M/s. Tidel Park Limited, CHENNAI V. ACIT, CHENNAI

CO 85/CHNY/2010

• Counselvise Citation: [2013] 122 COUNSELVISE.COM (IT) 8669 (ITAT-CHENNAI)
• Duration Of Justice: 2 year(s) 9 month(s) 10 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 03-06-2013
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 09-05-2013
• Assessment Year: 2007-2008
• Appeal Filed On: 23-08-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: RU GEORGE
• Assessee Lawyers: R VIJAYARAGHAVAN
• Keywords: Business income; Depreciation
• Section: 143(3); 147; 28

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH : CHENNAI [BEFORE SHRI. ABRAHAM P. GEORGE, ACCOUNTANT MEMBE R AND SHRI S.S. GODARA, JUDICIAL MEMBER] I.T.A. NO.1060/MDS/2010 ASSESSMENT YEAR : 2007-2008 TIDEL PARK LIMITED NO.4, RAJIV GANDHI SALAI TARAMANI CHENNAI 600 113. [PAN NO.AABCT 0666R] VS THE ADDITIONAL COMMISSIONER OF INCOME TAX COMPANY RANGE-III, CHENNAI 600 034. (APPELLANT) (RESPONDENT). I .T.A. NO.1198/MDS/2010 & C.O.NO.85/MDS/20 10. ASSESSMENT YEAR : 200 7-2008 THE ADDITIONAL COMMISSIONER TIDEL PARK LIMITE D OF INCOME TAX NO.4, RAJI V GANDHI SALAI COMPANY RANGE-III, TARAMANI CHENNAI 600 034. CHENNAI 600 113. [P AN NO.AABCT 0666R] (APPELLANT) (RESPON DENT/CROSS OBJECTOR) APPELLANT BY : SHRI. R. VIJAYARAGHAVAN, ADV. RESPONDENT BY : SMT. RUBY GEORGE, CIT(DR) DATE OF HEARING : 09-05-2013 DATE OF PRONOUNCEMENT : 03-06-2013 I.T.A.NO.1060/MDS/2010. I.T.A .NO.1198/MDS/2010 & CO - 8 5/MDS/2010. :- 2 -: O R D E R PER BENCH THESE CROSS APPEALS HAVE BEEN FILED AT THE BEHEST OF THE ASSESSEE AND THE REVENUE; RESPECTIVELY. IN ADDITIO N, THE ASSESSEE HAS ALSO PREFERRED CROSS OBJECTIONS IN THE REVENUES AP PEAL. BOTH APPEALS AS WELL AS THE CROSS OBJECTIONS ARISE FROM THE ORDE R OF THE COMMISSIONER OF INCOME TAX (APPEALS)-III CHENNAI; D ATED 30.4.2010 IN ITA NO.591/09-10/A-III, FOR ASSESSMENT YEAR 2007 -2008, IN PROCEEDINGS UNDER SECTION 143(3) OF THE INCOME TAX ACT 1961[ IN SHORT THE ACT] 2. CONCISE FACTS, COMMON TO THE CASES ARE THAT THE ASSESSEE/COMPANY IS AN UNDERTAKING OF GOVERNMENT O F TAMIL NADU. IT IS ENGAGED IN DEVELOPING, OPERATING AND MAINTENANCE OF AN INFORMATION TECHNOLOGY PARK. ON 30.10.2007, IT HAD FILED ITS RETURN DECLARING AN INCOME OF F7,26,98,355/-. CLAIMING IT SELF TO BE AN UNDERTAKING ENGAGED IN DEVELOPMENT OF INFRASTRUCTUR E, IT HAD CLAIMED DEDUCTION UNDER SECTION 80IA OF THE ACT F38,18,62 ,561/-. IN THE IMPUGNED ASSESSMENT YEAR, ITS TOTAL RECEIPTS READ A S FOLLOWS:- I.T.A.NO.1060/MDS/2010. I.T.A .NO.1198/MDS/2010 & CO - 8 5/MDS/2010. :- 3 -: RENTAL INCOME FROM MODULES : 51,98,81,901/- OTHER RENT CAR PARKING CHARGES :1,04,91,333/- COMMUNICATION ELECT. CHARGES : 43,13,333/- ELECTRICAL ROOM RENT : 5,21,408/- OTHER RENTAL