure that each and every residential unit in such a housing project confirms inter alia to the size prescribed with a view to make an assessee eligible for claiming the deduction. However, the words used in clause ‘c’ are as under:

“(c) the residential unit has a maximum built-up area of one thousand square feet where such residential unit is situated within the city of Delhi or Mumbai or within twenty five kilometers from the municipal limits of these cities and one thousand and five hundred square feet at any other place”

It is a well settled principle of interpretation of statutes that when the language of a statute is unambiguous and admits of only one meaning, no question of construction of a statute then arises. Reliance in this regard can be placed on the Apex Court judgment in  Nelson Motis V/s. Union Of India And Another2. It, therefore, becomes clear that clause ‘c’ only qualifies an eligible residential unit and no more and further that if there is such a residential unit, which confirms to the requirement as to size in a housing project, all other conditions being fulfilled, the benefit of deduction cannot be denied in regard to a such residential unit. Section 80IB(10), nowhere even remotely aims to deny the benefit of deduction in regard to a residential unit, which otherwise confirms the requirement of size at the cost of an ineligible residential unit with a built-up area of more than 1500 sq.ft.

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