2013 (4) TMI 949 - AT - Income Tax

Summary

Issues involved:
The appeal concerns the eligibility of lease rental income for deduction u/s 80IA of the Income Tax Act 1961.

Issue 1: Eligibility of lease rental income for deduction u/s 80IA

The Revenue's appeal challenges the CIT(A)'s decision allowing the lease rental income from providing built-up lab space for industrial use to be eligible for deduction u/s 80IA of the Act. The Revenue contends that the CIT(A) erred in this regard and seeks acceptance of the appeal.

The assessee argues that the issue is supported by case law, specifically referencing the decision of the Jurisdictional High Court in the case of CIT v. Elnet Technologies Ltd. The assessee maintains that the lease rental income qualifies for deduction u/s 80IA.

After considering the arguments and reviewing the assessment order and CIT(A)'s findings, it was established that the assessee, a company engaged in biotech park business, had claimed deduction u/s 80IA for various receipts including rent and other income. The Assessing Officer disallowed the claim, stating that the relief under section 80IA(4)(iii) applies only to business profits from the sale of built-up units, not rental income. Consequently, the Assessing Officer computed the assessee's income under different heads.

The CIT(A) ruled in favor of the assessee, stating that the activities of the assessee in providing infrastructure facilities for an industrial park qualify for deduction u/s 80IA(4)(iii). The interest income and other receipts were categorized under different heads. The Revenue, being dissatisfied, filed an appeal.

Upon careful consideration of the contentions and the facts presented, it was determined that the key question was whether the assessee, generating rental income through infrastructure provision in an industrial park, is eligible for deduction u/s 80IA(4)(iii). Citing the precedent set by the Jurisdictional High Court in CIT v. Elnet Technologies Ltd., where a similar issue was decided in favor of the assessee, the Tribunal found no distinguishing features or arguments from the Revenue to warrant a different outcome. Consequently, the Tribunal upheld the CIT(A)'s decision.

Therefore, the Revenue's appeal was dismissed, affirming the CIT(A)'s findings regarding the eligibility of lease rental income for deduction u/s 80IA.