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2021 (11) TMI 966 - AT - Income TaxDisallowance of deduction claimed u/s. 80IA(4)(iii) in respect of profit derived from "Industrial Park Salarpuria Softzone - assessee failed to furnish CBDT notification in accordance with Industrial Park Scheme, 2020 which is mandatory for claim of deduction u/s. 80-IA(4)(iii) - CIT-A deleted the addition - HELD THAT:- CIT(A) has given a finding of fact that all the items claimed under the head 'Miscellaneous Income' have a direct nexus with the business of the assessee namely operation and maintenance of the three (3) eligible industrial parks. CIT(A) has noted that in the facts of the case the profits and gains from sale of scrap and the interest income constitutes income from business and citing the decision in Sanjeeb Lal [2014 (7) TMI 99 - SUPREME COURT] was of the opinion that purposive interpretation is required to be made while adjudicating such claims. We find that since the scraps or waste materials which were left behind by the occupants when they shift from the Park were getting accumulated in the parks and removal of the same was necessary to keep the Park clean & tidy which activity is the task of assessee i.e. operation & maintenance of the Park, so the income which was generated from the sale of scrap/waste material (non-reusable) and interest from BESCOM have nexus with the maintenance and operation of the industrial parks. The deposits interest from BESCOM which was clarified by the Ld. AR of the assessee that without deposit of money, electric connection and un-interrupted supply of electricity could not be given by the BESCOM, therefore, for smooth operation and maintenance of the parks uninterrupted electricity is the necessity and, therefore, the interest income in this way is having nexus with the maintenance and the operation of the park and have direct nexus with the income (interest) which is a plausible view of Ld. CIT(A), which we do not want to interfere because in earlier years & subsequent years, such a disallowance was made by the AO. Therefore, applying the Rule of consistency we uphold the action of Ld. CIT(A) and we dismiss the ground of Revenue. Addition as rental income earned in the three industrial parks - profit derived from Industrial Parks Salarpuria Softzone was treated as non-eligible income to qualify for deduction u/s. 80IA(4)(iii) - CIT-A deleted the addition - HELD THAT:- CIT(A) found that the income derived from letting out of such "KIOSKS/STALLS" and the resultant benefit in the hands of the assessee was for providing better services to the occupants of the industrial parks and, therefore, was an extended portion of the business activity of operating and maintenance of the industrial parks. The Ld. CIT(A) noted that the said "KIOSKS/STALLS" were given on rent so that the persons working in various companies operating from the industrial parks to get coffee, tea and refreshment as well. Moreover, the Ld. CIT(A) has taken note of the CBDT Circular No. 16 of 2016 which clarifies that the lease rent from letting out buildings/developed space along with other amenities in the industrial park (SEZ) need to be treated as business income As brought to our notice that the AO in earlier years had allowed the claim of the assessee in respect of this rental income by treating it as business income and allowed the claim u/s. 80IA(4)(iii) of the Act. In the light of the CBDT circular (supra) and taking note of the fact that in earlier years and subsequent years the lease rent income from letting off of kiosks/stalls to be treated as business income and since in earlier years and subsequent years this claim was not disallowed and for the first time this disallowance is made, so by applying the Rule of consistency, the disallowance was not warranted since there is no change in facts or law. Therefore, the action of Ld. CIT(A) is confirmed. Therefore, we confirm the order of the Ld. CIT(A) and dismiss this ground of revenue's appeal. Undisclosed 26AS receipt - reconciliation statement furnished by the assessee is not backed by credible evidence - CIT-A deleted the addition - HELD THAT:- CIT(A) after going through the facts and the reconciliation filed as well as after going through the complete list of parties (who deducted TDS on reimbursement along with the amount of reimbursement) has made a factual finding that there is no difference which warrants any addition on this count. In the light of the aforesaid discussion we are of the opinion that the AO erred in making the addition merely on the basis of the data in 26AS and the Ld. CIT(A) after perusal of the reconciliation and other documents filed has rightly deleted the addition which does not require any interference from our part and, therefore, we confirm the order of the Ld. CIT(A) on this issue. Therefore, this ground of appeal of revenue is dismissed. Addition on account of sundry balances written off debited in the Audited P & L Account - assessee has failed to furnish any document in this regard despite providing several opportunities of being heard to the assessee - CIT-A deleted the addition - HELD THAT:- We note that the amount in question includes sundry debtor as well as loans and advances. The loans and advances are not allowable u/s. 36(v)(iii) of the Act. Break-up of the amount in question, which has been written off has not been given. Therefore, the allowability of the loans/advances written off by the assessee have to be examined by the AO. According to the Ld. AR, even if the advances are not allowable u/s. 36(v)(iii) of the Act still it is allowable as business expenditure u/s. 28 of the Act. Be that as it may, on this issue the order of the Ld. CIT(A) is set aside and this issue is remitted back to the file of the AO for examining whether the advances/loans which were written off can be treated as business loss which he may decide in accordance to law after giving opportunity of being heard to the assessee.
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