ASCENDAS PANVEL FTWZ PRIVATE LIMITED,MUMBAI V. DEPUTY COMMISSIONER OF INCOME TAX, WARD 14(1)(1), MUMBAI

ITA 701/MUM/2025

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The case involves Ascendas Panvel FTWZ Private Limited, which appealed against the disallowance of deduction claimed under section 80-IAB of the Income-tax Act, 1961, for the Assessment Years 2018-19, 2020-21, and 2021-22. The Tribunal examined whether the assessee, as a co-developer in a Special Economic Zone (SEZ), was eligible for the deduction. The primary contention was whether the definition of 'Developer' under the SEZ Act, which includes co-developers, applies to the deduction under section 80-IAB. The Tribunal concluded that the assessee qualifies as a 'Developer' under the SEZ Act and thus is entitled to the deduction claimed.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 836032 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-02-2026
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2018-2019
• Appeal Filed On: 30-01-2025
• Laws Referred To: Income-tax Act, 1961, Special Economic Zones Act, 2005
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJESH KUMAR YADAV
• Assessee Lawyers: SURYANARAYANA T
• Keywords: Tax effect; Principle of natural justice; TDS; Initiation of penalty proceedings; FORM 26AS
• Section: 27; 115JB

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL, ‘A‘ BENCH MUMBAI BEFORE: SHRI AMIT SHUKLA, JUDICIAL MEMBER & SHRI MAKARAND VASANT MAHADEOKAR, ACCOUNTANT MEMBER ITA No.701/Mum/2025 (Assessment Year :2018-19) ITA No.711/Mum/2025 (Assessment Year: 2020-21) & ITA No. 712/Mum/2025 (Assessment Year: 2021-22) Ascendas Panvel FTWZ Private Limited Plot No. Kalwa K-14/2, 15,37, TTC Industrial Area, MIDC Airoli, Thane-400708 Vs. Deputy Commissioner of Income tax, Ward 14(1)(1), Mumbai PAN/GIR No.AAICA2250K (Appellant) .. (Respondent) Assessee by Shri Suryanarayana T & Shri Jeet Kamdar Revenue by Shri Rajesh Kumar Yadav, CIT DR & Shri Surendra Mohan, Sr. DR Date of Hearing 27/01/2026 Date of Pronouncement 10/02/2026 आदेश / O R D E R PER AMIT SHUKLA (J.M): These three appeals, pertaining to Assessment Years 2018-19, 2020-21 and 2021-22, arise from separate orders dated 08.11.2024 passed by the learned Commissioner of Income-tax (Appeals), National Faceless Appeal Centre, Delhi, Printed from counselvise.com ITA No.701/Mum/2025 and others Ascendas Panvel FTWZ Private Limited 2 confirming the disallowance of deduction claimed by the assessee under section 80-IAB of the Income-tax Act, 1961, along with consequential issues relating to TDS credit, MAT computation, MAT credit, levy of interest and initiation of penalty proceedings. Since the factual matrix, statutory interpretation, and the core controversy are common across all years, the appeals were heard together and are being disposed of by this consolidated order. 2. The assessee, Ascendas Panvel FTWZ Private Limited, is engaged in the business of development, operation and maintenance of infrastructure facilities in a notified Special Economic Zone and Free Trade Warehousing Zone situated at Panvel, Maharashtra. The genesis of the controversy lies in the claim of deduction under section 80-IAB on profits derived from operation and maintenance of six fully operational warehouses located in the FTWZ, forming part of a sector- specific SEZ notified under the Special Economic Zones Act, 2005. 3. The SEZ in question was originally conceived and developed by Arshiya Limited, which was granted in-principle approval on 14.11.2008, formal approval on 27.02.2009 and was subsequently notified as a “Developer” for setting up a sector-specific SEZ for FTWZ at Sai Village, Panvel Taluk, Raigad, Maharashtra, vide Gazette Notification dated 04.05.2009 issued by the Ministry of Commerce and Industry, Department of Commerce, Government of India. Printed from counselvise.com ITA No.701/Mum/2025 and others Ascendas Panvel FTWZ Private Limited 3 4. On 13.10.2016, the assessee entered into a co- development agreement with Arshiya Limited for undertaking authorised operations, including operation and maintenance of six operating warehouses forming part of the FTWZ. Pursuant thereto, the assessee applied for approval as a co- developer under section 3(12) of the SEZ Act, 2005, and such approval was granted by the Department of Commerce on 05.12.2016 for providing infrastructure facilities, including operation and maintenance of the said six warehouses. The assessee formally accepted the conditions of approval vide letter dated 13.12.2016 and also submitted such acceptance to the Development Commissioner, SEEPZ, on 18.04.2017. Thereafter, on 03.02.2018, a detailed lease agreement was executed between Arshiya Limited and the assessee, whereby six fully developed and operational warehouses were leased to the assessee for an initial period of thirty years, renewable at the sole discretion of the assessee for a further period of thirty years. The consideration agreed was Rs. 434 crores along with additional conditional lease rent of Rs. 100 crores payable in instalments. Under this arrangement, the assessee assumed full operational control, management and maintenance responsibilities in respect of the said warehouses. 