TaxTMI 
TaxTMI 
2019 (1) TMI 148
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.... letters have no legal sanctity as these were not issued by the competent authority of Board of Approval but by the Under Secretary and J. S, Ministry of Commerce respectively, who were not competent to issue any such clarification as per provision of sec 8(8) of the SEZ Act. 2. Whether the Ld. CIT(A) has failed to appreciate that Ministry of Commerce could not have issued clarification regarding approval given by BOA and whether such a clarification issued by an authority other than BOA has any legal sanctity or evidentiary value particularly when relevant activities mentioned in the clarification are not mentioned in the approval given by BOA to the assessee or to its co developer, and such a clarification is also in contravention of spirit of SEZ Act. 3. Whether the Ld. CIT(A) is justified in relying upon the clarifications issued by the Ministry of Commerce (SEZ section) without verifying that the same have been issued by the Board of Approval by following proper procedure and also whether CBDT was consulted before issue of such clarifications because it had the effect of diluting the disclaimer clause which was added on behest of CBDT. 4. Whether the Ld. CIT(A) has er....
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....ommerce ignoring the fact that approval given by BOA or Ministry of Commerce was not absolute but subject to condition that the treatment of income arising out of transact on of transfer of bare shells by assessee to co-developer would be decided as per relevant provisions of IT Act. 11. Without prejudice to the above grounds, whether the Ld. CIT(A) has erred in law and on facts of the case in accepting the development consideration received by the assessee as being at market value. The Ld. CIT(A) has erred in summarily accepting rent capitalization method for determining development consideration of bare shells Ignoring the relevant considerations/factors such as other methods of determination of sale consideration, prevalent rate of such type of commercial properties in the area etc. 12. Whether the Ld. CIT(A) has erred in law & on facts in holding capitalization rate of 9% as reasonable ignoring the fact that normal capitalization rate in the area of NCR 'S 12% 13. Whether the Ld CIT(A) has erred in law & on facts in holding that the bare shell buildings transferred to CO-developer was stock in trade as against capital asset. 14. Whether the Ld. CIT(A) has erred ....
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....as assessable under the head 'income from other sources' rather than 'income from house property' and thereby made a disallowance of 30% of the annual value u/s 24(s) of the Act and thereby assessed the total income at Rs. 2,84,69,73,320/- as against the returned income of Rs. 190,46,46,860/-. 3. Assessee carried the matter by way of an appeal before the ld. CIT (A) who has allowed the appeal. Feeling aggrieved, the Revenue has come up before the Tribunal by way of filing the present appeal. 4. We have heard the ld. Authorized Representatives of the parties to the appeal, gone through the documents relied upon and orders passed by the revenue authorities below in the light of the facts and circumstances of the case. GROUNDS NO.1 TO 14 5. Undisputedly, the AO has declined the deduction u/s 80IAB of the Act by following the AYs 2008-09 & 2009-10. It is also not in dispute that the assessee company is entitled for deduction u/s 80IAB for a period of 10 years and it is the third year of claiming deduction. It is also not in dispute that the assessee has claimed deduction u/s 80IAB on the basis of agreement entered into between the assessee company and its co-developer, M/s. DAPL w....
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.... shell by the Co-Developer as 'Authorized Operations' Page 21 para 5.15 Assessee received clarification from BOA/Government of India, Ministry of Commerce and Industry, Deptt of Commerce (SEZ Section), Udyog Bhawan, New Delhi dated 18/1/2011 & 20/1/2011 BOA in exercise of its statutory powers approved business model of the Assessee clarified that under Rule 11(9) 'sale of land' is not permissible in a SEZ. However Co- Developer can take land on lease from Developer for definite period. Further SEZ buildings i.e. bare shell/cold shell can be transferred and handed over to the Co-developer on payment of consideration to Developer, this transfer is permissible and authorized as per SEZ Act and Rules. The correspondence with the SEZ Authorities on this issue is placed on the P.B at Pages 122 to 130 and its contents are referred to by the ld. Counsel. Thus as per specific clarifications by BOA the transfer of bare shell building on long term lease to approved codeveloper are authorized activities under SEZ Act & Rules. Thus these clarifications also dispel the findings of CIT revising the asse4ssment order and setting aside the same. 263 order and findings therein being contrary to lega....
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.... The assessee has not sold any land but only transferred the bare shell buildings on lease. Therefore, there is no error as pointed out by Ld. CIT. Page 42 Para 9 The condition mentioned in Notification dated 27/10/2006 giving to assessing officer the right to examine the taxability of issue of 80IAB in the spirit of SEZ provision stands vindicated. Besides, we may hasten to add that apparently this rider appear to be made while approving the codeveloper agreement. This is possible applicable to co-developer and not the assessee as the condition was put during the course of approval of the agreement between assessee and the co-developer. Page 46 para 9.5 Apropos the issue of sale of bare shell buildings being authorized activity, it is amply clear that the SEZ Act authorizes activities include construction of bare shell/cold shell/warm shell buildings and transfer thereof, BOA has approved it and clarified the same. There is enough material on the record to hold that the transfer of bare shell buildings to co-developers constitute authorized activity. Thus, we see no error on any count as held by CIT in the order of assessing officer allowing deduction u/s 80IAB." 39. We thus....
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....m other sources' rather than 'income from house property' and thereby made disallowance of deduction u/s 24(a) of the Act to the tune of Rs. 1,13,71,259/-. It is the case of the assessee that signage income of Rs. 3,79,04,198/- has been received from tenants to whom the buildings have been given on rent and not to any outside parties. The lessee was allowed to put signage on the location where their offices are situated which are not advertisement hoardings and the assessee company has not received signage income from any outside party other than the tenants for putting the signage in the company's buildings. Assessee company also relied upon Memorandum of Understanding dated 21.05.2007 entered into between the assessee company and one of the tenants, M/s. Global Space Pvt. Ltd.. The ld. CIT (A) extracted the relevant portion of MoU in the impugned order and the same is reproduced for ready perusal as under :- "Subject to all local laws applicable, Lessor shall through its architect identify the locations and provide space for signage at the atrium/floor occupied by the LESSEE, as approved by the architect and the LESSEE will the allowed to put signage on such location. All taxes....