TaxTMI 
TaxTMI 
2017 (10) TMI 1578
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.... counsel for the assessee stated that the impugned issues raised by the revenue have been decided in favour of the assessee and against the revenue in assessee's own case in the immediately preceding assessment year i.e. A.Y. 2009-10. The ld. counsel furnished the order of the Tribunal in ITA No. 1464/Ahd/2012. The ld. D.R. stated that due to the amendment in the section 80-IAB. The issue is not covered by the previous order of the Tribunal. In support, the ld. D.R. filed the copy of the judgment of the Hon'ble Supreme Court in the case of Prakash Nath Khanna 266 ITR 1. 4. We have given a thoughtful consideration to the orders of the authorities below and have carefully perused the decisions relied upon by both sides. The assessee carries on the business of development operation and maintenance of Special Economic Zone (SEZ). The assessee claimed deduction u/s. 80-IAB of the Act. During the course of the scrutiny assessment proceedings and on examining the claim of deduction u/s. 80-IAB of the Act, the A.O. was of the opinion that the assessee is not eligible for the claim of said deduction. The A.O. was of the firm belief that the second proviso to Section 80-IAB of the Act ....
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....u/s 80IAB in respect of Rs. 3,25,07,625/- being income from operation & maintenance and Rs. 18,250/- being income from sale of scrap related to SEZ. The appellant relied on the appeal order dt. 30/04/2012 in the case of appellant for A.Y. 09-10 on this issue where Ld. CIT(A)XIV, Ahmedabad on similar facts & contention allowed such deduction. My predecessor vide order No.CIT(A)XIV/Jt.CIT.R.8/2011-12 dated. 30.04.201 2 in appellant's own case for A. Y.2009-1 0 held as under: "I have carefully perused the assessment order and the submissions given by the appellant. The A. O. has disallowed the claim of income of the appellant by operation and maintenance of the SEZ as the section 80IAB mentions only the word 'developing'. The appellant has submitted that the claim is in accordance with the provisions of section 80IAB and should therefore be allowed. In order-to clearly understand the controversy, various provisions which are relevant are quote hereunder: Section 80IAB of the I. T. Act. " (1) Where the gross total income of an assessee, being a Developer, includes any profits and gains derived by an undertaking or an enterprise from any business of developing a Spec....
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.... the Developer. Therefore, in view of the preceding discussion, the word 'developer' also includes the activities of operation and maintenance of the SEZ in the case of the appellant. The interpretation by the A. O. that operation and maintenance are different to that of development and legislature were fully aware of this fact and, therefore, the words 'operation and maintenance' have not been intentionally omitted is not justified. A harmonious interpretation of the provisions of various Acts, as discussed above, clearly show that in the case of the appellant, the deduction is available for operation and maintenance also in accordance with the terms and approval. The observations of the A. O. that the second proviso to section 80IAB where the Act provides for deduction in respect of profits and gains derived from operation and maintenance activities in the hands of transferee developers, if .any developer after developing a SEZ transfers the operation and maintenance of such SEZ to another developer is also, in my opinion, not justified. The activity of development, operation and maintenance are continuous in nature. Once a person takes up the work of developm....
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....r the deduction on that income. The claim regarding prior period income of Rs. 23,09,372/- has been disallowed by the A. O. on the ground that the income pertained to earlier year and only the income of current year can be considered for deduction. The appellant has submitted that it had started recovering the raw water charges from the current Financial Year, and the charges for earlier years were also collected. Therefore, the same should be allowed as the appellant was allowed deduction in earlier years also. It is noted that the appellant has commenced the billing process for the water services from the present year. The raw water charges have been billed and collected in the current' assessment year itself and, therefore, the income has crystallized and has become due in the current assessment year itself. Therefore, the appellant has correctly shown the income in the current assessment year and the same should be treated as income of the current year. The reliance is placed on the judgment of Hon'ble High Court o'f Guj'arat in the case of Saurashtra Cement and Chemicals Industries Limited [80 Taxman 61]. The claim of deduction is, therefore, allowable a....
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.... the profits and gains derived from such business for ten consecutive assessment years. (2) The deduction specified in sub-section (1) may, at the option of the assessee, be claimed by him for any ten consecutive assessment years out of fifteen years beginning from the year in which a Special Economic Zone has been notified by the Central Government : Provided that where in computing the total income of any undertaking, being a Developer for any assessment year, its profits and gains had not been included by application of the provisions of sub-section (13) of section 80-IA, the undertaking being the Developer shall be entitled to deduction referred to in this section only for the unexpired period of ten consecutive assessment years and thereafter it shall be eligible for deduction from income as provided in sub-section (1) or subsection (2), as the case may be : Provided further that in a case where an undertaking, being a Developer who develops a Special Economic Zone on or after the 1st day of April, 2005 and transfers the operation and maintenance of such Special Economic Zone to another Developer (hereafter in this section referred to as the transferee Developer), the de....