Sai Enterprise, Baroda V. The Income Tax Officer, Ward 5(2), Baroda

ITA 1482/AHD/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 0764 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 3 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-09-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 04-08-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 20-05-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: ANIL R SHAH
• Section: 5(2); 234B; 80IB; 2

Judgement Text

, D IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, AHMEDABAD BEFORE SHRI S.S. GODARA, JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER ./ ITA.NO.1482/AHD/2013 / ASSTT. YEAR: 2009-10 SAI ENTERPRISE FF.1, SHREEJI COMPLEX OPP: WATER TANK KARELIBAUG, BARODA. PAN : ABJFS 8241 F. VS ITO, WARD - 5(2) BARODA. ! / (APPELLANT) '# ! / (RESPONDENT) ASSESSEE BY : SHRI ANIL R. SHAH REVENUE BY : SHRI PRASOON KABRA, SR.DR / DATE OF HEARING : 04/08/2016 / DATE OF PRONOUNCEMENT: 06 /09/2016 $%/ O R D E R PER AMARJIT SINGH, ACCOUNTANT MEMBER: THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL AGAIN ST THE ORDER OF THE LD.CIT(A)-V DATED 20.3.2013 PASSED FOR THE ASST T.YEAR 2009-10. 2. THE ASSESSEE HAS RAISED THE FOLLOWING THREE GROU NDS OF APPEAL, WHICH READ AS UNDER: 1. THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-V, BARODA HAS ERRED BOTH IN LAW AND IN FACT IN CONFIRMING NON ALL OWANCE OF DEDUCTION ITA NO.1482/AHD/2013 2 U/S. 80IA(4)(III) OF THE ACT OF RS.59,22,000/-ERRON EOUSLY DISALLOWED BY I.T.O. 2. YOUR APPELLANT HAVING SATISFIED ALL CONDITI ONS NECESSARY FOR CLAIM OF DEDUCTION U/S. 80 IA(4)(III) AND HE HAVING GIVEN FULL INFORMATION AND PROOF THEREOF TO THE A.O., THE LD. CIT (A) OUGHT TO HAVE GRANTED RELIEF OF DEDUCTION OF RS.59,22,530/- U/S. 80IA (4)(III). 3. IT IS FURTHER SUBMITTED THAT NOTIFICATION OF INDUSTRIAL PARK BY CBDT IS ONLY A FORMALITY AND THE APPLICATION BEING PENDI NG FROM 18-10-2007 UNDER INDUSTRIAL PARK SCHEME, 2008 THE APPELLANT WI LL BE ELIGIBLE FOR THE RELIEF / DEDUCTION FROM THE SAID DATE AND THERE FORE, IT IS SUBMITTED THAT THE LD. CIT (A) OUGHT TO HAVE GIVEN DEDUCTION OF RS.59,22,530/-U/S. 80IA (4) (III). 3. MAIN GRIEVANCE OF THE ASSESSEE IN THE ABOVE THRE E GROUNDS IS AGAINST NON-ALLOWANCE OF DEDUCTION UNDER SECTION 80 IA(4)(III) OF THE INCOME TAX ACT, 1961. WE WOULD TAKE BRIEF FACTS RE LEVANT FOR THE CONSIDERATION OF THIS ISSUE, FROM THE MATERIAL AVAI LABLE ON RECORD. 