Meenakshi Infrastructure Private Limited, Hyderabad V. Dy.CIT, Circle-16(2), Hyderabad

ITA 831/HYD/2013

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 4840 (ITAT-HYDERABAD)
• Duration Of Justice: 6 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-12-2013
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 23-05-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: RAVI SHESHAGIRI RAO
• Keywords: Depreciation; Competent authority
• Section: 143(3); 153A; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A', HYDERABAD BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SMT. ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER ITA NO. 831/HYD/2013 ASSESSMENT YEAR 2009-10 M/S. MEENAKSHI INFRASTRUCTURE PVT. LTD. HYDERABAD PAN: AAECM0206D VS. THE DCIT CIRCLE-16(2) HYDERABAD APPELLANT RESPONDENT APPELLANT BY: SRI RAVI SHESHAGIRI RAO RESPONDENT BY: SMT. K. HARITHA DATE OF HEARING: 12 . 12 .2013 DATE OF PRONOUNCEMENT: 12 . 12 .2013 O R D E R PER CHANDRA POOJARI, AM: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF THE CIT(A)-V, HYDERABAD DATED 20.2.2013 FOR A.Y. 2009-10. 2. THE ASSESSEE RAISED THE FOLLOWING GROUNDS: 1. THE ORDER OF THE LEARNED CIT(A) IS ERRONEOUS BOTH ON FACTS AND IN LAW. 2. THE LEARNED CIT(A) ERRED IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER IN DISALLOWING THE CLAIM FOR DEDUCTION U/S. 80IA OF THE I.T. ACT AMOUNTING TO RS. 2,49,43,580/-. 3. THE LEARNED CIT(A) OUGHT TO HAVE APPRECIATED THE FACT THAT SIMPLY BECAUSE THE AUDIT REPORT IN FORM 10CCB WAS NOT FILED THE DEDUCTION U/S. 80IA SHOULD NOT BE DISALLOWED. ITA. NO. 831/HYD/2013 M/S. MEENAKSHI INFRASTRUCTURE PVT. LTD. ============================= 2 4. THE LEARNED CIT(A) OUGHT TO HAVE SEEN THAT THE APPELLANT COMPLIED WITH ALL THE REQUIREMENTS OF THE PROVISIONS OF SEC. 80IA OF THE I.T. ACT AND, THEREFORE, THE ASSESSEE IS ELIGIBLE FOR DEDUCTION. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE-COMPA NY IS ENGAGED IN THE BUSINESS OF REAL ESTATE, CONSTRUCTIO N CONTRACTS, PROPERTY DEVELOPMENT, DEVELOPMENT OF SOFTWARE PARKS , ETC., FIELD ITS RETURN OF INCOME ON 30.09.2009 ADMITTING TOTAL INCOME OF RS. 12,83,15,990. THE ASSESSING OFFICER COMPLETED THE ASSESSMENT U/S. 143(3) OF THE ACT DETERMINING THE TAXABLE INCO ME OF THE ASSESSEE-COMPANY AT RS. 15,44,32,440 BY DISALLOWING EXEMPTION US. 80IA OF THE ACT AMOUNTING TO RS. 2,49 ,43,580 AND BY DISALLOWANCE OF EXCESS DEPRECIATION CLAIM OF RS. 11,72,870. 4. ON APPEAL, THE CIT(A) OBSERVED THAT THE ASSESSEE DI D NOT SUBMIT ANY COPY OF AGREEMENTS OR APPROVALS WHICH AR E STATUTORILY REQUIRED U/S. 80IA. FURTHER, AS PER TH E PROVISIONS OF SECTION 80IA(7), THE ASSESSEE IS REQUIRED TO FILE A LONG WITH THE RETURN OF INCOME AN AUDIT REPORT IN FORM NO. 10CCB, WHICH WAS NOT SUBMITTED FOR CLAIMING THE DEDUCTION UNDER THAT SECTION. IN FACT THE ASSESSEE ADMITTED IN ITS WRITTEN SUBMISSIO NS ABOVE THAT IT HAD NOT OBTAINED THE FORMAL CERTIFICATE UNDER SE CTION 10CCB. SINCE THE ASSESSEE HAD NOT COMPLIED WITH THE VITAL STATUTORY REQUIREMENT AS ABOVE, THE CIT(A) AGREED WITH THE AS SESSING OFFICER THAT THE DEDUCTION U/S. 80IA CANNOT BE ALLO WABLE. AGAINST THIS, THE ASSESSEE IS IN APPEAL BEFORE US. 5. