AI Drafter 
TaxTMI 
TaxTMI 
2021 (8) TMI 464
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....facts of the case, we find that the order of the Tribunal is cryptic and no finding has been recorded by the Tribunal whether or not the assessee has fulfilled the conditions laid down in the scheme. In paragraph 4 of the order, the Tribunal has recorded a finding that an identical issue has been dealt by it in the case of PIRAMAL PROJECTS P. LTD. and the case of the assessee is also similar. However, no reasons have been assigned by the Tribunal. The Tribunal is the final fact finding authority and has to record the reasons for its conclusions. Since the Tribunal has failed to assign any reasons for recording the finding with regard to the fact whether or not the assessee has fulfilled with the terms and conditions laid down in the scheme, we are left with no option but to quash the order passed by the Tribunal. Therefore, it is not necessary to answer the substantial question of law. The Tribunal shall decide the matter afresh and shall after affording an opportunity of hearing to the parties shall record a finding whether the assessee has complied with the conditions laid down in the Industrial Park Scheme, 2002 and whether the assessee is eligible to claim deduction un....
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....e jurisdiction Bench of the ITAT in the case of Primal Projects Pvt. Ltd. (139-TTJ-233) which has not yet reached finality. 10. For these and such other grounds that may be urged at the time of hearing, it is humbly prayed that the order of the CIT(A) be reversed and that of the Assessing Officer be restored. 11. The appellant craves leave to add, to alter, to amend or to delete any of the grounds that may be urged at the time of hearing of the appeal. 3. The brief facts of the case are as follows: The assessee is a company engaged in construction, promotion and development of software park. For these assessment years the claim of deduction u/s.80IA(4)(iii) of the I.T.Act was denied by the Assessing Officer on two grounds namely :- (i) There ought to be 4 tenants in the industrial park of assessee, whereas in this case there is only three tenants. (ii) No unit should occupy more than 50% of the allocable area, whereas in this case one tenant, namely M/s.I-Flex Solutions is occupying more than 50% of the total constructed area. 4. Aggrieved by the denial of benefit of deduction u/s 80IA(4)(iii) of the I.T.Act, the assessee preferred appea....
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....ently and separately from other units. It does not matter even if the entire developed area has been leased out to a single company. The Hon'ble jurisdictional High Court in the case of CIT v. M/s.Primal Projects Pvt. Ltd. in ITA 196/2011 dated 10.11.2020 has approved the functional test. It was further submitted that so long as the project developed is with the requisite approvals and which complies the conditions for granting the deduction will be eligible for relief u/s 80IA(4)(iii) of the I.T.Act. The assessee, according to the learned AR, has complied with all the conditions and also was in conformity with the functional test. 6. We have heard rival submissions and perused the material on record. The assessee-company developed an IT park called "Millennium Tower" at Kundanahalli, Broke field, Bangalore. The assessee-company, originally made an application on 05.01.2004, in Form No.IPS-1 for approval before the Investment Promotion and Infrastructure Development Cell, Ministry of Commerce and Industries, Department of Industrial Policy and Promotion and for the setting up of Industrial Park on 2 acres of land, in question, for 32 number of Industrial Units. Later, on 8.12.20....
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.... M/s.Primal Projects Pvt. Ltd. (supra) has laid down the functional test, i.e., whether each unit is in a position to carry on its activities independently and separately from other units. If such was the case, the Hon'ble High Court held that each of such units should be considered as an independent unit. It was further held by the Hon'ble Court that it does not matter even if the entire developed area has been leased out to a single company. The Hon'ble High Court confirmed the factual finding of the ITAT and the relevant portion of the Hon'ble High Court judgment at para 3 reads as follow:- "3........with separate facilities, instrumentation, power connection, door number and capacity to function independently. It was further held that since, the units are functioning independently on different floors even though are situated under the same roof, the assessee has successfully complied the functional test of five independent units." 6.3 It was further held by the Hon'ble High Court at para 9 of the judgment as follows:- "9........The tribunal has recorded a finding tht even though, assessee has leased out five / four floors to a particular tenant, but the ten....
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....area) and 30,000 sft. of super built up area in II floor (16.07%) of the Industrial park. Thus, according to the assessee, the lessee had taken 3 different industrial units and each unit is less than 50% of the allocable area and the AO, instead of considering them as individual functional units, treated them as one combined unit which is wrong in light of functional test laid down by Hon'ble High Court. In the instant case, even though the CIT(A) had held that the facts of Primal Projects Private Limited and that of the assessee are identical, there is no factual finding either by the AO nor by the CIT(A) that the assessee claims that each of the floors in its industrial park is an independent and separate unit, capable of functioning on its own. Therefore, there should be a factual finding by the A.O. on the above issue. (ii) The Income tax benefits u/s 80IA(4)(iii) of the I.T.Act will be available only after the proposed number of Industrial units mentioned in the approval letter i.e. 4 units are located in the Industrial Park. The assessee had constructed multistoried buildings for the purpose of developing infrastructure facilities as approved by the Ministry of Co....