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2013 (9) TMI 115 - AT - Income TaxDeduction u/s 80IB - Deduction allowed on pro-rata basis - Held that:- The appellant’s claim is supported by the decision of Hon’ble Mumbai ITAT in case of M/s. Saroj Sales Organisation [2008 (1) TMI 420 - ITAT BOMBAY-E], wherein on identical facts the Hon’ble ITAT following the Hon'ble Supreme Court decision in the case of Bajaj Tempo Ltd. reported in [1992 (4) TMI 4 - SUPREME Court] has observed that the provisions should be interpreted liberally. even if the units constructed are both smaller and larger units with reference to the stipulated area, the profit derived from the construction of the smaller units i.e., within the stipulated area of 1,000 sq.ft. built-up area ought to be allowed as deduction under section 80IB(10) of the Act. The theory of pro-rata deduction is approved and held the deduction under section 80IB on pro-rata basis meets the objectives of the provisions of section 80IB. The Hon’ble ITAT Bangalore Bench in the case of DCIT v/s Brigade Enterprises Pvt. Ltd. [2008 (8) TMI 453 - ITAT BANGALORE-A] has held that the disallowance if any will have to be restricted to the extent of noncompliance of the provisions. This rule of proportionately is well founded in the income tax law and is recognized under various provisions of the Act. The Hon’ble ITAT Chennai in the case of Arun Excello Foundation Pvt. Ltd. v/s ACIT (2007 (2) TMI 264 - ITAT MADRAS-A) has also upheld the pro-rata deduction on eligible residential units. Thus, respectfully following the above judgments of the various ITAT and Courts and particularly the jurisdictional ITAT in the case of Saroj Sales Organisation (supra), Assessee is entitled for deduction under section 80IB on pro-rata basis. The A.O. is therefore, directed to allow the deduction under section 80IB(10) on pro-rata basis as discussed above - Decided against Revenue.
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