ACIT, Circle-6(1), Hyderabad v. M/s. Annapurna Builders,, Hyderabad

ITA 1177/HYD/2011 | 2007-2008
Pronouncement Date: 30-11-2011 | Result: Dismissed

Appeal Details

RSA Number 117722514 RSA 2011
Assessee PAN AAEFA9477F
Bench Hyderabad
Appeal Number ITA 1177/HYD/2011
Duration Of Justice 5 month(s) 12 day(s)
Appellant ACIT, Circle-6(1), Hyderabad
Respondent M/s. Annapurna Builders,, Hyderabad
Appeal Type Income Tax Appeal
Pronouncement Date 30-11-2011
Appeal Filed By Department
Order Result Dismissed
Bench Allotted B
Tribunal Order Date 30-11-2011
Assessment Year 2007-2008
Appeal Filed On 17-06-2011
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B' HYDERABAD BEFORE SHRI G.C. GUPTA VICE PRESIDENT AND SHRI CHANDRA POOJARI ACCOUNTANT MEMBER I.T.A. NO. 1177/HYD/2011 ASSESSMENT YEAR : 2007-08 THE ACIT CIRCLE-6(1) HYDERABAD VS. M/S. ANNAPURNA BUILDERS HYDERABAD PAN: AAEFA9477F APPELLANT RESPONDENT APPELLANT BY: MS. K. MYTHILI RANI RESPONDENT BY: MR. K.C. DEVADAS DATE OF HEARING: 10.10.2011 DATE OF PRONOUNCEMENT: O R D E R PER CHANDRA POOJARI AM: THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST TH E ORDER OF THE CIT(A)-IV HYDERABAD DATED 15.3.2011 FOR THE ASSESS MENT YEAR 2007-08. 2. THE REVENUE RAISED THE FOLLOWING GROUNDS OF APPE AL: 1. THE LD. CIT(A) ERRED IN HOLDING THAT THE ASSESSE E HAS RECEIVED 'APPROVAL' AND 'NOTIFICATION' FROM THE CEN TRAL GOVERNMENT AND THE SAME H AS NOT BEEN WITHDRAWN TIL L DATE FOR ANY REASONS AND AS SUCH THE ASSESSEE IS ENTITLED TO THE BENEFIT OF EXEMPTION U/S. 80IA(4)(I II) OF THE ACT. 2. THE LD. CIT(A) ERRED IN FOLLOWING THE DECISION O F THE ITAT IN THE CASE OF M/S. MEENAKSHI INFRASTRUCTURE P . LTD. VS. DCIT REPORTED IN 44 SOT 59. 3. THE LD. CIT(A) FAILED TO APPRECIATE THE FACT THA T THE ASSESSEE HAS FAILED TO FULFIL THE CONDITIONS LAID D OWN BY THE MINISTRY OF COMMERCE/CBDT THAT 90% OF ALLOCABLE AREA SHALL BE EARMARKED FOR INDUSTRIAL USE. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A PARTNERSHIP FIRM ENGAGED IN THE BUSINESS OF CONSTRUCTION. THE ASSES SEES INCOME INCLUDES INCOME FROM HOUSE PROPERTY AND BUSINESS INCOME DERI VED FROM SALE OF FLATS I.T.A. NO. 1177/HYD/2011 M/S. ANNAPURNA BUILDERS =================== 2 IN BLOCK NOS. I AND II OF WHITE HOUSE CONSTRUCTED B Y IT. THE ASSESSEE HAD SHOWN SALE PROCEEDS IN RESPECT OF BLOCK II AT RS. 79 04 900 BESIDES SHOWING RENTAL INCOME OF RS. 5 22 23 691 FROM THE S AID BLOCK. THE ENTIRE NET PROFIT FROM BLOCK II SHOWN AT RS. 3 93 90 365 H AD BEEN CLAIMED AS DEDUCTION U/S. 80IA(4)(III) ON THE GROUND THAT BLOC K III OF WHITE HOUSE HAS BEEN NOTIFIED AS AN INDUSTRIAL PARK UNDER THE INDUS TRIAL PARK SCHEME 2002. ACCORDING TO THE ASSESSEE BLOCK III HAD BEEN OPERA TED AND MAINTAINED AS AN INDUSTRIAL PARK IN TERMS OF SECTION 80IA(4)(III) AFTER OBTAINING APPROVAL FROM THE MINISTRY OF COMMERCE GOVERNMENT OF INDIA AS WELL AS FROM THE CBDT NEW DELHI. ACCORDING TO THE ASSESSING OFFICE R THE ASSESSEE HAS NOT COMPLIED WITH THE CONDITIONS SPECIFIED BY THE A PPROVING AUTHORITY VIZ. THE MINISTRY OF COMMERCE. THE ASSESSING OFFICER EX TRACTED PARA 4 OF THE LETTER OF MINISTRY OF COMMERCE DATED 25.9.2006 IN T HIS BEHALF WHICH READS AS FOLLOWS- '4. THE CONDITIONS MENTIONED IN PARA 1 ABOVE ARE AS PER THE PROPOSAL MADE BY THE UNDERTAKING AND ARE WITHIN THE PROVISIONS OF THE INDUSTRIAL PARK SCHEME 2002. TH E CONDITIONS MENTIONED IN THIS LETTER AND THOSE INCLU DED IN THE INDUSTRIAL PARK SCHEME 2002 SHOULD BE ADHERED TO DURING THE PERIOD WHEN BENEFITS UNDER THIS SCHEME ARE TO B E AVAILED. THE GOVERNMENT MAY WITHDRAW THE ABOVE APPROVAL IN C ASE OF FAILURE TO COMPLY WITH ANY OF THE CONDITIONS.' 4. THE ASSESSING OFFICER OPINED THAT THE ABOVE CLA USES WERE NOT COMPLIED WITH BY THE ASSESSEE. HE ALSO NOTED THAT IN PARA 1 OF THE ABOVE LETTER OF THE MINISTRY IN ITEM NO. (V) IT HAD BEEN MENTIONED THAT THE PERCENTAGE OF 'ALLOCABLE AREA' EARMARKED FOR INDUST RIAL USE IS 90% WHILE AS PER ITEM NO. (VI) THEREOF IT WAS 10% FOR COMMERCIA L USE. FURTHER AS PER PARA 1(IV) OF THE LETTER OF APPROVAL THE PROPOSED I NDUSTRIAL ACTIVITY OF THE 'INDUSTRIAL PARK' WERE COMMUNICATION SERVICES DATA PROCESSING SOFTWARE DEVELOPMENT COMPUTER CONSULTANCY SERVICES BUSINES S AND MANAGEMENT CONSULTANCY ACTIVITIES ARCHITECTURAL AND ENGINEERI NG AND OTHER TECHNICAL CONSULTANCY ACTIVITIES