4. ASSESSEE IS A FIRM ENGAGED IN DEVELOPMENT OF IND USTRIAL PARK. IT HAS FILED ITS RETURN OF INCOME ON 27.9.2009 SHOWING TOTAL INCOME AT RS.NIL. THE RETURN WAS PROCESSED UNDER SECTION 143 (1) OF THE ACT, AND THEREAFTER, CASE OF THE ASSESSEE WAS TAKEN UP FOR S CRUTINY ASSESSMENT AND ISSUED NOTICE UNDER SECTION 143(2) OF THE ACT ON 18 .8.2010 WHICH WAS DULY SERVED UPON THE ASSESSEE. THE LD.AO, ON VERIF ICATION OF RECORD, FOUND THAT THE ASSESSEE HAS CLAIMED DEDUCTION OF RS .59,22,530/- UNDER SECTION 80IA(4)(III) OF THE ACT. ASSESSEE WAS ASKE D TO JUSTIFY CLAIM OF DEDUCTION UNDER THE SAID PROVISION WITH SUPPORTING PROOF. THE ASSESSEE FILED DETAILS CONTAINING COPY OF APPLICATION FOR CO NSIDERATION UNDER THE INDUSTRIAL PARK SCHEME 2008; COPY OF STATUS REPORT OF FUNCTIONING OF THE INDUSTRIAL PARK, COPY OF REVISED FORM NO.IPS-1, COP Y OF SALE DEED OF LAND ITA NO.1482/AHD/2013 3 PERTAINING TO INDUSTRIAL PARK. ON VERIFICATION OF THE DETAILS FURNISHED BY THE ASSESSEE, THE AO NOTICED THAT THE INDUSTRIAL PA RK HAS NOT BEEN NOTIFIED BY THE CENTRAL BOARD OF DIRECT TAXES, WHIC H IS ONE OF THE PRIMARY CONDITIONS TO BE FULFILLED FOR CLAIMING DED UCTION U/S.80IA(4)(III) OF THE I.T.ACT. THE AO WAS NOT SATISFIED WITH THE E XPLANATION OF THE ASSESSEE, AND THEREFORE, DISALLOWED THE IMPUGNED CL AIM OF THE ASSESSEE, MAINLY ON THE GROUND THAT IN ORDER TO AVAIL TAX BEN EFIT UNDER THE ACT, UNDERTAKING AND/OR THE INDUSTRIAL PARK HAVE TO BE N OTIFIED BY THE CENTRAL BOARD OF DIRECT TAXES UNDER SECTION 80IB OF THE ACT WHICH HAS NOT BEEN GRANTED TO IT BY THE CBDT TILL THE DATE. THE AO, A CCORDINGLY, DISALLOWED THE CLAIM OF THE ASSESSEE, AND ASSESSED TOTAL INCOM E OF THE ASSESEE AT RS.59,22,530/- INSTEAD OF NIL RETURNED BY THE ASSES SEE. 5. DISSATISFIED WITH THE ACTION OF THE AO, THE ASSE SSEE WENT IN FIRST APPEAL, WHERE THE LD.CIT(A) ALSO FOUND THAT THE CLA IM OF THE ASSESSEE CANNOT BE ENTERTAINED AS THE INDUSTRIAL PARK CONSTR UCTED BY THE ASSESSEE WAS NOT NOTIFIED BY THE CBDT, WHICH IS PREREQUISITE FOR CLAIMING THE DEDUCTION UNDER SECTION 80IA(4)(III) OF THE ACT. T HE AO, WHILE REJECTING THE CLAIM OF THE ASSESSEE HAS RECORDED REASONS IN T HE ASSESSMENT ORDER. IT READS AS UNDER: . FROM THE SUBMISSION OF THE ASSESSEE, IT WAS NOTICED THAT THE ASSESSEE HAS ONLY MADE APPLICATION TO THE UNDER SEC RETARY TO THE GOVT. OF INDIA, MINISTRY OF COMMERCE AND INDUSTRIES FOR CONSIDERATION UNDER THE INDUSTRIAL PARK SCHEME, 2008 DATED 18.10. 