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATE RIAL ON RECORD. SIMILAR ISSUE CAME FOR CONSIDERATION BE FORE THIS TRIBUNAL IN ASSESSEES OWN CASE FOR A.Y. 2008-09 IN ITA NO. 19/HYD/2012. THE TRIBUNAL VIDE ORDER DATED 20.6.20 13 HELD AS FOLLOWS: ITA. NO. 831/HYD/2013 M/S. MEENAKSHI INFRASTRUCTURE PVT. LTD. ============================= 3 '9. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. IN OUR OPINION, IT IS AN ADMIT TED FACT THAT THERE IS NO APPROVAL U/S. 10CCB OF THE AC T FOR THE ASSESSEE'S PROJECT. THE AR SUBMITTED BEFOR E US THAT THE ASSESSEE-COMPANY HAS APPLIED FOR APPROVAL IN TIME. HOWEVER, THE APPROVAL WAS NOT YE T GIVEN BY THE MINISTRY OF COMMERCE, GOVERNMENT OF INDIA. IN THE ABSENCE OF STATUTORY APPROVAL FROM MINISTRY OF COMMERCE, GOVERNMENT OF INDIA, AS PER THE PROVISIONS OF SECTION 80IA OF THE ACT EXEMPTION CANNOT BE GRANTED. SIMILAR ISSUE CAME BEFORE THIS TRIBUNAL IN THE CASE OF SSPDL LTD. VS. DCIT (24 ITR (TRIB) 290). THE TRIBUNAL VIDE ORDER DATED 5.4.201 3 HELD AS UNDER: '6. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. IT IS SEEN FROM THE CONDITIONS LAID DOWN IN THE PROVISIONS OF SECTION 80IA(4)(III) OF THE IT ACT READ WITH RULE 18C OF TH E IT RULES, 1962 THAT APPROVAL FROM THE MINISTRY OF COMMERCE AND INDUSTRY UNDER THE INDUSTRIAL PARK SCHEME AND SUBSEQUENT NOTIFICATION IN THIS REGARD BY THE CBDT IS A SINE QUA NON FOR CLAIMING ANY DEDUCTION UNDER THE SAID SECTION. UNDISPUTEDLY, SUCH APPROVAL OR NOTIFICATION HAD NOT BEEN RECEIVED BY THE ASSESSEE. UNDER THE CIRCUMSTANCES, THE REVENUE AUTHORITIES CANNOT BE SAID TO BE INCORRECT IN NOT ALLOWING THE CLAIM OF DEDUCTION U/S. 80IA. THE CONTENTION OF THE ASSESSEE COUNSEL IS THAT THE ASSESSEE GOT APPROVAL FROM THE MINISTRY OF COMMERCE AND INDUSTRY VIDE THEIR LETTER DATED 22.12.2006 FOR SETTING UP OF INFRASTRUCTURE FACILITY FOR STP UNIT UNDER THE STP SCHEME AT ALPHA CITY INDUSTRIAL IT PARK AT NAVALUR VILLAGE, OLD MAHABALIPURAM ROAD, KANCHEEPURAM, CHENNAI SO AS TO GRANT DEDUCTION U/S. 80IA OF THE ACT. ACCORDING TO THE ASSESSEE, THE ASSESSEE FULFILLED THE CONDITIONS LAID DOWN U/S. 80IA(4)(III) OF THE ACT AND IT IS ENTITLED FOR DEDUCTION U/S. 80IA OF THE ACT. IN THIS CASE ADMITTEDLY THE ASSESSEE APPLIED FOR APPROVAL UNDER INDUSTRIAL POLICY 2002 VIDE APPLICATION DATED 8.1.2007 UNDER NON-AUTOMATIC APPROVAL SCHEME. UNDER THIS SCHEME, THE EMPOWERED COMMITTEE COULD REJECT THE APPLICATION OF THE ASSESSEE AFTER GIVING OPPORTUNITY TO THE ASSESSEE AND ORDER OF ITA. NO. 831/HYD/2013 M/S. MEENAKSHI INFRASTRUCTURE PVT. LTD. ============================= 4 REJECTION SHALL BE PASSED WITHIN 12 WEEKS FROM DATE OF RECEIPT OF APPLICATION. 