TECHNICAL TESTING AND ANALY SIS SERVICES. THE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT P ROCEEDINGS CONDUCTED ENQUIRY THROUGH HIS INSPECTOR WHO SUBMITTED A DETA ILED REPORT FURNISHING DETAILS OF THE TENANTS OCCUPYING THE PREMISES. ASS ESSEE ALSO SUBMITTED I.T.A. NO. 1177/HYD/2011 M/S. ANNAPURNA BUILDERS =================== 3 DETAILS REGARDING THE OCCUPANCY OF THE BUILDING. L EASE DEED COPIES WITH THE TENANTS WERE OBTAINED BY THE ASSESSING OFFICER FROM THE ASSESSEE. ASSESSEE ALSO SUBMITTED CERTIFICATES FROM THE TENAN TS WITH REGARD TO THE ACTIVITIES BEING CARRIED OUT BY THEM. THE INFORMAT ION COLLECTED THROUGH FILED ENQUIRY AS WELL AS THE INFORMATION FURNISHED BY THE ASSESSEE WAS SUMMARISED BY THE ASSESSING OFFICER IN A CHART WHIC H WAS MADE ANNEDURE- 1 TO THE ASSESSMENT ORDER. ON ANALYSIS OF THE DET AILS IT WAS NOTICED THAT THE TOTAL AREA OCCUPIED BY THE TENANTS CARRYING OUT THE PROPOSED ACTIVITIES AS MENTIONED IN THE LETTER OF APPROVAL OF THE GOVER NMENT OF INDIA IS MUCH LESS THAN 90% OF THE TOTAL AREA. ASSESSEE SUBMITTE D A MEASUREMENT CERTIFICATE OF THE BUILDING FROM THE ARCHITECT M/S. RAGA ACCORDING TO WHICH THE TOTAL AREA OF THE INDUSTRIAL PARK IS 2 72 829 S Q. FT. AND THE PERCENTAGE OF AREA OCCUPIED UNDER THE PROPOSED ACTIVITIES TO THE TOTAL AREA WORKED OUT ONLY TO 34.91%. ASSESSEE SUBMITTED BEFORE THE ASSES SING OFFICER THAT EXCLUDING THE FLOOR AREA OF 12968 SQ. FT FOR COMMON FACILITIES THE TOTAL AREA AVAILABLE FOR LEASING OUT IS 154671 AND DEDUCTING THEREFROM THE AREA SOLD IN THE GROUND FLOOR DULY OFFERING THE INCOME FROM SUCH SALE TO TAX OF 5293 SQ. FT. BALANCE AREA COMES TO 149378. ON THAT BASI S SUBMITTING A LIST OF TENANTS WITH THE AREA UNDER THEIR OCCUPATION AND AC TIVITIES UNDERTAKEN BY THEM ASSESSEE SUBMITTED BEFORE THE ASSESSING OFFIC ER THAT MORE THAN 90% AREA WAS ALLOCATED FOR USE BY THE TENANTS FOR APPRO VED ACTIVITIES. 5. THE ASSESSING OFFICER WAS NOT CONVINCED WITH THE ABOVE EXPLANATION OF THE ASSESSEE. ACCORDING TO HIM AS PER THE ASSE SSEES APPLICATION THE TOTAL AREA OF THE INDUSTRIAL PARK WAS 281273.97 SQ. FT AND DEDUCTING THEREFROM THE AREA OF COMMON FACILITIES OF 104108 THE NET ALLOCABLE AREA WORKS OUT TO 177165 SQ. FT. AS AGAINST THIS THE ASSESSING OFFICER NOTED THE ASSESSEE CONSTRUCTED A TOTAL AREA OF 2 72 829 WHICH IS LESS THAN THE APPROVED AREA OF 281273.97 SQ. FT. ON THIS COUNT I TSELF ACCORDING TO THE ASSESSING OFFICER ASSESSEE VIOLATED ONE OF THE CON DITIONS SUBJECT TO WHICH APPROVAL WAS GRANTED BY THE GOVERNMENT. BESIDES A SSESSEE HAS SOLD OUT A PORTION ADMEASURING 5293 SQ. FT. IN THE GROUND FL OOR OUT OF THE ALLOCABLE AREA OF THE INDUSTRIAL PARK FOR WHICH THE GOVERNMEN T APPROVAL WAS I.T.A. NO. 1177/HYD/2011 M/S. ANNAPURNA BUILDERS =================== 4 RECEIVED. AFTER RECEIVING THE APPROVAL ACCORDING TO THE ASSESSING OFFICER THE ASSESSEE CANNOT SELL OUT A PORTION OF THE INDUS TRIAL PARK FOR WHICH THE GOVERNMENT APPROVAL WAS RECEIVED. AT THIS POINT AL SO THE ASSESSING OFFICER NOTED THE ASSESSEE HAS VIOLATED THE CONDIT IONS ATTACHED TO THE GOVERNMENT APPROVAL. THE ASSESSING OFFICER FURTHER NOTED THAT THE NET ALLOCABLE AREA EXCLUDING COMMON AREA AS PER ASSES SEES APPLICATION IS 16459.12 SQ.MTR AND HENCE THE AREA WHICH SHOULD BE UTILISED FOR THE APPROVED INDUSTRIAL PURPOSE SHOULD BE 14813.2 SQ.MT R (90% OF 16459.12 SQ. MTR.). HE FURTHER TOOK NOTE THAT THE ASSESSEE HAS TO ADHERE TO CONDITIONS MENTIONED IN THE LETTER OF APPROVAL AND THOSE INCLUDED IN THE INDUSTRIAL PARK SCHEME 2002 AND THE GOVERNMENT MA Y WITHDRAW THE APPROVAL IN CASE OF FAILURE TO COMPLY WITH ANY OF THE CONDITIONS. 6. THE ASSESSING OFFICER NOTED FROM THE CHART EXTRA CTED THAT THE TOTAL ALLOCABLE AREA WHICH IS LET OUT IS 111700 SQ. FT O UT OF WHICH THE TOTAL AREA UNDER APPROVED INDUSTRIAL ACTIVITY IS 80 311 SQ.FT WORKING OUT TO 71.989% ONLY AGAINST THE AREA UNDER COMMERCIAL ACTIVITIES A DMEASURING 31389 SQ.FT. (28.10%). 