2007. HOWEVER, THE INDUSTRIAL PARK HAS NOT BEEN NOTIFIED BY THE CE NTRAL BOARD OF DIRECT TAXES TILL DATE. THE ASSESSEE HAS ALSO ADMIT TED IN ITS ABOVE SUBMISSION THAT THE INDUSTRIAL PARK HAS NOT BEEN NO TIFIED BY THE CENTRAL BOARD OF DIRECT TAXES TILL DATE. SIMPLY MAK ING AN APPLICATION FOR NOTIFICATION OF THE INDUSTRIAL PARK WOULD NOT E NTITLE THE ASSESSEE TO CLAIM DEDUCTION U/S 80IA(4)(III) OF THE IT. ACT. AS PER THE PROVISIONS OF ITA NO.1482/AHD/2013 4 THE INCOME-TAX ACT AN ASSESSEE ENGAGED THE BUSINESS OF DEVELOPMENT OF INDUSTRIAL PARK IS ENTITLED TO CLAIM DEDUCTION U/S 80IA(4)(III) OF THE IT. ACT ONLY IF THE FOLLOWING C ONDITIONS ARE FULFILLED. [1] THE INDUSTRIAL PARK SHALL BE CONSTRUED AS DEVEL OPED ON THE DATE OF COMMENCEMENT. [2] TAX BENEFITS UNDER THE ACT WILL BE AVAILABLE TO THE UNDERTAKING ONLY AFTER MINIMUM NUMBER OF THIRTY UNITS ARE LOCATED IN THE INDUSTRIAL PARK. [3] THE TAX BENEFITS UNDER THE ACT WILL BE AVAILABL E TO THE UNDERTAKING ONLY IF THE UNDERTAKING AND THE INDUSTRIAL PARK HAVE BEEN N OTIFIED BY CENTRAL BOARD OF DIRECT TAXES UNDER SECTION 80IA OF THE ACT. [4] THE TAX BENEFITS UNDER THE ACT WILL BE AVAILABL E ONLY TO THE UNDERTAKING NOTIFIED BY THE CENTRAL GOVERNMENT AND NOT TO ANY O THER PERSON WHO MAY SUBSEQUENTLY DEVELOP, DEVELOPS AND OPERATES OR MAIN TAINS AND OPERATES THE NOTIFIED INDUSTRIAL PARK, FOR ANY REASON. [5] THE UNDERTAKING MUST KEEP SEPARATE BOOKS OF ACC OUNT FOR THE INDUSTRIAL PARK AND MUST FILE ITS INCOME-TAX RETURN S BY THE DUE DATE TO THE INCOME-TAX DEPARTMENT. [6] THE UNDERTAKING SHALL ELECTRONICALLY FURNISH AN ANNUAL REPORT TO THE CENTRAL BOARD OF DIRECT TAXES IN FORM NO.IPS-11. 6. BEFORE US, THE LD.COUNSEL FOR THE ASSESSEE REITE RATED THE SUBMISSIONS MADE BEFORE THE REVENUE AUTHORITIES, WH EREAS, THE LD.DR RELIED UPON THE ORDERS OF THE AO AND THE LD.CIT(A). 7. WE HAVE GONE THROUGH THE MATERIAL AVAILABLE ON R ECORD AND THE PLEADINGS OF THE ASSESSEE BEFORE THE LOWER AUTHORIT IES. WE DO NOT FIND ANY REASON TO INTERFERE IN THE CONCURRENT FINDING O F THE REVENUE AUTHORITIES ON THE CLAIM OF THE ASSESSEE UNDER SECT ION 80IA(4)(III) OF THE ACT. UNDISPUTEDLY, FOR CLAIMING THE DEDUCTION UNDE R THIS PROVISION, THE ASSESSEE HAS TO FULFILL CONDITIONS PROVIDED IN SECT ION 80IA(4)(III) OF THE ACT. RELEVANT PORTION OF THE SECTION 80IA(4)(III) READS AS UNDER: ITA NO.1482/AHD/2013 5 (4) THIS SECTION APPLIES TO (III) ANY UNDERTAKING WHICH DEVELOPS, DEVELOPS AND OPERATES OR MAINTAINS AND OPERATES AN INDUSTRIAL PARK (OR SPECI AL ECONOMIC ZONE) NOTIFIED BY THE CENTRAL GOVERNMENT IN ACCORDA NCE WITH THE SCHEME FRAMED AND NOTIFIED BY THAT GOVERNMENT FOR T HE PERIOD BEGINNING ON THE 1 ST DAY OF APRIL, 1997 AND ENDING ON THE 31 ST DAY OF MARCH, 2006. ACCORDING TO THIS