2018 (4) TMI 1821 - AT - Income Tax

Deduction u/s 80IA(4)(iii) - specific condition in the notification pertaining to the assessee regarding the number of units was not fulfilled - assessee contended that the Assessing Officer had ignored the Profit and Loss Account relating to software business filed vide letter dated 14.02.2014 - CIT-A allowed the claim - HELD THAT - Where the learned Departmental Representative for the Revenue has failed to controvert the findings of CIT(A) and in view of evidences filed by the assessee in audit report in form No.10CCB, we hold that the assessee is entitled to claim the aforesaid deduction under section 80IA(4)(iii) - Decided against revenue.

Summary

Issues involved:
Appeal against order of CIT(A) related to assessment year 2011-12 under section 143(3) of the Income-tax Act, 1961.
1. Whether deduction under section 80IA(4)(iii) of the Act was correctly allowed.
2. Compliance with specific conditions in the notification regarding the number of units.
3. Consideration of previous ITAT decisions for A.Y. 2003-04.
4. Eligibility for deduction despite not meeting the minimum number of units specified in the notification.
5. Eligibility for deduction on rental income.
6. Compliance with IPS 2002 norms regarding minimum number of units.
7. Violation of the condition regarding occupancy of allocable area.
8. Failure to commence operation by a specified date.
9. Absence of appropriate completion certificate.
10. Failure to meet the minimum number of operational units requirement.

Analysis:
1. The appeal pertains to the eligibility of the assessee for deduction under section 80IA(4)(iii) of the Act. The assessee was engaged in various property development activities and claimed the deduction based on the Industrial Park Scheme (IPS), 2002. Previous disputes regarding deduction were noted, with the Tribunal denying the deduction in A.Y. 2003-04 but the High Court admitting an appeal for further consideration. The assessee's compliance with scheme conditions was highlighted, and the Assessing Officer allowed the deduction for subsequent years. For A.Y. 2011-12, the assessee claimed deduction of ?62,38,339, which was denied by the Assessing Officer due to unclear income computation.

2. Before the CIT(A), the assessee provided additional details supporting the claim, including income from rent and maintenance charges from a software park. The CIT(A) allowed the deduction under section 80IA(4)(iii) considering the submissions and past allowances. The Revenue's contentions were not found to counter the CIT(A)'s findings, leading to the allowance of the deduction. The history of compliance and past allowances further supported the decision in favor of the assessee.

3. The Tribunal dismissed the Revenue's appeal, noting that the assessee had fulfilled conditions in A.Y. 2005-06 and subsequent years, where deductions were allowed. The consistent allowance of deductions in subsequent years, despite initial denials, indicated the assessee's compliance with scheme requirements. Thus, the Revenue's appeal was dismissed, affirming the CIT(A)'s decision to allow the deduction under section 80IA(4)(iii) for A.Y. 2011-12.