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TMI Blog2013 (6) TMI 851X X X X Extracts X X X X X X X X Extracts X X X X ..... e served for the Revenue to again insist on a decision on the character of the receipt. - Decided in favour of assessee - Tax Case (Appeal) Nos. 139 to 145 of 2012 and MP.Nos. 1 of 2012 (7MPs) - - - Dated:- 26-6-2013 - THE HONOURABLE MRS.JUSTICE CHITRA VENKATARAMAN AND THE HONOURABLE MS.JUSTICE K.B.K.VASUKI For the Appellant : Mr.Aravind P. Datar, Senior Counsel For the Mr.N.Senthil Kumar, Mr.N.V.Balaji COMMON JUDGMENT CHITRA VENKATARAMAN, J. The above Tax Case (Appeals), filed at the instance of the assessee as against the order of the Income Tax Appellate Tribunal for the assessment years 2002-03 to 2008-09, allowing the Revenue's appeal thereby remanding the matter back to the Assessing Officer for consideration on the question of character of a receipt, by raising the following substantial questions of law: 1.Whether the ITAT has erred in considering an issue, which has attained finality and not been challenged by the respondent in their appeal before the ITAT? 2. Whether the Tribunal has the jurisdiction to go into issues (like deduction under Section 80IA (4)) that are not subject matter of the appeal or have never been raised in the gro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. Pointing out to the various facilities offered in the buildings let out treating the rental income as business income, the assessee claimed deduction under Section 80IA of the Income Tax Act. The Assessing Officer however rejected the contention of the assessee and assessed the income as income from the house property and disallowed the assessee's claim for deduction under Section 80IA of the Act. This led to the assessee filing an appeal before the Commissioner of Income Tax (Appeals). 3. Before the Commissioner of Income Tax (Appeals) the assessee raised two questions, one as regards the assessment of the monthly rental income as income from the house property and secondly as a consequence, the disallowance of claim of deduction under Section 80IA of the Act. The Commissioner of Income Tax (Appeals) held that the assessee had borrowed large sums of money from financial institution against the mortgage of the property as well as against the future rent receivables to develop the state of the art infrastructure, which went much beyond the construction of the building. Thus it provided plug and play environment for the software companies, so that the lessee could start its ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d on the view of the Commissioner that irrespective of the character of the receipt, the deduction was available. On considering the nature of the receipt, the Tribunal agreed with the submission of the assessee that income derived by developing and operating or maintaining an industrial park was assessable under the head of Profit and Gains of business or profession as could be inferred from the provisions of Section 80IA(4)(iii) of the Act. Pointing out to the view of the Commissioner of Income Tax (Appeals) that the relief under Section 80IA(4)(iii) of the Act would be available even if the property in question was treated as income from house property, the Tribunal held that the assessee as well as the Revenue had not brought out any materials to show that the facilities developed by the assessee after completion of the development was treated as an industrial park by any authority and it was not clear that whether the alleged industrial park was so notified by the Central Government or not. In the absence of any material to show that what was predominant in the letting out of the building and whether the facilities were incidental, the Tribunal viewed that it was necessary to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aim of deduction for the above said receipt under Section 80IA, the Commissioner of Income Tax (Appeals) pointed out that the approval of the Ministry stated that the assessee was eligible for deduction under Section 80IA (4)(iii) of the Act which specifically referred to developing, operating and maintaining of industrial part. Admittedly the assessee had made the application for development of an industrial park under the scheme notified by the Government in accordance with law. The Commissioner of Income Tax (Appeals) further pointed out that the scheme recognised the activity of any undertaking engaged in the development of infrastructure facilities or built up space with common facilities in any area allotted or earmarked for the purpose of software development as industrial park as business activity. Thus, while agreeing with the assessee on the character of the receipt of lease rental as business income, he also agreed in principle that the deduction under Section 80IA would be allowed, even if the rental income is assessed as income from house property. Further he relied on the decision of the Apex Court reported in 57 ITR 306 - COMMR. OF INC. TAX v. COCANADA RADHASWAMI BAN ..... X X X X Extracts X X X X X X X X Extracts X X X X
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