7. THE ASSESSEE MADE A PLEA BEFORE US THAT SINCE THE MINISTRY OF COMMERCE RECEIVED THE APPLICATION OF THE ASSESSEE ON 10.1.2007, THE PERIOD OF 12 WEEKS EXPIRED ON 10.4.2007 AND THERE WAS NO COMMUNICATION UNTIL 15 TH JANUARY, 2009 AND ONLY ON 15 TH JANUARY, 2009 IT WAS INFORMED TO THE ASSESSEE THAT THE APPLICATION OF THE ASSESSEE COULD NOT BE CONSIDERED UNDER INDUSTRIAL POLICY SCHEME 2002 AND IT WAS ADVISED TO APPLY TO THE CBDT UNDER THE INDUSTRIAL POLICY SCHEME 2008. ACCORDING TO THE ASSESSEE ON 10.1.2007 WHEN THE APPLICATION WAS MADE FOR APPROVAL, THERE WAS NO SUCH SCHEME AND ONLY SCHEME UNDER WHICH THE ASSESSEE HAS TO BE CONSIDERED IS INDUSTRIAL POLICY 2002. THE MINISTRY OF COMMERCE HAVING ACTED UPON THE APPLICATION IT SHOULD BE GRANTED WITH THE APPROVAL UNDER INDUSTRIAL POLICY, 2002. 8. HE ALSO BROUGHT TO OUR NOTICE THAT THE MINISTRY OF COMMERCE & INDUSTRIES HAS GRANTED APPROVAL UNDER THE IP SCHEME, 1999 AND 2002 TO ONE ASSESSEE M/S. HARYANA STATE INDUSTRIAL AND INFRASTRUCTURE DEVELOPMENT CORPORATION LTD., PANCHKULA, PARK AT HSIIDC LTD., GROWTH CENTRE, BAWAL, NH-8, DIST. REWARI, HARYANA VIDE THEIR APPLICATION NO. 85/ SIA/IP/2008 DATED 10.7.2008 APPROVED ON 17.3.2009. AS SUCH THE ASSESSEE 'S CASE HAS TO BE APPROVED ON SIMILAR LINES. FURTHER IT WAS BROUGHT TO OUR NOTICE THAT THE ASSESSEE ALSO MADE APPLICATION IN RESPONSE TO THE ADVICE OF MINISTRY OF COMMERCE & INDUSTRIES TO THE CBDT VIDE THEIR APPLICATION DATED 5.3.2009. FURTHER IT WAS SUBMITTED THAT THE ASSESSEE ALSO FILED A WRIT PETITION ON 14.5.2009 BEFORE THE MADRAS HIGH COURT AGAINST THE DELAY MADE BY THE DEPARTMENT OF INDUSTRIAL POLICY PROMOTION (DIPP), MINISTRY OF COMMERCE & INDUSTRY WHICH WAS PENDING. HOWEVER, IN THE PRESENT CASE ON THE DATE OF APPLICATION MADE BY THE ASSESSEE, THERE WAS NO SCHEME IN OPERATION UNDER INDUSTRIAL PARK POLICY, 2002. THE 2002 SCHEME HAD LAPSED AS IT WAS EFFECTIVE, NOTIFIED AND APPLICABLE UP TO 31 ST MARCH, 2006. THE 2002 SCHEME WAS NO LONGER IN OPERATION. IT IS ITA. NO. 831/HYD/2013 M/S. MEENAKSHI INFRASTRUCTURE PVT. LTD. ============================= 5 NOT POSSIBLE TO AGREE WITH THE CONTENTION OF THE ASSESSEE THAT SCHEME 2002 WAS SUBSTITUTED WITH NEW SCHEME 2008. IN OUR OPINION, AT THE TIME OF MAKING INITIAL APPLICATION BY THE ASSESSEE TO DIPP THERE WAS NO SCHEME UNDER INDUSTRIAL POLICY SCHEME, 2002. A NEW SCHEME WAS FRAMED AND GAZETTED ONLY ON 8 TH JANUARY 2008 AND THIS SCHEME HAS BEEN IMPLEMENTED WITH EFFECT FROM 1 ST APRIL 2006. BEING SO, WE CANNOT HOLD THAT THE 2002 SCHEME CONTINUED TO BE IN OPERATION TILL 8 TH JANUARY, 2008. BEING SO, THE ASSESSEE CANNOT TAKE ADVANTAGE OR BENEFIT U/S. 80IA(4)(III) OF THE ACT. A NEW SCHEME WAS FRAMED ON 8 TH JANUARY 2008 AND MADE APPLICABLE WITH EFFECT FROM 1 ST APRIL, 2006. IN VIEW OF THE ABOVE, IN OUR OPINION, THE ASSESSEE IS NOT DULY APPROVED BY THE COMPETENT AUTHORITY FOR AVAILING BENEFIT OF DEDUCTION U/S. 80IA(4) OF THE ACT, WHICH IS MANDATORY IN NATURE. MERE MOVING AN APPLICATION TO THE CENTRAL GOVERNMENT FOR BEING NOTIFIED UNDER CLAUSE (III) OF SECTION 80IA(4) ON 8 TH JANUARY, 2007 TO THE SECRETARY, DIP & P, MINISTRY OF COMMERCE & INDUSTRY, NEW DELHI CANNOT CONFER THE BENEFIT WHEN THE 2002 SCHEME WAS NOT IN OPERATION AND NOT APPLICABLE. THE