AMENITY SOFTWARE P.LTD, MUMBAI V. ITO WD 8(1)(1), MUMBAI

ITA 1550/MUM/2012

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 93166 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 4 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-07-2015
• Appeal Filed By: Assessee
• Bench Allotted: A
• Next Hearing Date: 27-04-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 05-03-2012
• Court: TRIBUNAL
• Department Lawyers: ASGHAR ZAIN
• Keywords: Business income

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A , BENCH MUMBAI . , . . , BEFORE SHRI D. MANMOHAN, VP & SHRI R.C.SHARMA , A M ./ ITA NO. 1550 / MUM/20 1 2 ( / ASSESSMENT YEAR : 20 0 8 - 09 ) M/S AMENITY SOFTWARE PVT. LTD., 404, CORPORATE CENTRE, ANDHERI KURLA ROAD, ANDHERI (E), MUMBAI - 400059 VS. ITO WARD - 8(1)(1), MUMBAI ./ ./ PAN/GIR NO. : A A ECA 7051 J ( / APPELLANT ) .. ( / RESPONDENT ) /ASSESSEE BY : NONE /REVENUE BY : SHRI ASGHAR ZAIN / DATE OF HEARING : 2 8 TH A PRIL , 201 5 / DATE OF PRONOUNCEMENT 08 - 07 - 2015 / O R D E R PER R.C.SHARMA (A.M) : TH IS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A) FOR THE ASSESSMENT YEAR 200 8 - 09. 2. THE ONLY GRIEVANCE OF THE ASSESSEE RELATES TO ALLOWABILITY OF CLAIM OF DEDUCTION U/S. 80IA(4)(III) OF THE ACT IN RESPECT OF IT PARK. 3 . WE FOUND THAT IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2009 - 10 AND 2010 - 11, THE TRIBUNAL HAS HELD THAT IT PARK OF ASSESSEE IS ELIGIBLE FOR CLAIM OF DEDUCTION U/S. 80IA(4) OF THE ACT . THE PRECISE OBSERVATION OF THE TRIBUNAL W AS AS UNDER : - 13. THE UNDISPUTED FACT IS THAT THE PROPERTY IN QUESTION IS AN I.T. PARK, WITH ALL INFRASTRUCTURE FACILITIES AND SERVICES. THIS IS NOT A SIMPLE BUILDING. THE MINISTRY OF COMMERCE AND INDUSTRIES, NOTIFIES I TA NO. 1550 / 1 2 2 CERTAIN BUILDING AS I.T. PARK ONLY I F VARIOUS FACILITIES AND INFRASTRUCTURE, AS SPECIFIED BY THE DEPARTMENT, ARE PROVIDED. IT IS AN UNDISPUTED FACT THAT ALL THE TECHNICAL REQUIREMENTS, INFRASTRUCTURES, FACILITIES AND SERVICES ARE BEING PROVIDED IN THIS BUILDING AND IT WAS ONLY FOR THIS REASO N THAT NOT ONLY THE MINISTRY OF COMMERCE & INDUSTRIES, BUT ALSO THE CBDT NOTIFIED THE SAME AS AN I.T. PARK WHICH ENTITLES THE ASSESSEE TO EARN CERTAIN INCENTIVES. THE INTENTION OF THE ASSESSEE WHILE PURCHASING THE PROPERTY IS TO PARTICIPATE IN THE I.T. PAR K AND IT CANNOT BE SAID THAT THE INTENTION IS ONLY TO INVEST IN PROPERTY. THE HON'BLE SUPREME COURT IN SHANBHU INVESTMENTS P. LTD. (SUPRA), CLEARLY LAYS DOWN THAT WHAT IS TO BE SEEN WAS THE PRIMARY OBJECT OF THE ASSESSEE WHILE EXPLOITING THE PROPERTY. IF I T IS FOUND BY APPLYING SUCH TEST, THAT THE MAIN INTENTION IS TO LET OUT THE PROPERTY, IT MUST BE CONSIDERED AS RENTAL INCOME OR INCOME FROM PROPERTY. IN CASE IT IS FOUND THAT THE MAIN INTENTION IS TO EXPLOIT THE PROPERTY BY WAY OF COMPLEX COMMERCIAL ACTIVI TIES, IN THAT EVENT, IT MUST BE HELD AS BUSINESS INCOME. IN THE CASE BEFORE US, THE ASSESSEE IS OFFERING COMPLEX SERVICES BY WAY OF PROVIDING OPERATION PLACE IN A NOTIFIED I.T. PARK, WITH ALL SERVICES AND AMENITIES SUCH AS INFRASTRUCTURE FACILITIES, WAITIN G ROOM, CONFERENCE ROOM, VALET PARKING, RECEPTION, CANTEEN, 24 HOURS SECURITIES, INTERNAL FACILITIES, HIGH SPEED LIFT, POWER BACK - UP, ETC. JUST BECAUSE A SISTER CONCERN INCURRED THIS EXPENDITURE AND CLAIMS REIMBURSEMENT