Deputy Commissioner of INcome TAx Circle-5(1)(2), Bangalore V. M/s Prasad Technology Park Pvt Ltd , Bangalore

ITA 2134/BANG/2017

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 7729 (ITAT-BANGALORE)
• Duration Of Justice: 7 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-07-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2014-2015
• Appeal Filed On: 07-11-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M RAJASEKHAR BENGALURU
• Assessee Lawyers: PRATHIBA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : BANGALORE BEFORE SHRI N.V. VASUDEVAN, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER ITA NO. 2134/BANG/2017 ASSESSMENT YEAR : 2014 - 15 THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 5(1)(2), BANGALORE. VS. M/S. PRASAD TECHNOLOGY PARK PVT. LTD., # 2/10, 3 RD FLOOR, 80 FEET ROAD, POOJARI LAYOUT, RMV 2 ND STAGE, BANGALORE 560 094. PAN: AAAGP 8351J APP ELL ANT RESPONDENT A PP EL LANT BY : SHRI M. RAJASEKHAR, ADDL.CIT(DR)(ITAT), BENGALUR U RE SPONDENT BY : SMT. PRATHIBA, ADVOCATE DATE OF HEARING : 05.06.2018 DATE OF PRONOUNCEMENT : 06.07. 201 8 O R D E R PER N.V. VASUDEVAN, JUDICIAL MEMBER THIS IS AN APPEAL BY THE REVENUE AGAINST THE ORD ER DATED 6.7.2017 OF THE CIT(APPEALS)-5, BENGALURU RELATING TO ASSESS MENT YEAR 2014-15. 2. THE GROUNDS OF APPEAL RAISED BY THE REVENUE RE ADS AS FOLLOWS:- 1. THE ORDER OF THE COMMISSIONER OF INCOME TAX(APP EALS) - 5, BANGALORE, IS OPPOSED TO THE LAW AND NOT ON THE FACTS AND CIRCUMSTANCES OF THE CASE. 2. WHETHER THE CIT(A) IS JUSTIFIED IN LAW BY ALLOWI NG THE CLAIM OF DEDUCTION U/S.80IA(4)(III) WHEN THE ASSESS EE WAS ITA NO. 2134/BANG/2017 PAGE 2 OF 5 NOT ABLE TO SUBMIT NOTIFICATION OF CBDT WHICH IS MANDATORY AS PER RULE 18(C)(4) OF THE I.T.RULES FOR CLAIMING DEDUCTION U/S.80IA(4)(III)'. 3. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND OR DELETE ANY OTHER GROUNDS ON OR BEFORE HEARING OF THE APPEA L. 3. THE ASSESSEE IS A COMPANY. THE ASSESSEE CLAIMED DEDUCTION OF A SUM OF RS.4,45,54,029 U/S. 80IA(4)(III) OF THE INCO ME-TAX ACT, 1961 [THE ACT]. THE ASSESSEE CLAIMED THAT IT HAD BUILT AN I NDUSTRIAL TECHNOLOGY PARK ON THE LAND ALLOTTED BY KIADB AND IS OPERATING AND MAINTAINING THE SAID TECHNOLOGY PARK AND DERIVING INCOME BY LEASING OUT THE PROPERTY BUILT ON THE LAND ALLOTTED BY KAIDB. THE AFORESAID CLAIM OF THE ASSESSEE FOR DEDUCTION WAS REJECTED BY THE AO FOR THE REASON THA T IDENTICAL CLAIM MADE BY THE ASSESSEE FOR DEDUCTION FOR AYS 2007-08 & 200 8-09 WAS REJECTED. 4. ON APPEAL BY THE ASSESSEE, THE CIT(APPEALS) ALLO WED THE CLAIM OF ASSESSEE AFTER IT WAS BROUGHT TO HIS NOTICE THAT CL AIM OF ASSESSEE FOR DEDUCTION U/S. 80IA(4)(III) OF THE ACT WAS ALLOWED BY THE ITAT IN AYS 2007- 08 & 2008-09 IN ITA NOS.138 & 139/BANG/2013 VIDE OR DER DATED 10.5.2013. THE TRIBUNAL IN THE AFORESAID DECISION HELD AS FOLL OWS:- 5.3.1 WE HAVE HEARD BOTH PARTIES AND CAREFULLY PE RUSED AND CONSIDERED THE MATERIAL ON RECORD AND THE JUDICIAL DECISIONS CITED. IT IS NOT IN DISPUTE THAT THE ASSESSEE, IN THE CASE . ON HAND, HAS SET UP A STP, (VIZ. INDUSTRIAL PARK) FOR WHICH IT HAS O BTAINED THE APPROVAL FROM THE MINISTRY OF COMMERCE AND INDUSTRY , GOVT. OF INDIA VIDE ORDER DT.13.4.2006. IT