INCOME : 22,55,000/- RENTAL TWO WHEELER PARKING : 4,95,675/- RENT FOR USAGE AREA : 2,20,104/- TELECOM ROOM RENT : 3,58,997/- USAGE OF CABLE DED (TRENCH) : 5,04,730/- 1,91,60,582/- AUDITORIUM RENT 29,45,799/- ------------------ RENTAL INCOME TOTAL 54,19,88,282/- ------------------ OPERATION AND MAINTENANCE CHARGES 8,78,66,158/- INTEREST INCOME 5,19,19,060/- INCOME FROM POWER GENERATION 1,15,45,584/ - REVENUE SHARING INCOME 23,74,513/- OTHER INCOME 15,38,478/- TOTAL 69,72,32,075/- 3. IT IS NOTICED FROM THE ASSESSMENT ORDER DATED 18.12 .2009 THAT THE ASSESSING OFFICER REJECTED THE ASSESSEES CLAIM OF DEDUCTION AFTER TAKING INTO CONSIDERATION THE RELEVANT STATUTORY PR OVISION AND ALSO ITS EXPLANATION IN SUPPORT THEREOF; BY HOLDING THAT SI NCE THE RECEIPTS IN QUESTION HAD RISEN FROM VARIOUS RENT/LEASE AGREEMEN TS, THEY WOULD GIVE RISE TO INCOME UNDER THE HEAD HOUSE PROPERTY INSTEAD OF BUSINESS INCOME AND ASSESSED THE SAME ACCORDINGLY . I.T.A.NO.1060/MDS/2010. I.T.A .NO.1198/MDS/2010 & CO - 8 5/MDS/2010. :- 4 -: 4. AGGRIEVED, THE ASSESSEE PREFERRED APPEAL. IT IS E VIDENT FROM THE CIT(A)S ORDER UNDER CHALLENGE THAT ON THE ONE HAND, HE HAS PARTLY ACCEPTED THE ASSESSEES CLAIM FOR TREATING THE RECE IPTS FROM LEASE OF MODULES TOTALING TO F51,98,81,721/- AS BUSINESS INC OME AND DIRECTED THE ASSESSING OFFICER TO ALLOW DEPRECIATION @ 15% Q UA ELECTRICAL MACHINERY INCLUDED IN THE ELECTRICAL FITTINGS CONSI STING OF TRANSFORMERS, SUB-STATION, DG SETS, ELECTRICAL INSTALLATIONS ETC. AT THE SAME TIME, HE HAS ALSO TURNED DOWN THE ASSESSEES PLEAS TO TREAT OTHER RECEIPTS (SUPRA) AS BUSINESS INCOME. IN THIS BACKDROP, ON T HE ONE HAND, THE ASSESSEES GRIEVANCE IS THAT ALL RECEIPTS ARE ENTIT LED TO BE TAKEN AS BUSINESS INCOME. ON THE OTHER, THE REVENUES CONTEN TIONS ARE THAT THE CIT(A) HAS WRONGLY TREATED RENTAL RECEIPTS AS INC OME FROM BUSINESS INSTEAD OF HOUSE PROPERTY. THE NEXT GRIEVANCE OF THE REVENUE AGITATES THE ISSUE OF DEPRECIATION @15% GRANTED TO THE ASSESSEE. 5. IN THE COURSE OF HEARING, BOTH PARTIES VEHEMENTLY R EITERATE THEIR RESPECTIVE CONTENTIONS. IN ADDITION, THEY ALSO SUP PORT THE RELEVANT PORTIONS OF THE CIT(A)S ORDER WHICH IS IN THEIR F AVOUR. FURTHER, AN ADDITIONAL PLEA IS ALSO SOUGHT TO BE RAISED BY THE ASSESSEE THAT WHATEVER EXPENDITURE HAS BEEN INCURRED REGARDING T HE RECEIPTS IN ITS APPEAL, THE CONCERNED EXPENDITURE BE ALSO DIRECTED TO BE DEALT WITH I.T.A.NO.1060/MDS/2010. I.T.A .NO.1198/MDS/2010 & CO - 8 5/MDS/2010. :- 5 -: BY THE ASSESSING OFFICER AFTER APPLYING NETTING FORMULA. HOWEVER, IN SUPPORT OF THE SAID CONTENTION, WE FIND THAT THERE IS NO MATERIAL ON RECORD BEFORE US IN SUPPORT OF THE PLEA DEMONSTRAT ING EXPENDITURE IN QUESTION. THEREFORE, IN THE ABSENCE OF ANY COGENT MATERIAL, WE DO NOT DEEM IT PROPER TO DIRECT THE ASSESSING OFFICER TO M AKE A ROWING ENQUIRY QUA CORRESPONDING EXPENDITURE IN QUESTION A ND REJECT THE CONTENTION. 