Home Income tax Corporate Income tax Provision in Section 80IA(12) Only Applies In Case of Transfering of Industrial Park Operation

Provision in Section 80IA(12) Only Applies In Case of Transfering of Industrial Park Operation

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Provision in Section 80IA(12) Only Applies In Case of Transfering of Industrial Park Operation
Chennai ITAT's Order for M/s. Olympia Tech Park (Chennai) Private Limited

The Chennai ITAT referring to CBDT Round no. 10/2014, pressured that if an endeavor is transferred to a different endeavor excluding the way in which of amalgamation and demerger and in different instances, the transferee endeavor might be certified for deduction for the remaining unexpired interval beneath part 80IA(4)(iii) of the Earnings Tax Act.

The Bench, Manmohan Das (Judicial Member) and Manjunatha. G (Accountant Member) adopted that “proviso to part 80IA(12) of the Act applies merely if there’s a switch of operation and upkeep of the economic park.

Within the information of the appellant case, the entire endeavor that developed the economic park has been transferred not solely the method and upkeep alone. Thus, in our thought-about view, the explanations offered through the Assessing Officer to permit deduction u/s. 80IA(4) of the Act solely to operation and upkeep shouldn’t be beneath regulation.” (Para 12)

In accordance with the case, the taxpayer’s return was chosen for scrutiny, whereby the AO known as upon the taxpayer to supply the required proof to elucidate the deduction claimed beneath part 80IA(4)(iii). The taxpayer answered that the economic park made by the corporate was duly permitted by the Division of Industrial Coverage and Promotion (DIPP) beneath the Ministry of Commerce and Business.

Central Board of Direct Taxes notifies concerning the said industrial park as per the Industrial Park Scheme, 2002. The taxpayer talked about that, on the time of the monetary 12 months, the corporate together with 4 different firms made a partnership agency has transferred the economic park as its capital contribution as a present topic.

The AO dominated that the taxpayer was not licensed for deduction u/s. 80IA(4), as the brand new endeavor which is taking over operation and upkeep of the economic park, shouldn’t be permitted beneath the Industrial Park Scheme, 2002 & Industrial Park Scheme, 2008.

The CIT(A) on attraction, rendered the AO to allow the deduction claimed beneath part 80IA(4), for the entire earnings together with the earnings beneath the top hire, operations, and upkeep of pit out and many others.

The Coram indicated that there isn’t a benefit within the causes that the AO furnished to disclaim deduction u/s. 80IA(4)(iii), for the easy purpose that the economic park created by the taxpayer firm is permitted beneath the Industrial Park Scheme, 2002 and the taxpayer has made the identical throughout the time stipulated beneath stated scheme.

The Bench adopted that switch u/s. 80IA(4)(iii), is qua the endeavor and never qua the taxpayer. Therefore, the explanations furnished through the AO to limit deduction u/s. 80IA(4)(iii), with the successor endeavor not composed within the date specified beneath Industrial Park Scheme, 2002 & Industrial Park Scheme, 2008 shouldn’t be legitimate and devoid of deserves.

Relevance:- Chennai ITAT Holds Disallowance of Tax Deduction U/S 80IC On account of Failure to E-file Type 10CCB

The Bench adopted that the AO as soon as once more losses to grasp the provisions of part 80IA(4)(iii), in the fitting perspective as transferred beneath the part. 80IA(4)(iii) is qua the endeavor and never qua the taxpayer.

Therefore on discovering that CBDT Round No. 779, illustrates the case and process of claiming deduction beneath part. 80IA(4)(iii) which was additionally supported by a press launch issued by the Authorities of India, the ITAT dismissed the Income’s attraction.

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