7. FOR THE ABOVE REASONS THE ASSESSING OFFICER CON CLUDED THAT THE ASSESSEE COULD NOT FULFIL THE CONDITIONS ATTACHED T O THE APPROVAL GRANTED BY THE MINISTRY AS WELL AS CBDT FOR THE INDUSTRIAL PAR K. 8. THE ASSESSING OFFICER FURTHER NOTED THAT THE ASS ESSEE IN ITS EXPLANATION SHOWED THAT AN AREA UNDER OCCUPANCY OF M/S. INDIA CEMENT LTD. ADMEASURING 9699 SQ.FT IS UTILISED FOR ENGINE ERING CONSULTANCY AND PARTLY COMMERCIAL. HOWEVER IN THE CERTIFICATE IS SUED BY M/S. INDIA CEMENT LTD. IT IS MENTIONED THAT THE SPACE IS USED AS REG IONAL OFFICE ONLY. BESIDES THE TOTAL AREA UNDER THE COMPANY IS 78790 SQ. FT. A S PER LEASE DEED AGAINST 9699 SQ. FT. AS MENTIONED BY THE ASSESSEE. BESIDES HE NOTED THE ASSESSEE SHOWED THAT THE AREA UNDER OCCUPANCY OF M/ S. REDDYS LABORATORY ADMEASURING 16643 SQ. FT. IS UTILIZED FO R RESEARCH AND MEDICAL TESTING. HOWEVER IN THE CERTIFICATE ISSUED BY TH E SAID TENANT COMPANY IT IS MENTIONED THAT THE SPACE IS USED FOR THE PURPOS E OF OFFICE SUPPORT FOR I.T.A. NO. 1177/HYD/2011 M/S. ANNAPURNA BUILDERS =================== 5 R&D/MARKETING RESEARCH. FROM THE CERTIFICATE IT I S CLEAR THAT THE SPACE WAS UTILIZED FOR OFFICE PURPOSE ONLY AS AGAINST HE CLAIM OF RESEARCH AND MEDICAL TESTING. BESIDES THE TOTAL AREA UNDER THE SAID COMPANY WAS 13941 SQ. FT. AS PER THE LEASE DEED AS AGAINST 1664 3 SQ. FT. MENTIONED BY THE ASSESSEE. 9. IN VIEW OF THE ABOVE THE ASSESSING OFFICER CON CLUDING THAT THE ASSESSEE HAS FAILED TO FULFIL THE CONDITIONS MENTI ONED IN PARA-1 OF THE LETTER OF THE GOVERNMENT GRANTING APPROVAL TO THE ASSESSE E WHICH WERE AS PER THE PROPOSAL MADE BY THE ASSESSEE ITSELF REJECTED THE CLAIM OF THE ASSESSEE FOR DEDUCTION UNDER S.80IA(4)(III) OF THE ACT. 10. ON APPEAL THE CIT(A) AFTER NOTING THE FACTS OF THE ASSESSEE AND THE SUBMISSIONS OF THE PARTIES AT LENGTH NOTED IN THE FIRST PLACE THAT AS PER THE APPROVAL RECEIVED THE PROPOSED AREA OF THE INDUSTR IAL PARK WAS 26 130.99 SQ.MTS. AND THE PERCENTAGE OF ALLOCABLE AREA EARMAR KED FOR INDUSTRIAL USE WAS 90% WHEREAS THAT EARMARKED FOR COMMERCIAL USE W AS 10% AND THE PROPOSED NUMBER OF INDUSTRIAL UNITS TO BE LOCATED I N THE INDUSTRIAL PARK WAS 03. HE ALSO NOTED THAT IN VIEW OF THE APPROVAL GI VEN BY THE CENTRAL GOVERNMENT THE CBDT VIDE NOTIFICATION DATED 20.2. 2006 NOTIFIED THE UNDERTAKING BEING DEVELOPED AND MAINTAINED AND OPE RATED BY THE ASSESSEE AS AN INDUSTRIAL PARK FOR THE PURPOSES OF S.80IA(4)(III). DEALING WITH THE FACT THAT THE TOTAL CONSTRUCTED AREA WAS 2 72829 SQ. FT. ONLY AS AGAINST THE PROPOSED AREA OF 281273.907 SQ. FT TH E CIT(A) CONCLUDED THAT SLIGHT VARIATION IN THE TOTAL CONSTRUCTED AREA AFTE R ACTUAL MEASUREMENT VIS-A- VIS THE PROPOSED AREA CANNOT BE CONSIDERED AS A VI OLATION OF THE TERMS OF APPROVAL. HE FURTHER OBSERVED THAT IT CANNOT BE S AID THAT THE TOTAL CONSTRUCTED AREA SO DEVELOPED WAS NOT SUFFICIENT TO LOCATE THE MINIMUM NUMBER OF THREE INDUSTRIAL UNITS AS SPECIFIED IN T HE APPROVAL AND CONSEQUENTLY MINOR VARIATION AFTER ACTUAL MEASUREME NT CANNOT ALTER THE FACT THAT THE ASSESSEE MADE INVESTMENT IN DEVELOPING THE INDUSTRIAL PARK WHICH THE LEGISLATURE INTENDS TO ENCOURAGE BY GRANTING DE DUCTION UNDER S.80IA(45)(III). EVEN AS FOR SALE OF 5293 SQ. FT. OF CONSTRUCTED AREA AFTER APPROVAL HE WAS OF THE VIEW THAT SALE OF ANY PORTI ON OF THE CONSTRUCTED I.T.A. NO. 1177/HYD/2011 M/S. ANNAPURNA BUILDERS =================== 6 AREA EVEN AFTER GETTING APPROVAL WOULD NOT BE VIO LATIVE OF THE CONDITIONS LAID DOWN IN THE APPROVAL SO LONG AS THE OTHER CON DITIONS REGARDING THE NUMBER OF UNITS OPERATING ETC. ARE SATISFIED SUBJE CT HOWEVER TO THE CONDITION THAT EVEN AFTER SUCH SALE ONLY 10% OF T HE TOTAL ALLOCABLE AREA INCLUDING THE AREA SOLD CAN BE USED FOR COMMERCIA L PURPOSES. WITH REGARD TO THE OBJECTION REGARDING DIFFERENCE IN MEN TIONING OF THE PURPOSE OF USE BY M/S. INDIA CEMENTS LTD. AND M/S. DR.REDDYS LABORATORIES LTD. OBSERVING THAT THE SUBSEQUENT VERIFICATION OF THE F ACTS BY THE ASSESSING OFFICER SHOWED THAT THE SAID TENANTS WERE CARRYING OUT APPROVED ACTIVITIES HE CONCLUDED THAT THE OBJECTION RAISED IS NOT SUSTA INABLE. 