6. COMING TO BOTH CASES, WE HAVE HEARD THE PARTIES AT LENGTH AND PERUSED THE CASE FILE. IN THE COURSE OF ARGUMENTS, THE ASSESSEE HAS PRODUCED ON RECORD TRIBUNALS DECISIONS PERTAININ G TO PRECEDING ASSESSMENT YEARS. WE WILL DEAL WITH THEM AT AN A PPROPRIATE STAGE. 7. FIRST, WE COME TO THE CONTENTION OF THE REVENUE THA T ASSESSEES INCOME IN QUESTION DESERVES TO BE TREATED UNDER TH E HEAD HOUSE PROPERTY INSTEAD OF BUSINESS INCOME. THE SUBMISS IONS OF THE REVENUE IN SUPPORT OF THE CONTENTIONS ARE THAT ADMI TTEDLY, THE ASSESSEE HAS RAISED THE RECEIPTS THROUGH RENTAL ACT IVITIES. IN OTHER WORDS, IT STRESSES THAT SINCE THE ASSESSEE HAS EXEC UTED LEASE AGREEMENTS QUA MODULES ETC, THE RECEIPTS IN QUESTIO N DO NOT GIVE RISE TO ANY BUSINESS INCOME FOR THE PURPOSE OF DEDUCTI ON UNDER SECTION 80IA(4)(III) OF THE ACT. IN REPLY, THE ASSESSEE HAS PRODUCED COPY OF I.T.A.NO.1060/MDS/2010. I.T.A .NO.1198/MDS/2010 & CO - 8 5/MDS/2010. :- 6 -: THE ORDER IN ITA NO.2120 & 2121/MDS/2011 AND CO NO .16 & 17/MDS/2012; RESPECTIVELY, DATED 11.04.2013 FOR ASS ESSMENT YEARS 2003-2004, 2005-2006 AND SUBMITTED THAT THE VERY IS SUE STANDS DECIDED IN ITS FAVOUR. IN LIGHT THEREOF, IT PRAYS FOR REJECTION OF THE REVENUES CONTENTIONS. 8. AFTER GIVING OUR THOUGHTFUL CONSIDERATION, WE FIND THAT THERE IS NO DISPUTE ON FACTS. THE ASSESSEE HAS DEVELOPED A SOFTWARE PARK BY THE NAME OF TIDEL INFORMATION TECHNOLOGY PARK; W HEREIN, IT HAS LEASED OUT ITS MODULES AND OTHER FACILITIES TO VARI OUS CLIENTS IN LIEU OF LEASE/RENT IN QUESTION. WE FURTHER MAKE IT CLEAR T HAT ITS TOTAL RENTAL INCOME IS F54,19,88,282/-. THE RECEIPTS FROM LETT ING OUT THE MODULES ARE F 51,98,81,901/. THE BALANCE AMOUNT OF F1,91,60 ,582/- HAS ARISEN FROM CAR PARKING CHARGES, COMMUNICATION, ELECTRICAL CHARGES ETC. IT IS ALSO EVIDENT TO US FROM THE CASE FILE AND PAPER BO OK ON RECORD THAT IN 1999, THE ASSESSEE HAD APPLIED TO GOVERNMENT OF IND IA,(DEPARTMENT OF INDUSTRIES), FOR SETTING UP AN INDUSTRIAL PARK UNDE R SECTION 80IA OF THE ACT. ON 24.04.2009, IT STOOD APPROVED SUBJECT TO VARIOUS TERMS AND CONDITIONS ENUMERATED UNDER RULE 18(3) SUB RULE (2 ) OF INCOME TAX RULES. THEREAFTER, THE CENTRAL BOARD OF DIRECT TAXE S, VIDE ITS NOTIFICATION DATED 26.12.1999, HAS ALSO NOTIFIED TH E INDUSTRIAL PARK I.T.A.NO.1060/MDS/2010. I.T.A .NO.1198/MDS/2010 & CO - 8 5/MDS/2010. :- 7 -: UNDER SECTION 80IA(4)(III) OF THE ACT. IT IS TO BE SEEN FROM BOTH THE ABOVE DOCUMENTS THAT THE DEDUCTION UNDER SECTION 80 IA HAS NOT BEEN GRANTED IN PERPETUITY, BUT IT IS LIABLE TO BE WITHD RAWN IF THE ASSESSEE VIOLATES THE CONDITIONS SPECIFIED THEREIN. HOWEVER, TILL DATE NO SUCH WITHDRAWAL HAS COME. SO, THE ASSESSEE ENJOYS THE S TATUS OF AN ELIGIBLE UNDERTAKING UNDER SECTION 80IA (4) (III) OF THE ACT . 