TMI Blog2016 (8) TMI 744X X X X Extracts X X X X X X X X Extracts X X X X ..... decided to grant the subsidy under the said scheme at the rate of 20% of the eligible investment in such park. A final approval in this respect was issued on 14.3.2011 and subsequently the Industries Commissioner under letter dated 8.4.2013 certified that as per the joint inspection team report, the park has completed industrial park as per the guidelines issued by Government Resolution dated 10.6.2004. Ignoring such evidence, CBDT proceeded on the basis that AUDA which was a local authority had not given any clear certificate that the industrial park was completed with constructed units by 31.3.2011. This insistence from CBDT was impermissible for two reasons. Firstly, the scheme pertained to certificate from a local authority and would not confine its purview to certification by AUDA alone and second that the insistence on demonstrating completion of industrial units by the leasing industries was not part of the requirement of the scheme at all, as held in case of Ganesh Housing Corporation Ltd.(2011 (8) TMI 654 - Gujarat High Court ). For such reasons, the second part of the CBDT's objection must fail. Coming to the first objection, of the petitioner having failed to produ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts are as under. The petitioner is a company registered under the Companies Act and is engaged in industrial development projects. The petitioner applied on 23.5.2006 for approval for setting up an industrial park at village Piplaj, District Ahmedabad, which would enable the petitioner to claim deduction under section 80IA(4) of the Income Tax Act,1961 ( the Act for short). This was done under the then prevailing Industrial Park Scheme, 2002. The Ministry of Commerce and Industry informed the petitioner on 5.1.2009 that the petitioner should apply under the new Industrial Park Scheme, 2008. The petitioner accordingly applied for approval under application dated 27.1.2009. According to the petitioner, the petitioner completed the development of the industrial park on 5.9.2010 which was well before the extended last date of 31.3.2011 envisaged in the Industrial Park Scheme, 2008. According to the petitioner as many as 182 units were allocated in the industrial park. Entire industrial development and plotting had been completed. The petitioner was therefore, entitled to deduction under section 80IA(4) of the Act. 3. Case of the petitioner is that the State Government had also fram ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l Park... This indicates that the applicant had approached AUDA on 04.03.2012 to issue a completion certificate. The question that arises is why the applicant approached the authority almost one year late to issue completion certificate and not immediately after the project was completed as per the claimed date. Further, on the basis of this, request the 'work' completion certificate (being discussed here) is dated 08.05.2013. In the absence of any specified date of completion in the letter, the certificate can be treated to be valid as on 08.05.2013. Hence, even if this document is relied for ascertaining the date of completion, the same can be inferred to be between 04.03.2012 (date of request by the applicant) and 08.05.2013 (date of issue of certificate). 2 Occupancy certificate dated 17/06/2010 given by AUDA to the one of the unit of the said project. It was issued after verification of the site and after satisfying that the required infrastructure under General Development Control Regulation (GDCR) has been completed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... applicant itself. This letter has been claimed to be a Completion Report dated 05.09.2010. This certificate mentions under the heading Ref...3) our progress report up to 16.06.2010 (a) work completed ₹ 1393.49 lakh and (b) work yet to be completed ₹ 160.29 lakh. This itself shows that as on 16.06.2010, work was pending completion. This strengthens our observations regarding document at Sr.no.2 above that the occupancy certificate issued by AUDA does not prove completion of work in respect of entire project by 17.6.2010. Further M/s. MARS, in this certificate has confined itself to development pertaining to infrastructure only, as evident from para (B) and not to construction of units, which is an important constituent of development work. In para(C), it gives the status of park as Follows ( c) Status of Industrial Park is as follows (1) No of units sold 180 (2) out of which agreement executed 99 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 2013 and not before 31.03.2011 as claimed by the applicant. Xxx 14. In order to verify the applicant's claim, independent enquiries were made from AUDA vide letter dated 29.08.2014 to inform the actual date of completion of the project based on their own records and documents. After reminders, the reply from AUDA dated 30.10.2014 was received on 31.10.2014 (Copy enclosed as Annexure5). It mentions the following facts : i. AUDA carried out an inspection on the 'specific request' of the applicant and issued a work completion certificate. However, as discussed at Sl No.(1) at the above table, it does not provide any certain or worthwhile evidence in support of applicant's claim. ii. AUDA does not mention that applicant had made a request for inspection when all the 182 units were completed. Instead, it has given occupancy certificate dated 17.06.2010, when only one unit was ready. It is rather clearly pointed out in the said letter that AUDA could not certify the date of final completion earlier iii. AUDA suggests to make reliance to the four documents already relied upon by the applicant listed in the above table. As discussed above, these documents ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng up an industrial park under Government Resolution dated 10.6.2004. The scheme envisages grant of subsidy relatable to the investment made by the developer. Some of the conditions for grant of subsidy provided as under : 7.6 Industrial Park is required to have minimum infrastructure facilities required for the park namely internal roads, water distribution network, drainage treatment, effluent treatment, power distribution network, communication network and other facilities. 