Income Tax Deduction u/s 80IB(10) applicable to Commercial Establishments/Shops: ITAT follows SC Ruling [Read Order]

The Income Tax Appellate Tribunal (ITAT), Chennai bench, while following the Apex Court ruling in the case of Sarkar Builders, held that the deduction under section 80IB(10) of the Income Tax Act, 1961 is applicable to commercial establishments or shops.

The assessee, M/s. Macro Marvel Projects Limited, originally claimed the deduction of Rs. 28,32,048/- under section 80IB(10) of the Act in respect of its project named Marvel Apoorva and Wood Creek Country. Subsequently, the assessee revised its return of income on 03.02.2006, restricting its claim of deduction in the project Marvel Apoorva only. The assessee in the revised statement of income claimed deduction of Rs. 68,79,782/- u/s. 80IB(10) of the Act in respect to projectMarvel Apoorva resulting thereby a net loss of Rs. 35,78,307/-.

After hearing arguments from both sides, Shri Mahavir Singh, Vice President and Shri Manoj Kumar Aggarwal, Accountant Member has observed that “As the issue is squarely covered, we find that the Supreme Court has gone a step further while interpreting the provisions of section 80IB(10) of the Act, which made it clear that the housing project contemplates under this section includes commercial establishments or shops also. It was further clarified that by way of amendment in the form of Clause (d), an attempt is made to restrict the size of the said shops and/ or commercial establishments. Therefore, the Supreme Court, by necessary implication noted that the provision has to be read prospectively and not retrospectively. Accordingly, in view of the decision of the Supreme Court in the case of Sarkar Builders (supra), we allow the appeal of the assessee.”

Shri G. Baskar, Advocate appeared for the assessee.

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