IS SEEN THAT IN O RDER OF ASSESSMENT, THE ASSESSING OFFICER HAD RAISED AN ISS UE REGARDING THE NON-COMPLIANCE TO THE CONDITION STIPULATED IN T HE APPROVAL ACCORDED REGARDING THE NUMBER OF UNITS TO BE MAINTA INED IN THE STP. HOWEVER, WE FIND THAT IN THE REMAND REPORT SUB MITTED TO THE LEARNED CIT(APPEALS), THE ASSESSING OFFICER HAS FAI RLY ACCEPTED THAT THE CONDITION REGARDING MAINTAINING OF ATLEAST THREE UNITS HAS ITA NO. 2134/BANG/2017 PAGE 3 OF 5 BEEN FULFILLED. THAT THE CBDT HAS SINCE NOTIFIED TH E UNDERTAKING VIDE NOTIFICATION DT.21.2.2012 IS ALSO AN UNDISPUTE D FACT ON RECORD. THAT THE CBDT NOTIFICATION HAS REPRODUCED / CONTAINS THE CONDITIONS STIPULATED IN THE APPROVAL LETTER OF THE MINISTRY OF COMMERCE AND INDUSTRY, GOVT. OF INDIA DT.13.4.2006 AND IS RELATED TO EXISTENCE OF THREE INDUSTRIAL UNITS IN T HE ASSESSEE'S INDUSTRIAL PARKS (VIZ. STP). FURTHER, THE ASSESSEE HAS BROUGHT ON RECORD A CERTIFICATE DT.28.5.2012 FROM THE JOINT DI RECTOR, DISTRICT INDUSTRIAL CENTRE, BANGALORE TO THE EFFECT THAT THE ASSESSEE HAS BEEN OPERATING AND MAINTAINING THE INDUSTRIAL PARK (SIP) SINCE 30.11.2005 AND THAT THE SAID INDUSTRIAL PARK HAS 12 SEPARATE INDEPENDENT AND IDENTIFIABLE UNITS SINCE INCEPTION AND THAT NONE OF THE UNITS INDIVIDUALLY OCCUPY MORE THAN 50% OF T HE BUILT-UP AREA. IN THIS FACTUAL MATRIX, AS LAID OUT ABOVE, WE HAVE NO HESITATION IN HOLDING THAT THE ASSESSEE HAS SATISFI ED THE CONDITIONS SPECIFIED IN THE APPROVAL LETTER DT.13.4.2006, ISSU ED BY THE MINISTRY OF COMMERCE AND INDUSTRY, GOVT. OF INDIA, FOR CLAIMING DEDUCTION UNDER SECTION 80 IA(4)(III) OF THE ACT. 5.4.1 REGARDING THE QUESTION OF AS TO WHETHER THE A SSESSEE IS ENTITLED FOR BEING ALLOWED DEDUCTION UNDER SECTION 80 IA(4)(III) OF THE ACT FOR ASSESSMENT YEARS 2007-08 AND 2008-09, T HE FACTS ON RECORD EVIDENCE THAT THE ASSESSEES INDUSTRIAL PARK / STP IS OPERATIONAL FROM 30.11.2005 AND THAT THE ASSESSEE S ATISFIES THE CONDITIONS STIPULATED FOR AVAILING THE DEDUCTION UN DER SECTION 80 IA(4)(III) OF THE ACT. IN THE FACTUAL MATRIX OF THE CASE ON HAND, WE ARE OF THE VIEW THAT THERE IS NO REASON TO DENY THE ASSESSEE THE DEDUCTION CLAIMED UNDER SECTION 80 IA(4)(III) OF TH E ACT MERELY BECAUSE THE CBDT NOTIFICATION WAS ISSUED MUCH LATER ON 21.2.2012, WHEN THE SAID NOTIFICATION IS ISSUED IN VIEW OF THE APPROVAL GRANTED BY THE MINISTRY OF COMMERCE AND IN DUSTRY, GOVT. OF-INDIA ON 13.4.2006. ONE OF THE TERMS AND C ONDITIONS SPECIFIED IN THE ANNEXURE TO THE CBDT NOTIFICATION DT. 21.2.2012 AT SL.NO.5 STATES THAT - 5. IN CASE THE INDUSTRIAL PARK DID NOT COMMENCE BY 31.3.2006, FRESH APPROVAL WILL BE REQUIRED UNDER THE INDUSTRIA L PARK SCHEME, 2008 SUBJECT TO THE APPLICABILITY UNDER THAT SCHEME AVAILING BENEFITS UNDER SUB-SECTION 4(III) OF SECTION 80 IA OF THE INCOME TAX ACT, 1961.' THE CBDT NOTIFICATION DT.21.2.2012 STIPULATES A CONDITION OF COMMENCEMENT OF THE INDUSTRIAL PARK / STP BY ITA NO. 2134/BANG/2017 PAGE 4 OF 5 31.3.2006, THE INEVITABLE CONCLUSION IS THAT THE BE NEFITS ARE AVAILABLE TO THE ASSESSEE FROM MARCH, 2006, IF THE INDUSTRIAL PARK COMMENCES BY THAT TIME. ANY OTHER REFERENCE, IN OUR CONSIDERED OPINION, WOULD BE INAPPROPRIATE IN VIEW OF THE FACT THAT THE JOINT DIRECTOR, DISTRICT INDUSTRIES CENTRE, BANGALORE HAS ISSUED A COMMENCEMENT OF ACTIVITIES CERTIFICATE CERTIFYING T HAT THE INDUSTRIAL PARK / STP OF THE ASSESSEE COMMENCED ITS ACTIVITIES ON 30.11.2005. 