DCIT, CHENNAI vs. KHIVRAJ TECH PARK LTD., CHENNAI

आदेश /O R D E R

PER N.R.S. GANESAN, JUDICIAL MEMBER:

All the three appeals of the Revenue are directed against

the common order passed by the Commissioner of Income Tax

(Appeals) – II, Chennai, dated 03.11.2014 and pertain to

assessment years 2009-10, 2010-11 and 2011-12. Since common

issue arises for consideration in all these appeals, we heard these

appeals together and disposing of the same by this common order.

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According to the Ld. D.R., it is not the business of the assessee to lease out the properties, therefore, the income has to be classified as income from house property. Hence, according to the Ld. D.R., the assessee is not eligible for deduction under Section 80-IA of the

Act.

representative for the assessee, submitted that the assessee constructed a building called “Olympia Tech Park”. It has all infrastructure facilities with all specifications and amenities required

for IT park. Under normal circumstances, the rental income from property has to be classified as income from house property. In the instant case, according to the Ld. representative, the Olympia Tech Park is located in STPI notified area and CBDT also approved the

3 I.T.A. Nos.1181 to 1183/Mds/15

building for deduction under Section 80-IA(4)(iii) of the Act by an

order dated 15.11.2006. Therefore, according to the Ld.

representative, when the assessee is systematically providing

services to the software development companies, by providing

specified area in the building and other infrastructure facility, this

has to be classified as business of the assessee, therefore,

according to the Ld. representative, the rental income has to be

necessarily classified as “income from business”. According to the

Ld. representative, the CIT(Appeals) by placing reliance on the

judgment of Madras High Court in CIT v. Elnet Technologies Ltd.

(2013) (213 Taxman 129), found that the income from letting out

house property has to be treated as income from business,

therefore, eligible for deduction under Section 80-IA of the Act. In

view of the above, according to the Ld. representative, the

contention of the Ld. D.R. that the income has to be classified as

income from house property is not justified. Referring to the

grounds of appeal raised by the assessee, the Ld. representative

submitted that the judgment of Madras High Court in CIT v. Chennai

Properties and Investments Ltd. (266 ITR 685) was reversed by the

Apex Court, therefore, the judgment of Apex Court in Chennai

4 I.T.A. Nos.1181 to 1183/Mds/15

Properties and Investments Ltd. would support the case of the

assessee.

dispute that the assessee established “Olympia Tech Park” for providing infrastructure facilities to software development companies. It is in STPI notified area. The only contention of the

Revenue is that the income from building has to be classified as income from house property, therefore, the assessee is not eligible for deduction under Section 80-IA of the Act. The building of the

assessee is not a mere building. It has infrastructure facilities for the purpose of development of software. The assessee is systematically providing services besides letting out the property.

Therefore, the judgment of Apex Court in Chennai Properties and Investments Ltd. v. CIT (2015) (373 ITR 673) would squarely applicable to the present case. Hence, this Tribunal is of the

considered opinion that the income from letting out of the property has to be classified as “income from business” and the assessee is eligible for deduction under Section 80-IA of the Act. Therefore, this

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Tribunal do not find any reason to interfere with the order of the lower authority and accordingly the same is confirmed.

Order pronounced on 24th August, 2016 at Chennai.

sd/- sd/- (ए. मोहन अलंकामणी) (एन.आर.एस. गणेशन) (A. Mohan Alankamony) (N.R.S. Ganesan) लेखा सद�य/Accountant Member �या�यक सद�य/Judicial Member

चे�नई/Chennai, �दनांक/Dated, the 24th August, 2016.

Kri.

आदेश क� ��त�ल�प अ�े�षत/Copy to: 1. अपीलाथ�/Appellant 2. ��यथ�/Respondent 3. आयकर आयु�त (अपील)/CIT(A)-II, Chennai 4. आयकर आयु�त/CIT-II, Chennai 5. �वभागीय ��त�न�ध/DR 6. गाड� फाईल/GF.