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TMI Blog2011 (5) TMI 975X X X X Extracts X X X X X X X X Extracts X X X X ..... 'ble Bangalore Bench in the case of GLOBAL TECH PARK (P) LIMITED. VERSUS ASSISTANT COMMISSIONER OF INCOME-TAX. [ 2008 (6) TMI 313 - ITAT BANGALORE-A] , where it was held that the activity was done by the assessee as a business venture and was in accordance with the main object of the company. He assessee is providing ward and watch, maintenance of common area,maintenance of drainage etc., This clearly establishes that the entire activity is in organized manner to earn profit out of investment made by the assessee as a commercial venture. Therefore arrived at a conclusion that the rental receipts of the assessee is to be assessed as 'business income' In conformity with the finding of the earlier Bench as well as ruling of the Hon'ble Apex Court, we are of the considered view that the Ld. CIT (A) was justified in arriving at such a conclusion. It is ordered accordingly. STCG on Sale of Land to Sister Concern - CIT (A) deleted the addition made on account of STCG on sale of the land to the assessee's sister concern - HELD THAT:- It is an undisputed fact that the assessee had parted with a piece of land to its sister concern for a sale consideration which, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appeals by the Revenue and (ii) two appeals as well as Cross Objections by the assessee company - are directed against the impugned appellate orders of the Ld. CIT (A)-I, Bangalore, in ITA No.269/DC-11(3)/CIT(A)-I/07-08 and in ITA No.204/AC- 11(3)/CIT(A)-I/08-09 dated: 12.10.2009 13.10.2009 for the assessment years 2005-06 2006-07 respectively in the case of M/s.Golf Link Software Park (P) Ltd., Bangalore. ITA NO.40/B/10 - AY 2005-06 - (By the Revenue): 2. Though the Revenue has raised seven grounds in its grounds of appeal in an extensive and illustrate manner, the cruxes of the issues are two-folds, namely: The Ld. CIT (A) erred in: (i) directing the AO to treat the assessee's income from lease rentals under the head 'business' and to allow the expenditure and depreciation as claimed; (ii) deleting the addition being the STCG on account of sale of the land to its sister concern. II. ITA NO.41/B/10 - AY 2006-07 - (By the Revenue): 2.1. For this AY too, though the Revenue has raised six grounds in an illustrative manner as in the preceding AY, the essence of the issue is confined to a lone ground, namely: (i) that the Ld. CIT (A) erred i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the Registry was directed to place the appeal papers on record. Let us now address to the grievance of the Revenue. I. ITA NO.40 41/B/10 - AY 2005-06 06-07- (By the Revenue): 6. Briefly stated, the assessee company - Golf Link Software Park (P) Limited - ('the assessee' in short henceforth) was in real estate development business. For the AYs under dispute, the assessee had furnished its returns of income, admitting income at Rs.Nil and a loss of ₹ 33.19 crores respectively which were initially processed u/s 143(1) of the Act and, subsequently, taken up for scrutiny. During the period under consideration, the assessee had received rents from different concerns by providing space, other fit-outs and equipments in the software Technology Park constructed by it in Golf Area of Bangalore. The income shown by the assessee as 'income from business' was, however, treated by the AOs as 'income from house property' and 'Other Sources' for the reasons recorded in their respective impugned assessment orders which are under challenge. Besides, for the AY 2005-06, the AO had also computed STCG on sale of land inside the tech. park by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re operations were to be viewed as commercial venture; that the object and business of the assessee is to do the business of tech park development operations and, therefore, the income earned there-from was to be taxed under the head 'business income'; - that the tech park development was covered by GOI under Industrial policy and promotion; that the government envisaged that the development of tech park was similar to the industrial activity and not mere construction of buildings, thus, the Govt. recognizes that the activity undertaken was complex operations and not mere construction of buildings; - relies on the case laws: (a) Narain Swadeshi Weaving Mills 26 ITR 765 (SC); (b) PFH Mall and retail Management Ltd. v. ITO - (2008) 110 ITD 337 (Kol) (c) Harvinder Pal Mehta v. DCIT 177 Taxman - ITAT, Mumbai (d) ITO v. Tejmalbhai Co., (2006) 100 TTJ (Rajkot) 898 (e) Sri Balaji Enterprises v. CIT 225 ITR 471 (Kar); (f) Global Tech Park Pvt. Ltd. v. ACIT 119 TTJ (Bang) 421 7.1. After analyzing the rival submissions and also placing strong reliance on the finding of the Hon'ble Bench in the case of Global Tech Park Pvt. Ltd. cited supra, the Ld. CI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ight in holding that the assessee was carrying on an adventure or concern in the nature of trade. The assessee not only constructed vaults of special design and special doors and electric fittings, but it also rendered other services to the vault-holders. It installed fire alarm and was incurring expenditure for the maintenance of fire alarm by paying charges to the municipality. Two railway booking offices were opened in the premises for the dispatch and receipt of film parcels. This, it appears to us, is a valuable service. It also maintained a regular staff consisting of a secretary, a peon, a watchman and a sweeper, and apart from that it paid for the entire staff of the Indian Motion Picture Distributors' Association an amount of ₹ 800 per month for services rendered to the licensees. These vaults could only be used for the specific purpose of storing of films and other activities connected with the examination, repairs, cleaning, waxing and rewinding of the films. 