TaxTMI 
TaxTMI 
2010 (10) TMI 684
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....06 and Rs. 25 lakhs for the assessment year 2006-07 over and above its income as per books. In the computation of income the assessee company claimed an amount of Rs. 25,68,56,265 as deduction under section 80-IA of the Act. The assessee company received rental income of Rs. 1,69,19,546 from M/s. Tata Consultancy Services which is located in the industrial park. The company also received Rs. 69,08,40,000 on the sale of software units in the e-park. The net income from these two sources worked out to Rs. 25,68,56,265 which was claimed as deduction under section 80-IA of the Act. According to the Assessing Officer, the assessee had not fulfilled the conditions mentioned in the industrial park scheme as per the approval letter issued by the Ministry. According to him, the deduction under section 80-IA is available only after 4 Units had been located and set up in the industrial unit. However, as on 31-3-2006, only one unit i.e., Tata Consultancy Services is set up and working. Accordingly, the deduction under section 80-IA was denied. On appeal CIT(A) confirmed the order of the Assessing Officer. Against this the assessee is in appeal before us. 4. The learned AR submitted that the a....
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....IA(4) (iii) laid down the condition for 'developing' to grant exemption. As per this the meaning of word 'locate' refers to prepare, develop the unit independently to able to commence the business by other. It does not speak about utilization. Once it is developed or kept ready the assessee is entitled for deduction under section 80-IA. The actual operation or commencement is not required. When there is a specific Notification by Government of India which was not at all withdrawn, though there is specific clause for withdrawal as per clause 8, the assessee is entitled for deduction since there is no withdrawal by Government of India. He submitted that the section 80-IA(4)(iii) to be read along with the notification. Further he relied on the judgment of Gujarat High Court in the case of Gujarat JHM Hotels Ltd. v. Director General of Income-tax (Exemption) [2008] 305 ITR 386 wherein it was held that a bare perusal of the document furnished by the assessee vis-a-vis section 80-IA(4)(iii) of the Act and rule 18BBC made it clear that a petitioner had fulfilled all the necessary condition for the grant of approval. The authority had only considered that the assessee did not fulfil the pi....
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....e interpreted liberally. For the same proposition he relied on the following judgments : 1. Broach Distt. Co-operative Cotton Sales, Ginning & Pressing Society Ltd. v. CIT [1989] 177 ITR 418 (SC) 2. CBDT v. Aditya V. Birla [1988] 170 ITR 137 (SC). 5. The learned DR submitted that the Government of India (CBDT) issued a Notification cited supra granting the benefit of deduction under section 80-IA on 21-8-2006 which is after the assessment year 2006-07. In the assessment year under consideration, there is no valid notification granting the benefit under section 80-IA. According to him, the CBDT Notification is not an empty formality, it is a mandatory requirement. The benefit will be available to the assessee under section 80-IA only after the date of notification and not before the date of notification. According to him, we cannot take liberty that the benefit of under section 80-IA can be made available to the assessee before the date of notification. It cannot be presumed that the notification will have effect before it has been issued. According to DR, as per Notification, the benefits under section 80-IA will be available to the assessee only after the proposed Number of Ind....
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....drew our attention to the dictionary meaning of word 'locate' and according to the Chambers Dictionary 1995 he explained meaning of word 'locate' as follows : "Locate : to place (often passive) to set a particular position, situate, to designate or find the position of, to find or pin point (orig N Am) to establish oneself in residence or business in an area. Adj. locatable or locate able : location the act of locating, or process of being located; a farm (Austr); in South Africa, under apartheid, any of the townships or other areas in which the black or Coloured population were obliged to live; position, site; site for filming outside the studio (cinema), a leaning on rent (law), a position in a memory which can hold a unit of information (comput); adj. locative : relating to location, denoting a case representing 'place where' (gram) - n the locative case, a word in the locative case - on location outside the studio (of filming or sound recording) (L locare to place)." 5.1According to him, each floor cannot be considered as an unit. He submitted strict interpretation of provisions to be done and the reliance by learned AR on various case law is misplaced and these judgments wer....
