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TMI Blog2017 (12) TMI 1762X X X X Extracts X X X X X X X X Extracts X X X X ..... :- 29-12-2017 - Smt. P. Madhavi Devi, Judicial Member And Shri S.Rifaur Rahman, Accountant Member For Revenue: Shri S. Moharana, CIT (DR) For Assessee: Shri Ramesh Babu Kilaru ORDER Smt. P. Madhavi Devi, J.M. This is Revenue s appeal for the A.Y 2013-14. In this appeal, the assessee is aggrieved by the order of the learned CIT (A)-2, Hyderabad, dated 31.01.2017 in directing the AO to allow the assessee the deduction u/s 80IAB of the Act. It is the case of the Revenue that the assessee does not qualify for exemption u/s 80IAB of the Act, as according to the AO, it is not doing any business activity, but is simply letting out the property. 2. Brief facts of the case are that the assessee is a society registered under the A.P. Societies Registration Act of 2001 under the Registration No.219/07 dated 12.12.2007. It filed its return of income for the relevant A.Y. on 31.7.2012 declaring income of Rs.Nil after claiming deduction u/s 80IAB of the Act. The AO observed that the main object of the assessee is to form an association of the owners of the land, into a society, for applying and obtaining Co-developer status under the Special Economic Zones (SE ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n u/s 80IAB is not allowable. Therefore, he treated the entire income derived from letting out of the property as income from house property and brought it to tax. 4. Aggrieved, the assessee preferred an appeal before the CIT (A), who allowed the same by taking into consideration the approval given by the Ministry of Commerce, treating the assessee as the Co-Developer for the purpose of section 80IAB of the Act. Against the relief given by the CIT (A), the Revenue is in appeal before us. 5. The learned DR submitted that the society is formed by the owners of the land on which the infrastructure has been developed by L T Phoenix Infoparks Pvt Ltd. Therefore, according to him, the L T Infoparks is the developer and the assessee society is only the owner of the property on which such infrastructure has been built. He submitted that the assessee had made only cosmetic changes to the infrastructure built by the L T Infoparks and the services which have been rendered are the services which any owner of a property would render to a tenant. He submitted that the certificate given by the Ministry of Commerce is relevant only for getting approval for SEZ purposes but under the I.T. A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... society is formed with the main object of applying and obtaining the co-developer status under the Special Economic Zones Act, 2005 on behalf of the members and their representative to comply with its rules on behalf of the members and for the purpose of taking care of common maintenance and upkeep of the constructed spaces, establish and provide for the common facilities, equipment and amenities and to provide all other incidental and necessary common services to its members, and to perform such other duties and to comply with all other statutory regulations on behalf of its Members. 8. We have gone through the letter of the Govt. of India, Ministry of Commerce Industry, dated 31.12.2008 conferring the co-developer status to the assessee in the IT/ITES SEZ at paper book (page Nos.7 8) filed by the assessee. We find that the status is given to the assessee for developing infrastructure facilities in the SEZ at Gacchhibowli, Ranga Reddy District and that the assessee shall obtain required approval from various statutory authorities under the relevant statutes and regulations of the Govt. of India and the State Govt. and local bodies and that the co-developer shall conform to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is a registered society. We find that similar issue had arisen before the Coordinate Bench of the Tribunal at Delhi in the case of DLF Infocity Developers (Chennai) Ltd vs. ACIT, reported in (2013) 37 Taxmann.com 311 wherein the Tribunal has at Paras 36 to 41 held as under: 36. Thus, as discussed above, the admitted and undisputed fact remain that the assessee has been duly approved by the BOA as a developer, the land owned by the assessee at Chennai was notified by the Govt. of India for establishment of SEZ, the authorized operations to be under taken in the said SEZ were approved by BOA, the codeveloper agreement dated 20/3/2008 executed with the co- developer contemplating transfer of bare shells to the co-developer has been duly approved by the BOP; the DAPL has been approved as a codeveloper, the transfer of bare shell to the co-developer has been approved as an authorized operation by the BOP and the disclaimer contained in Clause 3(XVII) of the approval letter dated 1/6/2009 applies only to the lease of land as clarified by the Ministry of Commerce in the clarification dated 18/1/2011 and not to the transfer of bare shells. Noting these material facts we are of the vi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it is clear from the above that the provisions of SEZ Act shall have over riding effect even if anything inconsistent is contained in the Income Tax Act. The SEZ Act has been enacted containing the specific legislation to be brought in other statutes. When the terms like SEZ, authorized operations, developers etc have been specifically defined under the SEZ Act, it is not open to any authority to relook at the meaning of terms already defined under the SEZ Act. In this regard, we also find support from the decision of the Tribunal in the case of assessee group itself for the A.Y 2007-08, the relevant paragraphs thereof is being reproduced hereunder:- page 17 para 5.3 The SEZ Act 2005, as well as, Income Tax Act, 1961 have placed 'Developer' and the 'Co-developer at the same level i.e for Development (creating infrastructure facilities), maintenance and operations. It was in this context that SEZ BOA, under the aegis of Ministry of Commerce, approved conversion of 'bare shell' into 'warm shell by the Co-Developer as 'Authorized Operations' Page 21 para 5.15 Assessee received clarification from BOA/Government of India, Ministry of Commerce and I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ms and various other fiscal legislation, the income- tax authorities cannot sit over the judgment of the BOA. By catena of judgments the courts have held that the approval accorded by such regulatory boards in development schemes cannot be questioned by tax authorities. Reline in this behalf is placed on: -ApolloTyres Vs. CIT (2002) 9 SCC 1(SC) -Malayala Manorama Co. Ltd Vs. CIT (2008) 12 SCC 612 (SC) -CIT Vs. HCL Commet System Service Ltd. 305 ITR 409 (SC) -Marmo Classic Vs. Commissioner of Customs [2002 (143) ELT 153 (Trib.- -Mumbai] affirmed by Hon'ble Supreme Court in [2003 (152) ELT A85 (SC)]; -Lokash Chemical Works Vs. M. S. Mehta 1981 (8) ELT 235; -Tital Medical System Pvt. Ltd. Vs. Collector 2003 (151) ELT 254 (SC) -CESTAT Judgment in Hico Enterprises Vs. Commissioner 2005(189)ELT 135 (Trib. LB) approved by Hon'ble Supreme Court in 2008 (228) ELT 161 (SC); -Atul Commodities Pvt. Ltd. Vs. Commissioner of Customs Cochin 2009 (235) ELT 385 (SC); -M.J. Exports Ltd. vs. CEGAT 1992 (60) ELT 161 (SC); The assessee has not sold any land but only transferred the bare shell buildings on lease. Therefore, there is no error as pointed out by L ..... X X X X Extracts X X X X X X X X Extracts X X X X
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