CBDT issued an instruction to clarify the matter as follows:

(Relevant Extract)

3. The above issue has been considered by the Board and it is clarified as under:-

(a) The deduction can be claimed on a year to year basis where the assessee is showing profit from partial completion of the project in every year.

(b) In case it is late, found that the condition of completing the project within the specified time limit of 4 years as started in section 80-IB(10) has not been satisfied, the deduction granted to the assessee in the earlier years is should be withdrawn.

Deduction for housing project developers can be claimed annually; prior claims must be withdrawn if project completion condition is not met. Deduction for undertakings developing building and housing projects is available annually when the assessee shows profit from partial completion each year; if the project fails to meet the prescribed completion timeframe, deductions granted in earlier years must be withdrawn.