2021 (1) TMI 1073

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....d at length and case record carefully perused. 4. The assessee filed its return of income declaring income of Rs. 66.37 lacs after claiming deduction u/s. 80IAB of the Act amounting to Rs. 316.04 crores. The return was selected for scrutiny assessment and accordingly statutory notices were issued and served upon the assessee. 5. While scrutinizing the return of income the AO noticed that the assessee has claimed deduction u/s 80IAB of the Act amounting to Rs. 316.04 crores. The AO found that the assessee has claimed the said deduction on the rental income shown under the head "income from house property". 6. The assessee was asked to show-cause why the claim of deduction u/s. 80 IAB of the Act should not be denied as the claim is made on....

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....y Developers Ltd DLF Cyber City District, Gurgaon 3 DLF Limited Silokhera, Gurgaon 4 DLF Commercial Developers Ltd Ranga Reddy District, Andhra Pradesh 12. As per the scheme of the Income Tax Act the assessee has shown the rental income derived from its SEZ projects under the head "income from other sources". 13. In our understanding, the scheme of SEZ is governed by the provision of law contained under the SEZ 2005. Section 51 of the SEZ Act 2005 provides that the SEZ Act shall have overriding effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force or in any instrument having effect by virtue of any law other than this Act. In our considered opinion developing SEZ by itself is ....

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....siness of developing a SEZ. It is not the business of running eligible units approved by the competent authority. In the present case, assessee is the developer. It need not do any other business to claim the benefit of deduction under sec. 80-IAB. Assesseeis not required to run operating units in the sector of Information Technology like M/s Robert Bosch, M/s Cognizant Technology, KGISL IT Parks etc. to whom the assessee has leased out developed area within the SEZ.(Para 40). 15. Similar view was taken by the coordinate Bench ITAT Chennai in the case of Lulu Tech Park Pvt. Ltd. in ITA No.593/Mds/2016. The relevant findings of the coordinate bench read as under :- The assessee claims that irrespective of the head of income, the (hous....

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....ly turning into account it's investment in the house property, being a building and land appurtenant thereto. It is, in fact, this - the construction of a building suitable for the firms operating in the IT sector, that qualifies it as a developer of' an Info-park, approved as a SEZ. That the said activity. i.e., developing real estate and leasing it, which is, broadly speaking, and in common parlance, only a business, is not regarded as so for the purpose of assessment of income there-from, being derived from a house property, a defined source of income for which a specific head of' income is provided under the Act, is another matter. This is so even where it is carried in an organized manner. i.e., as a business, as in the present case. I....