2022 (10) TMI 82

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....Section 143(3) of the Income Tax Act, 1961 (the Act) concerning AY 2010-11. 2. As per Ground No.1, the assessee has challenged the denial of deduction under Section 80IAB in respect of income received in the nature of car parking rental amounting to Rs.1,28,94,927/- 2.1 The assessee-company is engaged in the business of real estate development and maintaining/operating a SEZ in Gurgaon developed by it. The assessee inter alia claimed deduction under Section 80IAB on the profits derived by it from the business of developing SEZ. The Assessing Officer in the course of scrutiny assessment inter alia denied the deduction claimed on profits derived from car parking rental, sale of waste oil and sale of garbage holding such income to be inc....

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....tivities as per the guidelines. Another reference was made to communication No. F 2/115/2005-EPZ Government of India, Ministry of Commerce and Industry, Department of Commerce (SEZ Section) dated 30th January, 2008 and was asserted that car parking has been included as part of authorized operations in SEZ. It is thus contended that car parking cannot be separated from the main business of SEZ and hence there is no justifiable reason to deny benefits on income from car parking rental in this backdrop. 4. We have carefully examined the issue and perused the orders of the lower authorities. In the light of documentary evidences placed by way of notifications and instructions from competent authorities, it is manifest that car parking rental....

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....i) where suo motu disallowance has been made, the Assessing Officer is required to form 'satisfaction' in terms of Section 14A of the Act for higher disallowance which has not been made and thus the formula provided for quantification of disallowance under Rule 8D would not automatically apply. 9. We find merit in the plea of the assessee that the disallowance cannot exceed the actual expenditure incurred in relation to the earning of the exempt income. In the instant case, no direct expenses has been incurred and the disallowance has been carried out under Rule 8D(2)(iii) of the Rules in respect of indirect expenses. The disallowance has been carried out at Rs.22,99,529/- (being 0.5% of the average value of investments) in place of the ....