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TMI Blog2020 (9) TMI 538X X X X Extracts X X X X X X X X Extracts X X X X ..... he terms of memorandum of association, the main object of the assessee given was to acquire properties and earn income by letting out the same, such income was brought to books as business income and not as income from house properties.- Decided in favour of the assessee. - Tax Case Appeal No.886 of 2018 - - - Dated:- 2-9-2020 - Mr. Justice T.S. Sivagnanam And Mrs. Justice Pushpa Sathyanarayana For the Appellant : Mr.N.V.Balaji For the Respondent : Mr.Karthik Ranganathan, SC JUDGMENT T. S. SIVAGNANAM,J We have heard Mr.N.V.Balaji, learned counsel appearing for the appellant assessee and Mr.Karthik Ranganathan, learned Standing Counsel appearing for the respondent Revenue. 2. This appeal, filed by the Rev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ogy park in computing its business income, even if the lease rental income is to be assessed under the head 'income from house property? 4. The above extracted substantial questions of law were considered by a Division Bench of this Court, to which, one of us (TSSJ) was a party, in the case of CIT Vs. Tidel Park Ltd. [TCA.Nos.732 733 of 2018 dated 07.7.2020] wherein the Court took note of various decisions and answered the substantial questions of law against the Revenue and in favour of the assessee. It is not in dispute that the said decision squarely covers the issue in the case on hand. The relevant portions of the said judgment reads as follows : 5. It is relevant to point out that in the said decision the Divis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er s. 14A. Income which does not form part of the total income is broadly adverted to as exempt income as an abbreviated appellation. Under sub-s. (2), the AO is required to determine the amount of expenditure incurred by an assessee in relation to such income which does not form part of the total income under the Act in accordance with such method as may be prescribed. The method, having regard to the meaning of the expression 'prescribed' in s. 2(33), must be prescribed by rules made under the Act. What merits emphasis is that the jurisdiction of the AO to determine the expenditure incurred in relation to such income which does not form part of the total income, in accordance with the prescribed method, arises if the AO is not sat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st the revenue and in favour of the assessee. 8. So far as Substantial Question of Law No.1 is concerned, it has to be seen as to whether the income derived from letting out of the property in an industrial park/SEZ including the amenities and the income received by the owners for such property and the amenities therein would be business income in the hands of the owner of the property. 9. We need not labour much on this issue, on account of the circular No.16 of 2017 issued by the CBDT dated 25.04.2017. The CBDT after taking note of the two decisions of the Karnataka High Court held that it is now a settled position that in the case of an undertaking which develops, develops and operates or maintains and operates an industrial pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... property or as income from other sources. The said decision of the Hon'ble Division Bench was appealed against by the revenue before the Hon'ble Supreme Court in SLP No.11638 of 2013 and we are informed that the appeal was dismissed on 27.01.2020 on the ground of Low Tax Effect. 12. Considering all those facts as wells as the circular issued by CBDT, substantial question of law No.1, has to be answered against the revenue and in favour of the assessee. The Tax Case Appeals are dismissed and the Substantial Questions of Law are answered against the revenue. 5. Furthermore, the decision of the Hon'ble Supreme Court in the case of Chennai Properties Investments Ltd. Vs. CIT [reported in (2015) 373 ITR 673] will als ..... X X X X Extracts X X X X X X X X Extracts X X X X
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