9. IT IS ALSO REVEALED FROM THE CASE FILE THAT THIS IS NOT THE FIRST YEAR OF THE ASSESSEES CLAIM OF DEDUCTION UNDER SECTION 80IA(4)(III). IT TRANSPIRES THAT IN ASSESSMENT YEAR 2003-2004 THE A O HAD HIMSELF FINALIZED SCRUTINY ASSESSMENT ON 10.03.2006 ALLOW ING DEDUCTION UNDER SECTION 80IA(4)(III) OF THE ACT. THEREAFTER, HE RE OPENED IT AND WITHDREW THE RELIEF ON 26.06.2008. THE ASSESSEE P REFERRED AN APPEAL, WHEREIN THE CIT(A) DIRECTED THE AO TO GRANT THE DED UCTION IN QUESTION. ON 30.06.2009, THE AO PASSED CONSEQUENTIAL ORDER. ON 17.03.2010, HE AGAIN ISSUED RE-OPENING NOTICE IN VIEW OF THE CA SE LAW CIT VS. CHENNAI PROPERTIES AND INV. LTD (MAD) 274 ITR 117, CIT VS. INDIAN METAL & METALLURGICAL CORPORATION (MAD) 215 ITR 424 AND FINALIZED REASSESSMENT ON 31.01.2010 DENYING THE ASSESSEE THE VERY DEDUCTION ON THE GROUND THAT IT WOULD BE AVAILABLE ONLY QUA T HE PROFITS DERIVED BY AN UNDERTAKING ENGAGED IN DEVELOPING AND MAINTAI NING AN I.T.A.NO.1060/MDS/2010. I.T.A .NO.1198/MDS/2010 & CO - 8 5/MDS/2010. :- 8 -: INFRASTRUCTURE FACILITY AND NOT FOR RENTAL INCOME. THE SAID ISSUE TRAVELLED UPTO THE TRIBUNAL. WE FIND THAT FROM TH E ORDER DATED 11.04.2013 (AUTHORED BY ONE OF US I.E. ABRAHAM P. G EORGE, ACCOUNTANT MEMBER), THAT NOT ONLY THE REOPENING HAS BEEN QUASHED ON LEGALITY ASPECT, BUT ALSO ON MERITS, IT HAS BEEN CONCLUDED THAT THE ASSESSEE IS ENTITLED FOR DEDUCTION UNDER SECTION 80 IA(4)(III). THE RELEVANT EXTRACT READS AS UNDER:- 12. IT IS CRYSTAL CLEAR FROM THE ABOVE THAT ASSESS ING OFFICER HAD, DURING THE ORIGINAL ASSESSMENT PROCEE DINGS ITSELF CONSIDERED THE DEDUCTIBILITY OF EACH OF THE ITEMS OF INCOME CLAIMED BY THE ASSESSEE UNDER SECTION 80-IA OF THE ACT. ASSESSING OFFICER HAS MADE AN OBSERVATION THAT EVERY NATURE OF INCOME DERIVED FROM INDUSTRIAL UNDERTAKING WAS NOT ELIGIBLE FOR SUCH EXEMPTION. H E HAD THEREAFTER HELD THAT INTEREST INCOME, MISCELLANEOUS INCOME AND OTHER RENT WERE NOT ELIGIBLE FOR SUCH EXEMPTION . IN THE FACE OF THE ABOVE, IT IS DIFFICULT TO ACCEPT TH E PLEA OF THE COUNSEL FOR THE LD. DR THAT ASSESSING OFFICER HAD NOT APPLIED HIS MIND WITH REGARD TO THE DEDUCTION CLAIM ED BY THE ASSESSEE UNDER SECTION 80-IA OF THE ACT. NO DO UBT, ASSESSING OFFICER, HAS NOT IN SO MANY WORDS MENTIO NED ANYTHING ABOUT THE DECISION OF HONBLE JURISDICTION AL HIGH COURT IN THE CASE OF CIT VS. CHENNAI PROPERTIES AND INVESTMENTS LTD.