2016 (12) TMI 1397

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....d the following grounds of appeal: "1. The order of the Learned C.I.T (Appeals) is against law, weight of evidence and probabilities of the case. 2. The Learned C.I.T (Appeals) erred in upholding the assessment of income derived by the assessee from the business of operation and maintenance of information Technology Park as "Income from house property". 3. The learned CIT(Appeals) ought to have appreciated that the assessee company was allotted/sold land by the APIIC to be used only for the specific purpose of setting up IT facility i.e., IT software, IT enabled service and IT infrastructure and that the assessee has developed an integrated business facility thereon called "Q-city" which has been exploited as a co....

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....of section 115JB of the Act. During the assessment proceedings u/s 143(3) of the Act, the AO observed that the assessee company was incorporated on 08.08.2003 and has purchased land admeasuring 5.975 acres at Nanakramguda Village, Serilingampally Mandal, R.R. District from Andhra Pradesh Industrial Infrastructure Corporation Ltd (APIICL) at an outright sale and constructed commercial building "Q-City" consisting of two blocks which were leased out to various companies on yearly basis. 3. During the assessment proceedings the assessee produced the detailed break up of income from the lease and operation credited to the P&L a/c treating it as "income from business". The AO however, asked the assessee to explain as to why such income should....

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.... Court in the case of CIT vs. Chennai Properties & Investments Ltd (cited Supra) has set aside the order of the Hon'ble Madras High Court and therefore, the income from letting out of commercial property along with the operations is to be treated as income from business. He also placed reliance upon the judgment of the Hon'ble Supreme Court in the cases of Rayala Corporation P Ltd (2001) 72 Taxmann.com 149 (S.C) and Chennai Properties & Investments Ltd (cited Supra). Copies of the said orders are also filed before us. 5. The learned DR, however, supported the orders of the authorities below. 6. Having regard to the rival contentions and the material on record, we find that the AO has followed the judgment of the Hon'ble Ma....

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....iscussed the scheme of the Income Tax Act and particularly six heads under which income can be categorised / classified. It was pointed out that before income, profits or gains can be brought to computation, they have to be assigned to one or the other head. These heads are in a sense exclusive of one another and income which falls within one head cannot be assigned to, or taxed under, another head. Thereafter, the Court pointed out that the deciding factor is not the ownership of land or leases but the nature of the activity of the assessee and the nature of the operations in relation to them. It was highlighted and stressed that the objects of the company must also be kept in view to interpret the activities. In support of the aforesaid p....

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....rcumstances of each case, viz., whether a particular business is letting or not. This is so stated in the following words: - "We think each case has to be looked at from a businessman's point of view to find out whether the letting was the doing of a business or the exploitation of his property by an owner. We do not further think that a thing can by its very nature be a commercial asset. A commercial asset is only an asset used in a business and nothing else, and business may be carried on with practically all things. Therefore, it is not possible to say that a particular activity is business because it is concerned with an asset with which trade is commonly carried on. We find nothing in the cases referred, to support the pro....