Business income treatment for lease rentals from a specialised IT park was upheld, with deduction under Section 80IA(4)(iii) allowed.

Lease rentals from a specially developed IT park were treated as business income because the real activity was developing and exploiting a specialised business asset, not holding an idle property. On identical facts, the jurisdictional precedent was applied, and the Revenue did not show any contrary factual basis. The receipts were therefore assessable under the business head rather than as income from house property, and the assessee was entitled to deduction under Section 80IA(4)(iii) of the Income-tax Act, 1961.

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Issues: Whether rental income from the assessee's IT park was assessable as business income and entitled to deduction under Section 80IA(4)(iii) of the Income-tax Act, 1961, or as income from house property.

Analysis: The assessee's activity was found to consist of developing and exploiting a specialised business asset as a source of lease rental income, with no material showing that the receipts arose from an idle property. The applicable head of income depended on the real nature of the activity, and where earning rentals was the assessee's exclusive or predominant business, the income fell under business income rather than house property income. The binding jurisdictional precedent on identical facts was applied, and the Revenue failed to establish any contrary factual basis.

Conclusion: The rental receipts were rightly assessed as business income, and the assessee was entitled to the claimed deduction under Section 80IA(4)(iii) of the Income-tax Act, 1961.

Final Conclusion: The Revenue's challenge failed, and the assessment treatment in favour of the assessee was sustained.

Ratio Decidendi: Where the dominant business of an assessee is to earn lease rentals from a specially developed business asset, the receipts are taxable as business income and not as income from house property.

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