9.2.1. Further, an identical issue to that of the present one had cropped up before the earlier Hon'ble Bangalore Bench in the case of Global Tech Park (P) Ltd. v. ACIT - reported in (2008) 119 TTJ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ke to emphasis that we have duly perused the case laws on which the Revenue had placed its strong reliance, chiefly, in the case of CIT v. Bhoopalam Commercial Complex and industries Pvt. Ltd. [262 ITR 517 (Kar)]. In that case, the issue, in brief, was that the assessee was a Private Limited Company and one of its directors had taken certain extent of lands situated at Bangalore on a long- term lease of 36 years under a registered lease-deed and executed a registered deed of transfer in favour of the assessee-company transferring his leasehold rights. Subsequently, the assessee-company built a commercial complex on the said land and allotted the same to various parties and earned income there-from. For the year 1985-86 and 86-87, the assessee filed its returns of income showing losses for which the AO completed the assessments making minor adjustments in computing the losses. The CIT initiated suo motto proceedings u/s 263 and after such proceedings directed the AO to make fresh assessments computing the income from rentals received from the commercial complex under the head Income from house property. On an appeal by the assessee, the Tribunal held that the income derived ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y as 'table space' with furniture and fixtures, lights, air-conditioners etc., and the monthly rent payable was inclusive of all charges whereas the issue on hand is entirely on different footing, namely, the assessee had developed about 4.7 million square foot of a technology park in a sprawling area of more than 55 acres by providing various amenities such as roads, street lights, drainage facilities, gardens, high connectivity facilities such as tele- communication towers, sewerage and water treatment tanks, water treatment plants to attain the status of a Soft-ware Technology Park whereas in the case of Shambhu Investment P. Ltd., the immovable was a tiny property and the so called amenities provided to the occupants only as against the amenities provided in a STP to feed a special purpose. Letting out of a building in a STP is incidental whereas the fact in the case of Sambhu Investment was rather predominant and, thus, Sambhu Investment case cannot, at any stretch of imagination, be equated with that of the present assessee. 9.4. Taking into account the facts and circumstances of the issue, we are, therefore, of the firm view that the case laws on which the Revenue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ption of the guideline value as the consideration for transfer of a capital asset, s.80IA (B) requiring adoption of market value of goods in place of the actual sale price in the cases of certain specified sales, and the transfer pricing rules, are some of the examples which give the AO the right to adopt a fair value. In this case, first, the transaction was at a fair value and secondly, the AO does not have power to substitute the value for the actual sale price in the absence of any evidence of understatement of the value. 10.2.1. Taking cognizance of the assessee's submission, the Ld. CIT (A) deleted the addition. 10.2.2. It was the case of the Revenue that the Ld. CIT (A) had failed to analyze the issue before coming to such a conclusion. 10.2.3. On the other hand, the Ld. AR was emphatic in his resolve that the issue in question has been duly examined by the Ld. CIT (A) and, thus, it was pleaded that there was no infirmity in the finding of the first appellate authority which requires review at this stage. 10.3. We have duly considered the rival submissions and also perused the relevant records. 10.3.1. It is an undisputed fact that the assessee had parted wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d made advances to DDPL with an intention to acquire real estate and to earn profit from the venture on total commercial understanding and that the advances were made in the course of business and for the purposes of business. Strong reliance was placed on the following case laws: (i) S.A.Builders Ltd. v. CIT (Appeals) (2007) 288 ITR 1 (SC) (ii) C.T.Desai v.CIT (1979) 120 ITR 240 (Kar); (iii) Madav Prasad Jatia v. CIT (1979) 188 ITR 200 (SC) (iv) CIT v. Chandulal Keshavlal Co. (1960) 38 ITR 601 (SC) 11.3. After taking into account the submission of the assessee coupled with various case laws cited supra, the Ld. CIT (A) had observed thus - 10. The above shows that no new argument or fact has been brought on record to enable me to delete the addition. 11. In fact, I find the appellant has harped on the legal issues more instead of giving the details of land owned by DDPL for which interest free advance was given to it. In the absence of such details, I find the appellant has no cause to grieve for the justified disallowance made by the AO.... 11.4. During the course of hearing before this Bench, when it was pointed out that the assessee had declared total in ..... 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