COMMISSIONER OF INCOME TAX vs. M/S PRIMAL PROJECTS (P) LTD.,

1 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 10TH DAY OF NOVEMBER 2020 PRESENT THE HON’BLE MR. JUSTICE ALOK ARADHE AND THE HON’BLE MR. JUSTICE H.T.NARENDRA PRASAD I.T.A. NO.197 OF 2011 BETWEEN: 1. COMMISSIONER OF INCOME TAX

CENTRAL CIRCLE, C.R. BUILDING

QUEENS ROAD, BANGALORE. 2. DEPUTY COMMISSIONER OF INCOME TAX

CIRCLE-1(4), BANGALORE. ... APPELLANTS (BY SRI. JEEVAN J. NEERALGI, ADV.,) AND: M/S. PRIMAL PROJECTS (P) LTD., NO.97/B, I FLOOR, 6TH BLOCK KORAMANGALA, BANGALORE.

... RESPONDENT (BY SRI. PAVAN KUMAR, ADV., FOR SRI. S. PARTHASARATHI, ADV.,) - - - THIS ITA IS FILED UNDER SECTION 260-A OF I.T. ACT, 1961 ARISING OUT OF ORDER DATED 28.02.2011 PASSED IN ITA NO.1298/BANG/2010 FOR THE ASSESSMENT YEAR 2008-09, PRAYING TO: (I) FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW STATED THEREIN. (II) SET ASIDE THE APPELLATE ORDER DATED 28.02.2011 PASSED BY THE ITAT, 'B' BENCH, BANGALORE IN APPEAL

2 PROCEEDINGS ITA NO.1298/BANG/2010, AS SOUGHT FOR IN THIS APPEAL, IN THE INTEREST OF JUSTICE AND EQUITY. THIS ITA COMING ON FOR HEARING, THIS DAY, ALOK ARADHE J., DELIVERED THE FOLLOWING: JUDGMENT This appeal under Section 260A of the Income Tax Act, 1961 (hereinafter referred to as the Act for short) has been preferred by the revenue. The subject matter of the appeal pertains to the Assessment year 2008-09. The appeal was admitted by a bench of this Court vide order dated 27.03.2012 on the following substantial questions of law: (i) Whether the Tribunal was correct in law in allowing assessee's appeal by holding that the assessee is eligible for deduction under section 80IA(4)(iii) of the I.T. Act, 1961 even when the assessee has failed to satisfy the conditions put forth in the said provision. (ii) Whether the Tribunal was correct in law to allow the deduction under section 80IA(4)(iii) of the I.T. Act, 1961 when the

3 assessee had not fulfilled the conditions envisaged by the Government of India as well as those included in the Industrial Park Scheme, 2002 and therefore contravened the provisions of Rule 18C(3) of the Income-Tax Rules? (iii) Whether on the facts and circumstances of the case, the Tribunal erred in law in interpreting the intentions of the legislation to promote large number of industrial units in the Industrial Park, by holding that the five floors leased to a single company would constitute five independent Industrial units and satisfy the criteria mentioned in para 1(vii) of the approval letter issued by the Ministry of Commerce and Industry. (iv) Whether the Tribunal was correct in law in interpreting Industrial Park Scheme, 2002 by holding that the four floors leased out to a single entity would constitute five separate taxable entities and therefore the assessee had not violated the condition that no single unit shall occupy

4 more than 50% of the allocable industrial area of an Industrial Park. (v) Whether the Tribunal was correct in law to allow the deduction under section 80IA of the I.T. Act when the assessee had constructed only 4,04,710/- Sq.ft. instead of the required area of 5,24,406.68 Sq.ft. and therefore had not fulfilled the condition laid out in the approval granted by the Ministry of Commerce and notification from Ministry of Finance. (vi) Whether the Tribunal was correct in law to allow the deduction under section 80IA of the I.T. Act on sale of built up area in Industrial Park when the assessee had not satisfied the condition of required number of units at the time of sale of built up area in an Industrial park. 2. We have considered the submissions made by learned counsel for the parties and have perused the record. For the reasons assigned in the judgment delivered by us today in I.T.A.No.196/2011, the

5 substantial questions of law framed by a bench of this court are answered against the revenue and in favour of the assessee. In the result, the appeal fails and is hereby dismissed. Sd/- JUDGE Sd/- JUDGE ss