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....ame of giving effect to the supposed underlying object. After all, the underlying object of any provision has to be gathered on reasonable interpretation of language employed by the Legislature. The court only interprets the law and cannot legislate. If a provision of law is misused and subjected to the abuse of the process of law, it is for the Legislature to amend, modify or repeal it, if deemed necessary. Legislative casus omissus cannot be supplied by judicial interpretative process. 3. IPCA Laboratories Ltd. v. Dy. CIT [2004] 266 ITR 521(SC) wherein it was held that even though a liberal interpretation has to be given to incentive provisions, the interpretation has to be as per the wording of this section. If the wordings of the section are clear, then benefits, which are not available under this section, cannot be conferred by ignoring or misinterpreting words in the section. 6. We have heard both the parties and perused the material available on records and also carefully gone through all the case law cited by the rival parties. The Industrial Park Scheme, 2002 was framed by the Government of India, Ministry of Commerce and Industry vide notification dated 1-4-2002. This ....
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....owing parties as follows : (i) On 25-3-2005 entered into agreement with M/s. Tata Consultancy Services leasing 103600 sq.ft. E-Park, bearing Plot No. 1, Jubilee Gardens, Kondapur, Cyberabad, Hyderabad. Under this agreement, the assessee leased ground floor, 1st floor, 2nd floor, 3rd floor and 4th floor along with facilities, amenities, furniture and fixtures and other infrastructures including parking space provided. The ground and 1st floor was to be handed over on or before 15th May, 2005. The remaining floors i.e., 2nd, 3rd and 4th floors were to be handed over before 15th September, 2005. (ii) On 23-12-2005 entered into Agreement with Excellence Data Research Pvt. Ltd., leasing 23,200 sq.ft. in 12th floor of E-Park, bearing plot No. 1, Jubilees Gardens, Kondapur, Cyberabad, Hyderabad. (iii) On 22-2-2006 executed the Sale Deed in favour of Vijay Infotech selling 1,81,800 sq. ft. in E-Park consisting of 1st to 6th floors and 12th floor along with proportionate car parking. (iv) On 29-8-2006 entered into agreement with DMV Business & Market Research Pvt. Ltd., leasing 23,200 sq.ft. in 11th floor of E-Park, bearing Plot No. 1, Jubilees Gardens, Kondapur, Cyberabad, H....
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....rd "locate" refers to fix or to establish in a position, situation or locality, place etc. The assessee has completed the construction of all the units and the entire infrastructure was ready. All the units were made 'located' by the assessee at the Industrial Park. As seen from the facts narrated above, the entire infrastructure was ready by February 2006. The entire area already used by the end of the year except an area of 23,200 sq.ft. which has been given on lease on 29-8-2006. It is the fact that the said area of 23,200 sq.ft. was made ready in all respect. The assessee actually had made ready the required number of industrial units by providing the entire infrastructure required for the purpose of establishing the industrial units. In our opinion, the assessee made kept ready the industrial units though one unit did not operate in the assessment year. It is also seen that the assessee has spent entire cost of project in the year under consideration. Though it was mentioned in the approval, the proposed total investment of Rs. 75 crores and investment on built up space for industrial use at Rs. 32 crores and investment in infrastructure development including investment on bui....
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....of the earlier year cannot be applied to the assessment year under consideration. Further, as discussed earlier the word 'locate' does not mean functioning of the units. The argument of the DR is that statutory provision must be read strictly as per literal meaning, but we do not think such a construction can be accepted. It ignores several vital considerations which must always be borne in mind when we are interpreting a statutory provision. The task of interpretation of a statutory enactment is not a mechanical task. It is more than a mere reading of mathematical formulae because few words possess the precision of mathematical symbols. It is an attempt discover the intent of the Legislature from the language used by it and it must always be remembered that language is at best an imperfect instrument for the expression of human thought and, it would be ideal to expect every statutory provision to be drafted with divine prescience and perfect clarity. It is true that the words used, even in their literal sense are the primary and ordinarily the most reliable source of interpreting meaning of any writing : be it a statute, a contract or anything else. But it is one of the surest ind....
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....sessee's obligation under the scheme completes. The assessee in this case has entered into lease agreement/sale agreement with the parties for leasing or sale of industrial units. The assessee entered these agreements with the parties only after the industrial unit came into existence or kept ready. The parties concerned who have taken the industrial units on lease or sale, if they fail to commence the units, the department cannot find fault with the assessee. In our opinion, as seen from the earlier paras, the assessee has kept ready the 4 industrial units as per the scheme. The argument of the learned DR is that the assessee is not only the developer, it is also operating and maintaining the industrial units and argued that in case of M/s. TCS the assessee is operating and maintaining the unit. We are not able to find out any evidence with regard to this. As seen from the records, the assessee received the rental income from the TCS. It cannot be said that the assessee is operating and maintaining the industrial units. In our opinion, the assessee is entitled for deduction under section 80-IA for this assessment year as a developer. 9. The next ground in this appeal is with rega....