Lease rent from tech park modules qualifies for business deduction under section 80IA

The Tribunal held that lease rent income from letting out modules of a software technology park qualifies as income from business eligible for deduction under section 80IA of the Act. It determined that the income derived from providing such facilities constituted a business activity. However, the Tribunal directed the Assessing Officer to treat interest income under the head of "income from other sources" due to it being received on delayed payment of rental income, not export sale proceeds. The Tribunal upheld the Commissioner of Income Tax (Appeals) decision, dismissing appeals from both the assessee and the Revenue.

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Issues:
1. Whether lease rent income from letting out modules of software technology park constitutes income from business eligible for deduction under section 80IA of the Act.
2. Whether interest income should be treated as income from business and eligible for deduction under section 80IA of the Act.

Issue 1: Lease Rent Income Eligibility for Deduction under Section 80IA:
The Revenue contended that the lease rent income received from letting out modules of a software technology park should not constitute income from business eligible for deduction under section 80IA of the Act. However, the Counsel for the assessee argued that the issue was already decided in favor of the assessee in a previous case for the assessment year 2008-09. The Tribunal, after considering the submissions and agreements, held that the income from providing modules of built-up space with common infrastructure facilities should be assessed as profits and gains from business, making it eligible for deduction under section 80IA. The Tribunal referred to the approval granted by the Ministry of Industry and CBDT, noting that the income derived from providing such facilities constituted a business activity, qualifying for the deduction under section 80IA.

Issue 2: Treatment of Interest Income:
In the assessee's appeal, it was argued that the interest income should be considered as income from business and not under the head of "other sources." The Counsel for the assessee relied on a decision by the Madras High Court in a specific case. The Tribunal, however, differentiated the facts of the present case from the case cited by the assessee. It noted that the interest income in question was not received on export sale proceeds but rather on delayed payment of rental income. Consequently, the Tribunal held that the decision cited by the assessee was not applicable to the current scenario. Therefore, the Tribunal directed the Assessing Officer to treat the interest income and other income under the head of "income from other sources" while allowing the deduction under section 80IA for the remaining incomes such as rent from premises, operation and maintenance income, revenue sharing income, and income from common facilities.

The Tribunal upheld the order of the Commissioner of Income Tax (Appeals) regarding the eligibility of lease rent income for deduction under section 80IA and the treatment of interest income. It referenced previous decisions by the jurisdictional High Court and the co-ordinate Bench of the Tribunal to support its findings. Ultimately, both the appeals of the assessee and the Revenue were dismissed, with the Tribunal emphasizing the inapplicability of the cited decision to the facts of the present case concerning interest income.

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