2013 (7) TMI 973 - AT - Income Tax

Summary

Issues involved:
The appeal concerns the classification of license fee earned from letting out premises of 'Cyber City' as either business income or income under the head 'House Property'.

Details of the Judgment:

1. Background:
The appeal by the Revenue challenges the Commissioner of Income Tax (Appeals)-II, Pune's order dated 30.01.2012, arising from the Assessing Officer's order u/s 143(3) of the Income-tax Act, 1961 for the assessment year 2008-09.

2. Grievance of the Revenue:
The Revenue's main contention is against the CIT(A) accepting the assessee's argument that the license fee earned from 'Cyber City' should be assessed as business income, not under 'House Property'.

3. Facts:
The respondent-assessee, a company developing 'Magarpatta City' in Pune, rented out buildings in the IT Park known as 'Cyber City' to software/other companies, earning license fees. The assessee claimed this income as 'business income', providing services along with premises. The Assessing Officer treated it as 'House Property' income, but the CIT(A) upheld the assessee's plea based on a previous order for the assessment year 2007-08.

4. Precedent:
The issue in this appeal aligns with the Tribunal's decision in the assessee's case for the assessment year 2007-08, where the Tribunal upheld the CIT(A)'s order.

5. Tribunal's Decision:
Referring to the Tribunal's previous order, the Tribunal affirmed the CIT(A)'s decision that the income from the license fee should be classified as 'business income' and not 'House Property' income. The Tribunal emphasized the extensive services provided by the assessee, justifying the income classification.

6. Conclusion:
Based on the precedent and the detailed analysis of services provided, the Tribunal dismissed the Revenue's appeal, upholding the classification of the license fee income as 'business income'. The decision was pronounced on 30th July, 2013, in the presence of both parties.

7. Result:
The appeal of the Revenue was ultimately dismissed, in line with the Tribunal's affirmation of the CIT(A)'s order regarding the classification of income earned from 'Cyber City'.