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TMI Blog2013 (9) TMI 1256X X X X Extracts X X X X X X X X Extracts X X X X ..... enance income: ₹ 9,41,22,297/- 5. Revenue sharing income: ₹ 90,925/- 6. Other income: ₹ 21,29,999/- 2. The Revenue is in appeal against the order of the Commissioner of Income Tax (Appeals) in holding that rent of ₹ 51,86,67,230/- from premises i.e. lease rent income of the industrial park, built-up space meant for I.T. industries, is eligible for deduction under section 80IA(4)(iii). 3. Brief facts are that the assessee is a company promoted by TIDCO and ElCOT (Government of Tamil Nadu Undertakings) and is engaged in the business of developing, operating and maintaining Information Technology Park/Software Technology Park (STP) under the name and style of Tidel Park as per approval of the Government of India, Ministry of Industry, Government of India. The assessee during the assessment year under consideration received the following incomes and claimed that the said incomes are assessable under the head 'income from business and claimed deduction under section 80IA(4)(iii) of the Act on the whole of such income:- Rent from premises ₹ 51,86,67,230 Operation & Maintenance Income ₹ 9,41,22,997 Revenue sharing income ₹ 90,9 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the premises of the assessee including income received for providing all other facilities have to be considered as business income only. The counsel submits that income from developing, operating and maintaining Software Technology Park (STP) would include rent for the use of modules and also charges for other services provided to the users of STP modules. He submits that STP modules cannot be operated without these ancillary services. Therefore, he submits that entire income arising to the assessee is intimately connected with the development, operation and maintenance of STP and hence the entire income is derived from the business of maintenance and operation of STP including the lease rent received from the user of modules and is eligible for deduction under section 80IA of the Act. 5. In respect of interest income of ₹ 7,74,19,358/- and other income of ₹ 21,29,999/-, the counsel for the assessee is not serious in his submission that they should be treated as income from business for the purpose of deduction under section 80IA. 6. The counsel for the assessee submits that the Commissioner of Income Tax (Appeals) though accepted that rent from premises is assessable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... perused the approval and the notification issued by the Ministry of Industry and CBDT. I have also gone through the decisions relied on by the /\O and AR. Deduction u/s. 80IA is available to an assessee for the profits and gains of an undertaking enterprise derived from eligible business. The eligible business in this case is an undertaking which develops, develops & operates or maintains & operate an industrial park notified by the Central Government in accordance with the scheme framed and notified by the Government during the period 01.04.1997 to 31.3.2006 (now up to 2011). The quantum of deduction is 100% for ten consecutive years in a block of fifteen years. The initial year is when the industrial park is developed. In case where an undertaking develops an industrial park and transfer the operation and maintenance of such industrial park to another undertaking (transferee undertaking), the deduction is available to such transferee undertaking for the remaining period in the ten consecutive years. The appellant has been granted the approval of the Government of India, Ministry of Industry, Department of Industrial Policy & Promotion to set up an industrial park in terms of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the terms of approval granted by the above notification, notifying the appellant as an industrial park For the purpose of section 80IA of the Act, it is clear that the appellant can provide built-up space for industrial use which means the appellant can lease the built-up space for industrial use which means the appellant can lease the built-up space in the industrial park developed, maintained and operated by it. Further, it is noticed that the lease rent collected from the lessees is for land, building and plant & machinery and other built in infrastructural facilities in the modules leased out. In other words, it is a composite lease rent. Since the appellant has developed industrial park for information technology/software technology and since the industrial park was notified by the Central Government under clause (iii) of sub-section (4) of section 80IA, which is an eligible business for the purpose of Section 80IA(1), I am of the considered opinion that the lease rent received from providing built-up space (module) for industrial use to various lessees is income from business eligible for deduction u/s. 80IA of the Act. Accordingly, I direct the Assessing Officer to assess t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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