BENEFIT U/S. 80IA(4)(III) COULD BE AVAILED BY THE ASSESSEE ONLY AFTER THE APPROVAL BY THE DIPP UNDER THE SCHEME. ACCORDINGLY, THE ASSESSEE CANNOT CLAIM DEDUCTION U/S. 80IA(4) OF THE IT ACT. THIS VIEW OF OURS IS ALSO FORTIFIED BY THE JUDGEMENT OF DELHI HIGH COURT DATED 24 TH JANUARY, 2012 IN THE CASE OF REGENCY SORAJ INFRASTRUCTURES VS. UNION OF INDIA & ORS., IN WPC 13825/2009 AND 7699/2010. THUS, THE CLAIM OF THE ASSESSEE IN GROUND NOS. 2 TO 7 IS REJECTED.' 10. BEING SO, THIS ISSUE IS COVERED AGAINST THE ASSESSEE. THE LEARNED AR TRIED TO DISTINGUISH THE ABOVE ORDER OF THE TRIBUNAL BY SUBMITTING THAT IN ASSESSEE'S CASE APPLICATION FOR APPROVAL WAS MADE IN TIME AND IN THE ABOVE CASE THERE WAS DELAY IN SUBMITTING APPLICATION FOR APPROVAL. BEING SO, THE ASSESSEE MAY GET APPROVAL FROM THE MINISTRY OF COMMERCE, GOVERNMENT OF INDIA AND ASSESSEE'S CASE TO BE REMITTED BACK TO THE ASSESSING OFFICER FOR FR ESH CONSIDERATION AFTER GETTING APPROVAL FROM MINISTRY OF COMMERCE, GOVERNMENT OF INDIA ON THIS ISSUE. THE ITA. NO. 831/HYD/2013 M/S. MEENAKSHI INFRASTRUCTURE PVT. LTD. ============================= 6 ASSESSEE SUBMITTED THAT THERE WAS A SEARCH ACTION I N THE CASE OF THE ASSESSEE U/S. 132 OF THE ACT. THE ASSESSING OFFICER IS GOING TO FRAME THE ASSESSMENT U/S. 153A OF THE ACT COVERING THIS ASSESSMENT YEAR ALSO. ACCORDINGLY, HE PRAYED THAT THE ISSUE MAY B E REMITTED BACK TO THE ASSESSING OFFICER. IF THERE W AS SEARCH ACTION IN THIS CASE OF THE ASSESSEE AND CONSEQUENCE OF PASSING OF ORDER U/S. 153A, IT CANNO T BE A REASON TO REMIT THE ISSUE BACK TO THE FILE OF THE ASSESSING OFFICER TO RECONSIDER THE ISSUE AS EACH ASSESSMENT IS INDEPENDENT AND SEPARATE PROCEEDINGS. ACCORDINGLY, THIS PLEA OF THE ASSESSEE IS REJECTED. 11. FURTHER IN THE EVENT OF ASSESSEE GETTING APPROV AL FROM MINISTRY OF COMMERCE, GOVT. OF INDIA, IT CAN F ILE AN APPLICATION FOR RESTORATION OF THIS APPEAL. WITH THAT LIBERTY TO THE ASSESSEE, WE DISMISS THE APPEAL OF THE ASSESSEE. 12. IN THE RESULT, APPEAL OF THE ASSESSEE IS REJECT ED.' 6. RESPECTFULLY FOLLOWING THE ABOVE ORDER OF THE TRIBU NAL, WE ARE INCLINED TO REJECT THE CLAIM OF THE ASSESSEE AS THE ASSESSEE HAS NOT FULFILLED THE BASIC CONDITION PROVIDED U/S. 80IA(7) OF THE ACT AS PER WHICH THE ASSESSEE IS REQUIRED TO FILE A LONG WITH THE RETURN OF INCOME AN AUDIT REPORT IN FORM NO. 10CCB. BEING SO, WE CONFIRM THE ORDER OF THE CIT(A) ON THIS ISSUE. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 12 TH DECEMBER, 2013. SD/ - (ASHA VIJAYARAGHAVAN) JUDICIAL MEMBER SD/ - (CHANDRA POOJARI) ACCOUNTANT MEMBER HYDERABAD, DATED 12 TH DECEMBER, 2013 TPRAO ITA. NO. 831/HYD/2013 M/S. MEENAKSHI INFRASTRUCTURE PVT. LTD. ============================= 7 COPY FORWARDED TO: 1. M/S. MEENAKSHI INFRASTRUCTURE PVT. LTD., C/O. SRI S . RAMA RAO, ADVOCATE, FLAT NO. 102, SHRIYA'S ELEGANCE, H. NO. 3- 6-643, ST. NO. 9, HIMAYATHNAGAR, HYDERABAD-500 029. 2. THE DCIT, CIRCLE - 16(2), HYDERABAD. 3. THE CIT(A) - V, HYDERABAD. 4. THE CIT - I V, HYDERABAD 5. THE DR 'A' BENCH, ITAT, HYDERABAD