5.4.2 IN THIS REGARD, WE HAVE PERUSED THE DECISION OF THE HON'BLE GUJARAT HIGH COURT IN THE CASE OF CREATIVE INFOCITY LTD (SUPRA) RELIED UPON BY THE ASSESSEE AND FIND THAT IS RELEVA NT AND SQUARELY APPLIES TO THE FACTS OF THE ASSESSEE'S CASE. IN THE CITED CASE, THE HON'BLE HIGH COURT HELD THAT ONCE APPROVAL WAS GRAN TED BY THE MINISTRY OF COMMERCE AND INDUSTRY, GOVT. OF INDIA T O THE ASSESSEE, THE CBDT WAS DUTY BOUND TO NOTIFY THE IND USTRIAL PARK / STP FOR BENEFITS UNDER SECTION 80 IA OF THE ACT, WI THOUT ANY FURTHER INVESTIGATION AS TO WHETHER THE ASSESSEE HA D COMPLIED WITH THE TERMS AND CONDITIONS ENVISAGED IN THE SCHE ME. IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE AS DISCU SSED ABOVE AND IN THE LIGHT OF THE DECISION OF THE HON'BLE GUJARAT HIGH COURT IN THE CASE OF CREATIVE INFOCITY LTD. (SUPRA), WE FIND SUBSTANTIAL MERIT IN THE CONTENTION OF THE ASSESSEE THAT THE NO TIFICATION TO BE ISSUED BY CBDT IS ONLY A FORMALITY ONCE THE APPROVA L IS GRANTED BY THE MINISTRY OF COMMERCE & INDUSTRY, GOVT. OF IN DIA, AND, THEREFORE, HOLD THAT ONCE THE CBDT NOTIFICATION IS ISSUED, THE ASSESSEE IS ENTITLED TO THE BENEFITS UNDER SECTION 80 IA (4)(III) OF THE ACT FROM THE DATE OF APPROVAL BY MINISTRY OF CO MMERCE AND INDUSTRY, GOVT. OF INDIA, SUBJECT TO THE COMPLIANCE OF THE TERMS AND CONDITIONS SPECIFIED THEREIN. THERE IS NOTHING TO SUGGEST THAT THE BENEFITS OF THE DEDUCTION UNDER SECTION 80 IA ( 4)(III) OF THE ACT ARE AVAILABLE ONLY FROM THE DATE OF NOTIFICATIO N BY THE CBDT. WE, THEREFORE, HOLD THAT THE ASSESSEE IS ENTI TLED FOR DEDUCTION UNDER SECTION 80 IA (4)(III) OF THE ACT F OR BOTH ASSESSMENT YEARS 2007-08 & 2008-09; THE TWO YEARS U NDER CONSIDERATION. IT IS ORDERED ACCORDINGLY. 5. AGGRIEVED BY THE ORDER OF CIT(APPEALS), THE REVE NUE HAS PREFERRED THE PRESENT APPEAL BEFORE THE TRIBUNAL. ITA NO. 2134/BANG/2017 PAGE 5 OF 5 6. THE ISSUE RAISED BY THE REVENUE IN THE GROUNDS O F APPEAL HAS ALREADY BEEN ADDRESSED BY THE TRIBUNAL IN ASSESSEE S OWN CASE FOR THE AY 2007-08 IN ITS ORDER DATED 10.5.2013. IN PARA 5.4. 2, THE TRIBUNAL HELD THAT THERE IS NOTHING TO SUGGEST THAT DEDUCTION U/S. 80I A(4)(III) IS ALLOWABLE FROM THE DATE OF NOTIFICATION BY THE CBDT. IN COMING TO THE AFORESAID CONCLUSION, THE TRIBUNAL HAS PLACED RELIANCE ON THE DECISION OF THE HONBLE GUJARAT HIGH COURT IN THE CASE OF CREATIVE INFOCITY LTD. [2012] 206 TAXMAN 413 (GUJ) . IN VIEW OF THE AFORESAID DECISION OF THE TRIBUNA L IN ASSESSEES OWN CASE, WHICH DECISION WAS ALSO FOLLOWED BY THE T RIBUNAL IN ASSESSEES OWN CASE FOR THE AYS 2009-10 TO 2011-12, WE ARE OF THE VIEW THAT THERE IS NO MERIT IN THIS APPEAL BY THE REVENUE. CONSEQUENT LY, THE APPEAL BY THE REVENUE IS DISMISSED. PRONOUNCED IN THE OPEN COURT ON THIS 06 TH DAY OF JULY, 2018. SD/- SD/- ( A.K. GARODIA ) ( N.V. VASUDEVAN ) ACCOUNTANT MEMBER JUDICIAL MEMBER BANGALORE, DATED, THE 06 TH JULY, 2018. / D ESAI S MURTHY / COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER SENIOR PRIVATE SECRETARY ITAT, BANGALORE.