11. DEALING WITH THE WORKING OUT OF 90% OF THE NET ALLOCABLE AREA WHICH IS REQUIRED TO EB USED FOR SPECIFIED INDUSTRIAL PUR POSES THE CIT(A) DETERMINED THE TOTAL ALLOCABLE AREA AFTER EXCLUSION OF COMMON FACILITIES AT 1 67 619 AND ACCORDINGLY TOOK 90% THEREOF USABLE F OR SPECIFIC INDUSTRIAL PURPOSES AT 1 50 857 AND 10% THEREOF AT 16 762. AS FOR THE CORRECTNESS OF THE ACTION OF THE ASSESSING OFFICER IN ADOPTING PLINTH AREA OF THE PREMISES FOR DETERMINING THE PERCENTAGE OF USAGE F OR SPECIFIC INDUSTRIAL PURPOSES THE CIT(A) OBSERVED THAT IT WAS AFTER CON SIDERING THE TOTAL AREA COMPRISING OF BOTH PLINTH AREA AND COMMON AREA THAT THE RENT FOR EACH PREMISES WAS DECIDED UNDER THE AGREEMENTS AND AS S UCH IT IS THE TOTAL AREA SPECIFIED IN THE AGREEMENTS THAT IS TO BE CONS IDERED AS USED FOR SPECIFIED INDUSTRIAL PURPOSES BY THE RESPECTIVE PAR TIES. TAKING NOTE OF THE AREAS LET OUT FOR COMMERCIAL PURPOSES THE CIT(A) O BSERVED THAT EVEN IF THE AREA SOLD OF 5 293 SQ. FT. IS CONSIDERED AS USED FO R COMMERCIAL PURPOSES THE TOTAL OF THE AREA USED FOR COMMERCIAL PURPOSES COMES TO 16 901 AND CONSEQUENTLY AFTER EXCLUDING THE AREA OF 16 901 CO NSIDERED AS USED FOR COMMERCIAL PURPOSES THE ALLOCABLE AREA LEFT IS 1 5 0 718 WHICH HAPPENS TO BE 89.92% OF THE TOTAL AREA I.E. ALMOST 90%. 12. THE CIT(A) FOUND NO MERIT IN THE VIEW TAKEN BY THE ASSESSING OFFICER THAT EVEN IF THE ASSESSEE HAD NOT LET OUT OR USED A LL OF SUCH 1 50 718 SQ. FT. FOR APPROVED INDUSTRIAL PURPOSES DURING THE YEAR I T CANNOT BE DENIED THAT ALL OF SUCH AREA HAD BEEN DEVELOPED AS PER THE AP PROVAL OF THE CENTRAL I.T.A. NO. 1177/HYD/2011 M/S. ANNAPURNA BUILDERS =================== 7 GOVERNMENT AND WAS FIT TO BE USED FOR THE SPECIFIED INDUSTRIAL PURPOSES AND FOR THIS PURPOSE RELIED ON THE DECISION OF THE HYDERABAD BENCH OF THE TRIBUNAL IN THE CASE OF MEENAKSHI INFRASTRUCTURES P . LTD. V/S. DCIT(44 SOT 59) IN THIS BEHALF. 13. THE CIT(A) ULTIMATELY HELD THAT THE ASSESSEE W OULD BE ENTITLED TO THE BENEFIT OF DEDUCTION UNDER S.80IA(4)(III) OF TH E ACT OBSERVING IN THE CONCLUDING PARAS OF HIS ORDER AS FOLLOWS- 8.6.4. ON THE OTHER HAND IT CAN BE SEEN THAT OUT OF THE TOTAL AREA OF 16 901 SQ. FT. USED FOR THE COMMERCIAL PURP OSES 8 373 SQ. FT. WAS USED FOR BEING LET OUT TO A REST AURANT. IT IS FURTHER SEEN THAT IN THE ANNEXURE VII TO LETTER DAT ED 14.10.2006 TO THE BOARD THE APPELLANT HAD PROPOSED PROVIDING THE FACILITY OF A RESTAURANT ALSO IN THE INDUSTRIAL PARK. WITH NO OTHER AREA HAS BEEN FOUND AS USED FOR RES TAURANT IT CANNOT BE DENIED THAT PART OF THE RESTAURANT BE ING RUN IN 8373 SQ. FT. OF THE INDUSTRIAL PARK IS BEING USED BY THE OCCUPANTS/TENANTS OF THE INDUSTRIAL PARK AS A COMMO N FACILITY ALSO. THE TOTAL AREA USED FOR COMMERCIAL PURPOSES BY M/S. DOOSAN HEAVY INDUSTRIES & CONSTRUCTION CO. LTD. WAS 1582 SQ. FT. WHILE THAT USED BY M/S. NAINA THAKKAR WAS 1 653 SQ. FT. EVEN IF THE AREA SOLD OF 5293 SQ. FT. IS CONSIDERED UNDER COMMERCIAL USER THE TOTAL COMES TO 11 608 SQ. FT. ONLY. THEREFORE EVEN IF A SMALL FRACTION OF THE AREA OF 8373 SQ. FT. LET OUT TO THE RESTAURANT IS CONSIDERED IN THE NATU RE OF COMMON FACILITY PROVIDED IN THE INDUSTRIAL PARK BY THE DEVELOPER THE USER FOR COMMERCIAL PURPOSES WOULD N OT BE MORE THAN 10%. 8.6.4. FURTHER IT IS SEEN THAT THE HONBLE ITAT IN THE CASE OF MEENAKSHI INFRASTRUCTURE P. LTD. V/S. DCIT SUPRA HAVE OPINED THAT WHEN THE CENTRAL GOVERNMENT APPRO VES THE ASSESSEES PROJECT UNDER INDUSTRIAL PARK SCHEME FRA MED BY THE CENTRAL GOVERNMENT THE CONDITIONS UNDER SEC.80 IA(4)(III) ARE SATISFIED. IT IS CLEAR THAT WHILE THE APPELL ANT HAS RECEIVED SUCH APPROVAL AND NOTIFICATION THE SAME HAS NOT BEEN WITHDRAWN TILL THE DATE FOR CONTRAVENTION OF ANY OF THE CONDITIONS EVEN THOUGH THERE IS A SPECIFIC PROVISI ON FOR WITHDRAWAL IN CASE THE CENTRAL GOVERNMENT FINDS TH AT HE CONDITIONS PRESCRIBED THEREIN HAVE NOT BEEN ADHERED . HOWEVER IT IS ALSO CLEAR THAT SUCH WITHDRAWAL HAS TO BE DONE BY THE CENTRAL GOVERNMENT ONLY AND AS LONG AS THIS IS NOT DONE THE ASSESSEE HAVING SUCH APPROVAL AND NOTIFIC ATION CANNOT BE DENIED THE DEDUCTION. UNDER THE CIRCUMST ANCES I AM OF THE VIEW THAT SINCE THE APPELLANT HAD DEVELO PED THE I.T.A. NO. 1177/HYD/2011 M/S. ANNAPURNA BUILDERS =================== 8 INDUSTRIAL PARK DULY APPROVED AND NOTIFIED BY THE C ENTRAL GOVERNMENT AND THE SAME HAS NOT BEEN WITHDRAWN FOR ANY REASON THE APPELLANT WOULD BE ENTITLED TO THE BENE FIT OF DEDUCTION UNDER S.80IA(4)(III). 