2018 (8) TMI 1189

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....the business of building, selling and leasing out Information Technology parks had given out on rent an IT Park called ''Ambit IT Park'' to various parties like CSS Corporation, Akshya Foods and Services Pvt. Ltd, Prizm payment services pvt. Ltd and Lopex Technologies. From the agreements with these parties, it was noted by the ld. Assessing Officer that assessee had received rental receipts as well as maintenance charges from lessees. Assessee had shown its income under the head ''income from business/profession''. However, ld. Assessing Officer noted that lessees had deducted tax u/s.194I of the Income Tax Act, 1961 (in short ''the Act'') on the payments made to the assessee and hence as per the ld. Assessing Officer, the income had to be....

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....infrastructural facility so as to exploit the property commercially. Thus, as per the assessee its income had to be considered under the head business/profession. Assessee also placed reliance on a judgment of Hon'ble Jurisdictional High Court in the case of CIT vs. Elnet Technologies Ltd, (2013) 89 DTR 442 and that of Hon'ble Apex Court in the case of Rayala Corporation Pvt. Ltd vs. ACIT, (2016) 386 ITR 500. 4. However, ld.CIT(A) was not appreciative of the above contentions. According to him, by virtue of the judgment of Hon'ble Apex Court in the case of Sultan Brothers Pvt. Ltd vs. CIT (1964) 51 ITR 353, East India Housing & Land Development Trust Limited, (1961) 42 ITR 49, Karnani Properties Limited vs. CIT, (1971) 82 ITR 547 and S.G....

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....plots, constructing, promoting, developing, industrial parks, information technology buildings, commercial buildings for sale, rent, lease or both. As per the ld. Authorised Representative, though there were two agreements with the clients, one for leasing out IT park and the other for maintaining and providing services relating to the infrastructure facility both these were contemporaneously entered into. According to the ld. Authorised Representative these agreements had to be construed together. Relying on a judgment of Hon'ble Karnataka High Court in the case of CIT vs. Velankani Information Systems (P) Ltd, (2014) 265 CTR 250, ld. Authorised Representative submitted that in a similar situation where an information technology park had r....

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....ich helped its business. Assessee had obtained approval from Department of Information Technology, Ministry of Communications and Information Technology, Government of India through a letter dated 30.06.2009 which has been placed at paper book page 16 & 17. What was mentioned in the above letter is reproduced hereunder:- ''Your application was considered by the Inter-Ministerial Standing Committee (IMSC) for Software Technology Park (STP ) and Electronics Hardware Technology Park (EHTP) Scheme in its meeting held on 27.08.2007 and I am directed to convey the approval of the Government for setting up of infrastructure facility for STP units under the STP Scheme namely '' Ambit'' located at Plot No.32A & 32B, Industrial Estate, Ambat....

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....n intention is to exploit immovable property by way of complex commercial activities, in that event it must be held as business income''. Thus, what is to be looked into is intention of the parties while entering into the lease. Admittedly, the agreements entered by the assessee with the lessees were contemporaneous. Objects of the lease was to allow enjoyment of the entire property with all services related to its use as technology centers. Main object of the assessee firm as it appears in its partnership deed is reproduced hereunder:- ''The business of the firm shall be to purchase, sell, sub- divide, consolidate any land and plots, construct, promote, develop, industrial parks, information technology buildings, commercial bui....

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..... It is to be noted that Hon'ble Apex Court in the case of Chennai Properties & Investments Ltd (supra) had considered all the judgments relied on by the ld. Commissioner of Income Tax (Appeals) including that of the five judge Bench in the case of Sultan Brothers Pvt. Ltd (supra), before holding in favour of the assessee. We are therefore of the opinion that ld. Commissioner of Income Tax (Appeals) erred in trying to distinguish the judgment of Hon'ble Apex Court in the case of Rayala Corporation (supra), which had placed specific reliance on the judgment of Chennai Properties & Investments Ltd (supra). As to the case of Raj Dadarkar and Associates (supra), of Hon'ble Apex Court in the said case, concerned assessee had income apart from....