Income Tax Appellate Tribunal - Ahmedabad
Sai Enterprise, Baroda vs Assessee on 6 September, 2016
आयकर अपील
य अ धकरण, अहमदाबाद यायपीठ 'D' अहमदाबाद ।
IN THE INCOME TAX APPELLATE TRIBUNAL
"D" BENCH, AHMEDABAD
BEFORE SHRI S.S. GODARA, JUDICIAL MEMBER
AND
SHRI AMARJIT SINGH, ACCOUNTANT MEMBER
आयकर अपील सं./ ITA.No.1482/Ahd/2013
नधा रण वष /Asstt. Year: 2009-10
Sai Enterprise ITO, Ward-5(2)
FF.1, Shreeji Complex Vs Baroda.
Opp: Water Tank
Karelibaug, Baroda.
PAN : ABJFS 8241 F.
अपीलाथ!/ (Appellant) "#यथ!/ (Respondent)
Assessee by : Shri Anil R. Shah
Revenue by : Shri Prasoon Kabra, Sr.DR
ु वाई क तार ख/ Date
सन of Hearing : 04/08/2016
घोषणा क तार ख / Date of Pronouncement: 06 /09/2016
आदे श/O RDER
PER AMARJIT SINGH, ACCOUNTANT MEMBER:
The assessee is in appeal before the Tribunal against the order of the ld.CIT(A)-V dated 20.3.2013 passed for the Asstt.Year 2009-10.
2. The assessee has raised the following three grounds of appeal, which read as under:
"1. The Ld. Commissioner of Income Tax (Appeals)-V, Baroda has erred both in law and in fact in confirming non allowance of Deduction ITA No.1482/Ahd/2013 2 u/s. 80IA(4)(iii) of the Act of Rs.59,22,000/-erroneously disallowed by I.T.O.
2. Your Appellant having satisfied all conditions necessary for claim of Deduction u/s. 80 IA(4)(iii) and he having given full information and proof thereof to the A.O., the Ld. CIT (A) ought to have granted relief of deduction of Rs.59,22,530/- u/s. 80IA (4)(iii).
3. It is further submitted that notification of Industrial Park by CBDT is only a formality and the application being pending from 18-10-2007 under Industrial Park Scheme, 2008 the Appellant will be eligible for the relief / Deduction from the said date and therefore, it is submitted that the Ld. CIT (A) ought to have given deduction of Rs.59,22,530/-u/s. 80IA (4) (iii)."
3. Main grievance of the assessee in the above three grounds is against non-allowance of deduction under section 80IA(4)(iii) of the Income Tax Act, 1961. We would take brief facts relevant for the consideration of this issue, from the material available on record.
4. Assessee is a firm engaged in development of industrial park. It has filed its return of income on 27.9.2009 showing total income at Rs.NIL. The return was processed under section 143(1) of the Act, and thereafter, case of the assessee was taken up for scrutiny assessment and issued notice under section 143(2) of the Act on 18.8.2010 which was duly served upon the assessee. The ld.AO, on verification of record, found that the assessee has claimed deduction of Rs.59,22,530/- under section 80IA(4)(iii) of the Act. Assessee was asked to justify claim of deduction under the said provision with supporting proof. The assessee filed details containing copy of application for consideration under the Industrial Park scheme 2008; copy of status report of functioning of the Industrial park, copy of revised form no.IPS-1, Copy of sale deed of land ITA No.1482/Ahd/2013 3 pertaining to industrial park. On verification of the details furnished by the assessee, the AO noticed that the industrial park has not been notified by the Central Board of Direct Taxes, which is one of the primary conditions to be fulfilled for claiming deduction u/s.80IA(4)(iii) of the I.T.Act. The AO was not satisfied with the explanation of the assessee, and therefore, disallowed the impugned claim of the assessee, mainly on the ground that in order to avail tax benefit under the Act, undertaking and/or the industrial park have to be notified by the Central Board of Direct Taxes under section 80IB of the Act which has not been granted to it by the CBDT till the date. The AO, accordingly, disallowed the claim of the assessee, and assessed total income of the assesee at Rs.59,22,530/- instead of NIL returned by the assessee.