5. For the sake of ready reference, the relevant chronology of dates and events are reproduced hereunder:- SI. No. Date Events 1 21.08.2007 Application filed by Arshiya Limited with the Government of India, Printed from counselvise.com ITA No.701/Mum/2025 and others Ascendas Panvel FTWZ Private Limited 4 requesting to set up SEZ for FTWZ at Sai Village, Panvel Taluk, Raigad, Maharashtra 2 14.11.2008 In-principal approval granted to Arshiya Limited by Department of Commerce (SEZ Section), Ministry of Commerce & Industry, Government of India (\"the Government\") for setting up of SEZ for FTWZ 3 27.02.2009 Formal approval granted to Arshiya Limited by the Government, for setting up of SEZ for FTWZ 4 04.05.2009 Arshiya Limited notified as a 'developer' for setting up SEZ for FTWZ at Sai Village, Panvel Taluk, Raigad, Maharashtra, vide a Gazette notification issued by Government of India. 5 13.10.2016 Appellant entered into a co- development agreement with Arshiya limited 6 13.10.2016 Application filed by the Appellant with Government of India, requesting approval as 'Co-developer for providing infrastructure facilities in FTWZ SEZ 7 05.12.2016 Appellant received approval from the Printed from counselvise.com ITA No.701/Mum/2025 and others Ascendas Panvel FTWZ Private Limited 5 Government as 'co-developer 8 13.12.2016 Acceptance letter filed by the Appellant with the Director (SEZ), Department of Commerce, accepting the terms and conditions stated in the above approval letter issued by the Government. 9 18.04.2017 Acceptance letter as submitted before the Department of Commerce, filed with the Development Commissioner, Seepz SEZ. 10 03.02.2018 Appellant entered into a lease agreement with Arshiya Limited, in terms of which, the six operating warehouses of Arshiya Limited in FTWZ, has been leased to the Appellant. 6. For Assessment Year 2018-19, the assessee filed its return of income on 29.11.2018 declaring total income of Rs. 26,45,480 after claiming deduction of Rs. 2,44,41,889 under section 80-IAB. Similar deductions were claimed in Assessment Years 2020-21 and 2021-22 amounting to Rs. 18,20,75,033 and Rs. 19,93,03,919 respectively. All three years were selected for scrutiny and the Assessing Officer disallowed the deduction under section 80-IAB in each year. Printed from counselvise.com ITA No.701/Mum/2025 and others Ascendas Panvel FTWZ Private Limited 6 7. The learned counsel for the assessee submitted that the disallowance was made on wholly erroneous understanding of section 80-IAB and the SEZ Act, 2005. It was submitted that the Assessing Officer proceeded on the fundamentally flawed premise that the assessee, being a co-developer, was not eligible for deduction, whereas section 80-IAB itself adopts the definition of “Developer” from section 2(g) of the SEZ Act, which expressly includes a co-developer. It was emphasized that section 80-IAB was not an independent incentive provision but was introduced by the SEZ Act itself through section 27 read with the Second Schedule, and therefore its interpretation must be firmly anchored in the SEZ statutory framework. 8. The learned counsel further submitted that the Assessing Officer also erred in alleging that there was no material to demonstrate whether the original developer, Arshiya Limited, had already claimed deduction under section 80-IAB. It was submitted that a categorical declaration from Arshiya Limited was placed on record confirming that no deduction under section 80-IAB had been claimed in respect of the six warehouses, inter alia because Arshiya had incurred losses in the relevant years. It was argued that the assessee, being a separate legal entity, could not be expected to furnish copies of Arshiya’s returns of income, particularly when such information was already within the domain of the Department. The learned counsel also addressed the objection relating to non-acceptance of approval conditions, submitting that the assessee had duly accepted the co-developer approval Printed from counselvise.com ITA No.701/Mum/2025 and others Ascendas Panvel FTWZ Private Limited 7 dated 05.12.2016 and such acceptance letters were filed with the Development Commissioner. It was submitted that this objection was factually incorrect and arose only because the Assessing Officer never called for such documents during assessment proceedings. 