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TMI Blog2012 (8) TMI 675X X X X Extracts X X X X X X X X Extracts X X X X ..... ice to the tenants of the industrial park. Thus, providing space to M/s Ascendas is part of operation and maintenance of the industrial park. The conclusion of the CIT(A) that income derived from the allocable area is only eligible for deduction u/s 80IA(4)(iii), therefore, is not acceptable - the deduction u/s 80IA(4)(iii) shall be restricted to income derived from the ‘allocable area’ only, thus the assessee is eligible to claim deduction u/s 80IA(4)(iii) on the rental income from M/s Ascendas Property Management Services (India) Ltd - in favour of assessee. - ITA Nos. 801 & 802/HYD/2011 - - - Dated:- 28-6-2012 - SHRI D. KARUNAKARA RAO, AND SHRI SAKTIJIT DAY, JJ. Appellant by : Shri S. Raghunathan Respondent by : Shri V. Srinivas ORDER PER SAKTIJIT DEY, J.M.: Both these appeals filed by the assessee are directed against the respective orders of the CIT(A)-IV, Hyderabad for the assessment years 2006-07 and 2007-08. Since identical issues are involved in both these appeals, they were heard together and, therefore, we find it convenient to dispose of these appeals by way of consolidated order. 2. Common grounds raised in both the appeals and the same are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sing Officer, the assessee explained that M/s Ascendas is the managing agency for maintenance and operation of industrial park and has set up its office in the Mariner Block. The Assessing Officer after making physical enquiry through the Inspector, came to a conclusion that the premises, which M/s Ascendas has occupied, and from which the assessee had received rent, was in a separate stand alone building, which did not form part of the structure called Mariner Block. The Assessing Officer further came to the conclusion that the administrative building does not form part of Mariner Block or Auriga Block and, therefore, the assessee is not covered by the Notification issued by the CBDT. On the aforesaid conclusions, the Assessing Officer held that the assessee is not eligible to claim deduction u/s 80IA(4)(iii) of the Act, for the receipts from M/s Ascendas. Aggrieved by the order of the Assessing Officer, the assessee carried the mater in appeal before the CIT(A). 5. Before the CIT(A), the learned AR of the assessee reiterated its stand/submissions as made before the Assessing Officer and contended that the administrative building forms part of the Mariner Block and, therefore, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , 1989, floated by the Central Government, which is at page 65 of the paper book submitted that the objective of the scheme does not restrict the benefit of section 80IA only to the allocable area. It was the contention of the learned counsel for the assessee that the industrial park is not only allocable area but also includes areas for providing other infrastructure and common facilities. In support of his contention, the learned counsel referred to the DIPP s approval letter placed at page 32 of the paper book and the CBDT notification at page 36 of the paper book. The learned counsel contended that the term relating to 100% utilisation of industrial use is only with respect to allocable area and it is not disputed that the assessee has utilized 100% allocable area for industrial use. The learned counsel for the assessee further contended that the assessee entered into a contract with M/s Ascendas in order to ensure World class services to the tenants of industrial parks. To facilitate this, M/s Ascendas was given space in the administrative building on consideration of rent. Charging of rent for the space provided in the administrative building, therefore, is eligible for deduc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . of India, a copy of which is placed at page 51 of the paper book. In this letter, the assessee has clarified that the mariner block in Phase 1 comprises of 5 buildings with 23 floors and common built up area for common facilities which includes administrative building consisting of 2 floors. These facts clearly prove that administrative building is part of Phase I i.e., Mariner Block. Having come to the conclusion that Administrative Building is part of Mariner Block, now it has to be seen whether the rent received from M/s Ascendas can still be considered as ineligible for deduction u/s 80IA(4)iii) since the administrative building is not part of the allocable area. The Central Government in exercise of power conferred u/s 80IA read with Rule 18C(2) issued a Notification on 30/03/1999 framing a scheme for industrial park. The objectives of the scheme under clause 1(b) provides as follows: an industrial park for development of infrastructural facilities in an area as well as provision of built-up space and common facil ities for the special ised purpose activity like sof tware development, gems and jewellery, electronics hardware. 9. Clause 2 of the Scheme provides that an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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