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2022 (4) TMI 1262 - ITAT AHMEDABADAllowability of deduction u/s 80-IA(4)(iii) - AO has rejected deduction u/s 80-IA(4)(iii) due to one single reason only i.e. the Notification was not issued by the CBDT at the time of finalization of assessment - As per assessee he has already submitted all details of the “Devraj Industrial Park” not only to the CBDT but also to the Ld. AO by filing the aforesaid letter dated 25.02.2013 and 25.03.2013 which are very much embodied in the assessment-order itself - HELD THAT:- We also observe from the submissions made by the Ld. AR that the assessee has submitted full details of the park to the CBDT, Ld. AO and Ld. CIT(A). We also observe that the assessee has submitted audited P&L A/c, audited Balance-Sheet and Form 3CD alongwith the return. We also observe that the Hon’ble Gujrat High Court [2017 (11) TMI 582 - GUJARAT HIGH COURT] para No. 31, reproduced above has mandated “The petitioner’s claim for deduction at whichever stage pending before the assessing or appellate authority shall be governed by this declaration”. In such circumstances we are inclined to hold that the Ld. CIT(A) has rightly allowed the deduction u/s 80-IA(4)(iii), as claimed by the assessee. - Decided in favour of assessee. Whether the other income earned by the assessee was eligible for deduction u/s 80-IA(4)(iii)? - After due consideration we find sufficient force in the submission of the Ld. AR, without repeating the same, that the Kasar Vatav and Dividend income earned by the assessee, are derived from the business of industrial park and therefore eligible for deduction u/s 80-IA(4)(iii). Accordingly, we allow deduction. Whether the bogus purchases and bogus expenditure are eligible for deduction u/s 80-IA(4)(iii)? - We have considered the submissions of both sides as also the aforesaid CBDT Circular No. 37 / 2016 dated 02.11.2016. We observe that the CBDT has clearly accepted that if the profit of business is enhanced by disallowances of expenses, such enhanced profit is eligible for deduction. Needless to mention that the Circulars issued by the CBDT are binding upon the lower authorities and so is the Circular No. 37 / 2016. Section 80AB is directly applicable, which mandates that the income computed in accordance with the provisions of this Act shall be deemed to be the income derived from the business of industrial park. In the present case, the Ld. AO has computed the income of the business of industrial park after making the disallowances of bogus purchases and bogus expenditure and therefore the amount arrived at after making these disallowance i.e. the enhanced profit of the industrial park, is the income computed in accordance with the provisions of this Act. Hence such enhanced profit is deemed to be the income derived from the business of industrial park and eligible for deduction. In view of this, we find no infirmity in the action of Ld. CIT(A). Hence we hold that the profit of business enhanced by the disallowance of bogus purchases and bogus expenses is eligible for deduction u/s 80-IA(4)(iii). Revenue appeal dismissed.
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