2019 (8) TMI 1619

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....nience, ITA No.4261/Mum/2016 (AY.2012-13) is taken up first. 2. In this appeal, Revenue has raised the following Grounds: "Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) erred in treating the income of the assessee from operation and maintenance of Information Technology Park amounting to Rs. 25,72,92,631/- as income under the head 'Profits and Gains of business or profession' without appreciating the fact that the assessee had fulfilled all the conditions prescribed in section 22 and leasing out of premises or renting out of property is not the object clause of the MOD of the assessee company and hence, the income arisen from the property should be brought to tax under the head 'Income from Hou....

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....aintenance charges aggregating to Rs. 25,72,92,631/-, which was treated as 'business income by the assessee'. The AO observed that the letting out is not of business of the assessee-company and assessee-company is following Project Completion Method and as a result, the assessee capitalized all the expenses incurred in connection with developmental activities and thus, called upon the assessee to show cause as to why the lease rentals and maintenance charges should not be brought to tax under the head 'house property', which was replied by assessee vide letter dt.02-02-2015. The AO also observed that the leasing out of property or letting out is not appearing in the main object in the Memorandum of Association of the assesseecompany and ult....

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....restored. 3.4. Ld.AR, on the other hand, submitted that assessee has developed an Information Technology Park in Chennai. Ld.AR also referred to the Memorandum of Association and Articles of Association of the assessee and pointed out that under the object clause, it has been mentioned that it is the business of assessee to buy, sell, lease, let-out or sub-let or acquire tenancy and/or development rights in relation to any construction or development of buildings, other properties, estates or other moveable or immoveable properties and in any right title or interest therein. Ld.AR submitted that Ld.AO while deciding the issue, has reproduced only one part of the main object, leaving the second part and therefore the order passed by the Ld.....

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...., operating and maintaining an Industrial Park and providing infrastructure facilities to different companies as its business, the lease rent received by the assessee from letting out building along with other amenities to IT industries. Similarly, the agreements were entered into with in respect of service amenities provided in that deduction, the Hon'ble Court has held as to state herein above. Ld.AR also referred to Circular No.16/2017 issued by the Govt. of India, Ministry of Finance, Department of CBDT dt.25-04-2015 in which it has been clarified about lease rent from letting out of building/Space developed along with amenities in the industrial park/SEZ are to be treated as 'business income'. Therefore, Ld.AR prayed that the Ld.CI....