(SUPRA). BUT IN THE SAID CASE, ASSE SSEE WAS A COMPANY DERIVING, INTER ALIA, RENTAL INCOME F ROM LETTING OUT OF TWO BUILDINGS CALLED CHENNAI HOUSE AND FIRHAVAN ESTATE. ASSESSEE CONCERNED WAS EXPLOITI NG THE PROPERTIES AS OWNER BY A SIMPLE LEASE AND WAS NOT ENGAGED IN LEASING OF AN ADVANCED FACILITY LIKE SOF TWARE PARK. IT IS DIFFICULT TO PLACE A SIMPLE LEASE OF P ROPERTY AND A LESE OF A SPECIALIZED FACILITY WITH A NUMBER OF FUNCTIONALITIES ON THE SAME FOOTING. IT IS ALSO NO TEWORTHY TO MENTION THE OBSERVATIONS OF THEIR LORDSHIPS IN C HENNAI I.T.A.NO.1060/MDS/2010. I.T.A .NO.1198/MDS/2010 & CO - 8 5/MDS/2010. :- 9 -: PROPERTIES AND INVESTMENTS LTD (SUPRA). IT WAS OBS ERVED THAT THE QUESTION WHETHER INCOME OF LEASING OUT SHO ULD BE TREATED AS INCOME FROM PROPERTY OR BUSINESS MUST B E CONSIDERED IN THE CIRCUMSTANCES OF EACH CASE. WE A LSO FIND THAT THIS POSITION OF LAW HAS BEEN REITERATED BY HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CI T VS. M/S. ELNET TECHNOLOGIES LTD(TCA NO.2336&2623 OF 200 6 AND 2169 OF 2008 DATED 09.10.2012) WHEREIN DECISION OF HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CI T VS. CHENNAI PROPERTIES AND INVESTMENTS LTD WAS CONSIDER ED. THUS, WHAT COMES OUT CLEARLY IS THAT NOT ONLY ASSES SING OFFICER HAD APPLIED HIS MIND ON THE APPLICABILITY O F SECTION 80-IA TO VARIOUS CATEGORIES OF INCOME OF THE ASSESS EE, BUT HAD ALSO REACHED A LAWFUL CONCLUSION THAT ASSESSEE WAS ELIGIBLE FOR CLAIMING SUCH DEDUCTION, EXCEPT ON SOM E OF SUCH CATEGORIES. ON BEING POINTED OUT, THE REVENUE STILL CLAIMS THAT SINCE THE FACTS ARE DISTINGUISHABLE IN THE IMPUGNED ASSESSMEN T YEAR QUA NATURE OF PROCEEDINGS I.E. UNDER SECTION 147 IN ASS ESSMENT YEAR 2003-2004 AND 143(3) IN IMPUGNED ASSESSMENT YEAR, T HEREFORE, IT IS NOT BOUND BY THE ORDER. IN OUR VIEW, THE SAME DOES NOT DESERVE TO BE ACCEPTED. UNDISPUTEDLY, THE CO-ORDIN ATE BENCH HAS APPROVED THE ORIGINAL SCRUTINY ASSESSMENT FIN ALIZED BY THE ASSESSING OFFICER GRANTING VERY DEDUCTION TO THE AS SESSEE. THIS MEANS THAT APART FROM LEGALITY OF RE-OPENING, THE O PINION OF THE ASSESSING OFFICER HAS MERGED WITH THE FINDINGS OF T HE TRIBUNAL. THAT BEING THE CASE, THE REVENUES CONTENTION THAT THE FINDINGS THEREIN ARE CONFINED TO LEGALITY ASPECT ONLY DO NOT CARRY I.T.A.NO.1060/MDS/2010. I.T.A .NO.1198/MDS/2010 & CO - 8 5/MDS/2010. :- 10 -: SUBSTANCE. ACCORDINGLY, WE UPHOLD THE CIT(A)S ORD ER UNDER CHALLENGE AND OBSERVE THAT THE ASSESSEE IS ELIGIBL E FOR CLAIMING DEDUCTION U/S 80IA (4)(III) OF THE ACT QUA THE LE ASE INCOME IN QUESTION. 