K. B. Bhujle, Advocate

83 Principal CIT vs. Prasad Technology Park Pvt Ltd
[2023] 450 ITR 564 (Karn)
A. Y.: 2014-15
Date of order: 17th October, 2022:
Section 80-IA(4)(iii) of ITA 1961

Infrastructure facility — Special deduction under section 80-IA(4)(iii) of ITA 1961 — Construction of technology park — Finding recorded by the Tribunal in earlier assessment years that the assessee had not leased more than 50 per cent of area to single lessee — Notification to be issued by CBDT is only a formality once approval is granted by Government — Order of Tribunal deleting disallowance need not be interfered with

The assessee constructed and set up a technology park. For the A.Y. 2014-15, the AO disallowed its claim for deduction under section 80-IA(4)(iii) of the Income-tax Act, 1961 on the grounds that the assessee had leased out more than 50 per cent of the allocable industrial area to a single lessee which was in contravention of the Industrial Park Scheme, 2002.

The Commissioner (Appeals) allowed the assessee’s appeal following the order in the assessee’s own case for the A.Ys. 2007-08 and 2008-09 and his order was upheld by the Tribunal.

On appeal by the Revenue, the Karnataka High Court upheld the decision of the Tribunal and held as under:

“i)    The Tribunal was correct in holding that the assessee was entitled to deduction under section 80-IA(4)(iii) and that the notification issued by the CBDT was only a formality once the approval was granted by the Government. For the A. Y. 2008-09 in the assessee’s own case the Tribunal had called for a remand report by the Commissioner (Appeals) and recorded a finding that the assessee had not leased out more than 50 per cent of the total area in favour of any one of the lessees. Based on that finding, the Tribunal had allowed the assessee’s appeal.

ii)    The questions of law are answered in favour of the assessee and against the Revenue.”