9. With regard to Form 10CCB, the learned counsel explained in detail the technical architecture of the form, submitting that selecting “Yes” in clause 16(c) would mandatorily trigger clause 16(d), requiring details of deduction claimed by the original developer along with its Form 10CCB, which was not possible since the developer had not claimed any deduction. It was therefore submitted that due to systemic constraints, the assessee selected “No” in clause 16(c), and such a technical limitation of the electronic filing system could not be elevated to a substantive disqualification of an otherwise valid statutory claim. 10. The learned counsel further submitted that the learned CIT(A) committed a serious legal error by introducing entirely new conditions while interpreting the second proviso to section 80-IAB(2), namely, that the entire SEZ must be fully developed before any transfer of operation and maintenance could occur, and that there must be absolute extinguishment of rights by the original developer. It was submitted that none of these conditions find place in the statutory language and that the CIT(A) effectively legislated by adding words to the provision. Printed from counselvise.com ITA No.701/Mum/2025 and others Ascendas Panvel FTWZ Private Limited 8 11. It was emphasized that development, operation and maintenance of SEZ infrastructure is a continuous and overlapping commercial activity, and the SEZ Act itself contemplates approval of co-developers during the development phase. It was submitted that insisting upon completion of the entire SEZ as a pre-condition would render section 3(12) of the SEZ Act otiose and defeat the very purpose of the incentive scheme. Reliance was placed on settled principles that beneficial provisions must be construed liberally and provisos cannot be interpreted to defeat the main enactment. The learned counsel also submitted that for Assessment Year 2018-19, there was a serious violation of principles of natural justice, as the show cause notice proposing disallowance was issued at the end of the day on 29.09.2021, initially to an incorrect email address, calling for response by 30.09.2021 before 2 p.m., and despite a request for time, the assessment order was passed the same day. 12. On ancillary issues, the learned counsel submitted that TDS credit of Rs. 76,63,837 was not granted in A.Y. 2018-19, that in A.Y. 2020-21 the assessed income under normal provisions was mechanically adopted as book profit under section 115JB without any adjustment and there was also a clear totalling error in the computation sheet, and that in A.Y. 2021-22 MAT credit under section 115JAA amounting to Rs. 4,58,998 was not granted. It was submitted that these were purely verifiable issues requiring correction. Printed from counselvise.com ITA No.701/Mum/2025 and others Ascendas Panvel FTWZ Private Limited 9 13. Per contra, the learned CIT-DR submitted that section 80-IAB is a special incentive provision and must be strictly construed. It was submitted that the second proviso to section 80-IAB(2) contemplates a situation where the original developer has completed the development of the SEZ and thereafter transfers operation and maintenance of the SEZ to another developer, and only in such circumstances can the transferee claim deduction for the remaining eligible period. According to the learned CIT-DR, in the present case, the SEZ was admittedly incomplete, with only six warehouses constructed and several others yet to be developed, and therefore the statutory condition was not satisfied. 14. The learned CIT-DR further submitted that the arrangements between Arshiya Limited and the assessee did not amount to transfer of operation and maintenance in the statutory sense but were merely internal arrangements within a group for administrative convenience, without absolute divestment of rights. It was also submitted that the assessee failed to produce cogent corroborative evidence to establish that the original developer had not claimed deduction earlier, and therefore the assessee failed to discharge the burden cast upon it. 15. It was thus submitted by the learned CIT-DR that both the Assessing Officer and the learned CIT(A) had correctly appreciated the statutory provisions and that the appeals deserved to be dismissed. Printed from counselvise.com ITA No.701/Mum/2025 and others Ascendas Panvel FTWZ Private Limited 10 16. We have given our most anxious consideration to the rival submissions, the detailed written synopsis placed on record by both sides, and the statutory framework governing the controversy. The dispute before us is not merely one of arithmetical eligibility, but one that turns upon the correct understanding of the legislative architecture of section 80-IAB of the Income-tax Act, 1961, read integrally and harmoniously with the Special Economic Zones Act, 2005, which is the parent statute that conceived, structured, and statutorily embedded this incentive. Any adjudication divorced from that architecture would, in our view, be fundamentally flawed. 