10. NOW WE COME TO THE SECOND ISSUE RAISED BY THE REVEN UE THAT CIT(A) HAS WRONGLY DIRECTED THE AO TO GRANT DEPRECI ATION TO THE ASSESSEE FOR ELECTRICAL ITEMS(SUPRA). ON PERUSAL OF THE CIT(A) ORDER, IT IS FOUND THAT QUA THIS ISSUE, HE HAS RELIED UPON HI S PREDECESSORS ORDER DATED 16.01.2007 AS WELL AS TRIBUNAL S ORDER DATED 08.08.2008 FOR ASSESSMENT YEAR 2003-2004 IN ITA NO.750/MDS/2007 DI RECTING THE AO THAT SUBSTANCE SHOULD PREVAIL OVER THE NOMENCLATURE AND DECIDE IT AFRESH. BEFORE US, NO MATERIAL HAS BEEN PLACED ON RECORD AS HOW THE ISSUE HAS BEEN DECIDED BY THE ASSESSING OFFICER. THAT BEING THE CASE, WE ARE OF THE VIEW THAT THE CIT(A) HAS RIGHTY REMI TTED THE ISSUE BACK TO THE FILE OF THE ASSESSING OFFICER AND FIND NO R EASON TO INTERFERE. ACCORDINGLY, THE REVENUES APPEA L IS DISMISSED. 11. NOW, WE COME TO THE PLEADINGS OF THE ASSESSEE WHERE IN ITS RECEIPTS IN QUESTION OF CAR PARKING CHARGES, COMMUN ICATION ELECTRICAL CHARGES, ELECTRICAL ROOM RENT, OTHER RENTAL INCOME, RENTAL TWO WHEELER PARKING, RENT FOR USAGE AREA, TELECOM ROOM RENT AN D USAGE OF CABLE I.T.A.NO.1060/MDS/2010. I.T.A .NO.1198/MDS/2010 & CO - 8 5/MDS/2010. :- 11 -: DUCT(TRENCH) OF F 1,04,91,333/-, F.43,13,333/-, F.5 ,21,408/-, F.22,55,000/-, F.4,95,675/-, F.2,20,104/-, F.3,58,9 97/- AND F5,04,730/-; RESPECTIVELY TOTALING F. 1,91,60,582 /- (SUPRA) ARE PRAYED TO BE TREATED AS BUSINESS INCOME INSTEAD OF OTHE R SOURCES AS HELD BY THE CIT(A). ITS GROUNDS READ THAT OPERATION AND MAINTENANCE CHARGES, INTEREST INCOME, INCOME FROM POWER GENERAT ION, REVENUE SHARING INCOME AND OTHER INCOME OF F8,78,66,158/-, 5,19,19,060/-, 1,15,45,584/-, 23,74,513/- AND F15,38,478/- RESPECT IVELY, HAVE BEEN WRONGLY TREATED BY CIT(A) AS INCOME FROM OTHER SO URCES. REITERATING THE PLEADINGS IN THE GROUNDS, THE ASSESSEE CONTENDS BEFORE US THAT THE IMPUGNED RECEIPTS HAVE ALSO ARISEN FROM THE SAME LE ASE AGREEMENTS PERTAINING TO THE MODULES(SUPRA). THEREFORE, THEY ARE LIABLE TO BE TREATED AS ITS BUSINESS INCOME. 12. PER CONTRA, THE REVENUE SUPPORTS THE CIT(A) FINDING S AND PRAYS FOR CONFIRMATION THEREOF. 13. WE HAVE EXAMINED CAREFULLY THE RIVAL CONTENTIONS. I N NUTSHELL, ASSESSEES GRIEVANCE IS THAT SINCE THE RECEIPTS IN QUESTION HAVE ARISEN FROM THE INFRASTRUCTURE FACILITIES INTEGRAL TO THE SOFTWARE PARK, THE RELIEF OF DEDUCTION ALSO COVERS THEM. IN SUPPORT, IT DRAWS OUR ATTENTION TO TRIBUNAL ORDER DATED 11.04.2013 (SUPRA) TO THE EF FECT THAT SIMILAR RELIEF I.T.A.NO.1060/MDS/2010. I.T.A .NO.1198/MDS/2010 & CO - 8 5/MDS/2010. :- 12 -: HAD BEEN GRANTED IN THE EARLIER ASSESSMENT YEARS. AFTER THOROUGH ANALYSIS, WE FIND THAT IN THE TRIBUNAL ORDER DATE D 08.08.2008(SUPRA), THE CO-ORDINATE BENCH HAS CONSIDERED THE ISSUE QUA INTEREST FROM DEPOSITS, MISCELLANEOUS INCOME AND OTHER RENT AND H ELD AS UNDER:- 2. THE FIRST ISSUE RAISED IS AGAINST RESTRICTION OF RELIEF U/S 80IA BY EXCLUDING THE FOLLOWING FROM THE BUSINE SS PROFITS FOR THE PURPOSE OF COMPUTING THE RELIEF:- I) INTEREST FROM DEPOSITS. II) MISCELLANEOUS INCOME. III) OTHER RENT. 2.1 WE HAVE HEARD BOTH THE COUNSELS AND PERUSED THE RELEVANT RECORDS. WE FIND THAT THE HONBLE