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2021 (8) TMI 464 - AT - Income TaxDeduction u/s 80IA(4)(iii) - claim denied as there ought to be 4 tenants in the industrial park of assessee, whereas in this case there is only three tenants - HELD THAT:- The assessee had constructed multistoried buildings for the purpose of developing infrastructure facilities as approved by the Ministry of Commerce and Industry. As mentioned earlier, the test to be applied is the functional test, i.e., the unit must be 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 has to successfully satisfy the above stated functional test of an independent unit, which has not undertaken by the A.O. nor the CIT(A) in this case. Even for A.Y. 2004-2005, though the A.O. in his remand report, had stated that the case of the assessee and of Primal Projects Private Limited are identical had not entered a factual finding of the claim of the assessee that each of the five floors in the industrial park is separate and independent units, capable of function on its own. Therefore, the assessee has to factually establish that it has 4 units or more and that no unit has occupied more than 50% allocable area. No unit should occupy more than 50% of the allocable area, whereas in this case one tenant, namely M/s.I-Flex Solutions is occupying more than 50% of the total constructed area - The criteria relating to restriction of leasing of allocable area to any particular tenant is redundant in view of the functionality test prescribed in the case of CIT v. M/s.Primal Projects Pvt. Ltd. [2020 (11) TMI 778 - KARNATAKA HIGH COURT]- we are of the view that the matter needs to be examined afresh by the A.O. Accordingly, the cases are restored to the files of the A.O. The A.O. is directed to come to a factual finding that assessee’s claim of five floors of the industrial park are independent and separate units as prescribed in the judgment of Hon’ble High Court in the case of CIT v. M/s.Primal Projects Private Limited. The assessee is directed to co-operate with the revenue for expeditious disposal of the matter - Appeals filed by the Revenue are allowed for statistical purposes.
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