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2017 (11) TMI 582 - HC - Income TaxEligibility of deduction u/s 80IA(4)(iii) - industrial park scheme - seeking rectification in the notification dated 26.12.2016 - As per the Revenue's interpretation, an assessee cannot claim deduction under the said provision till all units are sold - whether the benefit of deduction to the petitioner's industrial park would be available to such park from the date of its commencement i.e. 05.09.2010? - Held that:- Once the minimum number of units are located, to expect the Park to postpone benefit of claiming deductions till the entire Park is set up and all the units are located, would be to leave the Park at the vagaries of uncertainty. Setting up of the remaining units, beyond 30 could be time consuming. The existing 30 Units have joined the Park project with an aim to have tax concessions; Impetus to set up such infrastructure facilities would receive a set back if the tax concession to such a Park is left to be opted for,only when the entire project is sold out. If the starting point of deduction is deferred till all units are sold, the assessee would get no deduction on the income arising out of sale of units in earlier years. For example, if the industrial park consists of 100 units, it is possible that the assessee may sell 30 units in the first year, 30 more units in the second year and 30 more in the third year. Remaining 10 units may be sold in the fourth year. As per the Revenue, the deduction would be available only during the year when the sale of these last 10 units are completed. This in turn would mean that the assessee would get no deduction on the sale of 90 units in the earlier years, completely defeating the object of the provisions. We may recall the deduction is available to any enterprise carrying on business of developing or developing and maintaining or developing, operating and maintaining any infrastructural facility. The deduction is spanned over a number of years. The interpretation given by the Revenue would mean that this availability of deduction over a span of year would not occur in case of an enterprise carrying on the business of developing any infrastructural facility and would be confined to only one assessment year. Once, as held in the case of Ganesh Housing (2011 (8) TMI 654 - Gujarat High Court) that the minimum number of units, namely 30 have been located, the Park becomes eligible to opt for the benefit under Section 80IA.It is then that,in accordance with the Circular dated 15.2.2016 that the Project Developer has the option to opt for such concession from the first year of setting up or in a subsequent year as the “initial assessment year” as clarified in the Circular dated 15.2.2016. As a result of a specific finding given by us that the petitioner is deemed to have been eligible for availing tax deduction under Section 80IA(4)(iii) from the Financial Year 2009-2010, Assessment Year 2010-11, the order rejecting the Rectification Application dated 17.3.2017 deserves to be set aside. The condition in the Notification extending the benefit of availing of deductions under Section 80IA(4)(iii) from the date of commencement of 5.09.2010 is a condition not found in any of the other notifications vis-a-vis other such projects, produced in other such cases. Accordingly, the respondents are directed to delete Condition No. 7 in the Notification of 26.12.2016
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