2016 (8) TMI 1452 - AT - Income Tax

Deduction u/s 80-IA denied - assessee established Olympia Tech Park for providing infrastructure facilities to software development companies. It is in STPI notified area - only contention of the Revenue is that the income from building has to be classified as income from house property, therefore, the assessee is not eligible for deduction under Section 80-IA - HELD THAT - The building of the assessee is not a mere building. It has infrastructure facilities for the purpose of development of software. The assessee is systematically providing services besides letting out the property. Therefore, the judgment of Apex Court in Chennai Properties and Investments Ltd. v. CIT 2015 (5) TMI 46 - SUPREME COURT would squarely applicable to the present case. Hence, this Tribunal is of the considered opinion that the income from letting out of the property has to be classified as income from business and the assessee is eligible for deduction under Section 80-IA of the Act. Therefore, this Tribunal do not find any reason to interfere with the order of the lower authority and accordingly the same is confirmed. - Decided against revenue.

Summary

Issues:
- Appeal against common order by Commissioner of Income Tax (Appeals) for assessment years 2009-10, 2010-11, and 2011-12.
- Deduction claimed under Section 80-IA of the Income-tax Act, 1961.

Analysis:
The judgment pertains to three appeals by the Revenue against a common order by the Commissioner of Income Tax (Appeals) for assessment years 2009-10, 2010-11, and 2011-12. The main issue in all three appeals is the deduction claimed by the assessee under Section 80-IA of the Income-tax Act, 1961. The Departmental Representative argued that the rental income from a building should be classified as income from house property, making the assessee ineligible for the deduction. On the other hand, the representative for the assessee contended that the building, Olympia Tech Park, was constructed with infrastructure facilities for IT park purposes and should be classified as income from business, making the assessee eligible for the deduction.

The Tribunal considered the submissions from both sides and examined the relevant material on record. It noted that the assessee established Olympia Tech Park in an STPI notified area, providing infrastructure facilities to software development companies. The Tribunal observed that the building was not just a structure but had specific facilities for software development services. Citing the judgment of the Apex Court in Chennai Properties and Investments Ltd. v. CIT, the Tribunal concluded that the income from letting out the property should be classified as "income from business," making the assessee eligible for the deduction under Section 80-IA of the Act. Consequently, the Tribunal upheld the lower authority's order, dismissing all three appeals filed by the Revenue.

In conclusion, the Tribunal affirmed that the income derived from letting out the property, Olympia Tech Park, should be categorized as "income from business," thereby entitling the assessee to claim the deduction under Section 80-IA of the Income-tax Act, 1961.