MADRAS HIGH COURT IN SOUTH INDIA SHIPPING CORPORATION LTD VS. C IT 240 ITR 24 HAS HELD, THAT INTEREST RECEIVED BY A COMPAN Y WHICH CARRIED ON BUSINESS, FROM BANK DEPOSITS AND LOANS C OULD ONLY BE TAXABLE AS IN COME FROM OTHER SOURCES AND NOT AS BUSINESS INCOME ON THE ANVIL OF THIS, IN OUR OPINI ON THE EXCLUSION OF INTEREST FROM DEPOSITS FOR THE PURPOSE OF COMPUTATION OF DEDUCTION U/S 80IA IS LIABLE TO BE C ONFIRMED. THE MISCELLANEOUS INCOME REPRESENTS VARIOUS MISCELL ANEOUS ITEMS LIKE WATER CHARGES, INSURANCE CLAIMS, STD BOO TH AND PCO, SALE OF TENDER DOCUMENTS ETC., THE RENTAL INCO ME REPRESENTS INCOME FROM PARKING SPACE, MOBILE PHONE NETWORK TOWERS AND OTHER FACILITIES ETC. LOWER AUTH ORITIES HAVE HELD THAT THIS CANNOT BE STATED TO BE DERIVED FORM THE BUSINESS OF DEVELOPING, OPERATING AND MAINTAINING T HE INFRASTRUCTURE OF THE STP UNDER CONSIDERATION. 2.2. SECTION 80IA(1) PROVIDES FOR AS UNDER:- WHERE THE GROSS TOTAL INCOME OF AN ASSESSEE INCLUD ES ANY PROFITS AND GAINS DERIVED BY AN UNDERTAKING OR AN E NTERPRISE FROM ANY BUSINESS REFERRED TO INTO SUB-SECTION (4) (SUCH BUSINESS BEING HEREINAFTER REFERRED TO AS THE ELIGI BLE BUSINESS), THERE SHALL, IN ACCORDANCE WITH AND SUBJ ECT TO THE I.T.A.NO.1060/MDS/2010. I.T.A .NO.1198/MDS/2010 & CO - 8 5/MDS/2010. :- 13 -: PROVISIONS OF THIS SECTION, BE ALLOWED, IN COMPUTIN G THE TOTAL ON COME OF THE ASSESSEE, A DEDUCTION OF AN AMOUNT E QUAL TO HUNDRED PER CENT OF THE PROFITS AND GAINS DERIVED F ROM SUCH BUSINESS FOR TEN CONSECUTIVE ASSESSMENT YEARS. A READY OF THE ABOVE MAKES IT CLEAR THAT PROFITS AN D GAINS, WHICH ARE DERIVED FROM THE ELIGIBLE BUSINESS, QUALI FY FOR EXEMPTION UNDER THIS SECTION. 2.3. WE FIND THAT HONBLE APEX COURT IN THE CASE OF CIT VS. STERLING FOODS 237 ITR 579(HON'BLE SUPREME COUR T) HAD HELD THAT, THE PROVISIONS OF SECTION 28 AS AMENDED MADE NO DIFFERENCE. THE WORD DERIVE IS USUALLY FOLLOWED BY THE WORD FROM AND IT MEANS; GET, TO TRACE FROM A S OURCE; ARISE FROM, ORIGINATE IN, SHOW THE ORIGIN OR FORMATION OF F. THE SOURCE OF IMPORT ENTITLEMENTS COULD NOT BE SAID TO BE THE INDUSTRIAL UNDERTAKING OF THE ASSESSEE. THE SOURCE OF THE IMPORT ENTITLEMENTS COULD ONLY BE SAID TO BE THE EX PORT PROMOTION SCHEME OF THE CENTRAL GOVERNMENT WHERE UN DER THE EXPORT ENTITLEMENTS BECAME AVAILABLE. THERE MU ST BE, FOR THE APPLICATION OF THE WORDS DERIVED FROM, A DIRECT NEXUS BETWEEN THE PROFITS AND GAINS AND THE INDUSTR IAL UNDERTAKING. IN THE INSTANT CASE, THE NEXUS WAS NO T DIRECT BUT ONLY INCIDENTAL. THE INDUSTRIAL UNDERTAKING EX PORTED PROCESSED SEA FOODS. BY REASON OF SUCH EXPORT, THE EXPORT PROMOTION SCHEME APPLIED. THEREUNDER, THE ASSESSEE WAS ENTITLED TO IMPORT ENTITLEMENTS, WHICH IT COULD SEL L. THE SALE CONSIDERATION THERE FORM COULD NOT BE HELD TO CONST ITUTE A PROFIT AND GAIN DERIVED FROM THE ASSESSEES INDUSTR IAL UNDERTAKING. THE RECEIPTS FROM THE SALE OF IMPORT ENTITLEMENTS COULD NOT BE INCLUDED IN THE INCOME O F THE ASSESSEE FOR THE PURPOSE OF COMPUTING THE RELIEF UN DER SECTION 80HH OF THE INCOME TAX ACT, 1961. 