FROM THE ASSESSEE, IT CANNOT BE SAID THAT THE FACILITIES ARE NOT PROVIDED BY THE ASSESSEE. WHOEVER MAINTAINS THEM, THE FACT REMAINS THAT IT IS THE ASSESSEE WHO ULTIMATELY BEARS SUCH EXPENDITURE FOR THE SERVICES AND UNDERTAKES TO PROVIDE SUCH SERVICES. THE FACILITIES ARE MADE AVAILABLE BY THE ASSESSEE TO THE PERSON OCCUPYING THE PREMISES. COMING TO THE CASE LAWS IN SAPTARSHI SERVICES TD. (SUPRA), THE HONBLE GUJARAT HIGH COURT HELD THAT THE INCOME EARNED FROM BUSINESS CENTRE IS TO BE ASSESSED UNDER THE HEAD INCOME FROM BUSINESS & PROFESSION. THE SPECIAL LEAVE PETITION FILED BY THE REVENUE AGAINST THIS JUDGMENT WAS REJECTED BY THE HON'BLE SUPREME COURT WHICH IS REPORTED AS 264 ITR (ST.) 36. COMING TO THE DECISION OF THE MUMBAI BENCH OF THE TRIBUNAL IN HARVINDARPAL MEHTA (SUPRA), THE TRIBUNAL, IN THIS DECISION, AFTER CONSIDERING THE JUDGMENT IN SHAMBHU INVESTMENTS P. LTD., HELD THAT THE INCOME EARNED FROM BUSINESS CENTRE IS TO BE ASSESSED UNDER THE HEAD INCOME FROM BUSINESS & PROFESSION. THE DECISION OF MUMBAI BENCH OF THE TRIBUNAL IN SHANAYA ENTERPRISES (SUPRA) HELD THAT WHEN THE PROPERTY IS USED FOR SPECIFIC PURPOSES AND IN THE NATURE OF PROVIDING COMPLEX SERVICES, THE INCOME IS TAXABLE UNDER THE HEAD INCOME FROM BUSINESS & PROFESSION. APPLYING THE PROPOSITIONS LAID DOWN IN THESE CASE LAWS, WE HOLD THAT THE PROPERTY CAN BE USED ONLY FOR A SPECIFIC PURPOSE I.E., I.T. OPERATION AND THE ASSESSEE HAS PROVIDED COMPLEX SERVICE FACILITIES AND INFRASTRUCTURE FOR OPERATING SUCH BUSINESS AND ON THIS FACTUAL MATRIX, WE UPHOLD THE CONTENTION OF THE ASSE SSEE THAT THE INCOME IN QUESTION SHOULD BE ASSESSED UNDER THE HEAD INCOME FROM BUSINESS & PROFESSION. CONSEQUENTLY, WE SET ASIDE I TA NO. 1550 / 1 2 3 THE ORDER PASSED BY THE COMMISSIONER (APPEALS) AND ALLOW THE GROUND RAISED BY THE ASSESSEE. 14. COMING TO GROUNDS NO.2 AND 3 , THE ASSESSING OFFICER IS DIRECTED TO ALLOW THE CLAIM OF EXPENSES AS THE DISALLOWANCE WAS MADE ONLY ON THE GROUND THAT THE INCOME IS ASSESSABLE UNDER THE HEAD HOUSE PROPERTY. CONSEQUENT TO OUR DECISION IN GROUND NO.1, WE DIRECT THE ASSESSING OFFICER TO ALLOW BOTH THE EXPENDITURE CLAIMED AS WELL AS THE CLAIM FOR DEDUCTION UNDER SECTION 80IA(4)(III). CONSEQUENTLY, WE SET ASIDE THE ORDER PASSED BY THE COMMISSIONER (APPEALS) AND ALLOW THE GROUND NO.2 AND 3 RAISED BY THE ASSESSEE. 5. AS THE FACTS AND CIRCUM STANCES DURING THE YEAR UNDER CONSIDERATION ARE PARI MATERIA , RESPECTFULLY FOLLOWING THE AFORESAID ORDER OF THE TRIBUNAL, WE CONFIRM THE ACTION OF THE CIT(A) FOR ALLOWING DEDUCTION U/S.80IA(4) IN RESPECT OF INCOME FROM IT PARK. 4. AS THE FACTS AND CIRCUMS TANCES DURING THE YEAR UNDER CONSIDERATION ARE SAME, RESPECTFULLY FOLLOWING THE ORDER OF THE TRIBUNAL, WE D O NOT FIND ANY MERIT FOR DECLIN ING OF ASSESSEES CLAIM OF DEDUCTION U/S.80IA(4) OF THE ACT IN RESPECT OF ITS IT PARK. 5 . I N THE RESULT, APPEAL OF THE R EVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 08/07 / 201 5 . SD/ - SD/ - ( . ) ( D.MANMOHAN ) ( . . ) ( R.C.SHARMA ) / VICE PRESIDENT / ACCOUNTANT MEMBER MUMBAI ; DATED 08/07 / 201 5 . . /PKM , . / PS / COPY OF THE ORDER FORWARDED TO : / BY ORDER, / ( ASSTT. REGISTRAR) , / ITAT, MUMBAI 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A), MUMBAI. 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE. //TRUE COPY//