14. AGGRIEVED BY THE ORDER OF THE CIT(A) REVENUE I S IN APPEAL BEFORE US. 15. THE LEARNED DEPARTMENTAL REPRESENTATIVE STRONGL Y SUPPORTING THE ORDER FO THE ASSESSING OFFICER SUBMITTED THAT THE A SSESSEE HAS FAILED TO FULFIL THE CONDITIONS LAID DOWN BY THE MINISTRY OF COMMERC E/CBDT THAT 90% OF THE ALLOCABLE AREA SHALL BE EARMARKED FOR INDUSTRIA L USE AND CONSEQUENTLY THE ASSESSEE IS NOT ENTITLED FOR THE RELIEF UNDER S .80IA(4)(III) OF THE ACT. HE SUBMITTED THAT THE DECISION OF THE HYDERABAD BENCH OF THE TRIBUNAL IN THE CASE OF MEENAKSHI INFRASTRUCTURE P. LTD. (SUPRA) H AS NO APPLICATION TO THE FACTS OF THE PRESENT CASE AND THEREFORE THE CIT(A ) WAS NOT JUSTIFIED IN FOLLOWING THE SAME. 16. THE LEARNED COUNSEL FOR THE ASSESSEE ON THE OT HER HAND STRONGLY RELYING ON THE ORDER OF THE CIT(A) SUBMITTED THAT THE ASSESSEE IS VERY MUCH ENTITLED TO THE RELIEF UNDER S.80IA(4)(III) OF THE ACT. REITERATING THE CONTENTIONS URGED BEFORE THE LOWER AUTHORITIES HE SUBMITTED THAT THE INDUSTRIAL PARK CONSTRUCTED BY THE ASSESSEE HAS BEE N APPROVED BY THE MINISTRY OF COMMERCE GOVERNMENT OF INDIA AS PER I NDUSTRIAL PARK SCHEME 2002 NOTIFIED BY THE GOVERNMENT VIDE S.O. NO.354(E) DATED 1.4.2002. ONE OF THE CONDITIONS FOR APPROVAL IS TH AT PERCENTAGE OF ALLOCABLE AREA FOR INDUSTRIAL USE IS TO BE 90% AND FOR COMMER CIAL USE IT IS TO BE 10%. APPROVAL ALSO MENTIONED THE PROPOSED INDUSTRIAL ACT IVITIES WHICH SHALL BE THE ACTIVITIES MENTIONED IN NATIONAL INDUSTRIAL CLA SSIFICATIONS 1987 CODE ISSUED BY CSO EXCLUDING CERTAIN ACTIVITIES. BASED ON THE APPROVAL OBTAINED FROM THE MINISTRY OF COMMERCE THE ASSESSE E HAS APPLIED TO CBDT FOR NOTIFICATION OF THE ASSESSEES INDUSTRIAL PARK AS ELIGIBLE UNDERTAKING UNDER S.80IA(4)(III) OF THE ACT FURNIS HING ALL THE RELEVANT DETAILS INCLUDING LIST OF TENANTS AREA OCCUPIED PURPOSE OF OCCUPATION ETC. AND THE CBDT AFTER CONSIDERING ALL THE DETAILS AND ENSURING THE I.T.A. NO. 1177/HYD/2011 M/S. ANNAPURNA BUILDERS =================== 9 COMPLIANCES MADE BY THE ASSESSEE NOTIFIED THE ASSE SSEES INDUSTRIAL PARK AS ELIGIBLE UNDER S.80IA(4)(III) OF THE ACT VIDE N OTIFICATION DATED 25.9.2006. HE SUBMITTED THAT THOUGH THE PROPOSED AREA OF THE I NDUSTRIAL PARK WAS 281271 SQ. FT. ON COMPLETION AND ON ACTUAL MEASURE MENT OF THE AREA CONSTRUCTED BY THE ARCHITECT SMALL VARIANCE IN THE CONSTRUCTED AREA AS COMPARED TO PROPOSED AND APPROVED AREA WAS FOUND. THE ASSESSEE HOWEVER WAS NOT CLAIMING ANY EXTRA DEDUCTION THAN WHAT HAS BEEN APPROVED. 17. THE LEARNED COUNSEL FOR THE ASSESSEE FURTHER SUBMITTED THAT THE ASSESSING OFFICER HIMSELF WAS TOTALLY CONFUSED AS T O THE AREA CONSTRUCTED AREA AND THE METHOD OF ARRIVING AT THE ALLOCABLE A REA AND THOUGH THE ASSESSEE HAS FURNISHED DETAILED CLARIFICATIONS AND CALCULATIONS INCLUDING USAGE OF THE AREA FOR INDUSTRIAL ACTIVITY PURPOSES AND THIS FACT HAS BEEN ACKNOWLEDGED BY THE ASSESSING OFFICER HIMSELF THE ASSESSING OFFICER HAS NOT CORRECTLY UNDERSTOOD THE CALCULATIONS AND PROC EEDED TO DETERMINE THE MATTER IN HIS OWN WAY. THE LEARNED COUNSEL SUBMITT ED THAT THE CBDT AFTER ANALYSING THE DETAILS FURNISHED BY THE ASSESSEE WIT H THE APPLICATION FOR APPROVAL AND AFTER SATISFYING ITSELF AS TO THE USA GE OF THE AREA HAS NOTIFIED THE ASSESSEES INDUSTRIAL PARK AS AN UNDERTAKING EL IGIBLE FOR RELIEF UNDER S.80IA. HE SUBMITTED THAT THE OCCUPANTS/USERS OF T HE PARK AS GIVEN TO THE ASSESSING OFFICER ARE THE SAME AS IN THE LIST GIVE N TO THE CBDT. HE SUBMITTED THAT LIST OF TENANTS GIVEN IN ANNEXURE I OF THE ASSESSMENT ORDER IS FACTUALLY INCORRECT AS IT LEAVES ABOUT 10260 SQ. F T. OF THE OFFICE GIVEN TO AVENION LIMITED ON 1 ST FLOOR 1604 SQ. FT. OFFICE SPACE GIVEN TO DOOSAN INFRASTRUCTURE LTD. ON THE 1 ST FLOOR OF THE COMPLEX; 3364 SQ. FT. OF OFFICE GIVEN TO PAPYRUS SOFTWARE (P) LTD ON 6TH FLOOR AND 6944 S Q. FT. OF OFFICE GIVEN TO BHARTI TELECOM LTD. ON 7 TH FLOOR BESIDES COMMITTING SMALL ERRORS IN THE AREAS MENTIONED. IN ADDITION THE ASSESSING OFFICE R HAS ALSO TAKEN EXTRA AREA OF 1782 SQ. FT. ON 4 TH FLOOR OF OFFICE GIVEN TO AURONA TECHNOLOGIES. HE FURTHER SUBMITTED THAT IN THE CASE OF INDIA CEMENTS LTD. AND DR.REDDYS LABS LTD. THE ASSESSING OFFICER HAS TAKEN THE AREA EXCLUDING COMMON AREA ON WHICH ALSO THE ASSESSEE GETS LEASE RENT WHEREAS IN ALL OTHER CASES HE I.T.A. NO. 1177/HYD/2011 M/S. ANNAPURNA BUILDERS =================== 10 HAS INCLUDED COMMON AREA WHICH IS SPECIFICALLY MENT IONED IN THE LEASE DEEDS. HE ALSO TOOK US THROUGH THE RECONCILIATION STATEMENT EXTRACTED BY THE CIT(A) IN PARA 5.6 OF THE IMPUGNED ORDER AND SUBMITTED THAT THE NET ALLOCABLE AREA IS ONLY 149396 SQ.FT. AND OUT OF IT THE ASSESSEE HAS USED ALMOST 97% OF THE AREA FOR SPECIFIED PURPOSE AND HA S LET OUT ONLY ABOUT 3% OF THE ALLOCABLE AREA FOR COMMERCIAL PURPOSE. HE FURTHER SUBMITTED THAT THOUGH