2.4 WE FURTHER FIND THAT AS HELD BY PRIVY COUNCIL I N CIT VS. RAJA BAHADUR KAMAKHAYA NARAYAN SINGH & OTHERS(1 948) 16 ITR 325, THE WORD DERIVED IS NOT A TERM OF A RT. ITS USE IN THE DEFINITION INDEED DEMANDS AN ENQUIRY INTO TH E I.T.A.NO.1060/MDS/2010. I.T.A .NO.1198/MDS/2010 & CO - 8 5/MDS/2010. :- 14 -: GENEALOGY OF THE PRODUCT BUT THE ENQUIRY SHOULD STO P AS SOON AS THE EFFECTIVE SOURCES ARE DISCOVERED. WE AL SO DRAW SUPPORT FROM EXPOSITION IN H.H. PRINCE AZAM JAH BAH ADUR VS. EXPENDITURE TAX OFFICER 1971 83 ITR 92(HON'BLE SUPR EME COURT) THAT THE ACT IN THE VERY NATURE OF THINGS CA NNOT BE ABSOLUTELY CAST UPON LOGIC. IT IS TO BE READ AND U NDERSTOOD ACCORDING TO ITS LANGUAGE. IF A PAIN READING OF TH E LANGUAGE COMPELS THE COURT TO ADOPT AN APPROACH DIFFERENT FR OM THAT DICTATED BY ANY RULE OF LOGIC, THE COURT MAY THINK OF ADOPTING IT. 2.5 IN THE BACKGROUND OF AFORESAID DISCUSSION, IN O UR OPINION , THE MISCELLANEOUS INCOME AND RENTAL IN COME IN THIS CASE CANNOT BE SAID TO BE PROFITS AND GAINS D ERIVED BY THE UNDERTAKING FROM THE ELIGIBLE BUSINESS. ACCORD INGLY, WE AFFIRM THE DECISION OF LEARNED COMMISSIONER OF INCO ME TAX (APPEALS) IN THIS REGARD. IN LIGHT THEREOF, IT IS APPARENT THAT BEFORE THE T RIBUNAL, THE ISSUE STANDS DECIDED AGAINST THE ASSESSEE. WE A LSO MAKE IT CLEAR THAT QUA ASSESSMENT YEAR 2003-2004, THE PA RTIES HAVE SEEN MANY ROUNDS OF LITIGATION (SUPRA). AT TH E SAME, SO FOR AS ASSESSEES ARGUMENTS THAT IN RE-ASSESSMENT T HAT THE ASSESSING OFFICER HAD GRANTED RELIEF ARE CONCERNED, IN OUR VIEW, THE FINDINGS DATED 08.08.2008 HEREINABOVE WOU LD PREVAIL OVER THOSE OF THE ASSESSING OFFICER. WE AL SO CLARIFY THAT IN THE ORDER DATED 11.04.2013 (SUPRA) THERE IS NO ADJUDICATION ON THESE ISSUES. HENCE, WE RELY ON TH E ORDER DATED 08.08.2008 AND CONFIRM THE CIT(A)S FINDINGS UNDER I.T.A.NO.1060/MDS/2010. I.T.A .NO.1198/MDS/2010 & CO - 8 5/MDS/2010. :- 15 -: CHALLENGE. IN VIEW THEREOF, THE OTHER RECEIPTS OF OPERATION AND MAINTENANCE ETC ARE HELD AS INCOME FROM OTHER SOURCES. 14. IN VIEW OF OUR DISCUSSION, BOTH APPEAL STANDS DISMI SSED. SINCE WE HAVE DISMISSED THE REVENUES APPEAL, THE ASSESSE ES CROSS OBJECTIONS SUPPORTING THE ORDER OF THE CIT(A) HAVE BECOME INFRUCTUOUS. ORDER PRONOUNCED ON MONDAY, THE 3RD OF JU NE, 2013, AT CHENNAI. SD/- SD/- (ABRAHAM P. GEORGE) ACCOUNTANT MEMBER (S.S. GODARA) JUDICIAL MEMBER DATED: 3RD JUNE, 2013. K.V COPY TO: APPELLANT/RESPONDENT/CIT(A)/CIT/DR