Section 80IB(10) of the Income Tax Act
Income-tax Act, 2025: s.141
Section 80IB(10) falls under section 80IB of the Income-tax Act, 1961, which corresponds to section 141 (Deduction in respect of profits and gains from certain industrial undertakings) of the Income-tax Act, 2025.
Read section 141 of the 2025 Act
Correspondence checked against the ICAI tabular mapping of the two Acts and the BharatTax.co section commentary.
The decision most relied on for Section 80IB(10) is K.C. Builders & Anr. v. ACIT (265 ITR 562), cited in 241 of the 838 judgments on BharatTax that turn on this section.
Leading authorities on Section 80IB(10)
When the addition made in the assessment order, on the basis of which a penalty for concealment under section 271(1)(c) is levied, is subsequently deleted, the penalty has no basis and must be cancelled.
Annual Letting Value (ALV) of unsold stock-in-trade flats/shops held by a real estate developer can be assessed under Section 22 of the Income Tax Act, 1961, as income from house property. This approach was followed by the Assessing Officer (AO) based on this decision.
A developer is entitled to proportionate deduction under Section 80IB(10) for housing projects even if certain conditions, such as unit built-up area limits, are not fully met across all units. Additionally, the conditions introduced by Section 80IB(10)(d) apply prospectively to projects commenced and sanctioned before April 1, 2005.
The Bombay High Court holds that for deduction under Section 80IB(10), the minimum plot area of one acre refers to the aggregate area of the land on which housing projects are developed, not necessarily to each individual project if multiple projects are undertaken on a larger single plot. This means the deduction is allowable even if a sub-block within the overall project is less than one acre, provided the total plot size meets the minimum.
An assessee should not be prejudiced by differences in accounting treatment if accounting principles are duly followed and the issue is revenue neutral, as hypothetical income cannot be subjected to tax.
The mere fact that one block in a housing project has units exceeding the built-up area limit does not disqualify the entire project from claiming deduction under section 80IB(10). Assessees are entitled to proportionate deduction for eligible blocks or units.
Deduction under section 80-IB(10) is available on a proportionate basis for eligible units, even if some units in a project exceed the prescribed area limits. The entire claim should not be rejected due to partial non-compliance.
An assessee can make a claim of deduction for the first time before the appellate authorities.
Expenditure incurred for repairs and renovation of hotel premises, which improves existing business without creating a new asset or advantage of an enduring nature, is treated as revenue expenditure.
An undertaking developing and building housing projects is eligible for deduction under section 80IB(10) if the housing project receives approval, and a separate approval for each distinct housing project within a larger development is not necessarily required.