THE ASSESSEE HAS SOLD A SMALL PORTION OF THE AREA IN THE GROUND FLOOR WHICH CAN BE USED ONLY FOR COMMERCIAL PURPOS E SINCE WHAT HAS BEEN SOLD IS THE AREA MEANT FOR COMMERCIAL PURPOSES IT DOES NOT IN ANY WAY VIOLATE THE CONDITIONS MENTIONED IN THE INDUSTR IAL PARK SCHEME 2002. HE FURTHER SUBMITTED THAT THE ASSESSING OFFICER HAS TOTALLY DISREGARDED THE CERTIFICATE ISSUED BY DR. REDDYS LABORATORIES LTD. STATING THAT THE AREA UNDER THEIR OCCUPANCY IS BEING USED FOR RESEARCH AN D DEVELOPMENT AND MARKETING RESEARCH THOUGH THE SAID CERTIFICATE HAS BEEN ACCEPTED BY THE CBDT WHILE NOTIFYING THE ASSESSEE AS AN ELIGIBLE UN DERTAKING. THE ASSESSING OFFICER ALSO SIMILARLY IGNORED THE CERTIF ICATE GRANTED BY THE INDIA CEMENTS LTD. OCCUPYING 9699 SQ.FT. AS REGIONAL OFFI CE FOR CARRYING OUT TECHNICAL CONSULTANCY MARKET RESEARCH AND PARTLY F OR COMMERCIAL PURPOSE. 18. PLACING STRONG RELIANCE ON THE DECISION OF THE APEX COURT IN THE CASE OF BAJAJ TEMPO LTD. V/S. CIT(62 TAXMAN 480) AND THE DECISION OF THE HYDERABAD BENCH OF THE TRIBUNAL IN THE CASE OF MEE NAKSHI INFRASTRUCTURE P. LTD (SUPRA) LEARNED COUNSEL FOR THE ASSESSEE S UBMITTED THAT THE CIT(A) WAS VERY MUCH CORRECT IN HOLDING THAT THE ASSESSEE IS ENTITLED FOR RELIEF UNDER S.80IA(4)(III) OF THE ACT 19. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PE RUSED THE ORDERS OF THE LOWER AUTHORITIES. WE HAVE ALSO GONE THROUGH TH E PAPER-BOOK FILED BY THE LEARNED COUNSEL FOR THE ASSESSEE AND OTHER MATE RIAL ON RECORD. IN THIS CASE THE ASSESSING OFFICER DENIED THE EXEMPTION U/S . 80IA OF THE ACT ON THE SOLE REASON THAT I) THAT THE CERTIFIED CONSTRUCTED AREA OF 272829 S Q. FT. WAS LESS THAN THE AREA OF 281273.97 SQ. FT. PROPOSED BY THE ASSESSEE. I.T.A. NO. 1177/HYD/2011 M/S. ANNAPURNA BUILDERS =================== 11 II) THAT THE ASSESSEE HAD SOLD OUT 5293 SQ. FT. OF THE GROUND FLOOR AFTER RECEIVING APPROVAL FOR THE TOTAL AREA OF THE PARK. III) THAT SOME OF THE TENANTS HAD SHOWN DIFFERENT USAGE OF THE PREMISES THAN THAT SHOWN BY THE ASSESSEE. IV) THAT THE ASSESSEE DID NOT USE 90% OF THE NET AL LOCABLE AREA FOR THE SPECIFIED INDUSTRIAL PURPOSES. 20. ACCORDING TO THE ASSESSEE TOTAL AREA INCLUDING COMMON AREA IS AT 1 49 543 SQ. FT. WHICH HE HAS RECONCILED WITH REFE RENCE TO THE ASSESSMENT ORDER AS FOLLOWS: (FIGURES IN SQ. FT.) TOTAL AREA INCLUDING COMMON AREA AS PER ANNEXURE-I OF THE ASST. ORDER 137526 ADD : AREA WRONGLY LEFT OUT NAME FLOOR USAGE AREA AVENION LTD. 1 ST SOFTWARE DEVP. 10260 DOOSAN INFRA LTD. 1 ST CONSULTANCY 1604 BARTI TELECOM. LTD. 7 TH TELE-COMMUNICATION 6944 PAPYRUS SOFTWARE P. LTD. 6 TH TECHNOLOGY 3364 -------- 22173 LESS : AREA EXCESS TAKEN AURONA TECHNOLOGIES LTD. 4 TH 1782 ------- 20390 157916 LESS : AREA FOR COMMON FACILITY OFFERED (RESTAURANT) 8373 --------- ALLOCABLE AREA 149543 -------- 20.1 FURTHER THE CALCULATION OF THE ALLOCABLE AREA BY THE ASSESSEE IS AS FOLLOWS: (IN SQ. FT.) TOTAL AREA 272829 LESS: AREA MEANT FOR PARKING AND TERRACE 105190 ---------- 167639 LESS: AREA MEANT FOR RESTAURANT AND OTHER COMMON FAC ILITY (THE ASSESSEE WAS FOUND TO PROVIDE EATING FACILITY AS COMMO N FACILITY AS MENTIONED IN ANNEXURE-5 OF THE APPLICATION) 12950 --------- 154689 LESS: AREA SOLD 5293 ----------- ALLOCABLE AREA 149396 I.T.A. NO. 1177/HYD/2011 M/S. ANNAPURNA BUILDERS =================== 12 21. HOWEVER IT WAS FOUND THAT 97.79% OF ALLOCABLE AREA HAD BEEN USED FOR SPECIFIED PURPOSES AS BELOW : (IN SQ. FT. ) TOTAL AREA AS PER ASSESSMENT ORDER (ANNEXURE I) 137526 ADD : AREA FOR WHICH RENTAL AGREEMENTS ARE FILED AND NOT CONSIDERED BY ASSESSING OFFICER IN ASSESSMENT ORDER BUT CONSIDERED IN REMAND REPORT 19034 ADD : AREA LYING VACANT DURING A.Y. 2007-08 BUT LENT SUBSEQUENTLY IN A.Y. 2008-09 FOR SPECIFIED PURPOSES. AVENION LIMITED 1534 DOOSAN INFRA CARE LTD. 1604 3138 159698 LESS AREA EXCESS TAKEN BY A.O. IN ASST. ORDER 1782 --------- TOTAL AREA 157916 LESS : AREA USED FOR COMMON FACILITY (RESTAURANT) 8373 149543 LESS : AREA LYING VACANT DURING A.Y. 2007-08 3138 --------- ALLOCABLE AREA 146405 --------- USED FOR COMMERCIAL PURPOSES 3235 2.21% USED FOR SPECIFIED PURPOSES 143170 97.79% 146405 100.00% 22. AS PER APPROVAL LETTER THE ASSESSEE HAS TO CONS TRUCT 2 87 273.97 SQ. FT. AND TO LOCATE MINIMUM THREE INDUSTRIAL UNITS T HEREIN. HOWEVER THE ASSESSEE CONSTRUCTED 2 72 829 