TaxTMI 
TaxTMI 
2020 (11) TMI 778
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.... to allow the deduction under section 80IA(4)(iii) of the I.T. Act, 1961 when the assessee had not fulfilled the conditions envisaged by the Government of India as well as those included in the Industrial Park Scheme, 2002 and therefore contravened the provisions of Rule 18C(3) of the Income-Tax Rules and as such whether because of this reason can the order passed by tribunal be said as perverse in nature. (iii) Whether on the facts and circumstances of the case, the Tribunal erred in law in interpreting the intentions of the legislation to promote large number of industrial units in the Industrial Park, by holding that the five floors leased to a single company would constitute five independent Industrial units and satisfy the criteria mentioned in para 1(vii) of the approval letter issued by the Ministry of Commerce and Industry. (iv) Whether the Tribunal was correct in law in interpreting Industrial Park Scheme, 2002 by holding that the five floors leased out to a single entity i.e. M/s. Accenture Services (P) Ltd., would constitute five separate taxable entities and therefore the assessee had not violated the condition that no single unit shall occupy more than 50% of the a....
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....ith the mandatory conditions stipulated in the scheme framed by the Central Government viz., Industrial Parks Scheme, 2002 (hereinafter referred to as 'the scheme' for short). It was held that five software companies were not located at the time of sale of built up area and one unit was occupying more than 50% of the industrial area, which is in violation of the mandatory conditions mentioned in the scheme. It was held that the assessee is not entitled to benefit of deduction under Section 80IA(4)(iii) of the Act. 3. The assessee thereupon filed an appeal before the Commissioner of Income Tax (Appeals) who by an order dated 29.01.2010 dismissed the appeal preferred by the assessee inter alia on the ground that the substantial development of the software park has taken place even before the approval was granted by the competent authority and therefore, the assessee is not entitled to benefit under Section 80IA(4)(iii) of the Act. The assessee thereupon approached the Income Tax Appellate Tribunal (hereinafter referred to as 'the tribunal' for short). The tribunal by an order dated 28.02.2011 inter alia held that though entire developed area has been leased out to th....
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.... to the assessee on 05.12.2006. Therefore, the assessee is not entitled to deduction under Section 80IA(4)(iii) of the Act. It is also submitted that the assessee has not complied with the requirement contained in Section 6F of the Scheme inasmuch as one single unit has occupied more than 50% of the allocable area. It is also urged that the expression 'unit' for Industrial park has to be interpreted ejusdem generis with the meaning of the term in Clause (i) of the Scheme, therefore, a unit which is an industrial park has to be a part of the building, which has to be dealt with independently under the state of central laws for the purpose of stamp duty under the Stamp duty Act and for the purpose of levy of capital gain under the Act. It is also contended that a unit means a separate taxable entity. It is also argued that Section 80IA of the Act is a incentive provision granting tax benefit and therefore, the same has to be construed strictly and the provision of the taxing statute has to be construed in a manner, object / purpose of the enactment is a cheat. In support of aforesaid submissions, reliance has been placed on decisions of the Supreme Court in 'GOPAL REDDY V....
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....ps, develops and operates or maintains and operates an industrial park or special economic zone notified by the Central Government in accordance with the scheme framed and notified 79 by that Government for the period beginning on the 1st day of April, 1997 and ending on the 31st day of March, 2006 : Provided that in a case where an undertaking develops an industrial park on or after the 1st day of April, 1999 or a special economic zone on or after the 1st day of April, 2001 and transfers the operation and maintenance of such industrial park or such special economic zone, as the case may be, to another undertaking (hereafter in this section referred to as the transferee undertaking), the deduction under sub-section (1) shall be allowed to such transferee undertaking for the remaining period in the ten consecutive assessment years as if the operation and maintenance were not so transferred to the transferee undertaking : Provided further that in the case of any undertaking which develops, develops and operates or maintains and operates an industrial park, the provisions of this clause shall have effect as if for the figures, letters and words "31st day of March, 2006", the figur....
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....er. The Assessing Officer in its order has held that in the relevant Assessment Year, the assessee did not have five industrial units, therefore, the assessee is not entitled to benefit of deduction under Section 80IA(4)(iii) of the Act. The Commissioner of Income Tax (Appeals) has held that since, the assessee had carried out the substantial development of the work prior to obtaining approval, therefore, the assessee is not entitled to benefit of deduction under Section 80IA(4)(iii) of the Act. It is pertinent to mention here that assessee has developed Information Technology Park on the basis of an agreement entered into by it and Karnataka Government Agency. The business was set up before or after the time prescribed in the statute. The tribunal has recorded a finding that even though, assessee has leased out five / four floors to a particular tenant, but the tenants are carrying on their operations as independent units and their activities are functionally different. It has further been held that each floor is physically identified for all functional purposes. It has also been held that approval granted by Ministry of Commerce and Industry itself is a testimony that the assesse....