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Judgment
The Court : Two principal questions are raised by the department in this appeal. The first of them pertains to a matter under Section 80-1A of the
Income Tax Act, 1961 in respect of deductions of profits and gains from industrial undertakings or enterprises engaged in infrastructure development.
The second question pertains to an issue of interest in respect of certain sister concerns of the respondent assessee to whom certain loans were made
available by the assessee.
To begin with the second aspect first, the primary grievance of the Revenue is that the appellate tribunal failed to appreciate that the connection
between the respondent assessee and the so called sister concerns was not clearly established or was tenuous at the best. It is not necessary to go
into the grievance since it is evident that no question of law is involved therein. As to whether an entity is associated with another or not is essentially
a question of fact unless there is some legal provision which comes into operation.
In the present case, there is no legal provision which is relied upon for such purpose. On the appreciation of facts, the tribunal came to a conclusion
that the other concerns were sister concerns of the respondent assessee and this aspect of the matter does not fall for any consideration in this limited
jurisdiction.
As to the first issue raised, the point that the Revenue makes is that there was no notification which had been issued for the industrial park or special
economic zone to be regarded as such. The Revenue refers to Section 801A(4)(iii) of the Act and the expression “any undertaking which develops,
develops and operates or maintains and operates an industrial park or special economic zone notified by the Central Government in accordance with
the scheme framed and notified by that Government†in such regard.
It is not in dispute that no such notification has been issued. Yet, it appears that not only was the relevant industrial park or special economic zone set
up, but the respondent assessee was also assigned the work of developing the infrastructure thereat and the respondent commenced or completed
such work.
Again, there are issues that are raised by the Revenue as to whether the work done by the respondent assessee was in terms of the scheme or the
rules entitling the assessee to claim the benefit. The parties refer to some of the judgments of High Courts where the question was addressed. Indeed,
the order impugned of the appellate tribunal refers to at least two such judgments.
The matter needs consideration on the following substantial question of law: Whether an assessee undertaking any work for developing or operating or
maintaining an industrial park or special economic zone may claim the benefit under Section 80-1A of the Act only upon a notification pertaining to the
industrial park or special economic zone being published by the Central Government and whether it is for the assessing officer or the income tax
authorities to ascertain whether the terms as to the completion of the project have been complied with by such assessee before allowing the benefit as
claimed.
The Revenue will prepare the paper-books and file them within eight weeks after the summer vacation. Copies of the paper-books should be served
on Advocate for the assessee. The matter will appear for hearing in the monthly list of September, 2018.