2013 (4) TMI 488 - HC - Income Tax

Amended provisions of Section 80IB (10) - Section 2(22)(e) - Deduction U/s 80IA(4)(iii) - Held that - The Tribunal, on examination of all facts concluded that all the requisite conditions for claiming benefit under Section 80IA(4)(iii) of the Act has been complied with by the respondent - assessee during the assessment year in question - Further, there is no reason to hold the benefit under Section 80IA(4)(iii) of the Act is available only prospectively from the date of the issue of Notification by the CBDT. In these circumstances, as the decision of the Tribunal is based on finding of fact and mere delay on the part of the Central Board of Direct Taxes in issuing the notification would not warrant the respondent - assessee being denied the benefit of Section 80IA(4)(iii) - This is so, particularly when the Revenue has not been able to point out any infirmity in the approval as granted by the Ministry for Commerce and Industry recognizing the respondent - assessee as industrial park - The view of the Commissioner of Income Tax (A) and the Tribunal is a reasonable view in the facts of the case and thus we see no reason to entertain question regarding Section 80IA(4)(iii). The appeal is admitted on questions amended provisions of Section 80IB (10) and Section 2(22)(e).

Issues:
1. Application of amended provisions of Section 80IB(10) to a project approved before 31-3-2005.
2. Eligibility for deduction under Section 80IB(10) based on project area.
3. Applicability of Section 2(22)(e) on deposits received.
4. Entitlement to deduction under Section 80IA(4)(iii) for an industrial park not notified by CBDT in the assessment year.

Analysis:

Issue 1: Application of amended provisions of Section 80IB(10)
The Tribunal held that the amended provisions of Section 80IB(10) would not apply to a project approved before 31-3-2005. The deduction under Section 80IB(10) cannot be disallowed based on the commercial component exceeding 2000 square feet in the Gawan Pada project. The Tribunal's decision was based on the interpretation that the amended provisions do not apply retrospectively to projects approved before the specified date. This issue has been admitted for further consideration.

Issue 2: Eligibility for deduction under Section 80IB(10) based on project area
The Tribunal ruled in favor of the assessee, citing a previous decision in a similar case. It was established that the deduction under Section 80IB(10) for the Gawan Pada project cannot be disallowed solely based on the area of the eligible component being less than one acre, as long as the total plot area exceeds one acre. This issue has been settled in favor of the assessee based on prior judicial decisions.

Issue 3: Applicability of Section 2(22)(e) on deposits received
The Tribunal held that the deposits received by the assessee from another entity should be treated as interest-free loans and not covered under Section 2(22)(e) as inter-corporate deposits. The real nature of the amounts received was considered to be loans and deposits, leading to the conclusion that the provisions of Section 2(22)(e) are not applicable. This issue has been admitted for further consideration.

Issue 4: Entitlement to deduction under Section 80IA(4)(iii) for an industrial park
The Tribunal upheld the assessee's entitlement to the deduction under Section 80IA(4)(iii) for the profits from an industrial park at Marol Andheri. The Revenue argued that the benefit should be available only from the assessment year 2007-08 when the industrial park was notified by the CBDT. However, the Tribunal found that all conditions for claiming the benefit had been met during the assessment year in question, and the delay in notification issuance did not warrant denying the benefit. The decision was based on factual findings and the reasonableness of the assessee's compliance with requirements. This issue has been settled in favor of the assessee based on the Tribunal's decision.

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