17. At this point for the sake of ready reference, the relevant provision of Section 80-IAB is reproduced hereunder:- “80-IAB(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 Special Economic Zone, notified on or after the 1st day of April, 2005 under the Special Economic Zones Act, 2005, there shall, in accordance with and subject to the provisions of this section, be allowed, in computing the total income of the assessee, a deduction of an amount equal to one hundred per cent of the profits and gains derived from such business for ten consecutive assessment years. Provided that the provisions of this section shall not apply to an assessee, being a developer, where the development of Special Economic Zone begins on or after the 1st day of April, 2017. (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. Printed from counselvise.com ITA No.701/Mum/2025 and others Ascendas Panvel FTWZ Private Limited 11 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 sub-section (1) 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 sub- section (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 referred to as the transferee Developer), the deduction under sub-section (1) shall be allowed to such transferee Developer for the remaining period in the ten consecutive assessment years as if the operation and maintenance were not so transferred to the transferee Developer. (3) The provisions of sub-section (5) and sub-sections (7) to (12) of section 80-IA shall apply to the Special Economic Zones for the purpose of allowing deductions under sub-section (1). Explanation — For the purposes of this section, “Developer” and “Special Economic Zone” shall have the same meanings respectively as assigned to them in clauses (g) and (za) of section 2 of the Special Economic Zones Act, 2005.” On a plain reading of the above provision, it is palpable that section 80-IAB applies to: (i) an assessee who is a developer in terms of the SEZ Act, 2005; (ii) who derives profits and gains from any business of developing a Special Economic Zone notified on or after 01.04.2005; and (iii) where development of the SEZ has begun prior to 01.04.2017. Printed from counselvise.com ITA No.701/Mum/2025 and others Ascendas Panvel FTWZ Private Limited 12 18. Upon satisfaction of the above conditions, the assessee becomes eligible to claim deduction equal to 100% of the profits and gains derived from such business for ten consecutive assessment years out of a block of fifteen assessment years. Further, the second proviso to sub-section (2) specifically provides that in case of transfer of operation and maintenance of an SEZ by a developer to another developer, the transferee developer becomes eligible to claim deduction for the remaining period in the ten consecutive assessment years. 19. However, the term “developer” is not independently defined in section 80-IAB of the Act. However, the Explanation to section 80-IAB mandates that the meanings of “developer” and “Special Economic Zone” shall be the same as assigned under the SEZ Act, 2005. 20. In this context, it would be relevant to refer to the following provisions of the SEZ Act, 2005: (i) Section 2(g) defines “Developer” to mean a person who has been granted by the Central Government a letter of approval under sub-section (10) of section 3 of the SEZ Act, and includes an Authority and a Co-Developer. (ii) Section 2(f) defines a “Co-Developer” to mean a person who has been granted by the Central Government a letter of approval under sub-section (12) of section 3 of the SEZ Act, 2005. (iii) Section 2(za) defines a “Special Economic Zone” to mean each SEZ notified under the proviso to sub-section (4) of section 3 and sub-section (1) of section 4, including a Free Trade and Printed from counselvise.com ITA No.701/Mum/2025 and others Ascendas Panvel FTWZ Private Limited 13 Warehousing Zone, and includes an existing Special Economic Zone. (iv) Section 4(1) provides that the Developer shall submit exact particulars of the identified area to the Central Government and upon satisfaction of the prescribed requirements, the Government may notify the specifically identified area in the State as a Special Economic Zone. (v) Section 3(11) provides that any person who intends to provide infrastructure facilities or undertake any authorised operation in the identified area may, after entering into an agreement with the Developer, make a proposal to the Board for approval. (vi) Section 3(12) provides that every person referred to in section 3(11), whose proposal has been approved by the Board and who has been granted a letter of approval by the Central Government, shall be considered as a Co-Developer of the SEZ. (vii) Section 27 read with the