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Income Tax Appellate Tribunal, ‘B’ BENCH, CHENNAI
Before: SHRI N.R.S. GANESAN & SHRI A.MOHAN ALANKAMONY
आदेश / O R D E R
Per A. Mohan Alankamony, AM:-
This appeal by the Revenue is directed against the order passed by the learned Commissioner of Income Tax (Appeals)-6, Chennai, dated 01.09.2017 in for the assessment year 2007-08 passed U/s.250(6) r.w.s. 143(3) of the Act.
2 The Revenue has raised the following grounds in its appeal:- 1. The Order of the learned Commissioner of Income Tax (Appeals) is contrary to the Law and facts of the case.
2.1 The CIT(A) erred in holding that income derived from the leasing out of the property with all amenities and facilities would be assessable as “Business Income”, by relying on the decision of the Hon’ble Madras High Court in the assessee’s own case for the AYs 95-96, 96-97 & 2001- 02, which was not accepted the department and further appeal is pending before the Hon’ble Supreme Court. 2.2 The CIT(A) erred in holding that the income derived from letting of property to the tenants for the purpose of running a software technology parks as income from business in the hands of the owner of the property. 3.1 The CIT(A) erred in holding that since letting out of the modules to the software companies is business income, the income earned through electricity is also business income. 3.2 The CIT(A) failed to consider the fact that the electricity income is received from the tenants who occupy the modules, for use of the power, supplied by TNEB and by operating generator sets which are operated and maintained by the assessee, would be treated as incidental charges and the same should be taxed under the head income from other sources, 4.1 The CIT(A) erred in holding that the income earned by the assessee company for letting out of the modules is “Business Income” then the income earned from the compensation amount collected from software companies is also “Business Income”. 4.2 The CIT(A) failed to the appreciate the fact that when letting of property to the tenants for the purpose of running a software technology parks under the head income from house property, then the compensation amount collected from software companies should be taxed under the head income from other sources. 5 For these and other grounds that may be adduced at the time of hearing, it is prayed that the Order of the learned Commissioner of Income Tax (Appeals) be set aside and that of the Assessing Officer be restored.
The brief facts of the case are that the assessee is a limited company engaged in the business of letting out property, filed its return of income for the assessment year 2007-08 electronically on 15.10.2007 declaring income of Rs.4,37,71,500/-. Initially the return was processed U/s.143(1) of the Act and subsequently the case was selected for scrutiny and notice U/s.143(2) of the Act was issued on 13.08.2008. Finally assessment order was passed U/s.143(3) of the Act on 28.12.2009 wherein the Ld.AO treated the lease rent received by the assessee as ‘income from house property’ as against ‘business income’ claimed by the assessee and further the Ld.AO treated the income arising out of electricity charges as ‘income from other source’ as against ‘business income’ claimed by the assessee.
At the outset the Ld.AR submitted that the Hon’ble High Court in the assessee’s own case for the assessment year 2001-02, 1995-96 & 1996-97 dated 09.10.2012 in Tax case (Appeal) Nos.2336 and 2623 of 2006 and 2169 of 2008 had held the issue in favour of the assessee by holding that in the case of the assessee the lease rentals and the income arising out of electricity charges should be treated as ‘business income’. It was further submitted that the Ld.CIT(A) had only followed the order of the Hon’ble Jurisdictional Madras High Court cited supra and therefore the same may be upheld. The Ld.DR on the other hand could not controvert to the submission of the Ld.AR.
We have heard the rival submissions and carefully perused the materials on record. Since with respect to the issue of lease rent received by the assessee and the electricity charges the Hon’ble
Jurisdictional High Court has decided the issue in favour of the assessee which was followed by the Ld.CIT(A), we do not find it necessary to interfere in the order of the Ld.CIT(A). Accordingly the order of the Ld.CIT(A) with respect to both the above mentioned issues are upheld. Further the Ld.CIT(A) has held that compensation amount collected from software companies as ‘business income’ because the lease rent which is related to the same is treated as business income by the Hon’ble Jurisdictional High Court. We do not find any fault in the reasoned Order of the Ld.CIT(A) on this issue. Hence the order of the Ld.CIT(A) on this issue is also upheld.
In the result the appeal of the Revenue is dismissed.
Order pronounced on the 18th April, 2018 at Chennai.