2014 (11) TMI 1227 - AT - Income Tax

Deduction u/s 80IA(4)(iii) in respect of income derived by it from the industrial park - specific condition in the notification pertaining to the assessee regarding the number of units was not fulfilled - Whether it is open to the Tribunal to rely upon rule 18C of the Rules and certain provisions from the Industrial Park Scheme, 2002 as laying down the condition construction of the minimum no. of units should be completed before deduction could be claimed under section 80IA(4)(iii) of the Act, when no such condition exists in the said section? - HELD THAT - Allowability of deduction u/s. 80IA(4)(iii) of the I.T. Act has been decided against the assessee by the Tribunal in assessee s own case for A.Y. 2003-04. In view of the order of the Tribunal in assessee s own case, the grounds raised by the Revenue are allowed. On further appeal by the assessee, the Hon ble High Court has already admitted the 3 substantial questions of law which are already mentioned at para 5 above. Therefore, in view of the declaration u/s.158A(1) filed by the assessee in Form No.8, we direct the Assessing Officer to amend the order if the issue is decided in favour of the assessee by the order of the higher authorities at a later date. Grounds raised by the Revenue are accordingly allowed.

Summary

Issues:
Allowability of deduction u/s. 80IA(4)(iii) of the I.T. Act for the Assessment Year 2004-05.

Analysis:
The appeal filed by the Revenue challenged the order of the CIT(A) allowing the deduction claimed by the assessee u/s. 80IA(4)(iii) of the I.T. Act. The assessee, a limited company engaged in the Development and Construction of an Industrial Park and sale of Properties, claimed a deduction of &8377;10,74,83,088/- under section 80IA(4)(iii) for the relevant assessment year. The Assessing Officer, during assessment proceedings, found non-compliance with the requirements of section 80IA(4)(iii) and denied the deduction, stating that if allowed later, certain incomes should be considered ineligible for computation. The CIT(A) reversed this decision, allowing the deduction claimed by the assessee.

The Revenue raised several grounds of appeal before the Appellate Tribunal. The first ground questioned the allowance of deduction when no notification existed at the time of assessment, citing a notification issued after the assessment date. The second ground challenged the eligibility of the assessee for deduction due to non-fulfillment of specific conditions in the notification. The third ground referred to the non-consideration of previous decisions by the ITAT for the A.Y. 2003-04. The fourth and fifth grounds raised issues regarding the completion certificate and eligibility for deduction on rental income, respectively.

The Tribunal noted that the issue had been previously decided against the assessee by the Tribunal for A.Y. 2003-04. However, the High Court had admitted substantial questions of law related to the case. Considering this, the Tribunal directed the Assessing Officer to amend the order if the issue is decided in favor of the assessee by higher authorities in the future. Consequently, the grounds raised by the Revenue were allowed, and the appeal filed by the Revenue was allowed.

In conclusion, the Tribunal's decision revolved around the allowability of deduction u/s. 80IA(4)(iii) of the I.T. Act for the Assessment Year 2004-05. Despite the previous unfavorable decision by the Tribunal, the High Court's admission of substantial questions of law indicated a potential reversal of the decision in the future, prompting the Tribunal to direct the Assessing Officer to amend the order accordingly.