SQ. FT. ONLY. THIS M INOR VARIATION IN CONSTRUCTION CANNOT ALTER THE FACT THAT ASSESSEE MA DE INVESTMENT IN DEVELOPING THE INDUSTRIAL PARK AND ALSO WE CANNOT H OLD THAT THE AREA SO DEVELOPED IS NOT SUFFICIENT TO LOCATE THE MINIMUM N UMBER OF THREE INDUSTRIAL UNITS AS SPECIFIED IN THE APPROVAL BY MINISTRY OF C OMMERCE GOVERNMENT OF INDIA. FURTHER OUT OF THE ABOVE DEVELOPED AREA THE ASSESSEE SOLD 5 296 SQ. FT. AREA. ACCORDING TO THE ASSESSING OFFICER T HIS IS VIOLATION OF CONDITIONS IN THE APPROVAL. FURTHER THE ASSESSING OFFICER OBJECTION IS REGARDING THE VARIATION IN THE USAGE IN THE CASE OF INDIA CEMENTS LTD. AND DR. REDDYS LABORATORY LTD. BUT THERE IS A CLEAR-CU T FINDING BY THE CIT(A) THAT SALE OF 10% OUT OF THE TOTAL ALLOCABLE AREA CA NNOT BE CONSIDERED AS VIOLATION OF THE APPROVAL. THE ACTIVITY CARRIED O N BY THE INDIA CEMENT LTD. I.T.A. NO. 1177/HYD/2011 M/S. ANNAPURNA BUILDERS =================== 13 AND DR. REDDYS LABORATORY LTD. CANNOT BE CONSIDER ED AS OUTSIDE THE APPROVED ACTIVITIES. THESE ENTITIES ARE CARRYING O N R & D / TECHNICAL SERVICES AND MARKETING RESEARCH AND OFFICE SUPPORT FOR R & D AND MARKETING RESEARCH. BEING SO IT IS UNDER THE PURV IEW OF THE APPROVED ACTIVITIES. FURTHER AS REGARDS THE OBJECTION THAT THE ASSESSEE DID NOT USE 90% OF THE NET ALLOCABLE AREA FOR THE SPECIFIED IND USTRIAL PURPOSES IT CANNOT BE DENIED THAT THE ASSESSEE HAD CONSTRUCTED TOTAL A REA OF 2 72 809 SQ. FT. OUT OF THE SAME THE AREA MEANT FOR PARKING AND TER RACE WAS 1 05 190 SQ. FT. THEREFORE THE TOTAL ALLOCABLE AREA AFTER EXC LUDING SUCH COMMON FACILITIES CAME TO 1 67 619 SQ. FT. AS PER THE APP ROVAL 90% THEREOF BEING 1 50 857 SQ. FT. WAS TO BE USED FOR SPECIFIED INDUS TRIAL PURPOSES WHILE UP TO 16 762 SQ. FT. BEING 10% COULD HAVE BEEN USED F OR COMMERCIAL PURPOSES. 23. IN THIS REGARD IT IS SEEN THAT THE ASSESSING O FFICER OPINED THAT THE PLINTH AREA OF THE PREMISES LET OUT TO VARIOUS PA RTIES ONLY WAS TO BE CONSIDERED AS USED FOR SPECIFIED INDUSTRIAL PURPOS ES. HOWEVER IT IS SEEN THAT THE AGREEMENTS WITH THE LESSORS ARE FOR SPACES COMPRISING OF BOTH PLINTH AREA AND COMMON AREA. IT WAS AFTER CONS IDERING THE TOTAL AREA COMPRISING OF BOTH PLINTH AREA AND COMMON AREA THA T THE RENT FOR EACH PREMISES WAS DECIDED UNDER SUCH AGREEMENTS. ACCORD INGLY WE ARE OF THE VIEW THAT IT IS THE TOTAL AREA SPECIFIED IN THE AGR EEMENTS THAT IS TO BE CONSIDERED AS USED FOR SPECIFIED INDUSTRIAL PURPOSE S BY THE RESPECTIVE PARTIES. 24. SO FAR AS THE COMMERCIAL USER IS CONCERNED THE AREA LET OUT TO M/S. DOOSAN HEAVY INDUSTRIES & CONSTRUCTIONS CO. LTD. 1 582 SQ. FT. MRS. NAINA THAKKAR 1653 SQ. FT. AND USED FOR THE RESTAURANT 8373 SQ. FT. TOTALLING TO 11 608 SQ. FT. HAVE BEEN CONSIDERED BY THE ASSESSIN G OFFICER AS USED FOR COMMERCIAL PURPOSES. NO OTHER AREA WAS FOUND USE D FOR COMMERCIAL PURPOSES. EVEN IF THE AREA SOLD 5293 SQ. FT. IS CONSIDERED AS USED FOR COMMERCIAL PURPOSES THE TOTAL OF THE ABOVE COMES TO 16 901 SQ. FT. THEREFORE IT IS CLEAR THAT AFTER EXCLUDING THE ARE A OF 16 901 SQ. FT. CONSIDERED AS USED FOR COMMERCIAL PURPOSES THE ALL OCABLE AREA LEFT IS I.T.A. NO. 1177/HYD/2011 M/S. ANNAPURNA BUILDERS =================== 14 1 50 718 SQ. FT. WHICH HAPPENS TO BE 89.925 OF THE TOTAL AREA I.E. ALMOST 90%. 25. THE ASSESSING OFFICER HAS OPINED THAT EVEN IF T HE ASSESSEE HAD NOT LET OUT OR USED ALL OF SUCH 1 50 718 SQ. FT. FOR AP PROVED INDUSTRIAL PURPOSES DURING THE YEAR IT CANNOT BE DENIED THAT ALL OF SU CH AREA HAD BEEN DEVELOPED AS PER THE APPROVAL OF THE CENTRAL GOVERN MENT AND WAS FIT TO BE USED FOR THE SPECIFIED INDUSTRIAL PURPOSES. THE T RIBUNAL IN ITS ORDER IN THE CASE OF MEENAKSHI INFRASTRUCTURES P. LTD. VS. DCIT (44 SOT 59) HAVE OPINED THAT THE WORD LOCATE REFERS TO TO FIX OR TO ESTABLISH IN A POSITION SITUATION OR LOCALITY PLACE ETC.. IT WAS HELD I N THE SAID CASE THAT SINCE THE ASSESSEE HAD COMPLETED THE CONSTRUCTION OF ALL UNIT S AND THE ENTIRE INFRASTRUCTURE WAS READY ALL THE UNITS HAD BEEN MA DE LOCATED BY THE ASSESSEE IN THE INDUSTRIAL PARK. APPLYING THE RATI O OF THE ABOVE REFERRED DECISION THEREFORE IT CAN BE SAID THAT EVEN IF AL L OF 1 50 718 SQ. FT. HAD NOT BEEN LET OUT DURING THE YEAR THE ENTIRE AREA SO D EVELOPED WAS READY AND FIT TO BE USED FOR APPROVED INDUSTRIAL PURPOSES. F URTHER IT HAS NOT BEEN FOUND THAT ANY PART OF SUCH 