PROVISION, CONDITION PRECEDENT F OR CLAIMING DEDUCTION UNDER SECTION 80IA(4)(III) IS THAT THE UN IT SHOULD BE NOTIFIED BY THE CENTRAL GOVERNMENT IN ACCORDANCE WITH THE SCHEM E OF THE ACT. ADMITTEDLY, ASSESSEE HAD APPLIED FOR NOTIFICATION O F ITS INDUSTRIAL PARK, BUT CBDT VIDE LETTER DATER DATED 13.5.2014 HAS REJE CTED APPLICATION OF THE ASSESSEE. THEREFORE, CLAIM OF THE ASSESSEE IS NOT MAINTAINABLE. THIS ASPECT HAS BEEN CONSIDERED BY BOTH THE AUTHORITIES BELOW AND RIGHTLY REJECTED THE CLAIM OF DEDUCTION. A COPY OF THE LET TER OF THE CBDT HAS BEEN PLACED ON RECORD BY THE ASSESSEE IN THE PAPER AT PAGE NO.7 OF THE PAPER BOOK. THEREFORE, WE ARE OF THE VIEW THAT THE REVENUE AUTHORITIES HAVE RIGHTLY DENIED THE CLAIM OF THE ASSESSEE, WHIC H WE UPHOLD, AND REJECT GROUNDS OF THE APPEAL OF THE ASSESSEE. 8. THE ASSESSEE HAS ALSO RAISED ADDITIONAL GROUNDS WITH REGARD TO CHARGING OF INTEREST UNDER SECTION 234B OF THE INCO ME TAX ACT. IN SUPPORT OF ITS CLAIM, THE LD.COUNSEL FOR THE ASSESS EE RELIED ON SOME JUDGMENTS OF THE HONBLE HIGH COURTS. ITA NO.1482/AHD/2013 6 9. WE HAVE GONE THROUGH THE CASE LAWS RELIED ON BY THE ASSESSEE. WE FIND THAT CASE LAWS CITED BY THE ASSESSEE ARE OF NO HELP TO THE ASSESSEE, AS THE FACTS THEREIN ARE DISTINGUISHABLE. INASMUCH AS , IN THE PRESENT CASE, THE ASSESSEE IS VERY MUCH AWARE THAT FOR CLAIMING D EDUCTION UNDER SECTION 80IA(4)(III) OF THE ACT CONDITIONS PROVIDED THEREIN ARE TO BE COMPLIED WITH, I.E. CONDITION PRECEDENT FOR CLAIMIN G DEDUCTION IS THAT THE INDUSTRIAL PARK OF THE ASSESSEE HAS TO BE NOTIFIED BY THE CENTRAL GOVERNMENT. APPLICATION TO THE CENTRAL GOVERNMENT FOR NOTIFICATION OF ASSESSEES INDUSTRIAL UNDERTAKING IPSO FACTO DOES NOT ENTITLE THE ASSESSEE TO CLAIM THE DEDUCTION UNDER SECTION 80IA(4)(III). PRESUMPTION OF THE ASSESSEE THAT MERE APPLICATION FOR NOTIFICATION OF THE INDUSTRIAL UNDERTAKING BY THE CENTRAL GOVERNMENT, THE ASSESSEE WILL BE ENTITLED FOR THE IMPUGNED DEDUCTION IS ILL-LOGICAL AND UNFOUNDED , AND THEREFORE, WE CANNOT BUY THIS PROPOSITION OF THE LD.COUNSEL FOR T HE ASSESSEE IN NOT CHARGING INTEREST UNDER SECTION 234B OF THE ACT. E VEN OTHERWISE ALSO, CHARGING OF INTEREST UNDER SECTION 234B IS MANDATOR Y AND CONSEQUENTIAL IN NATURE. THEREFORE, WE REJECT THIS ADDITIONAL GR OUND OF APPEAL OF THE ASSESSEE. 10. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DI SMISSED. ORDER PRONOUNCED IN THE COURT ON 6 TH SEPTEMBER, 2016 AT AHMEDABAD. SD/- SD/- ( S .S. GODARA) JUDICIAL MEMBER ( AMARJIT SINGH ) ACCOUNTANT MEMBER AHMEDABAD; DATED 06/09/2016 VK*