S. 80IA : Industrial undertakings-Enterprises engaged in infrastructure development-Income tax refund-Interest on excess payment of tax-Income derived from eligible business-Eligible for deduction- No substantial question of law. [S. 260A]
The assessee, a developer of IT Parks and SEZ, claimed deduction u/s 80-IA not only on lease rental income (undisputedly eligible) but also on interest received on income tax refund arising from excess payment of tax. The Assessing Officer denied deduction, holding that such interest had no nexus with the eligible business. The CIT(A) and ITAT, however, held in assessee’s favour.The High Court upheld the Tribunal’s view. It observed that interest on excess tax paid was integrally connected with the assessee’s business of leasing out premises in IT Parks and SEZ, since the payment and refund of income tax formed part of the same business cycle. The Tribunal had rightly concluded that such income can be said to have been derived from the assessee’s eligible business, and therefore, deduction u/s 80IA was allowable. Accordingly, no substantial question of law arose, and the Revenue’s appeal was dismissed. (ITA No.1413 of 2016, dt. 10-01-2019) (AY.2009 10)
PCIT (Central)-1 v. Hiranandani Builders (Bom)(HC), www.itatonline.org
Editorial : Order of Tribunal in ITO v. Hiranandani Builders (2017) 83 taxmann.com 65 (Mum)(Trib)
[Coram : Hon’ble Shri Anil Kureshi and
Hon’ble Shri Justice M.S. Sanklecha]