1 50 718 SQ. FT. WAS US ED FOR ANY COMMERCIAL PURPOSE DURING THE YEAR. IN FACT IT IS CONTENDED BY THE ASSESSEE THAT OUT OF THE SAME FURTHER AREAS ADMEASURING 1434 SQ. FT. A ND 1604 SQ. FT. WERE LET OUT AND USED FOR APPROVED INDUSTRIAL PURPOSES IN TH E SUBSEQUENT FINANCIAL YEAR THOUGH THE SAME WERE LYING VACANT IN THE YEAR UNDER CONSIDERATION. THE SUBSEQUENT USER OF SUCH AREA FOR SPECIFIED PURP OSES SHOWS THAT THOSE ALSO WERE DEVELOPED AND INTENDED TO BE USED FOR S IMILAR PURPOSE IN THE YEAR UNDER APPEAL ALSO THOUGH THE ASSESSEE HAD NOT BEEN ABLE TO REALISE ANY RENT FROM LETTING OUT THE SAME. 26. ON THE OTHER HAND IT CAN BE SEEN THAT OUT OF T HE TOTAL AREA OF 16 901 SQ. FT. USED FOR THE COMMERCIAL PURPOSES 8 373 SQ. FT. WAS USED FOR BEING LET OUT TO A RESTAURANT. IT IS FURTHER SEEN THAT IN THE LETTER DATED 14.10.2006 TO THE BOARD THE ASSESSEE HAD PROPOSED PROVIDING T HE FACILITY OF A RESTAURANT ALSO IN THE INDUSTRIAL PARK. WHILE NO OTHER AREA HAS BEEN FOUND AS USED FOR RESTAURANT IT CANNOT BE DENIED THAT PART OF THE RESTAURANT BEING RUN IN 8373 SQ. FT. OF THE INDUSTRIAL PARK IS BEIN G USED BY THE I.T.A. NO. 1177/HYD/2011 M/S. ANNAPURNA BUILDERS =================== 15 OCCUPANTS/TENANTS OF THE INDUSTRIAL PARK AS A COMM ON FACILITY ALSO. THE TOTAL AREA USED FOR COMMERCIAL PURPOSES BY M/S. DOO SAN HEAVY INDUSTRIES & CONSTRUCTION CO. LTD. WAS 1582 SQ. FT. WHILE THA T USED BY MRS. NAINA THAKKAR WAS 1653 SQ. FT. EVEN IF THE AREA SOLD OF 5293 SQ. FT. IS CONSIDERED UNDER COMMERCIAL USER THE TOTAL COMES TO 11 608 SQ . FT. ONLY. THEREFORE EVEN IF A SMALL FRACTION OF THE AREA OF 8373 SQ. FT . LET OUT TO THE RESTAURANT IS CONSIDERED IN THE NATURE OF COMMON FACILITY PROVIDE D IN THE INDUSTRIAL PARK BY THE DEVELOPER THE USER FOR COMMERCIAL PURPOSES WOULD NOT BE MORE THAN 10%. 27. FURTHER IT IS SEEN THAT THIS TRIBUNAL IN THE C ASE OF MEENAKSHI INFRASTRUCTURES P. LTD. VS. DCIT (SUPRA) HAVE OPINE D THAT WHEN THE CENTRAL GOVERNMENT APPROVES THE ASSESSEES PROJECT UNDER IN DUSTRIAL PARK SCHEME FRAMED BY THE CENTRAL GOVERNMENT THE CONDIT IONS UNDER SEC. 80IA(4)(III) ARE SATISFIED. IT IS CLEAR THAT WHIL E THE ASSESSEE HAS RECEIVED SUCH APPROVAL AND NOTIFICATION THE SAME HAS NOT BE EN WITHDRAWN TILL DATE FOR CONTRAVENTION OF ANY OF THE CONDITIONS EVEN TH OUGH THERE IS A SPECIFIC PROVISION FOR WITHDRAWAL IN CASE THE CENTRAL GOVER NMENT FINDS THAT THE CONDITIONS PRESCRIBED THEREIN HAVE NOT BEEN ADHERED TO. HOWEVER IT IS ALSO CLEAR THAT SUCH WITHDRAWAL HAS TO BE DONE BY THE CE NTRAL GOVERNMENT ONLY AND AS LONG AS THIS IS NOT DONE THE ASSESSEE HAVIN G SUCH APPROVAL AND NOTIFICATION CANNOT BE DENIED THE DEDUCTION. UNDER THE CIRCUMSTANCES I AM OF THE VIEW THAT SINCE THE ASSESSEE HAD DEVELOPED T HE INDUSTRIAL PARK DULY APPROVED AND NOTIFIED BY THE CENTRAL GOVERNMENT AND THE SAME HAS NOT BEEN WITHDRAWN FOR ANY REASONS THE ASSESSEE WOULD BE ENTITLED TO THE BENEFIT OF DEDUCTION U/S. 80IA(4)(III). 28. FURTHER IN THE CASE OF GANESH HOUSING CORPORAT ION LTD. VS. PADAM SINGH UNDER SECRETARY & ORS. (2011) 61 DTR (GUJ)1 THE GUJARAT HIGH COURT HELD THAT WHAT WAS REQUIRED TO BE DONE BY TH E ASSESSEE WAS TO PROVIDE FOR INFRASTRUCTURAL FACILITIES BEFORE THE L AST DATE ENVISAGED UNDER THE SCHEME AND THEREAFTER THERE WAS NO OBLIGATION ON I TS PART TO ENSURE THAT INDUSTRIAL UNITS ON SUCH PLOTS MUST ALSO COME INTO EXISTENCE AND COMMENCE THEIR PRODUCTION ACTIVITIES IMPUGNED SHOW CAUSE NO TICE FOR WITHDRAWAL OF I.T.A. NO. 1177/HYD/2011 M/S. ANNAPURNA BUILDERS =================== 16 APPROVAL OF ASSESSEES INDUSTRIAL PARK IS LIABLE TO BE QUASHED AND CBDT IS DIRECTED TO NOTIFY THE SAME. 29. BEING SO IN OUR OPINION CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE AND THE JUDGEMENT RELIED ON BY THE AR THE CIT(A) RIGHTLY ALLOWED THE CLAIM OF THE ASSESSEE. 30. IN THE RESULT REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH NOVEMBER 2011. SD/- SD/- SD/- (G.C. GUPTA) VICE PRESIDENT SD/- (CHANDRA POOJARI) ACCOUNTANT MEMBER HYDERABAD DATED THE 30 TH NOVEMBER 2011 COPY FORWARDED TO: 1. THE ASST. COMMISSIONER OF INCOME-TAX CIRCLE-6(1 ) 7 TH FLOOR 'D' BLOCK I.T. TOWERS MASAB TANK HYDERABA D 2. M/S. ANNAPURNA BUILDERS DR. NO. 6-3-1192 KUNDA NBAGH BEGUMPET HYDERABAD. 3. THE CIT(A)-IV HYDERABAD. 4. THE CIT-III HYDERABAD. 5. THE DR B BENCH ITAT HYDERABAD B.V.S./TPRAO