Section 80CC deduction covered shares bought from promoters' quota where statutory conditions were satisfied

Section 80CC was interpreted to extend beyond subscriptions in the public issue portion and to include shares acquired from a promoters' reserved quota, where the statutory conditions were otherwise met. The shares had been allotted under the promoters' quota pursuant to consent for the public issue, and the statutory wording was not read as restricting the deduction only to public subscriptions. On that construction, investment in such shares qualified for deduction under section 80CC.

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Issues: Whether deduction under section 80CC of the Income-tax Act, 1961 was allowable in respect of investment in shares purchased from the promoters' quota.

Analysis: The provision was construed to cover subscriptions made pursuant to an offer to the public as well as subscriptions made under a reservation or option in favour of a promoter. The shares in question were reserved under the promoters' quota and were issued pursuant to the consent granted for the public issue. The statutory language did not restrict the deduction only to shares taken in the public portion of the issue.

Conclusion: Deduction under section 80CC was allowable to the assessee for investment in shares purchased from the promoters' quota.

Ratio Decidendi: Section 80CC allowed the deduction not only for subscriptions to public issue shares but also for shares subscribed from the promoters' reserved quota where the statutory conditions were satisfied.

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