2021 (7) TMI 1233 - AT - Income Tax

Disallowance of deduction u/s 80IAB - income derived from 'Operation and Maintenance Activities' of SEZ - HELD THAT - A combined reading of provisions of section 80IAB of the Act with section 2(g) and Section 3(10) of the Special Economic Zone Act that a person would be considered as a developer with the grant of letter of approval from competent authority, if the approval has been granted for development, operating and maintaining the SEZ. Therefore, activities of the assessee being a developer, include operation and maintenance of SEZ, and therefore entitled for deduction under section 80IAB of the Act. DR has not disputed or point out any material difference in this year from that of earlier years, so that the Tribunal can take a different view on the issue of claim of deduction under section 80IAB of the Act. Therefore, respectfully following orders of the Tribunal in the assessee s own case cited. 2018 (2) TMI 2040 - ITAT AHMEDABAD ,. 2017 (10) TMI 1578 - ITAT AHMEDABAD and 2016 (8) TMI 696 - ITAT AHMEDABAD based on which the ld.CIT(A) has allowed the claim of the assessee, we uphold order of the ld.CIT(A) and dismiss the ground of appeal of the Revenue.

Summary

Issues:
- Disallowance of deduction under section 80IAB of the Income Tax Act, 1961.

Detailed Analysis:

Issue: Disallowance of deduction under section 80IAB
The Revenue appealed against the order of the ld.CIT(A) deleting the disallowance of deduction under section 80IAB amounting to ?2,15,25,030. The assessee, engaged in development, operation, and maintenance of a Special Economic Zone (SEZ), claimed the deduction under section 80IAB. The ld.AO contended that the activities of development of SEZ were distinct from the activities of "operation and maintenance" of SEZ, and thus, the assessee was not eligible for the deduction under section 80IAB on income derived from "operation and maintenance activities" of SEZ. The ld.CIT(A) allowed the deduction, relying on previous orders and Tribunal decisions in the assessee's case for earlier assessment years. The Tribunal upheld the ld.CIT(A)'s decision, emphasizing that as a developer of SEZ, the assessee's activities included operation and maintenance of SEZ, making them eligible for the deduction under section 80IAB. The Tribunal found no material difference in the current year's claim compared to earlier years and upheld the allowance of the deduction, dismissing the Revenue's appeal.

This judgment highlights the interpretation of provisions under section 80IAB of the Income Tax Act in the context of SEZ development and maintenance activities. It establishes the eligibility criteria for claiming deductions under this section based on the nature of activities carried out by the assessee. The decision emphasizes consistency in applying legal principles across assessment years and the significance of previous Tribunal rulings in determining the eligibility of deductions under the Income Tax Act.