Tribunal grants deduction under section 80IA(4) for IT park profits, citing legal principles.

The Tribunal allowed the assessee's claim for deduction under section 80IA(4) for profits from IT park activities, citing legal principles and precedents. The Tribunal emphasized that if relief was granted initially, subsequent years' relief cannot be denied, as per judgments in similar cases. The Tribunal found a change of opinion by the Assessing Officer in disallowing the claim for subsequent years, favoring the assessee's entitlement to relief. Consequently, the Tribunal dismissed relevant grounds and partly allowed both appeals of the assessee.

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Issues:
Allowability of claim of deduction u/s.80IA(4) of the Act in respect of eligible profits earned by the assessee from IT park and related activities.

Analysis:
The core issue in this case pertains to the allowability of the claim of deduction u/s.80IA(4) of the Income Tax Act, 1961 concerning the eligible profits earned by the assessee from IT park and related activities. The assessee, a company engaged in Builders and Developers business, filed returns declaring income after claiming deductions u/s.80IA(4)(iii). The Assessing Officer (AO) observed completion of only 7 units as per the PMC certificate, with the remaining units completed later without fresh approval for the delay. The AO denied the claim based on the Industrial Park Scheme 2002 conditions, stating each unit should be allocated to distinct parties. The CIT(A) upheld the AO's decision. The issue was whether the claim was allowable under section 80IA(4) for the relevant years.

The assessee's claim for deduction u/s.80IA(4) was allowed in the A.Y. 2009-10 but disallowed in subsequent years due to completion date discrepancies and lack of approvals. The AO contended only 7 out of 14 units were completed as per the PMC certificate, leading to denial of the claim. The assessee argued that the claim was allowed in the first year and should not be disturbed in subsequent years. Citing the judgment in CIT Vs. Paul Brothers, the assessee emphasized that unless the relief claimed initially was withdrawn, subsequent year's relief cannot be withheld. The Hon'ble High Court observed a clear case of change of opinion in the reassessment proceedings, favoring the assessee's claim.

In light of the legal precedents and judgments, the Tribunal analyzed the applicability of the binding judgment in CIT Vs. Paul Brothers. Referring to similar cases, the Tribunal reiterated that if the relief granted in the first year is not withdrawn, subsequent years' relief cannot be denied. The Tribunal also cited the judgment in the case of CIT Vs. Western Outdoor Interactive Pvt. Ltd., supporting the assessee's entitlement to deduction based on the initial approval. Additionally, the Pune Bench of the Tribunal in M/s. Ygyan Consulting Pvt. Ltd. Vs. DCIT upheld the assessee's claim based on the principle that if the claim was accepted initially, the Revenue cannot question eligibility in subsequent years.

Ultimately, the Tribunal concluded that the assessee was entitled to relief for both years based on legal principles and binding judgments. Considering the relief granted on technicalities, the Tribunal deemed further adjudication on merits as academic. Consequently, the relevant grounds were dismissed, and both appeals of the assessee were partly allowed.

In conclusion, the judgment focused on the allowability of the deduction u/s.80IA(4) for the assessee's profits from IT park activities, emphasizing legal principles and precedents to support the assessee's claim based on initial approvals and relief granted in the first year of the undertaking.

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