Second Schedule of the SEZ Act provides for modifications to the Income-tax Act, 1961 by introducing section 80-IAB for the benefit of Developers, including Co-Developers, in respect of profits and gains derived from development or provision of infrastructure facilities in an SEZ. (viii) Section 51 of the SEZ Act provides that the provisions of the SEZ Act shall have an overriding effect over any other law for the time being in force or any instrument having effect by virtue of any law other than the SEZ Act. Ergo, a combined reading of the provisions of the Income-tax Act and the SEZ Act demonstrates that section 80-IAB was enacted to complement and give fiscal effect to the scheme of the SEZ Act. The provision is consciously worded in line with the definitions, structure and approvals contemplated under the SEZ Act, 2005. 21. Ergo, it must be underscored that section 80-IAB is not an ordinary incentive provision inserted independently into Printed from counselvise.com ITA No.701/Mum/2025 and others Ascendas Panvel FTWZ Private Limited 14 the Income-tax Act. It owes its very genesis to the SEZ Act, 2005. Section 27 of the SEZ Act, read with the Second Schedule thereto, expressly amends the Income-tax Act by introducing section 80-IAB. This legislative technique is of considerable significance: Parliament did not merely grant a tax incentive in abstract, but consciously embedded it within the SEZ statutory ecosystem, importing definitions, concepts, and operational realities from the SEZ Act into the Income-tax Act itself. This intent is made explicit by the Explanation to section 80-IAB, which mandates that the expressions “Developer” and “Special Economic Zone” shall have the meanings respectively assigned to them in clauses (g) and (za) of section 2 of the SEZ Act, 2005. 22. Once this statutory bridge is crossed, the controversy regarding the assessee’s status as a “co-developer” loses much of its supposed complexity. Section 2(g) of the SEZ Act defines “Developer” to mean a person granted a letter of approval under section 3(10) and expressly includes a “Co- Developer”. Section 2(f) defines “Co-Developer” as a person granted a letter of approval under section 3(12). Section 3(11) and section 3(12) together contemplate a structured statutory mechanism by which a person, after entering into an agreement with the Developer, is approved by the Central Government to provide infrastructure facilities or undertake authorised operations in the identified area of the SEZ and, upon such approval, assumes the legal character of a Co- Developer. The SEZ Act thus does not treat a co-developer as an inferior or peripheral participant; it statutorily assimilates Printed from counselvise.com ITA No.701/Mum/2025 and others Ascendas Panvel FTWZ Private Limited 15 a co-developer into the category of “Developer” for all purposes of the Act. When section 80-IAB itself adopts this definition, there remains no legal room to contend that a co- developer stands excluded from its ambit. It is an undisputed fact that assessee has also been approved as co-developer by the Ministry of Commerce and Industry, Government of India and accordingly, for the purpose of Section 80-IAB assessee has to be treated as falling within the definition of “developer” because meaning assigned to word “developer” in SEZ Act, 2005 also includes co-developer. It is trite that Section 51 of SEZ Act 2005, the SEZ has an overriding effect of any other law including the Income Tax Act. 23. Thus, Assessing Officer’s reasoning, endorsed by the learned CIT(A), that section 80-IAB applies only to a “developer” and not to a “co-developer”, therefore collapses at the level of plain statutory interpretation. It proceeds on an artificial bifurcation which the statute itself does not recognise. More importantly, section 51 of the SEZ Act provides that the provisions of the SEZ Act shall have effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force. When the Income- tax Act, by deliberate legislative choice, incorporates SEZ Act definitions, the interpretative command becomes even more compelling: the meaning assigned under the SEZ Act must govern the construction of section 80-IAB. 24. We now turn to the heart of the controversy, namely the construction of sub-section (2) of section 80-IAB and, in Printed from counselvise.com ITA No.701/Mum/2025 and others Ascendas Panvel FTWZ Private Limited 16 particular, the second proviso thereto. The substantive provision allows deduction of 100 per cent of profits derived from the business of developing a SEZ for ten consecutive assessment years out of a block of fifteen years beginning from the year in which the SEZ is notified. The second proviso addresses a specific contingency: where a Developer who develops a SEZ on or after 01.04.2005 transfers the operation and maintenance of such SEZ to another Developer, the deduction shall be allowed to the transferee Developer for the remaining period in the ten consecutive assessment years, as if the operation and maintenance were not so transferred. 