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2013 (7) TMI 420 - HC - Income TaxDeduction u/s 80IA(4)(iii) - Towers in the Industrial Park rented out for software concern - CIT A held that irrespective of the character of the receipt, the deduction was available to assessee - Tribunal rejected the deduction - Held that - First Appellate Authority held that income received by the assessee was to be assessed as income from business only - Commissioner of Income Tax (Appeals) pointed out that the approval of the Ministry stated that the assessee was eligible for deduction under Section 80IA (4)(iii) - Head under which income is assessed is not relevant for the purpose of claiming exemption under the Act - When the Revenue had accepted the view of the Commissioner of Income Tax (Appeals) on Section 80IA that the assessee had complied with Section 80IA(4)(iii) of the Act, there remains nothing for an enquiry either as to the nature of the receipt or for that matter the facilities developed to be treated as an industrial park to consider the question of deduction under Section 80IA(4)(iii) of the Act - Order of the Tribunal is set aside - Following decision of COMMR. OF INC. TAX v. COCANADA RADHASWAMI BANK LTD 1965 (4) TMI 11 - SUPREME Court - Decided in favour of assessee.
Issues:
1. Jurisdiction of the ITAT to consider issues not raised in appeal 2. Character of receipt for deduction under Section 80IA 3. Validity of ITAT's decision to remand the matter back to the Assessing Officer Analysis: Issue 1: Jurisdiction of the ITAT to consider issues not raised in appeal The High Court addressed the first substantial question of law regarding the ITAT's jurisdiction to consider an issue that had attained finality and was not challenged by the respondent in their appeal before the ITAT. The court emphasized the importance of following the procedure set out in Rule 11 of the Income Tax (Appellate Tribunal) Rules, 1962. The ITAT's decision to set aside the matter to the files of the respondent without any grievance in the respondent's appeal was questioned. The court highlighted the need for proper consideration of materials filed by the appellant and the binding nature of notifications issued by CBDT on the respondent. Issue 2: Character of receipt for deduction under Section 80IA The court delved into the details of the case where the assessee, engaged in developing an Industrial Park, claimed deduction under Section 80IA of the Income Tax Act. The Commissioner of Income Tax (Appeals) recognized the assessee's eligibility for relief under Section 80IA based on the approval received for developing the Industrial Park. The court analyzed the definition of an undertaking under the Industrial Park Scheme and concluded that the income derived from letting out the Industrial Park should be considered as income from business. The court upheld the Commissioner's decision that the nature of the receipt was immaterial once the approval for deduction under Section 80IA was granted. Issue 3: Validity of ITAT's decision to remand the matter The court scrutinized the ITAT's decision to remand the matter back to the Assessing Officer for further verification of the nature of the receipt. The court agreed with the appellant's argument that the remand order was unjustified since the eligibility criteria for Section 80IA relief had already been satisfied. The court emphasized that the ITAT's order of remand for a redundant enquiry on the character of the receipt was unwarranted. The court set aside the ITAT's order, emphasizing that the issue had reached finality, and there was no justification for remand based on an irrelevant issue. In conclusion, the High Court allowed the appeals filed by the assessee, setting aside the ITAT's order and emphasizing the importance of considering only relevant issues in tax appeals without unnecessary remands or enquiries.
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