Section 80HHBA of Income Tax Act "Deduction in respect of profits and gains from housing projects in certain cases"
80HHBA. (1) Where the gross total income of an assessee
being an Indian company or a person (other than a company)
who is a resident in India includes any profits and gains
derived from the execution of a housing project awarded to
the assessee on the basis of global tender and such project
is aided by the World Bank, there shall, in accordance with
and subject to the provisions of this section, be allowed,
in computing the total income of the assessee, a deduction
from such profits and gains of an amount equal to-
(i) forty per cent thereof for an assessment year beginning
on the 1st day of April, 2001;
(ii) thirty per cent thereof for an assessment year
beginning on the 1st day of April, 2002;
(iii) twenty per cent thereof for an assessment year
beginning on the 1st day of April, 2003;
(iv) ten per cent thereof for an assessment year beginning
on the 1st day of April, 2004,
and no deduction shall be allowed in respect of the
assessment year beginning on the 1st day of April, 2005 and
any subsequent assessment year.
(2) The deductions under this section shall be allowed
only if the following conditions are fulfilled, namely :-
(i) the assessee maintains separate accounts in respect of
the profits and gains derived from the business of the
execution of the housing project undertaken by him and,
where the assessee is a person other than an Indian company
or a co-operative society, such accounts have been audited
by an accountant as defined in the Explanation below
sub-section (2) of section 288 and the assessee furnishes
along with his return of income the report of such audit in
the prescribed form duly signed and verified by such
accountant;
(ii) an amount equal to such percentage of the profits and
gains as is referred to in sub-section (1) in relation to
the relevant assessment year is debited to the profit and
loss account of the previous year in respect of which the
deduction under this section is to be allowed and credited
to a reserve account (to be called the Housing Projects
Reserve Account) to be utilised by the assessee during a
period of five years next following for the purposes of his
business other than for distribution by way of dividends or
profit :
Provided that where the amount credited by the assessee to
the Housing Projects Reserve Account in pursuance of clause
(ii) is less than such percentage of the profits and gains
as is referred to in sub-section (1) in relation to the
relevant assessment year, the deduction under this section
shall be limited to the amount so credited in pursuance of
clause (ii).
(3) If at any time before the expiry of five years from the
end of the previous year in which the deduction under
sub-section (1) is allowed, the assessee utilises the amount
credited to the Housing Projects Reserve Account for
distribution by way of dividends or profit or for any other
purpose which is not a purpose of the business of the
assessee, the deduction originally allowed under sub-section
(1) shall be deemed to have been wrongly allowed and the
Assessing Officer may, notwithstanding anything contained in
this Act, recompute the total income of the assessee for the
relevant previous year and make necessary amendment and the
provision of section 154 shall, so far as may be, apply
thereto, the period of four years specified in sub-section
(7) of that section being reckoned from the end of the
previous year in which the money was so utilised.
(4) Notwithstanding anything contained in any other
provision of this Chapter under heading "C.-Deduction in
respect of certain incomes", no part of the income payable
to the assessee for the execution of a housing project under
sub-section (1) shall qualify for deduction for any
assessment year under any other provision.
Explanation.-For the purposes of this section,-
(a) "housing project" means a project for-
(i) the construction of any building, road, bridge or other
structure in any part of India;
(ii) the execution of such other work (of whatever nature)
as may be prescribed;
(b) "World Bank" means the International Bank for
Reconstruction and Development Bank referred to in the
International Monetary Fund and Bank Act, 1945.
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