7.8 The incentive is for development of Industrial Park. One single unit in the park will not be eligible for incentive under the scheme. 8. The scheme envisaged State Level Approval Committee consisting of Industries Commissioner as Chairman and various other Government officials as its members and provided that : The disbursement of subsidy will be after physical verification of the investment made in Industrial Park under the project proposal. The application under the scheme will be received by Industries Commissionerate and place before the committee for decision. 9. In the background of this scheme, the petitioner had claimed the subsidy. The State Level Approval Committee in its m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... titioner had carried out and completed the work of infrastructure development and construction work as per the AUDA rules and regulations. The certificate also recorded that the petitioner had set up sewerage system, storm water drain, rain water harvesting system, street light, garden, parking, compound wall, tree plantations etc. and also constructed utility plots for common amenities like conference hall, first aid centre, library, ware house, administrative office, training centre, R D section, canteen display center, etc. As noted, despite such evidence produced by the petitioner, CBDT was unmoved and formed an opinion that there was inconclusive evidence of the petitioner having completed the project before the final date of 31.3.2011. 13. For discarding various documents produced by the petitioner before the CBDT, detailed reasons have been given. Regarding Work Completion Certificate dated 8.5.2013 issued by AUDA, it was observed that there is no specified date of completion in such certificate. Regarding Occupancy Certificate dated 17.6.2010 issued by AUDA, it was observed that such certificate mentions only one unit out of 102 units which were part of the project. Thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ause (2) of Clause9 required the petitioner before availing the tax benefits to ensure that all units indicated in the application are located in the Industrial Park. As noted earlier, term Unit has been defined in Definition clause2( i) to mean, any separate and distinct entity for the purpose of one or more state or central tax laws. The question arises Did the petitioner fulfills this requirement ? For this purpose, we may note that the entire infrastructural facilities were created by the petitioner before the last date envisaged under the Scheme by providing various facilities such as roads, drainage, electricity, lights, water, etc. The entire plot on which the Industrial Park was located was further subdivided into several plots. The petitioner had in fact sold all 32 plots to different units before 31st March 2006. These assertions of the petitioner are not seriously disputed by the respondents. Even the impugned show cause notice is not based on nonfulfillment of above requirements. We, therefore, proceed on the premise that considerably had taken these steps before 31st March 2006 in furtherance of implementation of the Scheme. To out mind, under the Scheme, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her be read in the Scheme nor can it be fastened on the petitioner in any other manner. The petitioner was a developer of the Industrial Park. The duty and responsibility of the petitioner, to be able to claim tax deductions, was to setup an industrial park by providing necessary infrastructural facilities. We have seen that the development of such a park would require providing of all infrastructural facilities; sub plotting the entire plot and also ensuring that the number of units indicated in the application are sold to the intending industries. In short, the duty and responsibility of the petitioner was to ensure that the industrial activity is facilitated on the Industrial Park so developed by it. It was thereafter not responsible to ensure that industries do in fact setup their units and commence production activities on such units that too before the last date envisaged in the Scheme. To our mind, such responsibility fastened on the petitioner is not borne out from the Scheme. The duty and responsibility of the petitioner was to provide infrastructural facilities which would be a catalyst for industrial growth by enabling the intending industries to setup their industry i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ompleted the project of industrial park. It was on the basis of such recommendations from MARS Planning Engineering Services Pvt. Ltd., and GIDC that the specially constituted committee in its meeting dated 28.2.2011 decided to grant the subsidy under the said scheme at the rate of 20% of the eligible investment in such park. A final approval in this respect was issued on 14.3.2011 and subsequently the Industries Commissioner under letter dated 8.4.2013 certified that as per the joint inspection team report, the park has completed industrial park as per the guidelines issued by Government Resolution dated 10.6.2004. 16. Ignoring such evidence, CBDT proceeded on the basis that AUDA which was a local authority had not given any clear certificate that the industrial park was completed with constructed units by 31.3.2011. This insistence from CBDT was impermissible for two reasons. Firstly, the scheme pertained to certificate from a local authority and would not confine its purview to certification by AUDA alone and second that the insistence on demonstrating completion of industrial units by the leasing industries was not part of the requirement of the scheme at all, as held in c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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