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TMI Blog2015 (2) TMI 397X X X X Extracts X X X X X X X X Extracts X X X X ..... ided against the assessee. Eligibility of the said income u/s.80-IA(4)(iii) - Held that:- assuming its maintainability, the location of the building, as pointed out by the ld. CIT(A), would be of little relevance in determining the nature of the income there-from, or its assessability under the Act, so that the fact of its location in a notified industrial park, or being let to entities falling in a particular class or industry/s, is by itself largely irrelevant and of little moment. At this stage, however, the ld. AR would inform us that it is not the case of the assessee owning a building, but of the said building itself being a notified park, toward which deduction u/s.80-IA(4)(iii) stands provided for by the statute, drawing our attention to the said Notification (No. 191/2006 dated 24.07.2006) issued by the CBDT u/s.80-IA(4)(iii) to the assessee (PB pgs. 1-3), and the letter by the CBDT to the assessee company conveying the said Notification (PB pgs. 4-8) as well as the communications in its respect to the assessee dated December 5 and 20, 2006. If the assessee’s building is itself a notified park, which it is operating and maintaining, as claimed, the matter would have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A), who examined the matter in detail. The appellant had acquired a multi-storied building Jayabheri Silicon Towers , at Hyderabad vide an Agreement dated 27.12.2005. The entire premises was put on lease vide separate lease deeds. The units in the said complex could only be used for rendering information technology (IT) and IT enabled services and, accordingly, the entire building was leased to tenants registered under the Software Technology Parks Scheme. Amenities/services by way of standby power (DG set), air conditioning, water storage and supply (both for drinking and general purposes), fire fighting, lifts, cables for communication and CCTV, were also provided by the assessee. It was not a simple case of letting by a landlord, rent received under which arrangement is liable for assessment u/s.22 as income from house property. The amalgamated and non-segregated industrial park development, and operating and maintenance activities, constitute a real, substantive, systematic and organized activity, qualifying to be business . The assessee had 20 employees on its rolls, looking after various operative and administrative functions. The said income was thus rightly assessable as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 61 (SC)), so that where it inadvertently fails to make a claim, arising from the given facts of the case, it would not be fatal to its case for deduction/exemption on its basis. 4.2 The only issue, therefore, before us is whether the income by way of lease rental is, under the facts and circumstances of the case, assessable as income from house property u/s.22, or as business income, assessable u/.28. The assessee s case is of an inseparable and integrated letting, i.e., of plant and machinery along with the building. Further, the same, i.e., the various facilities and amenities being provided, is only toward operating and maintaining an industrial park, by way of an organized activity, exempt u/s.80-IA(4)(iii) of the Act. The Revenue s case, on the other hand, is that the principal and predominant object and intention of the assessee in acquiring the property is to generate income by way of lease rent of the premises. The same, therefore, has to be necessarily considered as assessable u/s.22. The provision of water, lift, power, communication facilities, etc. would not alter this in-as-much as these are integral to and necessarily required for the proper user and enjoyment of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s it is by way of its letting, would not therefore operate to be regarded as business under the Act, which classifies ownership of a house property as a source of income, so that where not used for own business, it s fair rental value - notional or actual, is brought to tax as annual letting value thereof. This shall also answer the assessee s claim of it being engaged in business in-as-much as it is engaged in a systematic, organized activity, employing staff. Apart from the fact that there is no finding with regard to the employee strength, i.e., by the authorities below, the moot question is with regard to the source of income. The same being essentially rental income from a house property, the fact of it being carried on in an organized manner, by an entity which is incorporated, and perhaps for that purpose, would by itself be of no moment; the said activity or business being categorized as a separate source of income, i.e., from house property, under the Act. The ratio of the decision in the case of CIT vs. Shambhu Investments P. Ltd. [2001] 249 ITR 47 (Cal.), since upheld by the apex court in [2003] 263 ITR 143 (SC), would squarely apply in the facts and circumstances of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o such examination, which has all through been considered as a case of building located in a software park let to software units, i.e., providing IT and IT enabled services, we only consider it fit and proper that the matter is restored back to the file of the ld. CIT(A) for re-adjudication in light of the facts being now exhibited before us. In fact, we consider this as unfortunate in-as-much as these documents, forming part of the assessee s paperbook dated 02.05.2014, bears a certificate to the effect that the same were furnished before and, accordingly, a part of the record of both the assessing and the first appellate authority, while their orders bear no reference thereto. The scheme framed and notified by the CBDT could not presumably be lightly inferred as inconsistent with the law, so that, as it appears, there are some gaps in the appreciation of the facts of the case. The requirements of the relevant scheme, and their positive satisfaction, would require being examined and adjudicated upon. 5. We accordingly restore the appeal back to the file of the ld. CIT(A), who shall decide the matter afresh in accordance with law, after considering these or any other materials t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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