Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2015 (10) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2015 (10) TMI 475 - AT - Income TaxDeduction under Section 80IB(4)(iii) denied - eligibility of functional test of an independent unit - Held that:- In the instant case, even though the assessee company had leased out the five/four floors to particular tenants, the tenants were carrying on their operation as independent units as the activities were functionally different. Each floor was physically identified for all functional purposes. Facilities and instrumentations were provided independently. Activities were carried on as independent units.In such circumstances, it was very difficult to ignore the contention of the assessee. The assessee had constructed multistoried buildings for the purpose of developing infrastructure facilities as approved by the Ministry of Commerce & Industry itself was a testimony that the assessee company had developed the infrastructure facility in the form of multi-storied structure to accommodate independent units to operate for themselves. Those identities and indualities did not disappear only for the reason that the entire developed area had been leased out to a single company. It was not possible to insist that every floor of the structure should be leased out to different companies. The test is not that who operates the independent units run in the multi-storied structure. It is also not the question whether all the stories are occupied by one tenant or different tenants. The test to be applied is the functional test. The unit must physically independent with physically independent with independent facilities and instrumentation, power connection, door number and the facility of functioning independently i.e every unit must be in a position to carry on its activities without depending upon other units even though all the units are situated under the same roof but in different floors. The assessee had successfully satisfied the above stated functional test of an independent unit - we uphold the impugned orders of the learned CIT (Appeals) in allowing the assessee's claim for deduction under Section 80IA(4)(iii) of the Act for Assessment Years 2005-06 and 2011-12 - Decided in favour of assessee.
|