25. The learned CIT(A) has read into this proviso two cumulative “legal tests”: first, that the entire SEZ must be fully developed before any transfer of operation and maintenance can be recognised; and second, that such transfer must involve absolute extinguishment or parting of rights by the original developer in favour of the transferee. With respect, we find no statutory warrant for either of these judicially introduced conditions. 26. The proviso does not employ the phrase “entire SEZ must be completely developed”, nor does it predicate the availability of deduction to the transferee upon completion of development in every parcel or phase of the SEZ. What it requires is that a Developer “develops a Special Economic Zone” and thereafter “transfers the operation and maintenance of such Special Economic Zone” to another Developer. The emphasis of the proviso is on continuity of the Printed from counselvise.com ITA No.701/Mum/2025 and others Ascendas Panvel FTWZ Private Limited 17 incentive attached to the SEZ project and the period of eligibility, not on imposing an artificial temporal sequence between development and operation. To insist that development must reach a state of absolute completion before any transfer of operation and maintenance can be recognised is to insert words into the statute that Parliament has consciously not used. 27. The commercial and statutory realities of SEZ development further reinforce this conclusion. Development of a SEZ is not a monolithic, one-time event; it is inherently phased, incremental, and continuous. Warehouses, processing units, infrastructure facilities and utilities are developed, operationalised, and maintained in overlapping cycles. The SEZ Act itself recognises this reality by permitting approvals to co-developers under section 3(12) during the development phase. If the construction adopted by the Revenue were to be accepted, section 3(12) would be rendered largely otiose, as no co-developer could ever meaningfully operate or maintain any infrastructure until the entire SEZ stands completed in all respects. Such an interpretation would defeat, rather than advance, the legislative scheme. 28. In the present case, the factual position emerging from the record is that the SEZ was duly notified on 04.05.2009, well within the period contemplated by section 80-IAB; that development commenced long prior to 01.04.2017; and that six warehouses forming part of the FTWZ were fully developed, fully equipped and operational before being Printed from counselvise.com ITA No.701/Mum/2025 and others Ascendas Panvel FTWZ Private Limited 18 entrusted to the assessee. The assessee was granted approval as a co-developer specifically for providing infrastructure facilities including operation and maintenance of these six operating warehouses. The profits claimed are derived precisely from such operation and maintenance activities within the notified FTWZ. On these facts, to deny deduction on the ground that other phases or warehouses of the SEZ were still under development is to conflate the macro- development of the SEZ with the micro-eligibility of profits derived from authorised SEZ operations. 29. The second limb of the learned CIT(A)’s reasoning, namely the requirement of “absolute extinguishment” of rights by the original developer, fares no better. The proviso speaks of “transfer of operation and maintenance”; it does not employ the language of transfer of ownership, title, or complete divestment of all rights. In the SEZ regulatory framework, ownership of land, regulatory control, and development rights may continue to vest with the original developer, while operation and maintenance of specified infrastructure is lawfully entrusted to a co-developer under long-term arrangements. The statute recognises and legitimises such arrangements. To import concepts of absolute conveyance drawn from property law into a provision dealing with operational transfer within a regulated SEZ environment is to misconstrue the legislative intent. 30. In this context, the lease agreement dated 03.02.2018 assumes significance. As placed on record, it evidences a Printed from counselvise.com ITA No.701/Mum/2025 and others Ascendas Panvel FTWZ Private Limited 19 long-term arrangement whereby six fully operational warehouses were leased to the assessee for an initial period of thirty years, renewable for a further thirty years at the assessee’s option, against substantial consideration running into hundreds of crores. The assessee assumed full responsibility for operation and maintenance of these warehouses. Such an arrangement cannot be dismissed as a mere revocable or cosmetic delegation. It constitutes, in substance and in law, a transfer of operation and maintenance rights in respect of the specified SEZ infrastructure for a substantial and enduring period. 