5. Dissatisfied with the action of the AO, the assessee went in first appeal, where the ld.CIT(A) also found that the claim of the assessee cannot be entertained as the industrial park constructed by the assessee was not notified by the CBDT, which is prerequisite for claiming the deduction under section 80IA(4)(iii) of the Act. The AO, while rejecting the claim of the assessee has recorded reasons in the assessment order. It reads as under:
"....From the submission of the assessee, it was noticed that the assessee has only made application to the Under Secretary to the Govt. of India, Ministry of Commerce and Industries for consideration under the Industrial Park Scheme, 2008 dated 18.10.2007. However, the Industrial Park has not been notified by the Central Board of Direct Taxes till date. The assessee has also admitted in its above submission that the Industrial Park has not been notified by the Central Board of Direct Taxes till date. Simply making an application for notification of the Industrial Park would not entitle the assessee to claim deduction u/s 80IA(4)(iii) of the IT. Act. As per the provisions of ITA No.1482/Ahd/2013 4 the Income-tax Act an assessee engaged the business of development of Industrial Park is entitled to claim deduction u/s 80IA(4)(iii) of the IT. Act only if the following conditions are fulfilled.
[1] The Industrial Park shall be construed as developed on the date of commencement.
[2] Tax benefits under the Act will be available to the undertaking only after minimum number of thirty units are located in the Industrial Park.
[3] The tax benefits under the Act will be available to the undertaking only if the undertaking and the industrial park have been notified by Central Board of Direct Taxes under Section 80IA of the Act.
[4] The tax benefits under the Act will be available only to the undertaking notified by the Central Government and not to any other person who may subsequently develop, develops and operates or maintains and operates the notified industrial park, for any reason.
[5] The undertaking must keep separate books of account for the industrial park and must file its income-tax returns by the due date to the Income-tax Department.
[6] The undertaking shall electronically furnish an annual report to the Central Board of Direct Taxes in Form No.IPS-11."
6. Before us, the ld.counsel for the assessee reiterated the submissions made before the Revenue authorities, whereas, the ld.DR relied upon the orders of the AO and the ld.CIT(A).
7. We have gone through the material available on record and the pleadings of the assessee before the lower authorities. We do not find any reason to interfere in the concurrent finding of the Revenue authorities on the claim of the assessee under section 80IA(4)(iii) of the Act. Undisputedly, for claiming the deduction under this provision, the assessee has to fulfill conditions provided in section 80IA(4)(iii) of the Act. Relevant portion of the Section 80IA(4)(iii) reads as under:
......ITA No.1482/Ahd/2013 5
......
(4) This section applies to -
......
......
(iii) any undertaking which develops, develops and operates or maintains and operates an industrial park (or special economic zone) notified by the Central Government in accordance with the scheme framed and notified by that Government for the period beginning on the 1st day of April, 1997 and ending on the 31st day of March, 2006.
......
......"
According to this provision, condition precedent for claiming deduction under section 80IA(4)(iii) is that the unit should be notified by the Central Government in accordance with the scheme of the Act. Admittedly, assessee had applied for notification of its industrial park, but CBDT vide letter dater dated 13.5.2014 has rejected application of the assessee. Therefore, claim of the assessee is not maintainable. This aspect has been considered by both the authorities below and rightly rejected the claim of deduction. A copy of the letter of the CBDT has been placed on record by the assessee in the paper at page no.7 of the paper book. Therefore, we are of the view that the Revenue authorities have rightly denied the claim of the assessee, which we uphold, and reject grounds of the appeal of the assessee.
8. The assessee has also raised additional grounds with regard to charging of interest under section 234B of the Income Tax Act. In support of its claim, the ld.counsel for the assessee relied on some judgments of the Hon'ble High Courts.
ITA No.1482/Ahd/2013 69. We have gone through the case laws relied on by the assessee. We find that case laws cited by the assessee are of no help to the assessee, as the facts therein are distinguishable. Inasmuch as, in the present case, the assessee is very much aware that for claiming deduction under section 80IA(4)(iii) of the Act conditions provided therein are to be complied with, i.e. condition precedent for claiming deduction is that the industrial park of the assessee has to be notified by the Central Government. Application to the Central Government for notification of assessee's industrial undertaking ipso facto does not entitle the assessee to claim the deduction under section 80IA(4)(iii). Presumption of the assessee that mere application for notification of the industrial undertaking by the Central Government, the assessee will be entitled for the impugned deduction is ill-logical and unfounded, and therefore, we cannot buy this proposition of the ld.counsel for the assessee in not charging interest under section 234B of the Act. Even otherwise also, charging of interest under section 234B is mandatory and consequential in nature. Therefore, we reject this additional ground of appeal of the assessee.
10. In the result, the appeal of the assessee is dismissed. Order pronounced in the Court on 6th September, 2016 at Ahmedabad.
Sd/- Sd/- (S.S. GODARA) (AMARJIT SINGH) JUDICIAL MEMBER ACCOUNTANT MEMBER Ahmedabad; Dated 06/09/2016 Vk*