TaxTMI 
TaxTMI 
2020 (12) TMI 799
X X X X Extracts X X X X
X X X X Extracts X X X X
....Asst. Commissioner of Income Tax,-3(1)(2),Mumbai (hereinafter referred to as ld. AO). 2. The revenue has raised the following grounds of appeal:- 1. 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. 42,33,57,012/- as income under the head 'Profits and Gains of business or profession' without appreciating the fact that the assessee has 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 MOU of the assessee company. 2.Whether on the facts and circumstances of the case in law, the Ld. C....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e of 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 by reversing the order of AO wherein it has been held that assessee has fulfilled the conditions prescribed u/s.22 of the Income Tax Act (Act) and also that leasing out of property is not in the object clause of the Memorandum and Articles of Association of the assessee-company. 3.1. The fact in brief are that assessee-company is engaged in the business of development of properties. During the year it filed its return of income on 28-09-2012 declaring loss at Rs. 62,30,66,774/-. The case of the assessee was selected for scrutiny and notices were duly issued....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e the criteria prescribed by Section 22 i. There should be house, ii. It should be owned by the assessee and iii. Such house should not be used by the assessee for his own business purpose." 3.3. Ld. DR vehemently argued that the income received by assessee in the nature of property income as it falls within the four corners of the provisions of Section 22 of the Act. The AO has comprehensively discussed the issue and came to the reasonable and correct view that income is to be assessed u/s.23 of the Act. Ld.DR, relied heavily on the order of AO and in the case of CIT Vs. Shambhu Investment Pvt. Ltd., [249 ITR 7], East India Housing & Development Trust Ltd., Vs. CIT [42 ITR 49] (SC) and CIT Vs. Ansal Housing Finance & Leas....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nd also capitalization done during the year. Similarly, Ld.AR referred to the copies of Maintenance Agreements filed in the Paper Book. Ld.AR submitted that the entire asset is for business purpose of the assessee and not in the nature property as envisaged u/s.22 of the Act. Ld.AR relied heavily on the decision of the Hon'ble Karnataka High Court in the case of CIT VS. Velankani Information Systems (P.) Ltd., [265 CTR 0250 / 218 Taxman 0088 / 94 DTR 0357] (Karnataka), wherein the Hon'ble Court has held that rental income received by the assessee falls under the head on profits and gains of business and profession and any other interpretation will defeat the very object of introduction of Section 80-IA as well as the scheme....
X X X X Extracts X X X X
X X X X Extracts X X X X
....oviding for amenities and facilities, which have been treated as 'business income'. We further observe from the perusal of Object Clause in the Memorandum of Association and Articles of Association that it has been clearly stated that it is the business of assessee to buy, sell, construct and lease-out the properties. Ld.CIT(A) has passed a very reasoned order after following the orders of coordinate benches. We therefore do not find any infirmity in the order of CIT(A) and the same is affirmed by dismissing the ground of Revenue. This Ground of appeal raised by Revenue is dismissed. 4. Ground No.2 raised by Revenue is against the order of CIT(A) in allowing the operating expenses of Rs. 4,00,96,685/-, administrative expenses of Rs....