31. The objection regarding Form 10CCB, particularly the response in clause 16(c), also does not advance the Revenue’s case. The assessee has explained, with specificity, the technical design of the electronic form, whereby selection of “Yes” in clause 16(c) mandatorily activates clause 16(d), requiring particulars and audit report of the original developer. Where the original developer has not claimed deduction at all, the form design itself creates a compliance impasse. A technical limitation of an electronic utility cannot be elevated into a substantive statutory disqualification, especially when the underlying facts regarding transfer of operation and maintenance and non-claim by the original developer are otherwise placed on record. 32. Similarly, the insistence that the assessee must furnish copies of the return of income of the original developer ignores practical and legal realities. The assessee is a separate Printed from counselvise.com ITA No.701/Mum/2025 and others Ascendas Panvel FTWZ Private Limited 20 juridical entity and cannot be compelled to produce the confidential tax returns of another taxpayer. The assessee has furnished a declaration from the original developer affirming non-claim of deduction under section 80-IAB in respect of the six warehouses. If the Department harboured any doubt, it was fully empowered to verify its own records. The statutory concern is to prevent duplication of deduction beyond the permissible ten years; that concern can be addressed by departmental verification without shifting an impossible burden onto the assessee. 33. We also cannot lose sight of the broader interpretative principles governing incentive provisions. While it is true that deductions are matters of legislative grace, it is equally settled that provisions enacted to promote economic growth and infrastructure development must be construed in a manner that advances, rather than frustrates, their object, so long as the express statutory conditions are satisfied. Courts and tribunals are not at liberty to add conditions under the guise of strict construction. The repeated emphasis in judicial precedent that words cannot be read into a statute when they are not there applies with full force to the present controversy. 34. Viewed thus, we are of the considered opinion that the assessee satisfies the substantive requirements of section 80- IAB. It is a co-developer approved under the SEZ Act, statutorily included within the definition of “Developer”; it derives profits from authorised operation and maintenance of Printed from counselvise.com ITA No.701/Mum/2025 and others Ascendas Panvel FTWZ Private Limited 21 infrastructure within a duly notified FTWZ; the SEZ was notified within the eligible period and development commenced prior to the cut-off date; and the arrangement by which operation and maintenance was entrusted to the assessee falls within the ambit of the second proviso to section 80-IAB(2). The disallowance of deduction on grounds extraneous to the statutory text cannot be sustained. 35. Accordingly, the deduction claimed by the assessee under section 80-IAB for Assessment Years 2018-19, 2020-21 and 2021-22 is directed to be allowed, subject to arithmetical verification of the quantum and the eligible period within the framework of section 80-IAB(2). 36. Turning to the ancillary issues, the grievance regarding short grant of TDS credit for A.Y. 2018-19 is purely factual and verifiable from departmental records. The Assessing Officer is directed to verify the claim with reference to Form 26AS and grant due credit in accordance with law. For A.Y. 2020-21, the grievance regarding erroneous adoption of assessed income under normal provisions as book profit under section 115JB, as also the pointed-out totalling error in the computation sheet, is likewise directed to be rectified after verification. For A.Y. 2021-22, the Assessing Officer shall verify and grant MAT credit under section 115JAA as claimed, in accordance with law. Consequential interest shall be recomputed on the revised tax effect. Printed from counselvise.com ITA No.701/Mum/2025 and others Ascendas Panvel FTWZ Private Limited 22 37. In the result, the appeals filed by the assessee are allowed in the above terms. Order pronounced on 10th February, 2026. Sd/- (MAKARAND VASANT MAHADEOKAR) Sd/- (AMIT SHUKLA) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai; Dated 10/02/2026 KARUNA, sr.ps Copy of the Order forwarded to : BY ORDER, (Asstt. Registrar) ITAT, Mumbai 1. The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file. //True Copy// Printed from counselvise.com "